Section 6

Question 0

Which of the following may be covered under the physical damage insuring agreement of a personal auto policy?

1. Loss of a cd played installed in the vehicle dashboard
2. Damage to the vehicle caused by an engine failure
3. Theft of a CB radio
4. All are covered

Answer 0

Loss of a cd played installed in the vehicle dashboard

Equipment installed become part of the audio

Question 1

The collision coverage of a personal auto policy does not cover the following loss situations, Except:

1. Large limb and branches of a tree that have fallen into the street as a result of a windstorm. The insured collides with them
2. Flood water that damage the insured vehicle
3. A dog belong to the neighbor is insured when the insured unintentionally strikes the dog when it runs into the street in front of the insured while he is driving the insured vehicle
4. These are all included under the collision coverage section of PAP

Answer 1

Large limb and branches of a tree that have fallen into the street as a result of a windstorm. The insured collides with them

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Question 2

Which of the following coverages may you buy with a named-operator policy? @

1. Liability only
2. Liability, uninsured motorist, medical payments, collision, and other than collision
3. Liability and uninsured motorist
4. Liability, uninsured motorist, and medical payments

Answer 2

Liability, uninsured motorist, medical payments, collision, and other than collision

Named operator or named insured, may purchase a,b,c & d

Question 3

To be covered for a hit and run accident under the uninsured motorist property damage coverage of a PAP, what is required to be provided to the insurer?

1. License number of the hit and run vehicle
2. Photographs identifying the hit and run vehicle
3. Testimony of an eyewitness to the accident
4. Legal affidavit describing the accident

Answer 3

License number of the hit and run vehicle

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Question 4

The PAP collision deductible is $1000, and the other-than-collision deductible is $550. How much would the insurer pay for an accident involving the overturn of one vehicle, resulting in $2000 of damages?

1. $1000
2. $0
3. $3000
4. $1,500

Answer 4

$1000

Overturn is part of collision and upset coverage

Question 5

Car “a” is in an accident with car “b”. “A” suffers $10,000 of damage but it is determined that “a” is 25% responsible for the accident. How much would “a”
Receive under comparative negligence rules?

1. $7500
2. $10000
3. $0
4. $2,500

Answer 5

$7500

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Question 6

Under California financial responsibility for each accident that involve serval people injured in one accident:

1. $10000
2. $15000
3. $5000
4. $30000

Answer 6

$30000

minimum requirement is $30000 per occurrence. Minimum bodily injury per person is $15000

Question 7

When an automobile insurance policy is canceled at the request of the insured, and the insurance company keeps all earned premiums, in addition to an amount to pay for overhead expense incurred by the insurer, it is referred to as what type of cancelation?

1. The flat rate type of cancelation
2. The short rate type of cancelation
3. The pro-rata type of cancelation
4. It is none of these

Answer 7

The short rate type of cancelation

Definition. Pro-rata requires a refund of all unearned premium upon cancellation. Flat rate is rescission or cancellation of policy and required 100% of the premium returned

Question 8

Which of the following coverages may you buy with a named non-owner liability policy? @

1. Liability, uninsured motorist, medical payments, collision, and other-than-collision
2. Liability, medical payments, and uninsured motorist
3. Liability and uninsured motorist
4. Liability only

Answer 8

Liability, medical payments, and uninsured motorist

If you only drive or borrowed or rented autos, physical damage (collision) is not usually available

Question 9

What coverage is available under the extended non-owned liability coverage?

1. Liability only
2. Liability and medical payment
3. Liability and physical damage
4. Liability, medical payments, and uninsured motorist

Answer 9

Liability and medical payment

Extended non-owned liability coverage- company car is provided for personal or regular use

Question 10

An insured has a personal auto policy and did not pay the initial insurance premium when it was due. Insurer cancels the policy for non-payment. How many days notice must the insurer give?

1. 20 days
2. 10 days
3. 15 days
4. 5 days

Answer 10

10 days

Cancellation for non payment of premium is 10 days notice

Question 11

What coverages is available under the miscellaneous type vehicle endorsement?

1. All coverage under the personal auto policy
2. Physical damage only
3. Liability and Physical damage only
4. Liability only

Answer 11

All coverage under the personal auto policy

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Question 12

If an insured purchase an all-terrain vehicle (ATV), what endorsement can be added to the personal auto policy to insure the vehicle?

1. Miscellaneous type vehicle endorsement
2. ATV endorsement
3. Recreational vehicle endorsement
4. There is no endorsement available for this exposure

Answer 12

Miscellaneous type vehicle endorsement

The endorsement can cover recreational vehicle like ATVs

Question 13

In the event of recovery of stolen property, which of the following is an insurer’a option when making a settlement with the insured under a personal auto policy?

1. Have the insured purchaser place the auto at an auto auction
2. Demand that the insured first attempted to settle with the responsible party
3. Instruct the insured to repair the vehicle at a designated shop
4. Return stolen property to the address shown in the policy

Answer 13

Return stolen property to the address shown in the policy

Insurer, after payment, may give insured a choice of money or property

Question 14

The personal auto policy towing and labor endorsement pay for

1. Towing and labor charges up to $1000 per year
2. The cost of towing the disable car to the garage, and up two hours of labor expenses at the garage
3. The cost of labor only if the labor is performed at the place of disablement

Answer 14

The cost of labor only if the labor is performed at the place of disablement

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Question 15

Which of the following losses would be covered under dicks personal auto policy other-than-collision coverage? @

1. Someone shoots dicks car rear window while the car is parked on the street overnight
2. Dicks suitcase is stolen from his car while the car is parked at the airport
3. The sides and top of dicks car are damaged when it rolls over on an icy curve
4. Dick locks his keys in the car, and then breaks a window to gain quick access

Answer 15

Someone shoots dicks car rear window while the car is parked on the street overnight

Other-than-collision covers any damage to the vehicle that is not considered a collision loss and that is not excluded by the policy

Question 16

In the business of insurance, the act if concealment is defined by all the following statements, except:

1. Concealment can be intentional
2. Concealment can be unintentional
3. Concealment is grounds for declination by the insurer
4. Concealment does not occur if no inquiry is made

Answer 16

Concealment does not occur if no inquiry is made

Concealment is the intention to withhold or secrete material information-whether an inquiry is made or not

Question 17

Where would an insured, that is in the business of importing exotic animals from Africa, most likely go to obtain insurance coverage?

1. Alien insurer
2. Excess and surplus lines insurer
3. Foreign insurer
4. State competition fund

Answer 17

Excess and surplus lines insurer

Imports and exports are a type of risk a surplus lines broker would handle

Question 18

What else must an applicant for a fire and casualty license, life agent license, or personal lines agent license complete, in addition to pre-licensing classroom study?

1. A sales training course provided by the insurance department
2. A contract law course at any approved college location
3. A diversity awareness course provided by the states of CA
4. A 12-hour course on ethics and the CA code

Answer 18

A 12-hour course on ethics and the CA code

This 12 hour course is added to the 40-hour course for life or fire & casualty, or 20-hour course for personal lines, accident & health or limited automobile agents license needed
P

Question 19

When is a Property and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a personal auto policy?

1. At the time of application
2. At renewal
3. At proposal
4. At policy delivery

Answer 19

At the time of application

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Question 20

The state law that regulates insurer practices regarding underwriting, sales, rate-marking, and claims handling are called:

1. Market conduct regulation
2. Insurer policing
3. Ethical standards surveillance
4. Standard regulation

Answer 20

Market conduct regulation

The market conduct bureau conducts
Examinations of California licensed insurers claims-practices

Question 21

It is a violation of the CA insurance code to act as a producer for a non-admitted carrier unless:

1. It is always a violation, no matter what type of producer
2. The producer is a surplus lines
   Broker
3. The producer is an insurance solicitor
4. The producer is duality licensed in at least two states

Answer 21

The producer is a surplus lines
Broker

Unless a person is licensed as a surplus lines broker, they may not transact any insurance on property located, or operation conducted, or on the lives of residents within the state of California with non-admitted insurers

Question 22

Where do most states require insurers to file policy forms?

1. The federal government insurance regulatory committee
2. The independent insurance association of America
3. The insurance department
4. The insurance services office

Answer 22

The insurance department

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Question 23

What must an insurer do who accepts an application from an agent who is not specifically appointed by the insurer, and then issues a policy from that application?

1. Forward to the commissioner a notice of appointment within 14 days of receipt of application
2. Send the agent the appointment approval within 30 days of policy issuance
3. The agent must become an employee of the company within 30 days of receiving application
4. Name the agent to the list of company’s approval agents

Answer 23

Forward to the commissioner a notice of appointment within 14 days of receipt of application

Facts

Question 24

In the state of CA, no rate will remain in effect if it is considered to be any of the following, except:

1. Inadequate
2. Unfairly discriminatory
3. Impartial
4. Excessive

Answer 24

Impartial

Ca. Department if insurance regulates policy rates to ensure fair, reasonable, and not discriminatory rates

Question 25

A representation in an insurance contract qualifies as which of the following?

1. An implied warranty
2. An amendment
3. An express warranty
4. A policy provision

Answer 25

An implied warranty

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Question 26

What is required of a broker-agent before appointing an insurance solicitor?

1. Must hold a notice of appointment
2. Must hold a permanent license
3. Must hold a certificate of insurance
4. Must be a domestic insurer

Answer 26

Must hold a permanent license

Insurance solicitor is hired by either agents or brokers, and they must have a license before they can appoint anyone

Question 27

Company that negotiates and binds ceding reinsurance on behalf of an insurer is considered:

1. An insurance specialist
2. A third-party administrator
3. A managing general agent
4. An insurance solicitor

Answer 27

A managing general agent

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Question 28

Insurers may purchase reinsurance for a variety of reasons. Which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance:

1. For the protection from catastrophic exposures, such as hurricanes or earthquakes
2. To more safety insure an exceptionally large account
3. To avoid capacity problems by reducing the amount of unearned premium
4. Only on the below average business submitted to them, keeping the good business for themselves

Answer 28

Only on the below average business submitted to them, keeping the good business for themselves

The purpose of reinsurance is to prevent insolvency, not to provide business advantages

Question 29

Any person who makes a loan of money using real property as security:

1. There are no current laws regarding lenders disclosing borrower’s information in California
2. Shall not make available the information contained in a borrower’s fire or casualty policy if the borrower has filed a statement with the lender that they do not want the lender to disclose this information
3. Shall be allowed to make available the information contained in a fire or casualty insurance policy for the purpose of soliciting either fire or casualty insurance only
4. Can give out any borrowers information to a solicitor if the lender discloses its practices to the borrower at the time the loan is made

Answer 29

Shall not make available the information contained in a borrower’s fire or casualty policy if the borrower has filed a statement with the lender that they do not want the lender to disclose this information

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Question 30

If an insurer pays an insurer $25000 in lost wages, $45000 for physicians visits and hospital costs, and $15000 for physical therapy treatments, and later finds out that the claim was fraudulent, the insured may be fined as much as:

1. $170000
2. $60000
3. $85000
4. $150000

Answer 30

$170000

Punishable by up to $150000 or double the value of the fraud whichever is greater

Question 31

Which of the following insurance professionals would be employed to aid an insurance broker?

1. Insurance adjustor
2. Managing general agent
3. Underwriter
4. Insurance solicitor

Answer 31

Insurance solicitor

A solicitor is an insurance salesperson who contacts potential customers and handles clerical responsibilities, but has no authority to execute insurance contracts

Question 32

The types of transactions and insurers that a surplus lines broker is involved with is/are:

1. Admitted insurers, liability insurances only
2. Admitted insurers, property insurance only
3. Non-admitted insurers, life and disability insurers
4. Non-admitted insurers, property and casualty insurance

Answer 32

Non-admitted insurers, property and casualty insurance

Fact

Question 33

How is an admitted insurer defined according to the California DOI?

1. It is incorporated under the laws of any other jurisdiction other than state of California
2. It is organized and chartered according to and under the laws of the state of California
3. It transacts insurance business in all states
4. It transacts insurance according to the laws of the state of California

Answer 33

It transacts insurance according to the laws of the state of California

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Question 34

All licensees must be appointed by the insurance companies they represent in order to sell the lines of insurance that a particular insurer may offer. Assuming that a licensed fire and casualty broker/agent has received the proper appointments, what type or types of insurance, from the following list, may this individual sell?

1. Property and disability insurance
2. Auto insurance only
3. Auto and disability insurance only
4. Auto, property insurance

Answer 34

Auto, property insurance

Fact

Question 35

The insurance code definition of an “insurance broker” is:

1. Any agent that writes more difficult to place business with the specialty insurers who have appointed him/her
2. Someone employed by a fire and casualty broker-agent, receiving commissions from the employer transacting insurance with the insurers employer represents, and acting on behalf of clients
3. Someone paid to transact insurance on behalf of another person, but not on behalf of the insurer
4. Someone appointed to transact insurance with admitted insurers, and receiving commissions from them, but acts on behalf of the clients

Answer 35

Someone paid to transact insurance on behalf of another person, but not on behalf of the insurer

Test question

Question 36

Under which of the following circumstances can the insurance commissioner deny the applicants on for an agents license without a hearing?

1. The applicant has previously been engaged in a fraudulent activity involving insurance sales
2. The applicant has had a license application denied for cause within past five year
3. The applicant has failed to pass the licensing exam three times in the last two years
4. The applicant has no previous experience in the insurance business

Answer 36

The applicant has had a license application denied for cause within past five year

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Question 37

It is vital that an insurance agent/broker fully assess, analyze, and review a particular risk in order to determine the proper insurance coverage needed. The least likely way to do this is to:

1. Examine published risk date associated with the type of business I question
2. Tour the business facility to watch operational procedures and processes, as well as talk to key people within organization about the company and how it operates
3. Review all coverages in their current insurance contracts as well as the premiums paid
4. Complete a questionnaire for the risk classification & then meet with key people in organization

Answer 37

Review all coverages in their current insurance contracts as well as the premiums paid

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Question 38

If an insured signs a claim form for a claim which is fraudulent, the insured may be guilty of:

1. Misrepresentation
2. Perjury
3. Nothing, if the claim is never paid
4. Obstruction of justice

Answer 38

Perjury

Means lying under oath

Question 39

Which of the following best defines binder?

1. A contract that is temporary, only oral, between the insurer and the insured
2. A contract of insurance that is temporary, either oral or in writing, between insured and soliciting agent
3. A contract of insurance that is temporary only in writing between the insured and insurer
4. A contract of insurance, that is temporary either oral or in writing between the insured or insurer

Answer 39

A contract of insurance that is temporary only in writing between the insured and insurer

A binder must be in writing and considered a temporary contract

Question 40

Max’s personal auto Policy (pap) has liability and collision coverage. His neighbors car has liability coverage only. Max borrows his neighbors car to go to the store and has an accident that is his fault. He damages his neighbors car and another car. Maxs pap provides:

1. Liability coverage that is excess if his neighbors liability coverage. His collision coverage also applies, but on a primary basis
2. Collision coverage because neighbor does not have this coverage. Liability coverage does not apply
3. Collision and liability coverages on a primary basis
4. Liability coverage that is excess his neighbors liability coverage. The collision coverage does not apply

Answer 40

Liability coverage that is excess if his neighbors liability coverage. His collision coverage also applies, but on a primary basis

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Question 41

A Personal auto policy (pap) insured’s car was a total loss when the car was stolen and wrecked. The insured has the following coverages: liability, medial payments, and “other-than-collision.” Her pap:

1. Liability coverage will pay for the loss
2. Medical payments will pay for hy loss
3. Will not pay for this loss-no coverage
4. “Other-than-collision” will pay for the loss

Answer 41

“Other-than-collision” will pay for the loss

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Question 42

The collision coverage of a personal auto policy covers:

1. A desert sand storm pitting the car windshield
2. A vandal making a deep scratch on the car with a screwdriver
3. Collision coverage does not cover any of these losses
4. Damage caused by the insured, driving into a fallen trees, that fell during a storm

Answer 42

Damage caused by the insured, driving into a fallen trees, that fell during a storm

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Question 43

Which of the following losses is not covered by either the personal auto policy collision other-than-collision coverage?

1. Davids car is washed away during a flood
2. Davids car is severely damaged by a storm when a sign is blown off the roof of a building, hitting his car
3. David leaves his personal (non business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen in his car.
4. Davids car is stolen when he leaves the keys in the ignition, and the doors and windows are unlocked while he runs into the grocery store

Answer 43

David leaves his personal (non business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen in his car.

This would be as homeowners loss

Question 44

If an insured rents an auto while on vacation, what coverages, if any, will be available for physical damages coverage under a personal auto policy?

1. The broadest coverage on any auto shown in the declaration
2. The coverage of the last auto shown in the declarations
3. The least coverage on any auto shown on the declarations
4. No coverage available

Answer 44

The broadest coverage on any auto shown in the declaration

As Long as physical damage is included in the insured’s pap, it is available for rental ace

Question 45

If an insured with a personal auto policy has an accident in a state with personal injury protection (pip) how does the policy respond?

1. Coverage automatically is broadened to provide PIP
2. PIP coverage is provided only for medical providers in that state
3. Coverage remains as written
4. The insured may apply for the additional PIP coverage within 10 days of the accident

Answer 45

Coverage automatically is broadened to provide PIP

Where available, personal injury protection includes first party benefits for the insured, including funeral costs, essential services, etc.

Question 46

Newly acquired motorcycles are not automatically covered under a personal auto policy (pap) because:

1. Motorcycles are too dangerous to insure
2. Motorcycles cannot be insured under the PA
3. Motorcycles are insured under a Homeonwers policy
4. The unendorsed policy does not cover two-wheeled vehicles

Answer 46

The unendorsed policy does not cover two-wheeled vehicles

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Question 47

Under a personal auto policy, if a newly acquired auto is to replace the covered auto that has only liability coverage, how long does the insured have to request collision coverage? @

1. 30 days
2. 14 days
3. 4 days
4. Immediately

Answer 47

4 days

4 days if physical damage coverage did not apply to the original vehicle otherwise 14 days

Question 48

Livery conveyance is best described as:

1. Share the expense carpool
2. Vehicle for hire to transport property
3. Vehicle for hire to transport people
4. Commercial vehicle with more than 4 wheels

Answer 48

Vehicle for hire to transport people

Question 49

If an insured borrows a neighbors vehicle to run a personal errands, how do the policies respond in the event of an auto accident?

1. The drivers policy is primary and the neighbors policy is excess
2. Both policies respond on a pro-rate basis
3. The neighbors policy is primary and the drivers policy is excess
4. Only the neighbors policy provides coverage, there is no coverage by the drivers policy

Answer 49

he neighbors policy is primary and the drivers policy is excess

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Question 50

All of the following expenses are covered, in addition to the limits of liability, under coverage a of a personal auto policy, except:

1. Loss of earnings to attend trials at the company’s request
2. Cost of bail bonds related to a covered accident
3. Premium for appeal bonds
4. Pre-judgement interest

Answer 50

Pre judgment interest

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Question 51

The collision coverage of a. Personal auto policy covers:

1. A desert sand storm pitting the car windshield
2. A vandal making a deep scratch on the car with a screwdriver
3. Collision coverage does not cover any of these losses
4. Damage caused by the insured, driving into a fallen tree, that fell during the storm

Answer 51

Damage caused by the insured, driving into a fallen tree, that fell during the storm

Collision is defined an impact with another vehicle or impact with another object, such as wall, telephone pole, or upset(rolling the car over)

Question 52

Which of the following losses is not covered by either the personal auto policy collision or other-than-collision coverage?

1. Davids car is washed away during a flood
2. Davids car is severely damaged by a storm when a sign is blown off the roof of a building, hitting his car
3. David leaves his personal (non-business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen from his car.
4. Davids car is stolen when he leaves the keys in the ignition, and the doors and windows are unlocked while he runs into the grocery store

Answer 52

David leaves his personal (non-business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen from his car.

This would be covered as a homeowners loss

Question 53

Newly acquired motorcycles Are not automatically covered under a personal auto policy (pap) because:

1. Motorcycles are not too dangerous to ensure
2. Motorcycles cannot be insured under the pap
3. Motorcycles are insured under a homeowner policy
4. The unendorsed policy does not cover two-wheeled vehicles

Answer 53

The unendorsed policy does not cover two-wheeled vehicles

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Question 54

Under the liability Portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car on a regular basis?

1. The broadest coverage of any autos listed in the declarations
2. The financial responsibility limits
3. The policy excludes this usage
4. The coverage primarily operated by the names insured

Answer 54

The policy excludes this usage

The question states that the non-owned company car is used regularly

Question 55

Which of the following events within the last three years would disqualify an individual from receiving a good driver discount?

1. A not-at-fault accident resulting in the death of a passenger
2. An at-fault accident involving minor bodily injury
3. An at fault accident involving only property damage
4. A moving violation while driving a company car during business hours

Answer 55

An at-fault accident involving minor bodily injury

Bodily injury is the most serious, and would cause the loss of a good driver discount

Question 56

California has lower financial responsibility limits than most other states. If, randy, a California personal auto policy insured, carrying minimum limits in coverage, has an accident in a state that requires higher limits then:

1. He is breaking the law of that state unless he has added the “other-state” endorsement
2. The policy will provide the higher limits retroactively, but only when he has paid the difference in premiums
3. The unendorsed policy does not cover the out-of-state operation of the automobile
4. The policy will automatically provided the higher required limits at no extra charge

Answer 56

The policy will automatically provided the higher required limits at no extra charge

Fact

Question 57

Jackies personal auto policy (which is unendoresed) would provide payment for which of the following?

1. Expense incurred as the result of an intentionally injury caused by Jackie
2. Expense of a rental car when Jackies vehicle is not drivable as the result of a collision that was not her fault
3. Expense of repairing a neighbors wall, surrounding a garden, that Jackie accidentally backed through
4. Expense incurred as the result of cracked windshield from a rock thrown by the tire of a truck

Answer 57

Expense of repairing a neighbors wall, surrounding a garden, that Jackie accidentally backed through

This is considered property damage of others and falls under coverage part a liability coverage. Choices 2&4 are covered under physical damage; choice 1 is excluded

Question 58

Which is an additional benefit that is included in a DP2 that is not included in DP1?

1. Debris removal
2. Lawns, trees, and shrubs
3. Reasonable repairs
4. Fire department services

Answer 58

Lawns, trees, and shrubs

Part of additional coverage dp2& dp3 not dp1 which is basic

Question 59

What is one way in which the HO2, HO4, and HO6 are similar?

1. Perils insured against under coverage C
2. The limits provided for under coverage c
3. Perils insured against under coverage a
4. The limits provided for under coverage b

Answer 59

Perils insured against under coverage C

Broad form perils in each case

Question 60

The ordinance or law limitation in a homeowner policy may cause a gap in coverage in which the following situations?

1. The insured’s home is damaged by fire and must be rebuilt to meet present building codes. The additional cost of complying with the codes is 50%
2. A community ordinance requires dogs to be on a leash. The insured’s dog, running free in park, bites a child
3. The insured has a business occupancy that is permitted by homeowners rule and does not affect his coverage. However, local community laws prohibit the occupancy unless certain approvals are obtained and fees are paid. The insured has not obtained approvals not paid fees prior to windstorm damage to home.
4. A law requires all swimming pools on a residential property to be fenced and to have self-closing gates. The insured’s gates is not self-closing, and the neighbors child goes through the gate and is severely injured when he falls into the insured’s pool

Answer 60

The insured’s home is damaged by fire and must be rebuilt to meet present building codes. The additional cost of complying with the codes is 50%

The HO policy provides only 10% of the coverage A limit can be applied to ordinance and law losses. This is example, there remain 40% gap in coverage

Question 61

Which of the following loss exposure is not covered by section II of Ron’s homeowner policy?

1. Ron’s use of a riding lawnmower while he is mowing his lawn
2. Ron’s register/licensed personal auto while used on his own property which includes 10 acres on undeveloped land
3. Ron’s use of a motorized golf cart, while playing golf on a golf course
4. Ron’s activities while rebuilding a car for fun in his garage at home. The car does not have an engine

Answer 61

Ron’s register/licensed personal auto while used on his own property which includes 10 acres on undeveloped land

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Question 62

What additional coverage does a dp2 have compare to a dp1?

1. Debris removal
2. Improvements, alterations & additions
3. Personal liability
4. Additional living expense

Answer 62

Additional living expenses

Question 63

Which of the following collaspe losses would be covered under an HO3?

1. Defective workmanship completed two years ago
2. Known insect damage
3. Weight of contents
4. Earth movement from a volcanic eruption

Answer 63

Weight of contents

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Question 64

Which coverages are typically provided in a boat owners policy?

1. Physical damage, liability, medical payment
2. Property, liability, and medical payment
3. Hull, running down, and protection & indemnity
4. Hull and collision.

Answer 64

Physical damage, liability, medical payment

Boat owners policy similar to an automobile policy

Question 65

The watercraft endorsement on a homeowners policy extends coverage for:

1. Liability coverage for watercraft listed on the schedule
2. Liability coverage for all owned watercraft
3. Physical damage and liability coverage for all owned watercraft
4. Physical damage and liability for watercraft listed on the schedule

Answer 65

Liability coverage for watercraft listed on the schedule

Liability provided for scheduled watercraft only

Question 66

Which is a valid reason for an applicant to purchase an HO3 policy instead of a dwelling policy?

1. The property is a six-unit building with the owner occupying one of the units
2. The insured does not want to have personal liability coverage
3. The insured desires broader coverage
4. The insured wants to pay a lower premium

Answer 66

The insured desires broader coverage

Ho3 covers more than standard dwelling

Question 67

A home is damaged two hours after the earthquake, first by fire, then by fuel pipes bursting and causing an explosion. Under an HO3 form:

1. There is no coverage unless the homeowner has made an earthquake coverage endorsement a part of the policy
2. There is coverage, but only for the damage caused by the fire and explosion
3. The policy covers all of the damage since explosion is an insured peril
4. The policy does not cover the damage since the HO3 provides only named peril coverage

Answer 67

There is coverage, but only for the damage caused by the fire and explosion

The damage ensues from the earthquake

Question 68

Which of the following perils is covered by a “causes of loss-basic form”? @

1. Riot
2. War
3. Ordinance or law
4. Government action

Answer 68

Riot

Riot is a coverage of the commercial basic form

Question 69

How are the HO3 and the HO5 similar?

1. Both provide open peril coverage for the dwelling
2. Both provide placement cost coverage for contents
3. Both provide named peril coverage for personal property
4. Both are designed to cover condominiums

Answer 69

Both provide open peril coverage for the dwelling

They both provide the same all risk coverage for the dwelling. The differences is that the HO5 upgrades the personal property coverage to be all-risk as well

Question 70

Which of the items if real property under HO3 are valued on an actual value basis?

1. Exterior paint
2. Roofing
3. Built in appliances
4. Wallpaper

Answer 70

Built in applicances

Could be considered personal property

Question 71

Grace has a HO policy that includes section I coverages ‘A,B,C’ these coverages, a, and c provide coverages for:

1. Dwelling other structures and personal property
2. Medical payments, personal liability, and damage to property of others
3. Dwelling, personal property and loss of use
4. Dwelling additional living expenses and loss of use

Answer 71

Dwelling other structures and personal property

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Question 72

What is the primary differences between an HO2 and HO3 policy?

1. The policy territory
2. The property covered
3. The perils insured against
4. The liability coverage

Answer 72

The perils insured against

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Question 73

What is the primary difference between an HO3 and HO5?

1. Coverage D limits
2. Coverage C broad named perils
3. Coverage A property
4. Coverage A and B perils

Answer 73

Coverage C broad named perils

Coverage c is personal property coverage
The ho5 upgrades the personal property co enrage to be open perils

Question 74

What perils are insured against under the additional coverages-property removed of a homeowners policy?

1. Basic form perils
2. Broad form perils
3. Perils of transportation
4. All perils

Answer 74

All perils

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Question 75

Which exclusion in the causes if loss-special form excludes coverage for mudflow?

1. Government action
2. Water (flood)
3. Utility service
4. Ordinance or law

Answer 75

Water (flood)

Fact

Question 76

Under a building and personal property coverage form, if the insured building has been vacant for more than 60 consecutive days what effect will this have on a vandalism loss?

1. The amount of loss will be reduced by 15%
2. The amount of the loss will be reduced by 60%
3. The loss is excluded
4. There is no effect

Answer 76

The loss is excluded

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Question 77

What is the primary Difference between a HO2 and a HO4 policy ?

1. Description of insured premises
2. Property insured under coverage A
3. Inside limits of liability for specified personal property
4. Perils insured against under coverage C

Answer 77

Property insured under coverage A

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