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
The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called a:
Bill of Transportation
Bill of Acceptance
Bill of Lading
Shipping Receipt
The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called a:
Bill of Transportation
Bill of Acceptance
Bill of Lading
Shipping Receipt
All of the following are true of the Fine Arts Floater, except:
Coverage is written on a replacement cost basis
It has a 90-day automatic coverage for newly acquired items
Coverage applies only to scheduled items
It covers such items as paintings, rare manuscripts and antiques
Which of the following claims would be covered under the DP-3?
Theft to a dwelling under construction
Damage by vandalism to a dwelling vacant for 30 days before the loss
Wind damage to TV antennas
Damage to a fence due to freezing and thawing of ice due to a winter storm
Which of the following is not true about medical payments under the Personal Auto Policy?
Medical expenses of all persons occupying the insured auto are covered
Medical expenses of the insured and family members are covered
Coverage applies only for medical expenses incurred within one year of the accident
The coverage limit applies per person, per accident
Which of the following is not true about medical payments under the Personal Auto Policy?
Medical expenses of all persons occupying the insured auto are covered
Medical expenses of the insured and family members are covered
Coverage applies only for medical expenses incurred within one year of the accident
The coverage limit applies per person, per accident
Which statement is false under a Homeowners Policy?
Theft of silverware is covered up to $2,500
The scheduled personal property endorsement provides open perils coverage
Money is covered up to $500 per occurrence
An endorsement may be added to cover the contents on a replacement cost basis
Liability coverage is designed to:
Permit the insured to countersue the insurer for losses not covered
Protect the insured from bodily injury and property damage they are legally obligated to pay
Cover injuries and damages caused by the insured’s intentional and unintentional actions
Protect an insured from being sued by an injured party
A commercial property has a $400,000 Commercial Building and Personal Property policy, and a fire breaks out on the loading dock, causing $80,000 in damage and $20,000 in debris removal. What is the maximum that may be received for the damage?
$80,000
$90,000
$400,000
$100,000
A Mobile Home Insurance Policy is most similar to:
An Auto policy
A Tenants policy
A Homeowners Policy
A Travel Trailer policy
Under the Farm Property Coverage Form, the definition of Farm Personal Property includes which of the following?
Equipment, supplies, and products of farming
Household furnishings of the farm dwelling occupied by the insured
Licensed vehicles owned by the insured and used in the farm operation
Silos, grain bins, and fences used in the farm operation
Which of the following is not a coverage extension under the Building and Personal Property Coverage Form?
Personal effects and property of others
Newly acquired or constructed property
Outdoor property
Inflation guard
Which Cause of Loss form for the Commercial Property Coverage Part will cover loss of sales merchandise due to a burglary?
The Special Form
The Broad Form
The Broad Form and The Special Form
There is no burglary coverage provided by the Commercial Property Policy
An insurer will not pay which of the following in the event of a Workers’ Compensation claim?
Claim expenses
Defense costs
Loss of insured’s earnings because the insurer requested the insured come to court
Premiums for appeal bonds
The part of an insurance contract that varies with each individual policy, but is still a mandatory part of the policy, is the:
Exclusions
Insuring agreement
Conditions
Declarations
Which of the following is true regarding the Earthquake Cause of Loss Form?
It can be used only with another Causes of Loss Form
It includes coverage for earthquakes that start within 168 hours after the expiration of the policy
It can be used by itself to provide a stand alone Earthquake policy
It provides coverage for mudslides
Endorsements that coordinate CPP coverages to avoid duplication are called:
Interline
Special
Coordinating
Panel
Following a large fire that requires several weeks of down time due to rebuilding, the Business Income Coverage Form will pay for:
Property that is not covered under the Building and Personal Property Coverage Form
Property that is spoiled because of loss of utility service
Net income plus continuing expenses of the business
Gross income, less taxes
Which of the following most accurately describes the abandonment condition?
Abandoned property must be protected from further damage
The insured cannot abandon damaged property to the insurer
The insured must cooperate with the company in the investigation of a claim
The insured must make reasonable and necessary repairs to protect the property
All of the following are included in Section I of the Businessowners Coverage Form, except:
An automatic 90% coinsurance clause
Business Income and Extra Expense coverages
An automatic increase in the limit of insurance for the building
An automatic increase in Business Personal Property Coverage to offset seasonal variations in stock
Which of the following are eligible to be insured under a Dwelling Policy?
Dwellings with any type of business in them
Dwellings used for incidental business
Farms
Mobile homes on wheels
S carries a Personal Auto Policy with Liability limits of 50/100/25. What is the maximum the policy will pay if S struck another vehicle causing injury to the occupants as follows: Driver - $70,000; Passenger 1-$30,000; Passenger 2-$50,000 and property damage to the other vehicle - $20,000?
$150,000
$170,000
$125,000
$120,000
Actual Cash Value is best defined as which of the following?
Today’s current price, minus depreciation
Market value
Replacement cost
Appraised value
All of the following are true of the HO-2, except:
The HO-2 pays for losses on an open peril basis
The HO-2 pays for losses to the dwelling on a replacement cost basis
The HO-2 covers owner-occupied dwellings
The HO-2 covers the broad form perils
If the insured and insurer do not agree on the value of a property loss, what condition would apply?
Arbitration
Subrogation
Abandonment
Appraisal
How much will the Dwelling Policy pay for additional living expenses after a dwelling insured for $100,000 under Coverage A is damaged by a fire?
$30,000
$20,000
$10,000
$50,000
The Named Non-owner endorsement:
Does not apply to a rented vehicle
Provides only liability coverage
Does not supply coverage to meet a state’s financial responsibility law requirements
Covers only the person named on the endorsement
The Named Non-owner endorsement:
Does not apply to a rented vehicle
Provides only liability coverage
Does not supply coverage to meet a state’s financial responsibility law requirements
Covers only the person named on the endorsement
Which of the following is a legal liability imposed without demonstrated negligence?
Contingent Liability
Absolute Liability
Vicarious Liability
Direct Liability
The Basic Causes of Loss Form under the Commercial Property Coverage Part would not cover which of the following?
Sinkhole collapse
Riot or civil commotion
Sprinkler leakage
Steam boiler explosion
Under the Commercial Property policy, vacancy is allowed for how many days before the peril of vandalism coverage is suspended?
120
30
60
90
Aircraft All Risk coverage includes which of the following levels?
Taxiing and on the ground and not in motion only
Taxiing and in flight only
On the ground and not in motion only
On the ground, taxiing, and in flight
Upon the passing of a licensing examination, the Director will issue what type of license to the applicant pending completion of their background investigation?
Permanent
Probationary
Conditional
Temporary
The loss of property when the cause of loss is not known is considered:
Robbery
Theft
Mysterious disappearance
Burglary
If a vehicle in Arizona is involved in a theft, what is the first thing the insured must do before receiving transportation expense reimbursement from an insurer?
File a claim for the vehicle
Provide proof of transportation expenses
Report the theft to the insurer
Report the theft to the police
M has a liability policy insuring M’s flower shop. After M sells the shop, the buyer asks if M can transfer the liability policy as part of the sale. Which provision prevents M from making this transfer without the insurer’s consent?
Subrogation
Assignment
Assumption of risk
Liberalization
Short-rate cancellation occurs when:
The insured cancels the policy mid-term
A policy is flat cancelled
The policy is non-renewed
An insurer cancels the policy mid-term
Under the Workers’ Compensation policy, the insurer may audit records pertaining to the policy for up to how many years after the policy period ends?
4
1
2
3
Which of the following are the Territorial Limits of the Personal Auto Policy?
The United States, its territories and possessions, Canada, and Mexico
The United States, Puerto Rico, Canada, and Mexico
The United States, Mexico, and Canada
The United States, its territories and possessions, Puerto Rico, and Canada
Which of the following is true about the Assigned Risk Plan?
It is intended for employers who are unable to purchase in the voluntary market
Insurers with income over $10 million can opt out of participating in the Plan
It is intended for employers who have high claims volume
Private insurers compete with the Assigned Risk Plan
Which of the following is true about the Assigned Risk Plan?
It is intended for employers who are unable to purchase in the voluntary market
Insurers with income over $10 million can opt out of participating in the Plan
It is intended for employers who have high claims volume
Private insurers compete with the Assigned Risk Plan
Which section of the Garage Coverage Form provides physical damage coverage for the insured’s covered autos?
Section IV
Section III
Section II
Section I
Which Business Auto Symbol is the most broad of all Symbols?
Symbol 3
Symbol 4
Symbol 1
Symbol 2
Producer B tells applicants that if they buy their insurance with the producer’s agency, the applicants will be refunded the first month’s premium. This is an example of which unfair trade practice?
Rebating
Coercion
Misrepresentation
Unfair Discrimination
Which type of cargo policy would cover a person who owns his/her own truck and hauls his/her own goods?
The Motor Truck Cargo Truckers Form Policy
A Bailee Policy
An Installation Floater Policy
The Motor Truck Cargo Owners Form
Which of the following is not true about the Home Business endorsement?
Professional services are excluded
Only property damage is covered
The business must be owned by the insured
Advertising injury is covered
Which of the following is not an element of negligence?
Duty owed
Proximate cause
Forseeable consequence
Assumption of risk
Which of the following is not an element of negligence?
Duty owed
Proximate cause
Forseeable consequence
Assumption of risk
Which of the following claims would be covered by Collision Coverage under Part D of the Personal Auto Policy?
Damage to the auto caused by collision with an animal on the roadway
Damage to the auto caused by objects blown into it during a severe windstorm or tornado
Breakage of the windshield caused by collision with a stone or other missile
Damage to the insured auto’s bumper when the auto crashed into a tree
All of the following are true of medical payments under the Commercial General Liability Coverage Forms, except:
Coverage applies to injuries that occur because of the insured’s operations
Coverage applies to the insured’s injuries
Coverage applies to expenses that are incurred and reported to the insurer within 1 year of the accident
Coverage applies to injuries that occur on the premises that the insured owns or rents
In order for a business entity to obtain a producer license, it must comply with which of the following requirements?
Ensure that all employees acting as producers are licensed as producers
Pay fees after submitting an application license to the Commissioner
Provide the name and address of the company’s clients
Only disclose the names of the company’s CEO
In order for a business entity to obtain a producer license, it must comply with which of the following requirements?
Ensure that all employees acting as producers are licensed as producers
Pay fees after submitting an application license to the Commissioner
Provide the name and address of the company’s clients
Only disclose the names of the company’s CEO
Which of the following coverage forms covers the cost of replacing or reproducing documents that are important for the continuation of business such as books, files, and maps?
Business Property Coverage Form
Valuable Papers and Records Coverage Form
Accounts Receivable Coverage Form
Commercial Articles Coverage Form
Choose the false statement about paying and sharing commissions:
An insurer must pay commissions for selling insurance to only licensed persons
Renewal commissions cannot be paid to a person who is no longer licensed on the renewal date
An unlicensed person cannot accept a commission for negotiating insurance
Commissions paid to producers are negotiated with the insurers that they represent
Choose the false statement about paying and sharing commissions:
An insurer must pay commissions for selling insurance to only licensed persons
Renewal commissions cannot be paid to a person who is no longer licensed on the renewal date
An unlicensed person cannot accept a commission for negotiating insurance
Commissions paid to producers are negotiated with the insurers that they represent
Under the property removed coverage extension of a Dwelling Policy, which of the following is incorrect?
The policy will not provide any coverage while insured property is being removed from endangered property
Coverage applies up to 5 days under the DP-1, and up to 30 days in the DP-2 and DP-3 forms
The property is covered against direct loss from any peril
The extension does not change the Limit of Liability that applies to the property
Choose the answer that is true regarding the HO-4 and HO-6.
Both provide open perils coverage on the personal property
Losses are paid on a replacement cost basis
The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the building itself
The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance
When a loss occurs as a result of two perils, one of which is excluded and the other of which is insured against, the situation is known as:
Concurrent Causation
Bilateral Causation
Supplemental Causation
Proximate Causation
An injury claim must be filed with the Workers’ Compensation insurer within __________ of the loss.
6 months
1 year
3 months
3 years
Which Ocean Marine insurance provision protects against direct damage caused by bursting of boilers?
Running Down Clause
Inchmaree Clause
Mechanical Failure Clause
Boiler & Machinery Clause
ABC Industries contracts with municipal governments to build bridges, viaducts, and similar engineering projects. If a bridge completed in the prior year by ABC Industries were to collapse, which kind of liability exposure would this be an example of?
Contingent liability
Completed operations
Premises and operations
Products
Which of the following statements regarding deductibles is true?
Deductibles tend to increase premiums
Deductibles help reduce the number of frivolous or small claims
Deductibles reduce the total amount of insurance available
Deductibles apply only to larger losses
Which of the following statements regarding deductibles is true?
Deductibles tend to increase premiums
Deductibles help reduce the number of frivolous or small claims
Deductibles reduce the total amount of insurance available
Deductibles apply only to larger losses
The following are all found on the Declarations page, except:
Location of the insured property
The policy exclusions
Amount of the deductible
Expiration date of the policy
In Arizona, a temporary insurance producer’s license issued upon the death of the original licensee is valid for how long before needing to be renewed?
180 days
90 days
365 days
270 days
Under the Basic Dwelling Form, when is damage caused by vandalism included as covered peril?
When under the unendorsed DP-1
This coverage is not available in the Basic Dwelling Policy
When the Extended Coverage perils are added to the DP-1
When the VMM Endorsement is added to the DP-1
Under the CGL, which of the following would exclude from coverage the legal liability associated with a product?
Negligence
Breach of warranty
Expected or intended injury
Strict liability
Which of the following best describes the Debris Removal coverage under the Homeowners policy?
The debris must be removed within 30 days of the loss
Coverage is limited to 10% of the Coverage A Limit
Debris Removal applies only to loss by fire, lightning, and windstorm
The policy will pay the insured for removing debris from a covered loss
In Arizona, the minimum limits of liability are ________.
50/100/25
25/50/25
30/60/25
25/50/15
If a licensee is called into active military service, they may request ___________ by sending a statement to the Department including their name, license number, and date the service begins.
Military leave
Voluntary surrender
Inactive status
Temporary leave
Which of the following is an insured under the CGL policy?
Spouse of volunteer worker
Trustee’s spouse
Spouse of a partner
Spouse of LLC members
The DP-3 insures personal property against the same perils as:
The DP-1 Personal Property Coverage
The DP-3 Dwelling coverage
The DP-2 Personal Property Coverage
The DP-1 Dwelling Coverage
The DP-3 insures personal property against the same perils as:
The DP-1 Personal Property Coverage
The DP-3 Dwelling coverage
The DP-2 Personal Property Coverage
The DP-1 Dwelling Coverage
Which of the following claims would be covered by the First Aid Expenses under the Homeowners Policy?
A member of the insured’s family is injured while on the premises
The named insured is injured while off the premises
Nonfamily residents of the household are injured while on the premises
A neighbor is injured while helping the insured install a carpet
If a producer in Arizona wants to send notices or written documents to an insured electronically, what should be the first step?
Stop sending notices in hard copy format
Receive consent from the insured
Charge the insured a fee for not using electronic communication
Notify the insured the date electronic communications will begin
In Arizona, Workers’ Compensation Disability benefits are payable retroactively to the day the injured employee left work if a disability is longer than how many days?
14
3
7
6
If an individual wants to transact business as an insurance producer, they must meet all of the following requirements, except:
Apply for a license within 2 years of passing the licensing exam
Be at least 18 years old
Not commit any act that is grounds for denial
Pay all required fees
In the state of Arizona, an insurer may use marital status to determine which of the following?
Policy terms
Dependent status
Premium rates
Insurance limitations
Which statement about insurance information and privacy protection is true?
An insurer may not investigate criminal or fraudulent activity
Personal information may be given to a third party at any time
An insurer must provide written privacy protection disclosures
Personal information may be disclosed over the telephone at any time
All of the following are true of the Dwelling Policy Broad Form, except:
Losses to the dwelling are paid on a replacement cost basis
The Broad Form automatically covers incidental business occupancies
The Broad Form covers dwellings located on farms
The dwelling and contents are covered for the Broad Form perils
All of the following are true of the Dwelling Policy Broad Form, except:
Losses to the dwelling are paid on a replacement cost basis
The Broad Form automatically covers incidental business occupancies
The Broad Form covers dwellings located on farms
The dwelling and contents are covered for the Broad Form perils
Which state plan provides coverage to employers who cannot obtain insurance in the normal market?
Arizona Workers’ Compensation Fund
Workers’ Compensation Insurance Plan
Industrial Commission
Assigned Risk Plan
Which state plan provides coverage to employers who cannot obtain insurance in the normal market?
Arizona Workers’ Compensation Fund
Workers’ Compensation Insurance Plan
Industrial Commission
Assigned Risk Plan
By Arizona insurance law, what is the maximum amount an insurer may pay for an individual reasonable incentive before it is considered a prohibited inducement?
$200
$100
$50
$150
Which of the following statements regarding using an assumed business name is not correct?
A producer may use an assumed name at any time
The Director may deny the use of an assumed name
An assumed business name may not be misleading or deceptive
A trade name must be legally registered
An insurer discontinued a policies that had been posted online. How long must the insurer allow the information for the policy to remain accessible?
2 years
1 year
5 years
3 years
For auto insurance, a ___-day written notice of cancellation or nonrenewal must be provided to the insured.
14
21
7
10
In Arizona, if an insured misses a payment on their personal auto policy, how long do they have to pay the premium before the policy is cancelled?
21 days
10 days
5 days
7 days
In Arizona, if an insured misses a payment on their personal auto policy, how long do they have to pay the premium before the policy is cancelled?
21 days
10 days
5 days
7 days
A policy cannot be issued in Arizona without identifying the name of the producer. Which of the following is a policy that is exempt from this rule?
Liability insurance
Policies issued by a vending machine
Policies issued through producers who receive commission
Life insurance
Which of the following statements is true regarding insurance vending machines?
The vending machine must display the insurer’s information but not the producer’s
Insurance vending machines may have insurance from unauthorized insurers
Once granted, the authority to issue insurance via vending machine does not expire
The Director must find the policy suitable for vending machines or it may not be solicited
Under the AZ Miscellaneous Type Vehicle endorsements, all of the following coverages can be added by endorsement, except:
Golf carts
Motor boats
Dune buggies
Motorhomes
Which of the following is a true statement about the Arizona uninsured/underinsured motorist coverage?
A volunteer worker’s injuries from an uninsured driver are excluded
Underinsured motorist coverage applies if the insurer for the negligent party is insolvent
If more than one policy applies to the same accident, the coverage will be proportionate based on the limits of liability
Uninsured motorist coverage can be rejected by the insured
A notice of information practices is not required in which of the following situations?
Insurance benefits change
Paying a premium installment to the producer
Policy is reinstated
Receiving a renewal policy
If a premium payment is sent through certified mail, which of the following is considered the date of payment?
5 days before the insurer receives the payment
The date the insurer receives the payment
The date shown on the postmark
The date the mail is issued for delivery
Choose the true statement regarding the National Flood Insurance Program.
The federal government oversees and reinsures all flood insurance
Coverage includes trees, shrubs, and plants
Agents may bind flood insurance for up to 15 days prior to submitting the final application
Flood policies are available only from the National Flood Insurance Program
Coverage is open peril on the Jewelers Block Floater but there is no coverage for ___________ unless added as an optional coverage.
Loss of market
Broken or smashed show windows
Wear and tear
Off-hours
Which of the following prevents all recovery for injuries if the claimant was also considered partially negligent?
Contributory negligence
Vicarious negligence
Proximate negligence
Comparative negligence
Which of the following prevents all recovery for injuries if the claimant was also considered partially negligent?
Contributory negligence
Vicarious negligence
Proximate negligence
Comparative negligence
Which of the following best describes the reason to purchase an HO-8?
When insuring homes with a replacement cost exceeding $250,000
When insuring an older home that might create a moral hazard when insurance is written at replacement cost
When insuring homes namely located on farms
When looking for a policy that covers the dwelling on an ACV basis
Which is true of the Dwelling Policy Special Form?
The form will cover the theft of contents
The form will cover the cracking of walls
Losses to the dwelling are paid on an actual cash value basis
Contents are covered on an actual cash value basis
