Tuesday Flashcards
Which of the following is the best explanation of liability insurance?
- It provides coverage to any party for injury that is expected to happen
- It provides coverage for bodily injury or property damage arising out of the insured’s premises or operations regardless of fault or negligence
- It provides protection in the event the insured’s negligence causes bodily injury or property damage to others and the insured becomes legally obligated to pay damages
- It provides coverage for bodily injury or property damage to the insured and the insured’s property
It provides protection in the event the insured’s negligence causes bodily injury or property damage to others and the insured becomes legally obligated to pay damages
Which of the following statements about a property policy is false?
- Named perils policies cover only stated perils
- Open perils policies cover all perils, except those excluded
- Coinsurance only applies to partial losses
- The purpose of coinsurance is to have the insured retain part of the risk
The purpose of coinsurance is to have the insured retain part of the risk - The purpose of coinsurance is to encourage the insured to carry insurance to value.
If the insured and insurer do not agree on the value of a property loss, what condition would apply?
- Appraisal
- Arbitration
- Subrogation
- Abandonment
Appraisal
When a loss occurs as a result of two perils, one of which is excluded and the other of which is insured against, and the insurer covers the loss, coverage is provided based on the principle of:
- Concurrent causation
- Proximate causation
- Bilateral causation
- Supplemental causation
Concurrent causation is the legal doctrine that states that when a property loss results from two causes, one that is excluded and one that is covered, the loss is covered.
Which of the following is true regarding the Personal Liability Supplement?
- It provides coverage for claim expenses, first aid expenses, and damage to property of others
- It covers professional services rendered by the insured
- The limit of liability is the same as the Coverage A amount
- It covers the insured’s personal autos
It provides coverage for claim expenses, first aid expenses, and damage to property of others
All of the following are types of insurers, except:
- Reciprocal insurers
- Mutual insurers
- Stock insurers
- Proprietary insurers
Proprietary insurers
The limit of liability for medical payments to others under an HO-3 is written on what basis?
- Per person
- Per occurrence
- Per accident
- Actual cash value
Per person
In North Carolina, the standard limit for Loss of Use coverage on an HO-5 is:
- 30% of Coverage A
- 20% of Coverage C
- 20% of Coverage B
- 20% of Coverage A
20% of Coverage A
R lives in a participating community, and the community is determined to be a high-risk flood zone. Before coverage can be rated and issued, the NFIP will:
- Request R to submit a FIRM
- Cede coverage to a residual market
- Ask R to sign a consent to rate form
- Require R to complete an elevation certificate
Require R to complete an elevation certificate
Which coverage is written with a per occurrence limit?
- Personal injury
- Bodily injury and property damage
Bodily injury and property damage
A leased auto is eligible for coverage under a Personal Auto policy if the lease contract is for a continuous period of at least:
- 12 months
- 9 months
- 3 months
- 6 months
6 months
The maximum limits of insurance for policies ceded to the Facility include all of the following, except:
- $1 million Uninsured Motorist coverage per person and per accident
- $100,000 bodily injury coverage per person
- $1,000 physical damage coverage
- $2,000 medical payments coverage per person
$1,000 physical damage coverage - Physical damage coverage is not provided by the Facility.
Special damages would be awarded for all of the following types of loss, except:
- Pain
- Medical expenses
- Loss of income
- Repair costs
Pain - Special damages are an award to an injured party for actual and known expenses such as bills, loss of earnings, and the costs of repairing or replacing damaged property. General damages are paid to compensate for losses that cannot be calculated objectively, like pain and suffering.
According to North Carolina’s Insurance Information and Privacy Protection Act, an adverse underwriting decision for an individual insurance policy would include any of the following, except:
- Offering to insure at a rate that is higher than standard
- Terminating coverage on a specific policy
- An agent declining to make an application with the specific insurer the applicant requested
- Policy rescission
Policy rescission - For individually written coverage, the rescission of a policy, termination of a policy on a statewide basis, or a declination of coverage because it is not available on a statewide basis are examples of decisions that are not adverse underwriting decisions.
Part D of the Personal Auto Policy provides which of the following coverages?
- Medical Payments Coverage
- Coverage for Damage to Your Auto
- Underinsured Motorists Coverage
- Liability Coverage
Coverage for Damage to Your Auto - Part D of the Personal Auto Policy includes Collision and Other Than Collision coverages.
