P Review

Question 1

Inland Marine will NOT cover:

Select one:

a.
cattle shipped to market

b.
imports

c.
leased buildings

d.
exports

Answer 1

Leased buildings

Question 2

A Business Income Coverage Form has a $100,000 limit of liability with a 25% monthly limit of indemnity. If the insured loses $47,000 in a particular month, the most the policy will pay for that month’s losses is:

Select one:

a.
$0

b.
$25,000

c.
$47,000

d.
$100,000

Answer 2

25,000

Question 3

Under Section II of the HO policy, Med Pay will cover a claim:

Select one:

a.
for pain and suffering.

b.
only if the insured is negligent and liable.

c.
for medical expenses of the insured.

d.
regardless of liability.

Answer 3

Regardless of liability

Question 4

Which would NOT purchase a bailee’s floater?

Select one:

a.
dry cleaner

b.
a credit union

c.
computer repair business

d.
a furrier

Answer 4

A credit union

Question 5

If a business insured by a Building and Personal Property policy (BPP) acquires a new business, the new business is insured for a grace period of:

Select one:

a.
30 days

b.
60 days

c.
90 days

d.
120 days

Answer 5

30 days

Question 6

Marine Transportation Insurance covers:

Select one:

a.
domestic shipments of goods

b.
commercial buildings

Answer 6

Domestic shipments of goods

Question 7

A Mobile Home policy covers a detached garage:

Select one:

a.
to 10% of A (with at least $2,000 coverage)

b.
with no limit

c.
only by a rider, endorsement, separate policy

d.
to 20% of A

Answer 7

To 10% of A (with at least $2,000 coverage)

Question 8

The HO’s Supplementary (Additional) Payments pays:

Select one:

a.
in addition to the limits of liability.

b.
after the deductible is satisfied.

c.
only after the limit of liability is reached.

d.
only up to the limit of liability.

Answer 8

In addition to the limits of liability

Question 9

Joe has a building covered by a Building and Personal Property policy. What must he do to cover a new lawnmower used to service the premises?

Select one:

a.
list the items on an endorsement

b.
nothing

Answer 9

Nothing

Question 10

A carpenter working on a house has a hammer slip from his hands, but no damage occurs. This is not an accident because:

Select one:

a.
it was unexpected.

b.
it was not intentional.

c.
no damage occurred.

d.
it happened very suddenly.

Answer 10

No damage occurred

Question 11

The owner of a new office building is unable to move in for 80 days. Which provision will restrict coverage?

Select one:

a.
vacancy

b.
abandonment

c.
coinsurance

d.
indemnity

Answer 11

Vacancy

Question 12

Which of the following is eligible for flood insurance?

Select one:

a.
a retail store only

b.
a retail store and its inventory

Answer 12

A retail store and it’s inventory

Question 13

Ocean marine floaters cover each of these EXCEPT:

Select one:

a.
jettison

b.
insects and vermin

c.
theft

d.
barratry

Answer 13

Insects and vermin

Question 14

The earthquake deductible is applied:

Select one:

a.
with each aftershock

b.
once each 7 days (168 hours)

Answer 14

Once each 7 days (168 hours)

Question 15

Each of the following could be included in a CPP EXCEPT:

Select one:

a.
Commercial Auto

b.
Inland Marine

c.
Equipment Breakdown

d.
Ocean Marine

Answer 15

Ocean marine

Question 16

The optional coverage under a BOP is:

Select one:

a.
Liability coverage

b.
Burglary and Robbery

c.
Building coverage

d.
Personal Property coverage

Answer 16

Burglary and robbery

Question 17

The Business Income coinsurance requirement to maintain the Coverage Extensions is:

Select one:

a.
20%

b.
50%

c.
80%

d.
90%

Answer 17

50%

Question 18

Under a Homeowner policy, abandonment is:

Select one:

a.
not permitted

b.
permitted

Answer 18

Not permitted

Question 19

The HO-2 provides vandalism coverage for a maximum of how many days after the beginning of the vacancy?

Select one:

a.
30 days

b.
60 days

c.
90 days

d.
120 days

Answer 19

60 days

Question 20

The Business Income form covers each of these EXCEPT:

Select one:

a.
payroll

b.
property replacement

c.
necessary continuing operating expenses

d.
lost profits

Answer 20

Property replacement

Question 21

Inland Marine policy losses are usually calculated with which method of valuation:

Select one:

a.
replacement cost

b.
actual cash value

Answer 21

Actual cash value

Question 22

Extra Expense covers:

Select one:

a.
all expenses necessary to continue the business after a loss.

b.
only the additional expenses necessary to continue the business after a loss.

Answer 22

Only the additional expenses necessary to continue the business after a loss

Question 23

The deductible under an earthquake policy is:

Select one:

a.
$250.

b.
a percentage.

Answer 23

A percentage

Question 24

The owner of a business carelessly left the rear door unlocked over the weekend, resulting in merchandise being stolen. Under a Building and Personal Property policy – Special, this loss:

Select one:

a.
will be covered as a theft loss

b.
will not be covered

Answer 24

Will be covered as a theft loss

Question 25

If the insured’s dog bites a jogger, the HO’s Bodily Injury Liability will pay for:

Select one:

a.
a new kennel.

b.
fencing for the dog.

c.
retraining the dog.

d.
defense costs if the jogger sues.

Answer 25

Defense cost of the jogger sues

Question 26

A building valued at $100,000 has a policy with an 80% coinsurance clause. The minimum coverage needed to fully cover a $15,000 fire loss is:

Select one:

a.
$15,000

b.
$50,000

c.
$80,000

d.
$100,000

Answer 26

$80,000

Question 27

Under the pair or set rule:

Select one:

a.
Both items in the pair or set must be insured for full replacement or actual cash value.

b.
In no event will the loss of one item in the pair or set be considered to be the loss of all items in the pair or set.

Answer 27

In no event will the loss of one item in the pair or set be considered to be the loss of all items in the pair or set

Question 28

The HO-5 policy provides:

Select one:

a.
Coverage F (Medical Payments) only

b.
neither Coverage E (Personal Liability) nor Coverage F (Medical Payments)

c.
Coverage E (Personal Liability) only

d.
both Coverage E (Personal Liability) and Coverage F (Medical Payments)

Answer 28

Both coverage E (personal liability) and coverage F (medical payments)

Question 29

The Building and Personal Property policy may be used to cover each of the following EXCEPT?

Select one:

a.
tenant’s improvements and betterments

b.
property of others

c.
property damage liability

d.
building additions

Answer 29

Property damage liability

Question 30

The HO’s Medical Payments pays:

Select one:

a.
only up to the limit of liability.

b.
after the deductible is satisfied.

c.
in addition to the limits of liability.

d.
only after the limit of liability is reached.

Answer 30

Only up to the limit of liability

Question 31

Which can get a Businessowner policy?

Select one:

a.
a small restaurant

b.
a bungee jump at an amusement park

c.
theatre

d.
a factory

Answer 31

A small restaurant

Question 32

Which form of Business Interruption coverage allows a business to continue partial or full operation after loss caused by a covered peril?

Select one:

a.
Extra Expense coverage.

b.
Direct loss coverage.

Answer 32

Extra expense coverage

Question 33

The HO’s Personal Liability section covers:

Select one:

a.
Damage to the property of other persons.

b.
Medical expenses of the Insured’s children.

c.
Damage to the insured’s home.

d.
A tenant’s suit for wrongful eviction.

Answer 33

Damage to the property of other persons

Question 34

A building with no occupants or contents is:

Select one:

a.
vacant

b.
unoccupied

Answer 34

Vacant

Question 35

A mobile home policy:

Select one:

a.
Provides Replacement Cost coverage.

b.
May be used if the mobile home has at least 200 square feet.

c.
will pay $500 of the cost of transporting the mobile home to a new permanent location.

d.
May be used if the mobile home has at least 300 square feet.

Answer 35

Provides replacement cost coverage

Question 36

A DP-1 (Dwelling Policy -1) covers each of the following EXCEPT:

Select one:

a.
hail

b.
earth movement

c.
fire and smoke

d.
explosion

Answer 36

Earth movement

Question 37

Which is true regarding the HO-8?

Select one:

a.
It is only designed for multi-family dwellings.

b.
It was created because replacement cost is too costly for some homes.

c.
It allows the insured to operate a small business in the home and still have both liability and property coverage as well as work comp coverage for employees.

d.
There is no liability coverage.

Answer 37

It was created because replacement cost is too costly for some homes

Question 38

If the insured is injured in her home, she will be compensated under:

Select one:

a.
Section I of the HO

b.
Section II of the HO

c.
Medical Payments under the HO

d.
Her health insurance policy, but not under the HO at all

Answer 38

Her health insurance policy, but not under the HO at all

Question 39

The Extended Business Income is intended to provide 30 days coverage that begins:

Select one:

a.
on the date the loss occurs.

b.
after the reopening of the business following the loss restoration.

c.
on the date the policy is purchased.

d.
after the policy terminates.

Answer 39

After the reopening of the business following the loss restoration

Question 40

The additional coverages under the Building and Personal Property policy include each of the following EXCEPT:

Select one:

a.
Fire Department Service Charges

b.
Removal/Preservation of Property

c.
Theft of Money

d.
Debris Removal

Answer 40

Theft of money

Question 41

A car is destroyed by a hurricane. This is:

Select one:

a.
an accident

b.
an occurrence

Answer 41

An accident

Question 42

The Building and Personal Property policy deductible does not apply to:

Select one:

a.
Newly Acquired or Constructed Property

b.
Trees

c.
Removal/Preservation of Property

d.
Fire Department Service Charge

Answer 42

Fire department service charge

Question 43

The Building and Personal Property policy covers outdoor furniture located within a maximum of:

Select one:

a.
50 feet

b.
100 feet

c.
200 feet

d.
250 feet

Answer 43

100 feet

Question 44

A mobile home policy:

Select one:

a.
may provide Replacement Cost coverage for the structure if it is insured to 80% of replacement cost.

b.
does not provide Section II liability coverage.

Answer 44

May provide Replacement Cost coverage for the structure if it is insured to 80% of replacement cost

Question 45

Flood insurance covers:

Select one:

a.
leaky roofs

b.
broken water pipes

c.
mudslides

d.
foundation seepage

Answer 45

Mudslides

Question 46

For a business, Extra Expense would cover:

Select one:

a.
rebuilding the structure

b.
lost business income

c.
payment of normal payroll

d.
rental of substitute space

Answer 46

Rental of substitute space

Question 47

Most Personal Articles Floaters are written on:

Select one:

a.
an open perils (all-risk) basis.

b.
a stated value basis.

Answer 47

An open perils (all-risk) basis

Question 48

A Personal Articles Floater:

Select one:

a.
is an unscheduled blanket policy.

b.
covers inherent vice.

c.
provides all-risk coverage.

d.
provides named peril coverage.

Answer 48

Provides all-risk coverage

Question 49

Under a CPP, the duration of the policy’s coverage is found in the:

Select one:

a.
exclusions

b.
declarations

c.
conditions

d.
insuring agreements

Answer 49

Declarations

Question 50

Extra Expense coverage may be provided with:

Select one:

a.
Business Income

b.
Liability insurance

Answer 50

Business income

Question 51

A store’s business owner’s policy covers the store’s portable shelving. The shelving, which was destroyed by fire, had the following valuations: replacement cost - $7,000; actual cash value - $3,000; original purchase price - $5,000; fair market value - $280. The policy will pay how much on this claim?

Select one:

a.
$280

b.
$3,000

c.
$5,000

d.
$7,000

Answer 51

$7,000

Question 52

Which federal agency runs the flood insurance program?

Select one:

a.
FEMA

b.
FTC

c.
EPA

d.
IRS

Answer 52

FEMA

Question 53

While playing with fireworks, Smith’s 16-year-old child negligently destroyed the neighbor’s $250,000 home. Smith’s homeowner’s policy will cover the liability up to:

Select one:

a.
$0

b.
$1,000

c.
$100,000

d.
$250,000

Answer 53

$100,000

Question 54

After a Building and Personal Property policy proof of loss is filed, the claim must be paid within:

Select one:

a.
10 days

b.
30 days

c.
60 days

d.
90 days

Answer 54

30 days

Question 55

Which of the following will result in an “automatic” assignment of a CPP?

Select one:

a.
sale of the business

b.
bankruptcy of the Insurer

c.
bankruptcy of the business

d.
death of the Insured

Answer 55

Death of the insured

Question 56

Loading docks and cattle shipped to market are insured by what area of insurance?

Select one:

a.
inland marine

b.
ocean marine

Answer 56

Inland marine

Question 57

The National Flood Insurance Program is operated by the:

Select one:

a.
state government

b.
federal government

Answer 57

Federal government

Question 58

The most a HO policy will pay for a liability slip and fall claim under Section II of the policy is:

Question 58 Select one:

a.
$15,000.

b.
$25,000.

c.
$40,000.

d.
the policy’s limit of liability.

Answer 58

The policy’s limit of liability

Question 59

If a fire causes $100,000 damage and the debris removal expense is $14,000, a Building and Personal Property policy will pay how much (assuming it has adequate limits of coverage)?

Select one:

a.
$14,000

b.
$100,000

c.
$114,000

d.
$135,000

Answer 59

$114,000

Question 60

Commercial floaters cover:

Select one:

a.
birthday gifts

b.
salespersons’ samples

Answer 60

Salespersons samples

Question 61

Which is a coverage extension?

Select one:

a.
fire extinguishers

b.
vans

c.
lawns and crops

d.
newly acquired property

Answer 61

Newly acquired property

Question 62

Building materials used for repairs are not covered for:

Select one:

a.
vandalism

b.
theft

c.
wind and hail damage

d.
fire damage

Answer 62

Theft

Question 63

Which BOP is not available?

Select one:

a.
Basic (standard) coverage

b.
Broad form coverage

c.
Special (open perils) coverage

d.
Basic and Special coverages

Answer 63

Broad form coverage

Question 64

An appliance repair business is robbed of $10,000 in equipment and $500 cash. The $75,000 Special Businessowner’s policy will cover the loss for:

Select one:

a.
$0

b.
$500

c.
$10,000

d.
$10,500

Answer 64

$10,000

Question 65

A homeowner policy requires notice of a loss to be given to each of the following EXCEPT:

Select one:

a.
the police if a crime is involved.

b.
the insurer.

c.
other insureds.

d.
the credit card company if a credit card is stolen.

Answer 65

Other insureds

Question 66

Under the Building and Personal Property policy, the mortgagee is entitled to:

Select one:

a.
Payment as per the mortgagee’s interest at the time of loss

b.
45 days notice of cancellation for nonpayment of premium

Answer 66

Payment as per the mortgagee’s interest at the time of loss

Question 67

Which floater covers a heating/air conditioning dealer putting a new furnace system in an office building?

Select one:

a.
Installment Sales Floater

b.
Contractor’s Equipment Floater

c.
Physicians and Surgeons Floater

d.
Installation Floater

Answer 67

Installation floater

Question 68

A refinery’s pipe suddenly bursts and pollutes the atmosphere. This is an:

Select one:

a.
occurrence

b.
accident

Answer 68

Accident

Question 69

Which of the following is covered by a Commercial Package Policy (CPP)?

Select one:

a.
Ships

b.
Crime

c.
Partners’ Accounting

d.
Aircraft

Answer 69

Crime

Question 70

The Building and Personal Property policy covers each of the following EXCEPT:

Select one:

a.
fire extinguishers

b.
building materials used to make repairs

c.
a tenant’s furnishings

d.
appliances furnished by the land lord in a tenant’s unit

Answer 70

A tenant’s furnishings

Question 71

Pollution over a long period of time is:

Select one:

a.
an accident

b.
an occurrence

Answer 71

An occurrence

Question 72

For the dwelling, Mobile Home policies cover loss settlement:

Select one:

a.
on an ACV basis.

b.
without a deductible.

c.
on a stated or agreed value basis.

d.
on a Replacement Cost basis.

Answer 72

On a replacement cost basis

Question 73

If the insured’s dog bites a jogger, the HO will pay a maximum of defense costs plus:

Select one:

a.
$1,000

b.
$100,000

c.
$101,000

d.
$250,000

Answer 73

$100,000

Question 74

If all of a business’s trees are destroyed in a fire, the maximum the BOP will pay is a total of:

Select one:

a.
$250

b.
$500

c.
$2,500

d.
$5,000

Answer 74

$2,500

Question 75

Three trees valued at $1,900, $600, and $200 were destroyed by fire. The businessowner policy will cover this loss to a total of:

Select one:

a.
$0

b.
$1,500

c.
$1,800

d.
$2,500

Answer 75

$1,800

Question 76

Each of these is true regarding flood insurance EXCEPT:

Select one:

a.
There are both regular and emergency programs.

b.
Flood policies contain a coinsurance requirement.

c.
Flood insurance is sponsored by the federal government because private insurance companies did not meet the need.

d.
One to four family dwellings are covered.

Answer 76

Flood policies contain a coinsurance requirement

Question 77

An Earth Movement policy covering a shopping mall would most likely cover a claim involving:

Select one:

a.
flood

b.
war

c.
nuclear

d.
volcanic eruption

Answer 77

Volcanic eruption

Question 78

A single unexpected event is:

Select one:

a.
an occurrence.

b.
an accident.

Answer 78

An accident

Question 79

A business is insured by a $400,000 BOP. If three trees valued at $600, $700, and $400 are destroyed by fire, the policy will pay how much?

Select one:

a.
$500

b.
$1,000

c.
$1,400

d.
$1,700

Answer 79

$1,700

Question 80

Ocean Marine covers:

Select one:

a.
loading bridges

b.
buildings

Answer 80

Loading bridges

Question 81

In comparing an HO-2 and HO-3, the HO-3 has:

Select one:

a.
better Property Damage limits.

b.
better Bodily Injury limits.

c.
higher Med Pay coverage limits.

d.
None of the above.

Answer 81

None of the above

Question 82

A Fine Art Floater:

Select one:

a.
covers private art works.

b.
covers public art collections.

Answer 82

Covers private art works

Question 83

Ocean Marine Insurance covers:

Select one:

a.
single family homes

b.
warehouses

c.
buildings

d.
ships’ cargo

Answer 83

Ship’s’ cargo

Question 84

The Building and Personal Property policy (BPP) covers:

Select one:

a.
retaining walls not attached to the building

b.
automobiles

c.
a rowboat stored in the building

d.
fences not attached to the building

Answer 84

A rowboat stored in the building

Question 85

Which section of a Special (Extended Coverage) form BPP contains information regarding whether a peril is covered?

Select one:

a.
exclusions

b.
insuring agreement

c.
declarations

d.
definitions

Answer 85

Exclusions

Question 86

A Business Income policy has a $10,000 limit of liability with a 25% monthly limit of liability. The Business is destroyed by a covered peril. The actual loss of income was $2,000 for the first month and $3,000 for the second month. The Business Income policy will pay a total of how much for the two months?

Select one:

a.
$2,000

b.
$2,500

c.
$4,500

d.
$5,000

Answer 86

$4,500

Question 87

Which is least likely to be eligible for a BOP?

Select one:

a.
jewelry stores

b.
small office buildings

c.
shoe stores

d.
large restaurants

Answer 87

Large restaurants

Question 88

The purpose of the National Flood Insurance Program is to:

Select one:

a.
provide flood insurance at subsidized rates.

b.
require all Americans to have flood insurance.

Answer 88

Provide flood insurance at subsidized rates

Question 89

Which coverage applies under an Ocean Marine policy when cargo is jettisoned to save the ship?

Select one:

a.
sue and labor expense

b.
particular average

c.
total loss

d.
general average

Answer 89

General average

Question 90

When there is no transfer of title, flood insurance is effective how many days after application?

Select one:

a.
1

b.
5

c.
10

d.
30

Answer 90

30

Question 91

The definition of vacancy under a Homeowner policy is:

Select one:

a.
10 days

b.
15 days

c.
20 days

d.
30 days

Answer 91

30 days

Question 92

Inland Marine policies are called?

Select one:

a.
floaters

b.
certificates

c.
mariners

d.
reservations

Answer 92

Floaters

Question 93

A person who owns jewelry worth over $50,000 should get a:

Select one:

a.
Personal Effects Floater

b.
Personal Articles Floater

Answer 93

Personal articles floater

Question 94

After 60 days, a property with no people and no significant amount of personal property is considered to be:

Select one:

a.
vacant

b.
unoccupied

Answer 94

Vacant

Question 95

Earth movement insurance is available:

Select one:

a.
only as a stand-alone policy

b.
only as an endorsement

Answer 95

Only as an endorsement

Question 96

Section I of the HO covers each of these EXCEPT?

Select one:

a.
Additional Living Expenses

b.
Appurtenant structures

c.
Unscheduled personal property

d.
Bodily Injury Liability

Answer 96

Bodily injury liability

Question 97

Inland Marine covers each of the following EXCEPT:

Select one:

a.
domestic shipments

b.
real estate and buildings

c.
exports

d.
imports

Answer 97

Real estate and buildings

Question 98

Boiler policies cover losses due to:

Select one:

a.
Corrosion

b.
Accidental breakdown

Answer 98

Accidental breakdown

Question 99

An accident is:

Select one:

a.
sudden and unintended

b.
repeated and continuous

Answer 99

Sudden and unintended

Question 100

The HO’s Personal Property coverage applies to:

Select one:

a.
property owned by an unrelated tenant.

b.
the insured’s automobile.

c.
the insured’s dog.

d.
the insured’s clothing.

Answer 100

The insured’s clothing