PSI Practice Tests Flashcards
What defines a loss which is consequential and comes as a result of an original loss?
Indirect Loss
True or False: Damage caused by acts of civil disobedience and riots is a common exclusion in a personal auto liability policy?
False
True or False: A warranty is part of a policy and can void the policy if breached whether the breach was intentional or unintentional.
True
What type of insurer is owned by policyholders?
Mutual Companies
What form triggers coverage for a loss under the GL Policy if a loss happens during the policy period?
Occurrence Form
Misrepresentation may void an insurance policy only if it involves what?
A material fact
What is the principle coverage provided under the HO-4 policy?
Coverage C
A woman slips on icy steps and breaks her leg. What is the peril in this situation?
The fall - cause of loss
True or False: Under the GL policy cost of bail bonds is a supplementary payment?
True - up to $250
True or False: A denial of the validity of the claim in the court of law is an established defense against negligence.
False
A single earthquake constitutes all shocks that occur within which time period
168 Hours - 7 Days
What does Symbol 7 reflect on the auto declarations page?
Specific Autos
What bond should you purchase to protect against dishonest acts from employees?
Fidelity Bond.
True or False: For towing and labor costs on the personal auto policy labor costs performed at the shop are limited to $25.
False - Only for the labor performed where the vehicle broke down.
What valuation policy is used to specify property value before the policy is issued?
Agreed Value
Who chooses the TRUE stated value of a property
The insured
When one party of a contract has greater power over the other party in drafting of the contract what type is it?
Contract of adhesion - The other party must adhere to it as written.
Which insurance contract states that when a loss occurs the insured should be restored to the financial condition before the loss?
Contract of indemnity
True or False: Storing your motorcycle outside is pure risk?
True - Pure risk is one which there is only the chance of loss or no loss without gain.
Who is covered for medical reimbursement under the GL policy?
Customers of the insured
A person who intentionally defrauds an insurer to gain from a claim is what type of hazard?
Moral Hazard
What is the special limit of coverage on a HO policy form for property damage to personal watercraft
$1500
What type of coverage is appropriate for a detached garage in a DP-1 policy?
Coverage B
The dec page shows the who, what, when, where and ?
How much
What principle holds that the insurer relies on the truthfullness of the applicant and in return, promises and has the ability to pay claims?
Good faith.
True or False: Antique construction is subject to functional replacement cost?
False
Which provision applies when the policy term ends and either the insured or the insurer wants to discontinue coverage?
Non-Renewal
What is not a method of limiting liability?
Collective limits
Which type of insurance organization returns profits to the insureds in form of dividends?
Mutual
Under a HO policy what is the correct timeframe for earthquake shocks to be considered as a single event?
72 hours
True or False: Mental anguish is not considered special damages.
True
In an insurance policy where are the terms and phrases to describe the extent of coverage?
Definitions
What is the purpose of a commercial package policy?
Repetitive information is eliminated
