PSI Premium Property

Question 1

What is an example of replacement cost valuation?

Answer 1

Fair market value of item at time of loss

Question 2

True or False: Lightning is covered under a DP-1 form without extended coverage.

Answer 2

True - Without endorsement DP-1 only insures against perils of fire, lightning and internal explosion.

Question 3

What principle holds that the insurer relies on the truthfulness of the applicant and in return promises to pay claims?

Answer 3

Good faith

Question 4

What is not found on the declarations page?

Answer 4

Policy exclusions

Question 5

Under flood insurance program, how long till coverage becomes effective?

Answer 5

30th Day

Question 6

What is the standard limit for Coverage-D Fair Rental Value on dwelling policy forms?

Answer 6

20% or .2

Question 7

What is the property valuation method of paying the full policy amount listed on the dec page regardless of the ACV?

Answer 7

Valued policy

Question 8

What is the waiting period included in the definition of period of restoration in the business income coverage form?

Answer 8

72 hours

Question 9

What is the standard amount of Coverage A - Dwelling provided by the HO-6 unit-owners policy?

Answer 9

$1000

Question 10

Under a farm policy is voluntary parting with property a covered cause of loss under a special form?

Answer 10

Yes - often by trickery is covered under the special form where livestock is under a broad form.

Question 11

What is the valuation basis for Coverage B - BPP under the businessowners policy?

Answer 11

Replacement Cost

Question 12

True or False: Modern construction is subject to functional replacement cost.

Answer 12

False - Easy to determine by replacement cost.

Question 13

Coverage F - Medical payment to others includes coverage for what?

Answer 13

Dental Services

Question 14

What type of insurance do insurers use to transfer risk among themselves?

Answer 14

Reinsurance

Question 15

True or False: Grave markers are covered for named perils under Coverage B.

Answer 15

False

Question 16

True or False: After a car crash you have to rent a replacement vehicle is a direct loss.

Answer 16

True - they are physical losses to property by perils that result in damage.

Question 17

What should the insured do following a loss for most property insurance contracts?

Answer 17

PPC / MSC = Prompt, protect complete & make submit cooperate.

Question 18

What part of a legal contract refers to an exchange of value?

Answer 18

Consideration

Question 19

True or False: Homeowners Coverage E - Personal Liability applies to liability or property arising from acreage the insured is renting for cash crop farming.

Answer 19

False

Question 20

True or False: Choosing a $1000 deductible is an example of risk retention.

Answer 20

True - Involves the insured personally assuming all or a portion of a loss.

Question 21

The property coverage of a BOP includes what?

Answer 21

Carpeting that is permanently installed

Question 22

True or False: Less depreciation losses are settled on an actual cash value basis?

Answer 22

True - Defined as ACV minus depreciation.

Question 23

As a general rule inland marine insurance doesn’t cover what?

Answer 23

Merchandise that is being manufactured.

Question 24

Which of the following HO forms provide the most comprehensive coverage?

Answer 24

HO-5 - Coverages on A, B, C and D are insured on special form open perils unless excluded.

Question 25

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

Answer 25

$1500

Question 26

What characterizes a policy requiring a deductible for a loss?

Answer 26

Risk sharing

Question 27

What is the chance or uncertainty of loss?

Answer 27

Risk

Question 28

Policy A covers a building for $50k. Policy B covers for $100k. If Company A pays $3k and Company B $6k what is the principle of indemnity for this action?

Answer 28

Pro Rata

Question 29

Under a CPP policy the common policy dec page shows the who, what, when, where and ?

Answer 29

How much

Question 30

True or False: A lightning strike on a home's chimney is a covered loss for Coverage A Dwelling?

Answer 30

True - Coverage A applies only to the dwelling itself.

Question 31

Who may bring a civil action in the United States district court against any person engaging in conduct constituting an offense?

Answer 31

The Attorney General

Question 32

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

Answer 32

Coverage C

Question 33

Under the Fair Credit Reporting act a licensee must give notice no later than how many days after a request?

Answer 33

3 Days

Question 34

True or False: Under the equipment breakdown coverage damage to a vacuum tube, glass tube or brush is covered.

Answer 34

False since glass is fragile

Question 35

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

Answer 35

Indirect loss

Question 36

What is a criteria to determine an insurable risk?

Answer 36

Calculable loss

Question 37

What type of authority is in writing and allows a producer to act on behalf of the insurer?

Answer 37

Express

Question 38

What is the difference between misrepresentation and fraud?

Answer 38

Misrepresentation is a representation that is actually false, but fraud is an intentional act designed to deceive.

Question 39

Who is not authorized to transact insurance in a state?

Answer 39

Non-admitted insurer

Question 40

What is the valuation basis for Coverage B - BPP under the business owners policy?

Answer 40

Replacement Cost

Question 41

A morale hazard is an example of what?

Answer 41

Indifference to loss

Question 42

True or False: A personal injury endorsement added to a HO Policy providies coverage for intermittently enterting his tenant's apt which violates the lease.

Answer 42

True - Covers injuries from false arrest, libel, slander, defamation of character and invasion of privacy.

Question 43

What does an application for insurance by the insured contractually represent?

Answer 43

An offer

Question 44

What is excluded as a covered loss under the DP-3 coverage?

Answer 44

Damage by ice to outdoor radio and television antennas and aerials.

Question 45

Why is the insuring agreement the heart of an insurance policy?

Answer 45

It describes property for covered and perils insured.

Question 46

What is a type of personal property is not covered under Coverage C of personal property?

Answer 46

Motor Vehicles

Question 47

Insurance contracts are what type of contracts?

Answer 47

Unilateral

Question 48

What forms the basis of a loss under an insurance policy?

Answer 48

Loss

Question 49

What is the waiting period for restoration in the business income form?

Answer 49

72 hours

Question 50

What policy condition states the terms under which property losses are settled?

Answer 50

Loss Settlement

Question 51

What is not a covered cause of loss under the HO-2 Broad Form coverage?

Answer 51

Discharge or overflow of water from a sump

Question 52

True or False: Breakage of glass is covered by the HO-2 Broad form coverage?

Answer 52

True - Includes breakage of glass or safety glazing materials.

Question 53

The causes of loss form lists what?

Answer 53

Perils the property is insured against

Question 54

What is the maximum amount reimbursable for tree debris removal for one occurrence under all homeowner forms?

Answer 54

$1000

Question 55

Who is the principle in a bond arrangement?

Answer 55

Person needing the bond

Question 56

Who is the oblige in a bond arrangement?

Answer 56

Entity requiring a bond

Question 57

What is required to get flood insurance certification?

Answer 57

A one time 3-hour course.

Question 58

On Farm Property what is Schedule E cover?

Answer 58

Scheduled Farm Personal Property - Does not provide coverage for growing crops, trees or personal property

Question 59

On Farm Property what is Schedule F cover

Answer 59

Unscheduled Farm Personal Property - Subject to 80% Coinsurance and up to $100k

Question 60

On Farm Property what is Schedule G cover?

Answer 60

Barns, outbuildings and other farm structures - Silos, farm buildings, fences, building materials, television antennas

Question 61

On Farm Property what is Schedule A cover?

Answer 61

Dwellings - Limit of $1,000 in any one occurrence

Question 62

On Farm Property what is Schedule B cover?

Answer 62

Other private structures - Automatic 10% limit of Coverage A as an additional limit of insurance

Question 63

On Farm Property what is Schedule D cover?

Answer 63

Loss of use - Includes the fair rental value in the even the dwelling becomes uninhabitable

Question 64

What is the livestock coverage form based upon?

Answer 64

Named peril coverage by basic causes of loss except vehicles.

Question 65

What is custom farming?

Answer 65

Specific planting or cultivating operations

Question 66

What farm forms are set up on basic causes of loss?

Answer 66

Coverages E & F

Question 67

What does farm broad form of loss include?

Answer 67

Electrocution of livestock, attack by dogs, accidental shooting, drowning of livestock

Question 68

What does special form farm loss include?

Answer 68

Open peril exclusions except for fire

Question 69

On a farm policy what happens to coverage if building/structure is left vacant or unoccupied for more than 120 consecutive days?

Answer 69

Limits of insurance are reduced by 50%

Question 70

What are farm property coverage exclusions?

Answer 70

Earth movement, flood, power failure off premise

Question 71

Why was the National Flood Insurance Program created?

Answer 71

To combat rising cost of taxpayer funded disaster relief for flood victims.

Question 72

Which valuation method is used by the insurer to specify value of a property before it is issued?

Answer 72

Agreed value

Question 73

What does inland marine insurance not cover?

Answer 73

Merchandise while being manufactured

Question 74

What policy condition states the terms under how covered property losses are settled?

Answer 74

Loss settlement

Question 75

What defines the term peril?

Answer 75

Cause of loss

Question 76

What authority is NOT written and allows a producer to conduct the business of the insurer?

Answer 76

Implied

Question 77

A BOP policy has two separate Aggregate limits. How many times the limit shown in the declarations for liability and medical are these?

Answer 77

Two Times

Question 78

What is a type of personal property not covered under Coverage C?

Answer 78

Motor Vehicles

Question 79

Which homeowner form provides the most comprehensive coverage?

Answer 79

HO-5

Question 80

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

Answer 80

Coverage B

Question 81

Under a farm policy what is a covered loss that is covered under special form?

Answer 81

Voluntary parting with property

Question 82

Determining adequate indemnification after a loss is a principle duty of the who?

Answer 82

Insurer

Question 83

Coverage F - Medical Payments to Others includes coverage for what?

Answer 83

Dental Services

Question 84

What defines the chance or uncertainty of a loss?

Answer 84

Risk

Question 85

Which type of a hazard is a person who intentionally increases the chance of loss?

Answer 85

Morale Hazard - involves the attitude of the insured

Question 86

What describes an insurers status that meets the insurance department's standards and is authorized to do business in the state?

Answer 86

Admitted

Question 87

What is the purpose of a homeowner's policy?

Answer 87

A package policy that reduces the need for multiple policies.

Question 88

What is a type of insurance the government may step in to provide that is NOT readily available from private insurers?

Answer 88

Residual Market - means remaining after & flood insurance is an example.

Question 89

What is something covered under a commercial articles floater?

Answer 89

Theft

Question 90

The BOP policy covers the medical expenses for what?

Answer 90

Anyone without regard to who is at fault

Question 91

Which type of authority holds that a producer may have whatever authority a reasonable person would assume the producer has?

Answer 91

Apparent

Question 92

Under the equipment breakdown coverage form, what does the term breakdown NOT cover?

Answer 92

Damage to any vacuum tube or brush

Question 93

What is included under the equipment breakdown coverage form?

Answer 93

Failure of pressure or vacuum equipment Electrical Failure Mechanical Failure

Question 94

True or False: A mobile home can be insured with a HO-8 modified coverage form?

Answer 94

False - Only under an HO-2 or HO-3

Question 95

Which type of insurer is a unincorporated group of people agreeing to insure each other's losses under a contract?

Answer 95

Reciprocal