Test Questions Flashcards
Which of the following Statements is true about reinsurance?
A. Rein is the process whereby the insurer transfers all or part of the risk to another company.
B. When an insurer obtains reinsurance, it has sold the contract to another insurer, and no longer has direct responsibility for the policy.
C. Property an casualty insurers use reinsurance, life insurers do not.
D. Rein is when the insured allows a policy to lapse for nonpayment. Later, if the insured makes the payment, the policy is reinsured.
A
Which of the following is defined as `an agreement between two or more parties enforceable by law?` A. Tort B. Agreement Clause C. Insurance Policy D. Contract
D
Which of the following is NOT required for a risk to be ideally insurable?
A. The loss must be definite and measurable.
B. The loss must create economic hardship.
C: The loss must occur on the insured`s property.
D: The loss must be an accident.
C
The law of large numbers is a principal that basically says:
A: the larger the possibility of a loss, the greater the exposure.
B: the larger the amount of information gathered, the more reliable that information will be.
C: the larger the number of people in an insurance company, the more stable it is.
D: the more insurance you have, the more protected you are.
B
Type of loss exposure pertaining to land and structures attached to it is: A: property loss exposure B: liability loss exposure C: financial loss exposure D: personal loss exposure
A
The degree of loss a person/organization faces from suits brought by a third party refers to: A: Liability Loss Exposure B: Loss Exposure C: Property Exposure D: Human Personnel Loss Exposure
A
The uncertainty or chance of a loss occurring is known as: A: risk management. B: pure risk. C: risk. D: speculative risk.
C
Restoring the insured back to the condition he or she was in before the loss occurred is known as: A: Restoration B: Insurable Interest C: Indemnification D: Loss Retention
C
When a right or privilege has been given up, a party cannot reassert that right or privilege. The process of preventing the party from reasserting that right or privilege is known as: A: Pro-rata B: Waiver C: Estoppel D: Indemnity
C
The term loss exposure refers to: A: the possibility of a loss. B: the actual cause of the loss. C: the uncertainty of a loss occurring. D: the increase in the possibility of a loss.
A
Materiality is determined by the disadvantage placed on the other party and: A: not by the event B: neither are correct C: the influence of the facts D: both are correct
D
A hazard is best defined as:
A: anything that increases the chance of loss or severity of loss due to a peril.
B: any action from a court that increases the likelihood or size of a loss.
C: a possibility of a loss.
D: risk shifted from one to another.
A
Which of the following is the amount of money the insured pays before the insurer pays for the rest of the claim? A: Subrogation B: Deductible C: Coinsurance D: Premium
B
Which of the following is an example of an adverse underwriting decision? A: All of these are examples B: Rejecting the risk C: Issuing with limitations D: Charging a higher rate
A
What are the two types of torts? A: Pure & Speculative B: Intentional & Unintentional C: Broad & Basic D: Legal & Non-Legal
B
Which of the following are the main types of risks? A: Avoidance and Retention B: Pure and Transfer C: Sharing and Transfer D: Speculative and pure
D
Which of the following is not a class of insurance? A: Auto B: Casualty C: Marine D: Fire
B
A hazard that deals with a persons mental attitude, behavior and habits is an example of: A: Legal hazard B: Moral hazard C: Morale hazard D: Physical hazard
B
Substitution of a small certain loss for a large uncertain loss is: A: law of large numbers B: insurance C: a pure risk D: an insurable event
B
Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain. A: Misrepresentation B: Theft C: Fraud D: Concealment
C
Which of the following is NOT a known private insurer? A: Mutual Insurance Companies B: Stock Insurance Companies C: Bond Insurance Companies D: Reciprocal Insurance Exchanges
C
When an insured rejects uninsured motorist in writing this is considered: A: a waiver B: a modification C: an example of estoppel D: a rescission
A
Insurance is a contract whereby one undertakes to indemnify another against: A: Physical hazard B: Damage C: Exposure D: Uncertainty
B
The state of being subject to a loss is considered: A: exposure B: insurance C: risk D: hazard
A
A peril is: A: pure and speculative. B: a possibility of a loss. C: the actual cause of the loss. D: anything that increases the chance of loss or severity of loss.
C
A beautician stating that this conditioner fixes badly damaged hair is a: A: stated fact B: representation C: expressed warranty D: implied warranty
D
The process of reviewing applications for insurance and the information on the application is:
A: Underwriting
B: Application Evaluation
C: Field Underwriting
D: the job of the agent before accepting or rejecting an application
A
Bob is thinking about obtaining insurance because he just found out he needs extensive surgery that will require several days in the hospital. This situation of waiting until the last minute to obtain insurance is known as: A: Ideally Insurable Risk B: Adverse Selection C: Spread of Risk D: Cost Effective Insurance
B
Which of the following elements of a contract is/are the binding force? A: Competent Parties B: Consideration C: Legal Purpose D: Offer & Acceptance
B
Performance depends upon an uncertain future event is the feature: A: adhesion B: unilateral C: conditional D: aleatory
D
Examples of tort law include all of the following EXCEPT: A: Breach of contract B: Bodily injury C: Libel and slander D: Personal injury
A
Loss control refers to:
A: taking measures to prevent further damage during a loss.
B: a combination of risk control techniques with risk financing techniques.
C: preventing a loss from becoming catastrophic.
D: taking the necessary precautions that will reduce the risk of a loss.
D
Any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest or create a liability against him/her, may be insured against. The more unpredictable a loss becomes:
A: the less insurable it becomes.
B: the less it becomes insurable interest.
C: the more it becomes insurable interest.
D: the more insurable it becomes.
D
According to the California insurance law, either party may rescind a contract for any of the following reasons EXCEPT:
A: Once a contract is signed, it can never be rescinded.
B: One party intentionally or unintentionally hides material information.
C: One party intentionally omits information from the other party.
D: If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract.
A
Punishment for twisting or misrepresentation would be: A: up to 1 year in jail B: neither are correct C: both are correct D: up to $25,000
C
Errors and omissions is a type of liability insurance:
A: for protection against misrepresentation when filing a declaration page.
B: that agents use to protect themselves if they give C: advice or information to a client.
D: that indemnifies a client.
E: for insured`s to use to protect themselves against a claim loss.
B
An insurer not authorized to conduct business in California would be: A: neither of these B: an unauthorized insurer C: a non-admitted insurer D: either of these
D
Which of the following actions would not be considered transacting insurance?
A: Handing a prospect a business card and asking them for information.
B: Giving a price quote over the phone.
C: Emailing a prospect a auto quote.
D: Collecting premium for a policy.
A
Binders can be extended how many additional days? A: 30 days B: 60 days C: 150 days D: 90 days
B
Which of the following is not true about the relationship between an agent and a solicitor?
A: A solicitor may give premium quotes over the phone, just like an agent.
B: A solicitor cannot be employed by more than one fire and casualty broker/agent at the same time.
C: An agent represents the company, whereas the solicitor is an assistant to an agent and has no binding authority.
D: An agent or broker cannot transact as a solicitor, but a solicitor can transact as a broker or agent
D
A broker can transact all of the following EXCEPT:
A: Casualty insurance
B: Life, health, and disability insurance
C: Property insurance
D: Personal Lines
B
If an agent gives Incorrect advice or unknowingly provides Incorrect information to the client, which of the following liability insurance policies for nonmedical professionals is available to pay for losses or defend lawsuits that might be filed against him? A: Errors and Omissions B: Medical Insurance C: Liability insurance D: Nonadmitted
A
Which marketing system does the insurer not own the expiration list? A: An independent agency B: A direct mail system C: Direct writing system D: A internet
A
Which of the following would not require a license? A: Public Adjuster B: All require a license C: Insurance Adjuster D: Independent Adjuster
C
The underwriting process consists of all of the following basic steps except: A: Issue the rate B: Gather necessary information C: Monitor the decision D: Implement the decision
A
Which of the following statements about insurance in connection with sales or loans is TRUE?
A: No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase except an agent licensed with the state of California.
B: A person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent if the agent is employed by that company.
C: A person approved by the Commissioner may be required to be involved in the business of financing the purchase of real estate. This person would act as the agent in purchasing insurance for the real estate.
D: No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase.
D
In which system is the agent considered an employee? A: A direct response system B: None of these C: Exclusive agency system D: Direct writing system
D
Which of the following is NOT a source of information an underwriter might use to investigate an application in order to approve or reject it? A: Medical Information Bureau B: Financial Reports C: Department of Industrial Relations D: Department of Motor Vehicles
C
When dealing with insurance in connection with sales or loans, violating the legal provisions specified by California law is considered a: A: misdemeanor B: felony C: penalty D: fine
A
Which of the following is NOT an action a person performs when transacting insurance?
A: The actual execution of a contract
B: Calling an insurer for a price quote
C: Any transactions that later result from the operation of the contract
D: Solicitation of insurance
B
An insurance agent is appointed to transact: A: all are InCorrect: B: all classes of insurance C: all lines of insurance D: all lines except 24hr care
A
In which of the following marketing distribution systems does the agent represent more than one insurer and more than one company? A: Independent agency B: Direct mailing system C: Direct writing system D: Exclusive agency
A
A lender does have the right to provide insurance or renew the insurance and charge a transaction fee if the borrower fails to deliver proof of insurance at least \_\_\_\_ days before the policy expires. A: 25 B: 10 C: 30 D: 15
C
There are no binders issued in: A: life insurance B: Any of the above C: in health insurance D: excess of 1 million
B
The following acts are unlawful and are misdemeanors in California except when performed by a surplus lines broker EXCEPT:
A: In any manner, advertising for a nonadmitted insurer in this state.
B: In any manner, advertising for an admitted insurer in this state.
C: In any other manner, aiding a nonadmitted insurer to transact insurance business in this state.
D: Acting as agent for a nonadmitted insurer in the transaction of insurance business in this state.
B
Which of the following is a responsibility of the insured in an insurance contract?
A: Send the application to the underwriting department.
B: To complete the application.
C: Give true statements and information on the application.
D: Fully explain the policy to the client.
C
A \_\_\_\_\_\_\_\_\_\_\_\_\_ licensee is authorized to transact ONLY the following lines of insurance: Automobile, recreational vehicles (noncommercial purposes), personal watercraft, residential property, earthquake, flood, inland marine, umbrella (excess liability). A: Fire and Casualty B: Limited Lines Automobile C: Life Only D: Personal Lines
D
Which of the following is NOT a type of authority given to agents? A: Express authority B: Apparent authority C: Customary authority D: Implied authority
C
Monitoring of existing risks is: A: post-selection B: a code requirement C: conditional underwriting D: pre-selection
A
Any person who transacts insurance without a valid license is guilty of a misdemeanor, punishable by a fine not exceeding \_\_\_\_\_\_. A: $25,000 B: $20,000 C: $50,000 D: $10,000
C
A person licensed as a broker/agent shall be deemed to be:
A: acting with the same authority granted a managing general agent
B: involved in the business of financing the purchase of real estate
C: responsible for deciding if an application should be approved or rejected
D: acting as an insurance agent in the transaction of insurance placed with those for whom a notice of appointment has been filed with the Commissioner
D
The application is the document that:
A: shows proof of insurance.
B: shows the insured has coverage currently in force.
C: states the name of the insured, the premium, and other facts that help the insurer decide whether to accept or reject it.
D: serves as a temporary contract that usually lasts 30 days.
C
A solicitor holds which license? A: Personal lines broker-agent B: P&C broker-agent C: A solicitor's license D: Either P&C broker-agent or Personal lines broker-agent
D
Law of agency is the relationship between: A: agent and principal B: agent and client C: insurer and customer D: agency and agent
A
In a legal relationship, which authority does a principal (company) give the agent in writing? A: Apparent authority B: Customary authority C: Express authority D: Implied authority
C
The marketing/sales department is responsible for:
A: using claims history, statistics, and computer data to predict losses.
B: receiving claim requests, evaluating them, and paying those claims that are covered by the terms of the contract and rejecting those that are not.
C: receiving applications for insurance and then deciding if the company should approve or reject the application.
D: advertising, promoting and distributing an insurer`s products to the public.
D
Transacting via internet with a California resident would not require: A: license expiration B: license number C: name on license D: state licensee is domicile
A
Commissioner may give an order that records be brought current within: A: 15 days of the order B: 60 days of the order C: 90 days of the order D: 30 days of the order
B
________ refers to the inability of the insurer to meet its financial obligations when they are due.
1: Insolvency
2: Actuarial
3: Paid in capital
4: Non-Admitted
A
After providing an opportunity for a hearing, the Commissioner may deny an application for a license based on the following reasons EXCEPT:
A: the applicant has acted as a licensed person before the license was issued
B: the applicant lied on the application
C: the applicant is disabled
D: the applicant was convicted of a felony
C
Agents must keep good records and make them available to the DOI for a period of: A: 3 years B: 2 years C: 5 years D: 1 year
C
All Property and Casualty Broker/Agents are required by law to display to the public:
A: The institution of education where they received their degree.
B: The types of insurance they are licensed to sell displayed in their personal office.
C: Their license to sell insurance displayed in their training room.
D: Their license to sell insurance, displayed in a place where it can be easily seen
D
For an agent or solicitor to be valid to transact requires: A: both are required B: a proper license C: neither are required D: an appointment
A
When should a licensee notify the Commissioner of a change in address?
A: within the 10 day grace period
B: immediately
C: within the 30 day grace period
D: after notifying the company the licensee is employed with
B
Which of the following is not a person under the Code? A: An estate of a deceased B: An individual C: An entity D: A family
D
If a license is in the possession of the insurer or the licensee`s employer, the licensee may surrender his/her license:
A: at any time.
B: after the termination of employment with an insurer.
C: after written notice is delivered to the Commissioner.
D: after notifying the Commissioner and a mandatory 30 days waiting period.
C
A Property and Casualty Agent is required to continue their education by completing:
A: a total of 100 hours during the first 4 years of licensing.
B: a total of 24 hours per license term.
C: a total of 25 hours during the first 2 years of licensing.
D: a total of 55 hours during the first 2 years of licensing.
B
Every applicant for a license to act as an agent must have filed with the Commissioner:
A: a notice of appointment to do business in the state.
B: a request for application prior to being licensed in the state.
C: a license number to be approved prior to receiving a license.
D: an application for employment with the company employed with.
A
In lieu of denying an application for a license the Commissioner can: A: charge extra fees B: issue a restricted license C: neither of these D: either of these
B
Every licensee shall prominently put their license number on all of the following except:
A: Phone book listing in the white pages
B: Price quote
C: Neighborhood advertising flyer
D: Business cards
A
Insolvency means:
A: a company has more claims than earned premium to pay for those claims
B: a company has more earned premium than claims made
C: an insurers inability to meet its financial obligations when they are due
D: an insurers inability to meet the standards set by the DOI
C
Informational records must be kept a minimum of: A: 5 years B: indefinitely C: 18 months D: 12 months
C
In order to update, add or change a statute a bill must be passed by the legislature and then presented to the governor. If the statute is passed, it will go into effect: A: on the next January 1st B: immediately C: on the next August 1st D: on the next fiscal year
A
A subsidiary formed to insure the parent company is called a(n): A: Co-op insurer B: Inter-insurance exchange C: Captive insurer D: Fraternal
C
The actuarial department is responsible for:
A: receiving claim requests, evaluating them and paying those claims that are covered by the terms of the contract and rejecting those that is not.
B: receiving applications for insurance and then deciding if the company should approve or reject the application.
C: using claims history, statistics and computer data to predict losses.
D: advertising, promoting and distributing an insurer`s products to the public.
C
It is against the law for an insurance licensee to offer free insurance to:
A: those who cannot afford it.
B: anyone as an incentive to acquire some other type of business.
C: anyone, regardless the reason.
D: family and other relatives.
B
A licensee may surrender his/her license:
Correct: upon written notice to the Department of Insurance at any time.
A: after the termination of employment with an insurer.
B: after notifying the Commissioner and a mandatory 30 day waiting period.
C: after written notice to the Department and the Commissioner after the next January 1.
A
When can a partnership continue if a new partner joins?
A: After the department is notified within 30 days and the changes are approved.
B: After the Commissioner is notified and a new license is issued.
C: After the new partner is issued a license by the department and the old license is terminated.
D: After all the partners file a written notice with the Commissioner within 45 days.
A
All of the following are examples of fiduciaries EXCEPT: A: Vendor B: Corporate directors C: Administrators D: Executors
A
According to the qualifications of an insurer under the California Code a person can be any of the following EXCEPT:
A: a trust
B: a corporation
C: a human being at least age 16 who is competent and not intoxicated
D: an estate of a deceased person
C
Appointments are terminated: A: termination of license B: license fees paid late C: by either agent or insurer D: any of these
D
An organization ceases to exist as an entity eligible to hold a license upon all of the following EXCEPT:
A: upon the termination of an association.
B: upon dissolution of a co partnership or upon any change in membership of a co partnership.
C: upon dissolution of a corporation.
D: upon the termination of a key employee.
D
Commissioner can suspend a permanent license without a hearing, except: A: conviction of any felony B: license revoked last 5 yrs C: none are exceptions D: client co-signing a loan
D
To handle long term care insurance, an agent of more then four years must satisfy the continuing education requirement of:
A: a 4 hour course in each of the first 2 years of licensing.
B: a 4 hour course in each of the first 4 years of licensing.
C: 8 hours of LTC training each license term.
D: an 8 hour course in each of the first 4 years of licensing.
C
An agent or broker may charge an extra fee for services above and beyond what are considered normal duties. Which of the following is NOT considered an extra service?
A: Application paperwork
B: Additional activities
C: Services performed as a convenience to the insured that result in extra expense to the broker or agent
D: Additional research
A
What is the difference between an admitted and a non-admitted insurer?
A: An admitted insurer has met all the qualifications designed by the DOI but hasn`t received a Certificate of Authority because they are not licensed in the state of California and a non-admitted insurer is licensed in the state of California.
B: A non-admitted insurer is a company that has met all of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas an admitted insurer has not complied or been denied.
C: An admitted insurer is a company that has met most of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas a non-admitted insurer has not applied or been denied.
D: An admitted insurer is a company that has met all of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas a non-admitted insurer has not complied or been denied.
D
If someone has a Life Agent Combo and a Property/Casualty license for 10 years, then how many CE hours would be required in the current license term? A: 50 hours B: 25 hours C: 30 hours D: 24 hours
D
Which of the following is NOT a valid reason for the Commissioner to deny the use of a name when filing with the Insurance Commissioner?
A: The name gives the impression the licensee is authorized to conduct a type of business it cannot legally conduct.
B: The name is politically connected to the government.
C: The name would interfere or is too similar to the name of another agency already licensed by the Commission.
D: The name would lead the public in the wrong direction.
B
Which of the following is NOT true about the California Insurance Code and the California Code of Regulations.
A: The CIC is written, updated, and changed by the California State legislature.
B: The Department of Insurance implements, enforces and monitors the CIC.
C: The CIC and the CCR are a complete guide to ethical behavior.
D: The CIC gives the Commissioner the power to institute rules and regulations which are called the CCR.
C
Records must be made available to the Commissioner: A: upon written request B: within 30 days C: within 5 days D: at all times
D
Which of the following is NOT a purpose of the Unfair Practices Article?
A: To protect the public from agents who practice bad methods of selling insurance.
B: To regulate trade practices in the insurance business.
C: To keep agents honest when selling insurance.
D: To determine the punishment for an agent found guilty of unfair practices in insurance.
D
The State of California requires that all admitted insurers be a member of the:
A: Insurance Board Council
B: Privacy Protection Committee
C: California Code and Ethics Board
D: California Insurance Guaranty Association
D
Which of the following is a responsibility of the Commissioner?
A: To write the law of insurance.
B: To enforce the law of insurance.
C: To form and appoint a council that will regulate the code.
D: To change the law of insurance.
B
Penalty for violation of a summary seizure would be: A: 1 yr imprisonment B: misdemeanor C: any and/or all of these D: $1,000
C
Which court case reversed the Paul vs. Virginia case of 1868? A Houghton-Mifflin case of 1938 B McCarren-Ferguson Act of 1945 C SEUA case of 1944 D Public Law 15
C
Solvency requires the insurer to have enough assets to cover: A paid-in-capital B reinsurance C liabilities D all of these
D
How is the Insurance Commissioner put into office?
A Elected by the citizens
B Elected by the council
C Appointed by the previous commissioner
D Appointed by the governor
A
Which of the following is NOT considered an unfair practice?
A Filing false financial documents.
B Unfairly discriminating against classes of insured`s.
C Failing to display the license in a clearly visible place for the public to see.
D Making false statements that mislead the public.
C
When the Commissioner takes over a company that is insolvent, his/her first responsibility is to:
A liquidate the company and appoint new officers.
B sell all the company assets and pay any open claims.
C attempt to restore the company if possible.
D shut down the company`s operations and start a full investigation.
C
Rates shall remain in effect if they are: A reasonable B adequate C not discriminatory D all of the following
D
Upon receiving any written or oral inquiry from the Department of Insurance concerning a claim, every licensee shall immediately, but in no event more than \_\_\_\_\_\_\_ calendar days of receipt of that inquiry, furnish the Department of Insurance with a complete written response based on the facts as then known by the licensee. A 30 B 14 C 7 D 21
D
What is the role of the Commissioner and the Department of Insurance in relation to consumers?
A The Commissioner and the DOI are responsible for regulating the conduct of agents and insurers.
B The Commissioner and the DOI are responsible for making sure the public is given the opportunity to purchase insurance.
C The Commissioner and the DOI are responsible for advertising to the public the roles and responsibilities of insurance.
D The Commissioner and the DOI are responsible for making sure companies bring in more income than claims being paid out.
A
Which of the following is NOT a type of rating law? A Use and file B File and use C Prior approval D Legal Competition
D
Which one of the following is not one of the three principal parts to the privacy requirement of the Gramm-Leach-Bliley Act? A Credit Reporting B Pretext Provisions C Financial Privacy Rule D Safeguards Rule
A
All of the following are efforts the Department of Insurance takes to combat insurance fraud EXCEPT:
A Each company is required to have a fraud detection unit.
B Each company is required to submit a complete record of fraudulent claims made to the business each year.
C Every insurer pays an annual fee to fund the fraud detection units
D Every automobile insured is assessed about $1 per year to fund automobile insurance fraud task force activities.
B
Which of the following describes use and file as a type of rating law?
A An insurance company must file rates with the commission, but can then use those rates until they hear back from the commission.
B The insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
C Insurers compete with one another by quickly changing rates without review by the state regulators.
D An insurance company uses the rate they determine appropriate first and then file that rate with the commission.
D
All of the following are penalties for unfair discrimination EXCEPT:
A prison
B $15,000-$100,000 for frequent violations
C $2,500 for first violation
D $5,000 for subsequent violations
A
What is the significance of the SEUA case of 1944?
A The court gave authority to the federal government to apply antitrust laws to the insurance business that was not being regulated by the state level.
B The court established the right of the states, instead of the federal government, to regulate insurance.
C The court exempted the insurance industry from the federal regulation required for most interstate commerce industries.
D The court decided the federal government should regulate insurance.
D
CIGA pertains to: A insurer's insolvency B insurer's forms C insurer's rating D insurer's fraud unit
A
According to the Code, the word “person” means:
A any person capable of binding an insurance contract.
B the insurer in an insurance contract.
C any person, association, organization, partnership, business trust, limited liability company, or corporation.
D the client seeking insurance.
C
A subsequent violation of a cease and desist would result in: A a minimum fine of $5000 B license suspension C imprisonment up to 5 yrs D a fine up to $55,000
B
An example of a self-regulatory authority of the insurance industry is: A the Commissioner B the ISO C the State legislature D the NAIC
D
Who administers the California Administrative Code of Regulations? A Commissioner B State Senate C Governor D Congress
A
To change the California Insurance Code a bill is brought before the Assembly and the Senate. After both parties vote on the bill and it is approved, it moves on to the: A Commissioner B Governor C Congress D State Senate
B
Insurer has up to how many days to accept or deny a claim? A 30 days B 40 days C 21 days D 15 days
B
All of the following are Incorrect penalties for violating the Unfair Practices article EXCEPT:
A $15,000 fine for the first offense; Minimum of 3 years in prison
B $10,000 fine for each act in violation; $15,000 fine for willful violation
C $5,000 fine for each act in violation; $10,000 fine for willful violation
D $5,000 fine for each act in violation; $15,000 fine for willful violation
C
Every company in California is required to report its financial condition to the Commissioner every year: A on or before March 1. B on or before December 31. C on or before January 1. D on or before April 15
A
Which of the following is a penalty for violating the Insurance Information and Privacy Protection Act?
A $5,000 fine for violations committed with regularity showing they are a general business practice
B $50,000 fine for violations committed with regularity showing they are a general business practice
C $100,000 fine for violations committed with regularity showing they are a general business practice
D $20,000 fine for violations committed with regularity showing they are a general business practice
B
Unless expressly otherwise provided, any personal notice required by any provision of the insurance code may be given by any of the following EXCEPT:
A postage prepaid
B mailing notice
C a third party
D notification at his residence or principal place of business
C
According to the Code a "Notice of Claim" is a(n): A either qualify B written notification C oral notification D neither qualify
A
Which is not a violation of Unfair Practice? A Age discrimination B Misrepresentation C Delaying an investigation D Defamation of an insurer
A
Once insured an insurer are in agreement payment must be made within: A: 30 calendar days B: 15 calendar days C: 15 business days D: 30 business days
A
If convicted of insurance fraud:
A: the fine can be up to $10,000 and up to 5 years in state prison.
B: the fine can be up to $50,000.
C: the fine can be up to $150,000 and up to 5 years in state prison.
D: the fine can be up to $10,000.
C
Which of the following describes prior approval as a type of rating law?
A: The insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
B: Insurers compete with one another by quickly changing rates without review by the state regulators.
C: An insurance company must file the rates with the commission, but can then use those rates until they hear back from the commission.
D: An insurance company uses the rate they determine appropriate first and then file that rate with the commission.
A
Which of the following statements about insolvency is TRUE?
A: An insurer cannot escape the condition of insolvency except by permission from the Commissioner.
B: An insurer can escape the condition of insolvency by meeting its financial obligations when they are due.
C: An insurer can escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks.
D: An insurer cannot escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks.
D
All of the following are categorized torts EXCEPT:
A: Adverse selection
C; Absolute/Strict
D: Negligence
A
Lapse refers to:
A a policy is terminated because the premiums have not been paid.
B terminating one`s insurance policy
C continuance of an insurance policy beyond its original term
D discontinuance of an insurance policy beyond its original term
A
Which of the following is NOT a description of what the California Workers Compensation Inspection Rating Bureau (WCIRB) does?
A: Collects and tabulates information and statistics for the purpose of developing pure premium rates to be submitted to the commissioner for issuance or approval.
B: Provides reliable statistics and rating information regarding workers compensation and employers liability insurance.
C: Inspects risks for classification or rate purposes to furnish to the insurer and upon request of the employer.
D: Develops information about property and liability risk and the property/casualty insurance industrys leading supplier of statistical, actuarial, underwriting, and claims data.
D
Combined ratio is defined as:
A: The company`s cost of operations, including overhead, marketing, and commissions.
B: the amount of money an insurer pays for operation of the business.
C: the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.
D: the percentage of each premium dollar a company spends on claims and expenses.
D
Which of the following is NOT an example of assumption of risk?
A: A spectator at a baseball game.
B: The driver of a limousine service.
C: A guest passenger in an automobile.
D: A passenger on a helicopter tour of an exotic island.
B
A special surplus line broker may transact Special Surplus Lines. All of the following are special surplus lines EXCEPT:
A: Farm or cattle ranch
B: Reinsuring the liability of an admitted insurer
C: Aircraft insurance
D: Insurance on property or operations of railroads engaged in interstate commerce
A
Before determining liability based on negligence, the following requirements must be met EXCEPT: A: breach B: gross negligence C: duty D: unbroken chain
B
Payment for the loss of the ability to bear children or loss of limb would be: A: special damages B: punitive damages C: specific damages D: general damages
D
Which organization is the leading source of information about property and liability risk and is the property/casualty insurance industrys leading supplier of statistical, actuarial, underwriting, and claims data?
A: The Insurance Service Office (ISO)
B: The California Workers Compensation Inspection Rating Bureau (WCIRB)
C: Department of Insurance (DOI)
D: Department of Data and Statistics (DDS)
A
Flat rate cancellation is described as:
A: Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force.
B: A type of cancellation whereby the insured can cancel without penalty. The insured receives a 100% refund of Premium.
C: The method used when a policy is canceled by the insured before it reaches the expiration date.
D: A policy is terminated because the premiums have not been paid.
B
A broken or interrupted chain of events is: A: intervening cause B: intentional tort C: breach of duty D: proximate cause
A
Which of the following is not a common law defense? A: Last clear chance B: Contributory negligence C: Comparative negligence D: Assumption of risk
C
Amounts paid for actual loss or injury are known as: A: Compensatory damages B: Specific damages C: General damages D: Punitive damages
A
When two or more perils happen at the same time, in sequence, and cause a loss, this is referred to as: A: Open peril B: Named peril C: All-risk D: Concurrent causation
D
Punitive damages are:
A: losses of property or injuries resulting in medical bills.
B: amounts paid for actual loss or injury sustained.
C: losses that are not easily measured in dollar amounts.
D: a form of punishment imposed by the court upon the individual responsible for a loss.
D
When someone willingly gives up the right to sue a person who was at fault, this is known as: A: Arbitration B: Mediation C: Subrogation D: Causation
C
When an employer is held responsible for actions of an employee this is: A: vicarious liability B: general liability C: contributory liability D: absolute liability
A
If an insured is 25% at fault and the insurer settles proportionally, this is: A: contributory negligence B: comparative negligence C: modified no fault D: common law negligence
B
Short rate cancellation is described as:
A: A type of policy the insured can cancel without penalty. The insured receives a 100% refund of the premium.
B: A policy is terminated because premiums have not been paid.
C: Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force.
D: The method used when a policy is canceled by the insured before it reaches the expiration date.
D
Which method of managing risk is described as not purchasing insurance at all, or paying part of a loss when it occurs? A: Avoidance B: Retention C: Transfer D: Reduction
B
A legal right of recovery can be based on which of the following? A: Torts B: Contracts C: Statutes D: Any one of these
D
All of the following are methods of managing risk EXCEPT: A: Transfer B: Rescission C: Retention D: Avoidance
B
Comparative negligence is best described as:
A: the injured party must be completely free of fault in order to collect.
B: people seeking insurance at the last minute when they need it.
C: the injured party is fully responsible for the claim and the damages are not reduced accordingly
D: part of the claim is paid for by the insured`s own insurance company; however, modification is made to the settlement amounts based on the idea of relative negligence, which assigns a percentage of carelessness to each party involved.
D
Proximate cause refers to:
A: a person should have acted a certain way in that circumstance, but did not
B: an uninterrupted chain of events resulting from negligence causes injury or damage
C: a product causes bodily injury or property damage
D: an individual`s negligent behavior does not mean he will be held legally liable
B
The Commissioner shall establish a list of all surplus line insurers who have met the recognized requirements for such title and shall issue a master list at least semiannually. This list is known as: A: LESLI B: OSHA C: the SEUA D: Commissioner`s list of surplus lines
A
Defamation is an intentional tort that damages one’s reputation that is:
A: either written or spoken
B: false
C: neither false or either written or spoken are correct
D: both false and either written or spoken are correct
D
Loss is defined as:
A: the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.
B: the percentage of each premium dollar a company spends on claims and expenses.
C: reduction of a company`s cost of operations, including overhead, marketing, and commissions.
D: the amount of money an insurer pays for operation of the business.
A
In computing the loss payment for contributory negligence the claim would:
A: be reduced by the percentage of fault for which the client is found responsible
B: pay nothing if the injured party didn`t meet the standard of self-protection in any form.
C: pay out the amount of the claim, minus the deductible.
D: pay the full amount of the claim under all circumstances.
B
Which would not be a tort? A: Any legal wrong B: Keeping a pet rattle snake C: Negligence D: Strict liability
A
Loss of rent, profits, expenses necessary to keep a business running until the damage can be fixed are examples of: A: Indirect loss B: Loss exposure C: Direct loss D: Named perils
A
Insurance Services Office develops forms and lost cost rating for:
A: surety ship and crops
B: property and casualty
C: workers’ compensation
D: Both property and casualty and surety ship and crops
B
Least professional method to identify loss exposure would be: A: copying previous apps. B: checklists and surveys C: financial statements D: contracts & agreements
A
The Tyler-Star Newspaper wrote an article about Jim`s Bakery that made Jim look like a racist. This type of injury to Jim`s character is known as: A: Absolute liability B: Libel C: Slander D: Misrepresentation
B
Which of the following terms describes an estimate of the amount an insurer will pay for a claim? A: Merit rate B: Manual rate C: Loss Reserve D: Rescission
C
Insurance that cannot be procured through admitted insurers may, under certain circumstances, be placed with nonadmitted insurers. This is known as: A: Surplus lines B: Special surplus lines C: Non-standard lines D: Tort lines
A
Mid-termination of a policy is known as: A: rescission B: policy termination C: cancellation D: none of these
C
Under personal lines insurance, dwelling insurance, which of the following perils is NOT covered on a standard fire policy? A Earthquake B Fire C Lightening D Removal
A
What is the difference between an HO 3 and an HO 3 with an HO 15 endorsement?
A An HO 3 is a policy that covers all risks, except those excluded, on the dwelling, and personal property is covered with broad form perils, whereas an HO 3 with an HO 15 endorsement covers all perils with both dwelling and personal property.
B An HO 3 covers the building under renters insurance, while an HO 3 with an HO 15 endorsement covers the building and all the property inside the building under renters insurance.
C An HO 3 is a policy that covers all risks, except those excluded, on both dwelling and personal property, whereas an HO 3 with an HO 15 endorsement is a policy that covers all risks on the dwelling.
D An HO 3 covers only broad form perils on a broad form, whereas the HO 3 with an HO 15 endorsement covers all perils.
A
Which HO form(s) provide open peril coverage for personal property? A HO-5 B Requires endorsement C Both HO-3 and HO-5 D HO-3
A
What is the difference between an HO 2 and an HO 3?
A An HO 2 has dwelling coverage on a special form and personal property on a broad form, while an HO 3 has coverage for both dwelling and personal property on a broad form.
B An HO 2 has dwelling and personal property coverage on a broad peril form, while an HO 3 has dwelling coverage on a special form and personal property on a broad peril form.
C Both an HO 2 and an HO 3 have dwelling and personal property on a broad peril form.
D An HO 2 has both dwelling and personal property on a special peril form, while an HO 3 has dwelling and personal property on a broad form.
B
How are HO-8, HO-2, HO-3 and HO-5 different? A Perils insured against B All of these C Coverage A, B, and C D Liability coverages
A
Property insurance policies contain many items EXCEPT: A Perils insured against B The date the policy is effective C Insured`s gender D Name of the insurer
C
Which of the following homeowners policies covers condominium units? A HO 2 B HO 6 C O 8 D HO 4
B
What method of valuation means the company will decide the replacement cost of a lost item, then subtract depreciation from it and pay the rest? A Market Value B Replacement Cost C Agreed Value D Actual Cash Value
D
Which of the following is NOT a difference between the Dwelling policy and Homeowners policy?
A In Dwelling forms, the liability coverage is available only by endorsement, whereas in Homeowners it is always included.
B In Dwelling forms, theft is a broad form peril, whereas in Homeowners it is not.
C In Dwelling forms, personal property coverage is optional, whereas in Homeowners it is included.
D In Dwelling forms, only 10% of the Coverage C limit is available for personal property away from the residence premises, whereas in Homeowners it is covered worldwide.
B
Policy provision that gives the insurer the right to repair or replace: A: loss payment B: our option C: loss settlement D: none of these
B
The part of the policy that contains the description of coverages provided is: A : insuring agreement B : additional coverages C : conditions D : declarations page
A
Which of the following homeowners policies covers renter`s insurance? A : HO 8 B : HO 4 C : HO 2 D : HO 1
B
A fire that is intentionally set and remains within its intended limits is: A : covered by fire insurance B : not covered C : the definition of a fire D : a hostile fire
B
Homeowner form(s) that do not provide any dwelling coverage (Coverage A)? A : HO-4 only B : Both HO-4 and HO-6 C : HO-6 only D : HO-2
A
In an insurance policy, which page contains information such as the insured`s name, information about risk, the date coverage begins, the premium, location of the property being insured, etc.? A : Insuring Agreement B : Exclusions C : Declarations D : Conditions
C
When an insurer pays the full amount of a claim, based on an appraisal made at the time of the contract and the value determined before the loss occurs, this is referred to as: A : Actual Cash Value B : Replacement Cost C : Stated Value D : Market Value
C
The stipulations for nonrenewing of a personal lines policy include a notice of cancellation of the policy in writing to the insured at least \_\_\_\_\_\_\_\_\_ before the effective date of cancellation. A : 45 days B: 10 days C: 60 days D : 20 days
A
Property and casualty policies are made up of the following parts except: A : Additional Claim Form B : Conditions C : Declarations D : Definitions
A
When an insured holds more than one identical policy for the same property, but the policies differ in coverage amount or length of coverage period, this is known as: A : Standard Mortgage Clause B : Concurrent Policy Coverage C : Special Lines Surplus Lines D : Standard Policy Coverage
B
Policy revision that provides broader coverage, no premium or endorsement: A : extension of coverage B : severability C : liberalization D : recovery
C
Two policies from different insurers otherwise identical are known as: A : nonconcurrent coverage B : fraud C : concurrent causation D : concurrent coverage
D
What is the main difference between the Standard Fire Policy (SFP) and the California Standard Form Fire Policy?
A : The SFP is standard for all companies in the U.S.
B : The SFP is under federal law, whereas the California Standard Form Fire Policy is under California state law.
C : The SFP has 165 lines of text and the California Standard Form Fire Policy has 158 lines of text.
D : The SFP is standard for all companies in the U.S. except California.
C
What is the difference between an HO 2 and an HO 4?
A : An HO 2 is written on a Basic form, while an HO 4 is the Special or open peril form.
B : An HO 2 is written on a broad form basis and covers the owner of a dwelling, whereas an HO 4 is a renter`s insurance policy.
C : For an HO 2, the applicant must be the homeowner and all perils are covered unless they are excluded, whereas in an HO 4 the insured must be the owner of a dwelling, only Broad form perils are covered, and personal property may also be insured.
D : An HO 4 is for condominium owners and an HO 2 is for tenants of the condominium.
B
This Standard Mortgage clause states that a \_\_\_\_\_\_\_\_\_\_ has the right to file a claim, make premium payments, and be notified of any cancellations or non-renewals. A : Insurance company B : Mortgage broker C : Policy Owner D: Lienholder
D
In a standard mortgage clause, what happens in the event of a total loss?
A: The insurer pays the insured first and then the lien holder.
B: The insurer pays the lienholder first and then the insured.
C: The insurer pays the insured the full amount and the insured is expected to pay the lienholder.
D: The insurer pays the lien holder the full amount and the lienholder pays the insured the remaining amount.
B
Cancellation for property and casualty policies for other than nonpayment is:
A: Both 30 days except auto and 20 days for auto are correct.
B: 30 days except auto
C : 20 days for auto
D : 50 days except auto
A
Which of the following is NOT a reason a home would be insured under a Dwelling policy rather than a Homeowners policy?
A : The dwelling is a seasonal dwelling and not used all the time.
B : The dwelling is a rental property.
C : The insured doesn`t want theft or liability coverage.
D : The dwelling has only one unit.
D
In an insurance policy, any modifications made to the regular contract are known as: A : Additional coverages B: Exclusions C : Conditions D : Endorsements
D
Which of the following homeowners policies have both dwelling and personal property on a broad peril form? A: HO 4, HO 5, HO 6 B : HO 2, HO 4, HO 5 C: HO 2 and HO 6 D : HO 2, HO 5, HO 8
C
Under HO property additional coverages, what is covered for debris removal expense?
A All costs, after the 10% share cost fee, to remove debris after a covered loss.
B 80% cost to remove debris after a covered loss.
C All cost to remove debris after a covered loss, unless excluded in the policy.
D This Reasonable cost to remove debris after a covered loss.
D
The correct statement regarding landlord furnishings would be:
A not covered in HO forms
B excludes the peril of theft
C This Both covered up to $2500 and excludes the peril of theft are correct
D covered up to $2500
C
Which HO endorsement covers loss due to personal injury (false arrest, libel, slander, defamation of character, and invasion of privacy?
A Personal Property - Replacement Cost endorsement
B Scheduled Personal Property endorsement
C This Personal Injury endorsement
D Guaranteed and Extended Replacement Cost Options
C
Under Section 1 Condition - Loss Settlement on an HO3, which of the following situations shows the insured is covered adequately in the event of a loss?
A The insured has $70,000 coverage on property worth $100,000.
B The insured has $40,000 coverage on property worth $90,000.
C This The insured has $80,000 coverage on property worth $100,000.
D The insured has $170,000 coverage on property worth $300,000.
C
All of the following are major differences between the broad form and the special form EXCEPT:
A This The broad form doesn`t require the 80% coinsurance and the special form does.
B There is no exclusion for antennas, outdoor equipment, fences, or awnings from the peril of falling objects in the special form.
C Coverage for accidental discharge or overflow of water or steam that occurs off the insured premises on the special form.
D Theft of property that is a part of the dwelling or other structure is covered in the special form.
A
All of the following are true of a broad coverage form EXCEPT:
A This No minimum amount of insurance is required for the basic form.
B The broad coverage form covers more perils than a basic coverage form.
C Seven extra perils are insured in a broad form.
D Coverage must equal at least 80% of the dwelling replacement cost.
A
Jewelry valued at $30,000 is destroyed in a hotel fire in Paris, the HO would: A exclude the loss B all are incorrect C limit the loss to $1500 D This cover up to Coverage C limit
D
Volcanic eruption excludes: A airborne shockwaves B none are excluded C lava D dust and ash
B
Coverage D, loss of use, depends on which of the following for a limit of insurance to be applied?
A Who is occupying the dwelling
B This How much coverage is placed on the dwelling?
C How long the dwelling has been occupied.
D Where the dwelling is located.
B
Coverage not provided without endorsement on a DP-1/Basic is: A Coverage D B This Coverage E C Coverage C D Both Coverage D and E
B
All of the following are considered an “insured” under Section 1 of the HO 3 EXCEPT:
A Named insured and his or her spouse.
B This Relatives who share the same last name as the insured.
C Family members who live with the insured.
D Guests and employees of the house (optional upon request).
B
Which is not an "other coverage" in the dwelling forms? A This Volcanic eruption B Breakage of glass C Tenant improvements D Collapse
A
In property coverage, what is specifically covered under coverage B?
A the dwelling unit and all personal property located inside the premises.
B all attached structures and outdoor personal property or equipment used to maintain or service the premises.
C This other structures/ separate structures at the same location, such as garages, sheds and birdhouses on the described location that are separated from the dwelling by a clear space or connected only by a fence or utility line.
D personal property commonly found in homes owned by the insured or other family members living with the insured.
C
Under Section II of the Homeowners form, what does coverage E (personal liability) cover?
A This This coverage will take affect if a claim is made against the insured for damages due to bodily injury or damage to the property caused by the insureds negligent acts.
B This coverage will take affect if the insureds business is sued.
C This coverage will take affect if the insured is hurt at work and needs medical attention.
D This coverage will take affect if the insured is injured and needs medical attention.
A
According to the ordinance or law exclusion, which of the following does NOT apply?
A The coverage applies to upgrades to a property due to building code changes by the city.
B This This coverage is required by state law.
C This exclusion also applies to the California requirement to provide restroom facilities compliant with the American Disability Act (ADA).
D This coverage can be added by endorsement.
B
Liability and Medical Payments are the two major coverages provided in:
A Section I of the Commercial form
B Section I of the Homeowners form
C Section II of the Commercial form
D This Section II of the Homeowners form
D
Which of the following would NOT be covered under Section II of Medical Payment to Others?
A This The insureds pets that are injured on the insureds property.
B Someone who trips over a water hose on the insureds property.
C The insureds family member not living on the property with the insured and not a named insured.
D A person injured on the insured`s property who was granted permission to be there by the insured
A
Under HO property coverage earth movement is a general exclusion. Which homeowners policy has done away with the exclusion for concurrent causation regarding this peril? A HO 6 B HO 2 C HO 4 D HO 3
D
Under HO property additional coverages, what is covered for removal?
A This Property removed from the insured`s premises to protect it from damage due to a covered loss.
B Debris removed after a covered loss to property.
C Any and all removal from loss due to a covered peril.
D Earth removal after total loss of a dwelling due to an earthquake or landslide.
A
Under Section II - Additional Coverages, which of the following is NOT included? A Damage to the Property of Others B First Aid to Others C Loss Assessment Coverage D This Medical Payments to Others
D
Which DP policies insure Coverage C for broad form perils? A DP-1, DP-2 and DP-3 B DP-3 C DP-2 D This Both DP-2 and DP-3
D
Which is not a liability endorsement on the HO forms? A Watercraft B Business pursuits C Personal injury D This Mobilehome
D
Difference between DP-2 Broad form and the DP-3 Special form is: A Collapse B This plumbing water damage C friendly fire D windstorm
B
According to Section II of the Homeowners policy (selected homeowners endorsements), which of the following is true of the mobile home endorsement?
A The mobile home is covered under the separate structure endorsement.
B This The mobile home is considered the dwelling being insured when it is endorsed on the policy.
C The mobile home is a moveable structure and is covered under the commercial policy.
D The mobile home is a moveable structure and therefore cannot be covered as a dwelling.
B
Under Section 1 Condition - Loss Settlement, which of the following formulas is used to determine payment to an insured in the event of a loss?
A This Insurance carried, divided by the insurance required, times the loss, minus the deductible, equals the loss payment.
B Insurance required, divided by the insurance carried, times the loss, minus the deductible, equals the loss payment.
C Insurance required, divided by the loss, times the insurance carried, minus the deductible, equals the loss payment.
D Insurance carried, divided by the loss, times the insurance required, equals the loss payment.
A
Under property coverage, which of the following is covered under coverage A? A Garage B Personal property C Other structures D This Dwelling
D
Which is not an exclusion under Coverage A on an HO-3? A Damage by insured's dog B Damage by vermin C Damage by insects D Damage by a deer
D
All of the following are general exclusions to the HO 3 policy except: A Loss Assessment B Earth Movement C Flood D Building Ordinance
A
Which of the following is true regarding vehicles covered and not covered under Section II?
A All the insureds vehicles are covered.
B All the insureds vehicles are excluded, except the primary vehicles listed on the policy.
C All the insureds vehicles are excluded, except trailers being towed by the vehicles.
D All the insureds vehicles and trailers towed by the insured are excluded from coverage.
D
The Homeowners Watercraft Endorsement under Section II includes all the following EXCEPT:
A Coverage for liability exposure on scheduled boats.
B Coverage for medical payments exposure on scheduled boats.
C Property damage for the boat itself is not covered.
D Use of a boat in a racing competition.
D
Which of the following properties are NOT included in insured locations and residence premises under Section II of the Homeowners policy?
A Insureds cemetery plot
B Insured`s work office space
C Vacant land
D Land on which a residence is being constructed
B
In the event of a loss, the insured has the responsibility to do all of the following EXCEPT:
A Notify the police if the loss is the result of theft.
B Report the loss as soon as possible.
C Protect the property from further damage.
D Provide a copy of the police report to the insurer.
D
Which is excluded under Section I and covered under Section II? A Ride on lawn mower B Firearms C Animals, birds, or fish D Hobby aircraft
C
Which of the following is NOT an option of the California Residential Property Insurance Disclosure Statement? A Fair Market Value Cost Coverage B Extended Replacement Cost Coverage C Guaranteed Replacement Coverage D Actual Cash Value
A
The following properties are included as an insured location and/or residence premises for Liability and Medical except: A Apartment B Insured's relative cemetery plot C Vacant Land D Borrowed beach home
B
Why is mobility a common characteristic of many types of property insured under Inland Marine contracts?
A Mobility covers property while it is in transit from one location to another.
B Mobility covers moveable property, whether or not it is actually moved.
C Mobility covers the expense of transporting goods from one location to another.
D Mobility covers the vehicles used to transport property from one location to another.
B
In an Inland Marine policy, what is the difference between the Personal Articles Floater (PAF) and the Homeowners Scheduled Personal Property Endorsement?
A The PAF provides coverage for all perils and the Homeowners Scheduled Personal Property Endorsement provides coverage for perils included in the policy.
B The PAF provides more coverage than the Homeowners Scheduled Personal Property Endorsement.
C The PAF must have an appraisal and the Scheduled may not.
D The Homeowners Scheduled Personal Property Endorsement provides more coverage than the PAF.
C
Which of the following provides coverage for injured crewmembers? This coverage is also known as Jones Act coverage. A Longshoreman and Harbor Workers B Personal Articles Floater C Workers Compensation D P & I (protection and indemnity)
D
Which of the following is NOT a provision provided by the California Earthquake Authority?
A $5000 Personal Property coverage.
B Dwelling coverage with a deductible equal to 15% of the dwelling limit.
C Optional coverage: $10000 building code upgrades.
D $2500 coverage on pools, fences, driveways, landscaping, and other structures.
D
Inland Marine policies are generally written on an open peril basis. All of the following are the most common exclusions EXCEPT: A government action B nuclear hazard C collision D indirect loss
C
What is the difference between the NFIP Emergency Program limits and the NFIP Regular Program limits?
A The Emergency Program limits cover less for building and contents than the Regular Program limits.
B The amount of coverage for contents is greater than coverage for the building in the Emergency Program limits.
C The Emergency Program limits and the Regular Program limits cover the same amount for building and contents.
D The Emergency Program limits cover more for building and contents than the Regular Program limits.
A
The Watercraft endorsement provides \_\_\_\_\_\_\_\_\_\_ coverage for Liability and Medical Payments to Others for scheduled boats. A extended B very limited C full D moderate limits of
D
Uninsured loss exposures on HO forms are due to: A uniqueness B items difficult to value C Any one of these D susceptibility to loss
C
In a boat owner`s policy, which of the following is NOT considered typical coverage? A Medical Payments B Physical damage coverage C Hull D Liability
C
The Earthquake stand alone policy typically has a deductible of \_\_\_\_\_\_. A 15% B 5% C $10,000 D $15,000
A
Which of the following statements with regards to the NFIP is incorrect?
A Flood Insurance is available on residential and commercial properties.
B Standard Homeowners policies cover losses as a result of flooding.
C Flood Insurance provides coverage to buildings and an insureds contents when damage.
D The NFIP makes flood available for both commercial and personal property risks.
B
In an Inland Marine policy, which of the following is NOT an advantage to filed lines?
A There have standardized forms.
B The simplified rating (discounts).
C They include Electronic Data Processing and Contractors Equipment floaters.
D The ability to be included in a Commercial Package policy.
C
All of the following are disadvantages of using the earthquake endorsement, EXCEPT:
A The deductible, typically 15% of the dwelling limit, applies to each coverage separately.
B The deductible may be lower
C The coverage usually costs more than a separate policy.
D The deductible applies only once on a separate policy.
B
