PSI Practice Tests

Question 1

What defines a loss which is consequential and comes as a result of an original loss?

Answer 1

Indirect Loss

Question 2

True or False: Damage caused by acts of civil disobedience and riots is a common exclusion in a personal auto liability policy?

Answer 2

False

Question 3

True or False: A warranty is part of a policy and can void the policy if breached whether the breach was intentional or unintentional.

Answer 3

True

Question 4

What type of insurer is owned by policyholders?

Answer 4

Mutual Companies

Question 5

What form triggers coverage for a loss under the GL Policy if a loss happens during the policy period?

Answer 5

Occurrence Form

Question 6

Misrepresentation may void an insurance policy only if it involves what?

Answer 6

A material fact

Question 7

What is the principle coverage provided under the HO-4 policy?

Answer 7

Coverage C

Question 8

A woman slips on icy steps and breaks her leg. What is the peril in this situation?

Answer 8

The fall - cause of loss

Question 9

True or False: Under the GL policy cost of bail bonds is a supplementary payment?

Answer 9

True - up to $250

Question 10

True or False: A denial of the validity of the claim in the court of law is an established defense against negligence.

Answer 10

False

Question 11

A single earthquake constitutes all shocks that occur within which time period

Answer 11

168 Hours - 7 Days

Question 12

What does Symbol 7 reflect on the auto declarations page?

Answer 12

Specific Autos

Question 13

What bond should you purchase to protect against dishonest acts from employees?

Answer 13

Fidelity Bond.

Question 14

True or False: For towing and labor costs on the personal auto policy labor costs performed at the shop are limited to $25.

Answer 14

False - Only for the labor performed where the vehicle broke down.

Question 15

What valuation policy is used to specify property value before the policy is issued?

Answer 15

Agreed Value

Question 16

Who chooses the TRUE stated value of a property

Answer 16

The insured

Question 17

When one party of a contract has greater power over the other party in drafting of the contract what type is it?

Answer 17

Contract of adhesion - The other party must adhere to it as written.

Question 18

Which insurance contract states that when a loss occurs the insured should be restored to the financial condition before the loss?

Answer 18

Contract of indemnity

Question 19

True or False: Storing your motorcycle outside is pure risk?

Answer 19

True - Pure risk is one which there is only the chance of loss or no loss without gain.

Question 20

Who is covered for medical reimbursement under the GL policy?

Answer 20

Customers of the insured

Question 21

A person who intentionally defrauds an insurer to gain from a claim is what type of hazard?

Answer 21

Moral Hazard

Question 22

What is the special limit of coverage on a HO policy form for property damage to personal watercraft

Answer 22

$1500

Question 23

What type of coverage is appropriate for a detached garage in a DP-1 policy?

Answer 23

Coverage B

Question 24

The dec page shows the who, what, when, where and ?

Answer 24

How much

Question 25

What principle holds that the insurer relies on the truthfullness of the applicant and in return, promises and has the ability to pay claims?

Answer 25

Good faith.

Question 26

True or False: Antique construction is subject to functional replacement cost?

Answer 26

False

Question 27

Which provision applies when the policy term ends and either the insured or the insurer wants to discontinue coverage?

Answer 27

Non-Renewal

Question 28

What is not a method of limiting liability?

Answer 28

Collective limits

Question 29

Which type of insurance organization returns profits to the insureds in form of dividends?

Answer 29

Mutual

Question 30

Under a HO policy what is the correct timeframe for earthquake shocks to be considered as a single event?

Answer 30

72 hours

Question 31

True or False: Mental anguish is not considered special damages.

Answer 31

True

Question 32

In an insurance policy where are the terms and phrases to describe the extent of coverage?

Answer 32

Definitions

Question 33

What is the purpose of a commercial package policy?

Answer 33

Repetitive information is eliminated