practice ad banker exam Flashcards
In Arizona, Workers’ Compensation Temporary Total Disability benefits are payable up to what percentage of the employee’s wage?
50%
66.67%
91%
75%
66.67%
For temporary total disability, the benefit amount is 66 2/3% of the employee’s monthly wages and is paid during the period of disability. In addition, the compensation for temporary total disability is paid for a specified period of time, depending on the type of disability.
The Law of Large Numbers provides that:
Small certain losses are substituted for large uncertain losses
As the number of insured units increases, predictability of losses improves
As the number of insured units increases, losses decrease
If funds are insufficient to pay claims, the insured is assessed additional premium
As the number of insured units increases, predictability of losses improves.
The larger the sample is, the more accurate the prediction is.
Choose the true statement about the Basic Dwelling Form.
The Basic Form covers contents on an open perils basis
The Basic Form automatically covers contents for theft
The Basic Form covers internal explosion
The Basic Form covers loss to trees, shrubs, and plants
The Basic Form Covers internal explosion.
‘
The Basic Form is written on a named perils basis and does not cover theft, or loss to trees, shrubs and plants.
The intent of the Personal Effects Floater is:
To insure personal property on a scheduled basis
To provide coverage for property kept at the home
To provide coverage worldwide for travelers
To insure hard-to-value property like fine art or heirlooms
To provide coverage worldwide for travlers.
All of the following are true regarding the structure of a property policy, except:
The Exclusions itemize the perils not covered
The Declarations include the insured’s name, policy period, policy limits and the amount of premium
The insured’s duties in case of loss are found in the Insuring Agreement
The bankruptcy condition does not relieve the insurer of its duties or obligations under the policy
The insured’s duties in case of loss are found in the Insuring Agreement.
(The Conditions list the general rules and duties in the even of a loss under the policy)
Which of the following is not covered under the Installation Floater?
Carpeting
Elevators
Construction equipment
Electrical equipment
Construction equipment.
Construction equipment is covered under the Equipment Dealers Floater
Which statement is true regarding inspections and surveys under the BOP?
The insurer is obligated to make an inspection when the policy is issued
The insurer is obligated to make a survey when the policy is issued
The insurer has the right, but is not obligated to make inspections and surveys at any time
Inspections and surveys may be conducted only upon permission of the insured
The insurer has the right, but is not obligated to make inspections and surveys at any time.
Which of the following is not an insured contract under CGL?
Lease for a new store location
Sidetrack agreement
An advertising contract
Elevator maintenance agreement
An advertising contract.
An advertising contract is not one of the insured contracts.
Property damage covered by a liability policy includes which of the following?
Damage to property owned by, or leased to, the insured
Damage to tangible property, including loss of use of that property caused by the insured’s negligence
Damage to property of others in the insured’s care, custody, or control
Damage to the insured’s products arising out of the products
Damage to tangible property, including loss of use of that property caused by the insured’s negligence.
Which 1980 regulation deregulated the trucking industry?
Trailer Interchange Act
Motor Carrier Public Liability Act
Motor Carrier Act
Trucking Reform Act
Motor Carrier Act
This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000 depending on the type of merchandise transported.
The Businessowners Liability Coverage Form includes coverage for bodily injury, property damage, personal injury and advertising injury to which coverage applies, plus:
Mobile equipment being transported on an auto owned or operated by an insured
Liquor liability
Employers liability
Liability assumed under an insured contract
Liability assumed under an insured contract.
Liabiility coverage is provided for sums for which the insured becomes legally liable to pay as damage for bodily injury, property damage, or personal injury and advertising injury, including liability assumed under an insured contract.
Which of the following is automatically covered under the Businessowners Policy?
Preservation of property up to 60 days
Signs attached to the building
Mechanical breakdown of pressure systems and air conditioners
Off-premises power failure
Signs attached to the building
Signs attached to the building are covered, but the limit of insurance on these signs is $1,000.
B has two policies on a property. Policy A is for $20,000; Policy B is for $40,000. If Policy A has a pro rata provision, how much will it pay for a covered loss of $15,000?
$5,000
$7,500
$10,000
$15,000
$5,000
The total amount of coverage is $60,000. Policy A provides 1/3 of that total, so Policy A’s pro rata contribution would be one-third, or $5,000. Policy B provides $40,000, or 2/3 of the total coverage, so Policy B pays two-thirds.
Which statement about Section II of a Homeowners Policy is false?
Insurer investigation expenses are in addition to the limits stated in Coverage E
Obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence
Total liability coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy
Coverage F limits are subject to a deductible
Coverage F limits are subject to a deductible
Section II coverages are not subject to a deductible.
Which of the following is not covered under the Valuable Papers and Records Floater?
Blueprints
Mortgages
Maps
Securities
Securities.
Which of the following prevents recovery for injuries caused by a negligent party if the claimant was also negligent?
Absolute liability
Gross negligence
Comparative negligence
Contributory negligence
Contributory negligence
The contributory negligence defense denies payment to an injured party if they were partly at fault.
Which of the following is not considered a type of advertising injury?
Misappropriation of advertising ideas
Infringement of copyright
Violation of copyright
Extortion
Extortion
Criminal acts are excluded under the CGL
Which of the following provisions in an Ocean Marine policy covers direct damage caused by bursting of boilers?
Inchmaree Clause
Mechanical Failure Clause
Running Down Clause
Boiler and Machinery Clause
Inchmaree Clause
The Inchmaree also covers direct damage caused by breaking of propeller shafts, or loss due to faults or errors in navigation by the crew, and it broadens the hull coverage.
The amount of insurance provided to cover personal property of a Homeowners Policy is what percentage of Coverage A?
20%
60%
40%
50%
50%
The basic amount of Coverage C insurance is 50% of the Coverage A Limit.
The Condominium Commercial Unit-Owners Coverage Form does not cover which of the following?
Business personal property
Appliances
Improvements
Building exterior wall
Building exterior wall
The exterior wall is part of the common property covered by the Condominium Association Coverage Form.
Which vehicle would not be eligible for a Business Auto Coverage Form?
A van that is used by a delivery firm
A trailer that is used to carry a backhoe
A private passenger auto that is used in the business
A forklift used in the business
Which of the following would be an eligible risk under the BOP?
Fast food restaurant
Auto repair shop
Manufacturer
Small amusement park
Product liability would cover:
Contractual liability
Product recall
A restaurant customer who contracts food poisoning
A vending machine that injured a customer’s hand
Under the HO-4 and HO-6, personal property is covered on which basis?
Replacement cost coverage
Basic Form perils coverage
Broad Form perils coverage
Open perils coverage
The Mobile Agricultural Machinery and Equipment Coverage Form does not include coverage for:
Combines and cotton pickers that are specifically described with a limit of insurance for each
Irrigation equipment
Hay balers
Farm tractors
The Businessowners Protective Safeguards endorsement requires the insured to notify the insurer if an automatic sprinkler system is off for how long?
96 hours
48 hours
72 hours
24 hours
Fine arts and antiques are classes of property insured on a:
Valued basis
Replacement cost basis
Market value basis
Actual cash basis
Which of the following statements is true regarding the eligibility of flood insurance?
In order to qualify for a federal loan, the property owner must purchase flood insurance if the property is located in a flood area
Banks and Savings and Loan Associations may exempt an individual from purchasing the flood insurance that is required for a federal loan
Industrial buildings are not eligible for flood insurance
All property located in a flood area must be insured against flood by law
All of the following are Optional Coverages under the Businessowners Policy, except:
Personal property of others that is in the insured’s care, custody and control
Money and securities
Outdoor signs
Employee dishonesty
All of the following are Optional Coverages under the Businessowners Policy, except:
Personal property of others that is in the insured’s care, custody and control
Money and securities
Outdoor signs
Employee dishonesty
Which statement is false regarding Workers’ Compensation?
Payment is made without regard to negligence
It covers investigation and defense costs
The premium is paid by the employee
It pays medical expenses, loss of time benefits and death benefits
The Common Policy Conditions are found in which section of the BOP?
Declarations Page
Section II
Section III
Section I
The Difference in Conditions Policy is a special form used to fill in gaps of a property policy. Which of the following is true regarding this policy?
The Standard DIC form is developed and filed by the NAIC
It is generally written on an open perils basis, excluding losses by perils that are covered under standard property forms
It is written with a minimum of 80% co-insurance
It is written with a Standard Deductible of $1,000
Coverage for recreational vehicles can be added to the Personal Auto Policy by the:
Named Non-Owner Endorsement
Cross Terrain Endorsement
Miscellaneous Type Vehicle Endorsement
Recreational Vehicles Endorsement
Which of the following perils is not insured against by the Special Causes of Loss form under the Farm Property policy?
Dishonest or criminal acts
Falling objects
Weight of Snow or Ice
Freezing of plumbing
Which of the following perils is not insured against by the Special Causes of Loss form under the Farm Property policy?
Dishonest or criminal acts
Falling objects
Weight of Snow or Ice
Freezing of plumbing
Under the Arizona Special Provisions endorsements for dwelling and homeowners coverage, which of the following is not an additional coverage?
Reasonable repairs
Fire department service charge
Property removed
Debris removal
Which of the following vehicle uses is not excluded under Personal Auto Medical Payments?
Occupying a vehicle as a residence
Livery
Racing
Farm use
At a trade show, a plumbing supplier discovers it has accepted payment for its new line of faucets in the form of counterfeit money orders. Under which Commercial Crime insuring agreement would this loss be covered?
Outside the Premises
Fund Transfer Fraud
Money Orders and Counterfeit Money
Forgery or Alteration
Which of the following is true concerning Workers’ Compensation benefits?
Benefits are be paid to employees for their on-the-job injuries, regardless of negligence an anyone’s part
Benefits are paid only if there was no negligence on the part of the employee
Benefits are paid for injuries sustained on or off the job
Benefits are paid only upon determination of negligence on the part of the employer
Who is the obligee on a Fidelity Bond?
The court
The employee
The employer
The surety
What is the name of the uniform document that common carriers are required to issue to the shipper of the goods being transported?
Bill of Lading
Bill of Acceptance
Shipping Receipt
Bill of Transportation
What is the name of the uniform document that common carriers are required to issue to the shipper of the goods being transported?
Bill of Lading
Bill of Acceptance
Shipping Receipt
Bill of Transportation
Which coverage is not an Additional Coverage under the Businessowners Coverage Form?
Business income and extra expense
Equipment breakdown
Pollutant clean up and removal
Increased cost of construction
The Miscellaneous Type Vehicle Endorsement attached to a Personal Auto Policy allows eligibility of a motorcycle by:
Amending the definition of ‘your covered auto’ and ‘newly acquired auto’ to include any miscellaneous type vehicle
Adding motorcycles to the list of eligible vehicles
Altering the four-wheel requirement
Specifically naming it in the Declarations
Which of the following is not true of the supplemental extended reporting period under the Claims-Made Form of the CGL?
The insurer may void it after the premium has been paid by the insured
It is an optional extended reporting period of unlimited duration
The one time premium may not exceed 200% of the annual premium for the coverage part
It must be purchased within 60 days after the end of the policy
Which of the following is true about the Dwelling Policy Special Provisions – Arizona endorsement?
The insurer has 60 days to pay a covered property loss
Intentional loss to property applies to a loss caused by domestic violence
The insurer can subrogate against the person who caused domestic violence
Fire department service charges are covered
Which of the following is not considered ‘occupying an automobile’?
Jumping off the trunk
Getting out of the car
Standing by the car exchanging insurance information
Closing a car door
The type of absolute liability that applies to products is called:
Vicarious liability
Assumption of risk
Comparative liability
Strict liability
Covered equipment under the Equipment Breakdown Protection Coverage Form, includes:
Electrical and mechanical equipment used in the utilization of energy
Catalysts
Equipment manufactured by the insured for sale
Insulating and refractory material
A producer who engages in an unfair or deceptive practice can be ordered by the Director to immediately stop engaging in that practice. This is an example of which of the following?
Suspension
Civil penalty
Contempt of court
Cease and desist
Which of the following claims would not be covered under Section II of a Homeowners Policy?
Medical expenses of a guest
Damage to property of others
Third-party bodily injury for which the insured is legally liable
$500 a day for the insured’s loss of earnings while defending a suit
Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy?
The named insured
A tenant who lives in a portion of the insured’s residence
The named insured’s spouse
A residence employee
An underwriter will consider each of the following factors when evaluating a risk, except:
Nature of the risk
Rates
Hazards
Claim history
Choose the false statement about the Homeowners Policy.
Coverage D provides coverage for additional living expense
Motor vehicles do not meet the definition of contents
Personal property owned and used by the insured in a vacation home would be covered
Coverage C extends to animals, birds, or fish owned by the insured
An insured who goes to client’s offices and homes for appointments would need coverage for which liability exposure?
Premises and Operations
Contingent Liability
Completed Operations
Products
An insured who goes to client’s offices and homes for appointments would need coverage for which liability exposure?
Premises and Operations
Contingent Liability
Completed Operations
Products
Which of the following terms best describes the crime of taking of property from inside the premises or a locked safe or vault by a person who commits forcible entry?
Theft
Shoplifting
Burglary
Robbery
Insurance Company C has decided that it is insuring too many homes in a particular area. Therefore, it decides to reinsure R’s Homeowners Policy because of the high value of R’s dwelling. The reinsurance contract can best be described as:
An agreement between R, Insurance Company C, and the reinsurer
An agreement between R and the reinsurance company
An agreement between Insurance Company C and the reinsurer
An agreement between R’s agent and Insurance Company C
Which of the following would not be covered under a Personal Auto Policy?
An eight passenger van with a gross vehicle weight of 7,600 pounds
A motorcycle
A pickup truck with a gross vehicle weight of 7,600 pounds
Any trailer that the insured owns
Which of the following would not be covered under a Personal Auto Policy?
An eight passenger van with a gross vehicle weight of 7,600 pounds
A motorcycle
A pickup truck with a gross vehicle weight of 7,600 pounds
Any trailer that the insured owns
Which of the following is not within an agent’s authority?
Selling applications on the insurer’s behalf
Countersigning insurance contracts
Representing the insured’s interest
Using express authority
Which of the following is true regarding commercial crime?
Burglary must include threat of violence
Money includes evidences of debt
The Employee Dishonesty coverage form covers extortion
Theft includes any act of stealing, including burglary and robbery
All of the following are true of torts, except:
They constitute the basis of a claim by a third party
Negligence is a type of tort
They must be committed intentionally
Liability insurance excludes intentional torts
Section II of a Homeowners policy may cover which of the following incidents?
Bodily injury caused by an insured’s activities while picnicking at a city park
The homeowner’s family dog bites their 2 year old son
The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat
An insured’s guest damages the stair railing during a visit
A consumer electronics business discovers that someone has used computer software to fabricate security passes, which were then used to gain access to their warehouse and steal several cases of smart phones. Under which Commercial Crime insuring agreement would this loss be covered?
Forgery or Alteration
Inside the Premises Theft of Money and Securities
Computer Fraud
Money Orders and Counterfeit Money
A deer chews a hole in an insured’s shed sitting next to a pond. Which of the following forms could cover this damage?
HO-2
DP-1
HO-3
HO-8
