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Adjusters Final Exam

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Question 1 of 806

1. Question

Which of the following terms best describes the chance of uncertainty or loss?

Risk
Correct Incorrect Correct answer

Peril
Correct Incorrect Correct answer

Hazard
Correct Incorrect Correct answer

Exposure
Correct Incorrect Correct answer

Correct

Incorrect
Question 2 of 806

2. Question

In order to avert the financial loss that sometimes accompanies an auto collision, Robert chooses not to own or drive a car. Which of the following means of risk management is Robert practicing?

Risk reduction
Correct Incorrect Correct answer

Risk avoidance
Correct Incorrect Correct answer

Risk transfer
Correct Incorrect Correct answer

Risk control
Correct Incorrect Correct answer

Correct

Incorrect
Question 3 of 806

3. Question

Which of the following is not a method of managing risk?

Transferring the risk to an insurance company
Correct Incorrect Correct answer

Retaining the risk and personally paying for any loss
Correct Incorrect Correct answer

Measuring and quantifying the risk
Correct Incorrect Correct answer

Avoiding the risk altogether
Correct Incorrect Correct answer

Correct

Incorrect
Question 4 of 806

4. Question

Which of the following risk management methods involves not engaging in the activity that carries risk?

Risk reduction
Correct Incorrect Correct answer

Risk avoidance
Correct Incorrect Correct answer

Risk monitoring
Correct Incorrect Correct answer

Risk transfer
Correct Incorrect Correct answer

Correct

Incorrect
Question 5 of 806

5. Question

Which of the following is an example of risk reduction?

A machine shop installs a sprinkler system to limit the severity of any fire that occurs.
Correct Incorrect Correct answer

A tire factory takes out an insurance policy to handle its liability exposures.
Correct Incorrect Correct answer

By never getting into a car, a woman is assured of not being involved in an auto collision.
Correct Incorrect Correct answer

The owner of a large delivery company decides that if any of its vehicles is involved in an accident, the company will pay for the loss.
Correct Incorrect Correct answer

Correct

Incorrect
Question 6 of 806

6. Question

A risk control technique that limits the severity of a loss comes under the heading of which of the following methods of risk management?

Risk avoidance
Correct Incorrect Correct answer

Risk reduction
Correct Incorrect Correct answer

Risk retention
Correct Incorrect Correct answer

Risk transfer
Correct Incorrect Correct answer

Correct

Incorrect
Question 7 of 806

7. Question

Don’s small home is paid for, and he has accumulated considerable savings. Since he has never filed a claim, he decides to cancel his homeowners insurance and pay for any loss he might experience. Which of the following risk management methods is Don using?

Risk avoidance
Correct Incorrect Correct answer

Risk retention
Correct Incorrect Correct answer

Risk transfer
Correct Incorrect Correct answer

Risk reduction
Correct Incorrect Correct answer

Correct

Incorrect
Question 8 of 806

8. Question

Mark’s apartment has been burglarized twice. After his second loss, he decides to purchase an insurance policy protecting the contents of his home. Which of the following methods of risk management is Mark practicing?

Risk reduction
Correct Incorrect Correct answer

Risk retention
Correct Incorrect Correct answer

Risk transfer
Correct Incorrect Correct answer

Risk control
Correct Incorrect Correct answer

Correct

Incorrect
Question 9 of 806

9. Question

Which of the following best describes the purpose of insurance?

To avoid risk
Correct Incorrect Correct answer

To eliminate risk
Correct Incorrect Correct answer

To transfer risk
Correct Incorrect Correct answer

To control risk
Correct Incorrect Correct answer

Correct

Incorrect
Question 10 of 806

10. Question

ABC Insurance Company must accurately predict its losses so that proper premiums can be charged to accumulate sufficient funds. Which of the following should the company rely on in order to achieve this result?

The law of averages
Correct Incorrect Correct answer

The law of large numbers
Correct Incorrect Correct answer

The principle of indemnity
Correct Incorrect Correct answer

The law of diminishing returns
Correct Incorrect Correct answer

Correct

Incorrect
Question 11 of 806

11. Question

Which of the following best illustrates the law of large numbers?

The more examples used to develop any statistic, the more reliable the statistic will be.
Correct Incorrect Correct answer

Only large samples can produce reliable predictions.
Correct Incorrect Correct answer

Every possible exposure from all insureds must be considered.
Correct Incorrect Correct answer

Large numbers of cases reduce the chance that an event may happen.
Correct Incorrect Correct answer

Correct

Incorrect
Question 12 of 806

12. Question

Which of the following types of risk can be managed with insurance?

Those with the greatest potential for gain
Correct Incorrect Correct answer

Those with only the possibility of loss
Correct Incorrect Correct answer

Those which are speculative in nature
Correct Incorrect Correct answer

Those with a greater potential for gain than for loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 13 of 806

13. Question

Which of the following types of risk can be managed with insurance?

Pure risk
Correct Incorrect Correct answer

Speculative risk
Correct Incorrect Correct answer

Specific risk
Correct Incorrect Correct answer

Genuine risk
Correct Incorrect Correct answer

Correct

Incorrect
Question 14 of 806

14. Question

The requirement that before a person can benefit from insurance, he or she must have a financial interest in the property illustrates:

The principle of indemnity
Correct Incorrect Correct answer

Insurable interest
Correct Incorrect Correct answer

The law of large numbers
Correct Incorrect Correct answer

Essential risk
Correct Incorrect Correct answer

Correct

Incorrect
Question 15 of 806

15. Question

The theory of insurable interest requires which of the following?

A chance at betterment in the event of a loss
Correct Incorrect Correct answer

A financial interest in the property
Correct Incorrect Correct answer

A speculative risk
Correct Incorrect Correct answer

A party to benefit from the loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 16 of 806

16. Question

Terry purchases a house from the Smiths. She makes a small down payment and borrows the rest from the bank. Which of the following parties has an insurable interest in the house?

Terry
Correct Incorrect Correct answer

Terry and the bank
Correct Incorrect Correct answer

Terry's children who will probably inherit the property someday
Correct Incorrect Correct answer

The Smiths
Correct Incorrect Correct answer

Correct

Incorrect
Question 17 of 806

17. Question

In order to be a suitable subject for insurance, the risk must meet all of the following criteria except:

The risk of loss must be definite as to time.
Correct Incorrect Correct answer

The risk of loss must be definite as to place.
Correct Incorrect Correct answer

The risk of loss must be difficult to falsify.
Correct Incorrect Correct answer

The risk of loss must be expected.
Correct Incorrect Correct answer

Correct

Incorrect
Question 18 of 806

18. Question

How large must a risk be in order to be a suitable subject for insurance?

Any size determined by the insured
Correct Incorrect Correct answer

Any size determined by the insurer
Correct Incorrect Correct answer

Large enough to create a financial hardship for the insured
Correct Incorrect Correct answer

Large enough to be satisfactory once the deductible is met
Correct Incorrect Correct answer

Correct

Incorrect
Question 19 of 806

19. Question

Which of the following would not quality as a suitable subject for insurance?

A risk for which it is difficult to assign a financial value
Correct Incorrect Correct answer

A risk that is definite as to time and place
Correct Incorrect Correct answer

A risk that cannot be assigned a financial value
Correct Incorrect Correct answer

A risk that is unexpected
Correct Incorrect Correct answer

Correct

Incorrect
Question 20 of 806

20. Question

Which of the following is used to make losses predictable?

A large number of people with a similar potential for loss
Correct Incorrect Correct answer

A large number of people with the same potential for loss
Correct Incorrect Correct answer

A very accurate loss experience of a small number of insureds
Correct Incorrect Correct answer

A large number of people with a diverse loss experience
Correct Incorrect Correct answer

Correct

Incorrect
Question 21 of 806

21. Question

Which of the following best illustrates the spread of risk?

Insuring every person in one town
Correct Incorrect Correct answer

Insuring several people in many towns
Correct Incorrect Correct answer

Insuring most people in one town
Correct Incorrect Correct answer

Insuring a few people in several towns
Correct Incorrect Correct answer

Correct

Incorrect
Question 22 of 806

22. Question

Which of the following increases the chance of a loss?

A hazard
Correct Incorrect Correct answer

A risk
Correct Incorrect Correct answer

A peril
Correct Incorrect Correct answer

An exposure
Correct Incorrect Correct answer

Correct

Incorrect
Question 23 of 806

23. Question

A hazard is best described as:

Anything that increases the chance of a loss
Correct Incorrect Correct answer

Something that increases the severity of a loss
Correct Incorrect Correct answer

Anything that causes a loss
Correct Incorrect Correct answer

Anything that contributes to a loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 24 of 806

24. Question

Which of the following describes the cause of loss?

Hazard
Correct Incorrect Correct answer

Risk
Correct Incorrect Correct answer

Peril
Correct Incorrect Correct answer

Exposure
Correct Incorrect Correct answer

Correct

Incorrect
Question 25 of 806

25. Question

Which of the following best describes the difference between a peril and a hazard?

A peril is the cause of loss; a hazard increases the chance of loss.
Correct Incorrect Correct answer

A peril is tangible while a hazard is not.
Correct Incorrect Correct answer

A peril can increase the severity of a loss while a hazard cannot.
Correct Incorrect Correct answer

A peril is the cause of loss while a hazard only contributes to the loss.
Correct Incorrect Correct answer

Correct

Incorrect
Question 26 of 806

26. Question

Which of the following types of hazards arises from the condition of the property itself?

Physical hazard
Correct Incorrect Correct answer

Material hazard
Correct Incorrect Correct answer

Moral hazard
Correct Incorrect Correct answer

Morale hazard
Correct Incorrect Correct answer

Correct

Incorrect
Question 27 of 806

27. Question

Sam’s auto is well insured. He sometimes drives carelessly because he knows his loss will be covered in the event of an accident. This scenario illustrates which of the following types of hazards?

Physical
Correct Incorrect Correct answer

Moral
Correct Incorrect Correct answer

Morale
Correct Incorrect Correct answer

Accidental
Correct Incorrect Correct answer

Correct

Incorrect
Question 28 of 806

28. Question

Which of the following is not one of the three types of hazards?

Physical
Correct Incorrect Correct answer

Speculative
Correct Incorrect Correct answer

Morale
Correct Incorrect Correct answer

Moral
Correct Incorrect Correct answer

Correct

Incorrect
Question 29 of 806

29. Question

Eileen is suffering financial difficulties, one of which is a large car payment. She decides to orchestrate an accident in order to total her vehicle and have it paid off. Eileen is exposing herself to a:

Physical hazard
Correct Incorrect Correct answer

Morale hazard
Correct Incorrect Correct answer

Moral hazard
Correct Incorrect Correct answer

Lawsuit
Correct Incorrect Correct answer

Correct

Incorrect
Question 30 of 806

30. Question

When two competent parties promise a certain performance in exchange for a certain consideration, which of the following has been achieved?

A contract
Correct Incorrect Correct answer

A meeting of the minds
Correct Incorrect Correct answer

A promissory note
Correct Incorrect Correct answer

A pact
Correct Incorrect Correct answer

Correct

Incorrect
Question 31 of 806

31. Question

All of the following are characteristics of a legally enforceable contract except:

Competent parties
Correct Incorrect Correct answer

Legal purpose
Correct Incorrect Correct answer

Offer and acceptance
Correct Incorrect Correct answer

Performance
Correct Incorrect Correct answer

Correct

Incorrect
Question 32 of 806

32. Question

Generally, which of the following could be a party to a valid contract?

A boy under the age of majority
Correct Incorrect Correct answer

A woman who has been judged insane
Correct Incorrect Correct answer

A competent adult
Correct Incorrect Correct answer

A person under the influence of alcohol when signing
Correct Incorrect Correct answer

Correct

Incorrect
Question 33 of 806

33. Question

Which of the following contracts could be considered valid?

One that is against public policy
Correct Incorrect Correct answer

One that in some way violates the law
Correct Incorrect Correct answer

One that is formed for a legal purpose
Correct Incorrect Correct answer

One that is offensive to the best interests of the public
Correct Incorrect Correct answer

Correct

Incorrect
Question 34 of 806

34. Question

When one party makes an offer and another party accepts it, which of the following has taken place?

A valid contract
Correct Incorrect Correct answer

Agreement
Correct Incorrect Correct answer

Acceptance
Correct Incorrect Correct answer

A settlement
Correct Incorrect Correct answer

Correct

Incorrect
Question 35 of 806

35. Question

Which of the following statements best illustrates the principle of indemnity?

Before a person can benefit from insurance, he or she must have a financial interest in the property.
Correct Incorrect Correct answer

The more examples used to develop any statistic, the more reliable the statistic will be.
Correct Incorrect Correct answer

After a loss, an insured should be restored to the approximate financial condition as before the loss, no more and no less.
Correct Incorrect Correct answer

The event that constitutes the trigger of a claim should be fortuitous.
Correct Incorrect Correct answer

Correct

Incorrect
Question 36 of 806

36. Question

Which of the following is a correct statement about an insurance contract?

An insurance contract insures property.
Correct Incorrect Correct answer

An insurance contract insures the person who owns the property.
Correct Incorrect Correct answer

An insurance contract should provide the insured with the opportunity for gain.
Correct Incorrect Correct answer

An insurance contract is similar to gambling.
Correct Incorrect Correct answer

Correct

Incorrect
Question 37 of 806

37. Question

When an insurance contract is referred to as aleatory, this means:

The contract is contingent on an uncertain event (loss).
Correct Incorrect Correct answer

The contract is certain to pay out at some time.
Correct Incorrect Correct answer

One party to the contract has greater power over the other party.
Correct Incorrect Correct answer

Both parties to the contract are bound to perform.
Correct Incorrect Correct answer

Correct

Incorrect
Question 38 of 806

38. Question

Why are insurance contracts considered adhesion contracts?

Both parties are bound to the agreement.
Correct Incorrect Correct answer

They are sometimes ambiguous.
Correct Incorrect Correct answer

One party to the agreement has greater power over the other party.
Correct Incorrect Correct answer

Both of the parties share power equally.
Correct Incorrect Correct answer

Correct

Incorrect
Question 39 of 806

39. Question

Why is an insurance policy considered a unilateral contract?

Because it is drawn up by one side, the insurance company
Correct Incorrect Correct answer

Because only the insurance company is obligated to perform
Correct Incorrect Correct answer

Because the insurer and the insured have purposes independent of one another
Correct Incorrect Correct answer

Because the insurer's position is inherently opposite that of the insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 40 of 806

40. Question

Because insurance companies rely on the truthfulness and integrity of insurance applicants, the insurance contract is considered:

Unreliable
Correct Incorrect Correct answer

One of utmost good faith
Correct Incorrect Correct answer

Bilateral
Correct Incorrect Correct answer

Questionable in its validity
Correct Incorrect Correct answer

Correct

Incorrect
Question 41 of 806

41. Question

Which of the following parts of the insurance policy contains such information as the name and address of the insured, the amount of coverage provided, a description of the property, and the premium amount?

The Declarations
Correct Incorrect Correct answer

The Insuring Agreement
Correct Incorrect Correct answer

The Conditions
Correct Incorrect Correct answer

The Definitions
Correct Incorrect Correct answer

Correct

Incorrect
Question 42 of 806

42. Question

Another term for policy jacket is:

Policy cover
Correct Incorrect Correct answer

Policy skeleton
Correct Incorrect Correct answer

Policy frame
Correct Incorrect Correct answer

Policy draft
Correct Incorrect Correct answer

Correct

Incorrect
Question 43 of 806

43. Question

Which of the following is always a correct statement about an insurance company organized as a stock company?

It sells interests to stockholders in order to raise money to operate.
Correct Incorrect Correct answer

It is incorporated.
Correct Incorrect Correct answer

Profits are returned to insureds in the form of dividends.
Correct Incorrect Correct answer

All stockholders are insureds.
Correct Incorrect Correct answer

Correct

Incorrect
Question 44 of 806

44. Question

All of the following are characteristics of mutual insurance companies except:

Insureds are owners of the company.
Correct Incorrect Correct answer

Insureds can vote to elect company management.
Correct Incorrect Correct answer

Insureds receive company profits in the form of dividends or premium reductions.
Correct Incorrect Correct answer

Shares of stock represent ownership in the company.
Correct Incorrect Correct answer

Correct

Incorrect
Question 45 of 806

45. Question

Reciprocate, as in a reciprocal insurance company, means:

To respond
Correct Incorrect Correct answer

To substitute
Correct Incorrect Correct answer

To give and take
Correct Incorrect Correct answer

To give
Correct Incorrect Correct answer

Correct

Incorrect
Question 46 of 806

46. Question

Which of the following manages an insurance company organized as a reciprocal?

Stockholders
Correct Incorrect Correct answer

Insureds
Correct Incorrect Correct answer

Board of directors
Correct Incorrect Correct answer

Attorney-in-fact
Correct Incorrect Correct answer

Correct

Incorrect
Question 47 of 806

47. Question

All of the following are correct statements about Lloyd’s associations except:

Association is voluntary.
Correct Incorrect Correct answer

Individuals or groups share in writing insurance contracts.
Correct Incorrect Correct answer

They are made up of syndicates.
Correct Incorrect Correct answer

They are insurance companies.
Correct Incorrect Correct answer

Correct

Incorrect
Question 48 of 806

48. Question

All of the following are correct statements about fraternal benefit societies as insuring organizations except:

A fraternal benefit society is incorporated.
Correct Incorrect Correct answer

A fraternal benefit society is organized for profit.
Correct Incorrect Correct answer

A fraternal benefit society is conducted only for the benefit of members and their beneficiaries.
Correct Incorrect Correct answer

A fraternal benefit society has no capital stock.
Correct Incorrect Correct answer

Correct

Incorrect
Question 49 of 806

49. Question

Which of the following best describes the purpose of risk retention groups?

As product manufacturers, they are formed to self-insure against liability exposures.
Correct Incorrect Correct answer

They are formed to offer insurance to high-risk companies.
Correct Incorrect Correct answer

They are formed to self-insure any company.
Correct Incorrect Correct answer

They are formed to self-insure any company against any exposure.
Correct Incorrect Correct answer

Correct

Incorrect
Question 50 of 806

50. Question

When part or all of a risk of loss is borne without the benefit of insurance coverage, which of the following has taken place?

An insurance deficit
Correct Incorrect Correct answer

Self-insurance
Correct Incorrect Correct answer

An absence of coverage
Correct Incorrect Correct answer

First loss retention
Correct Incorrect Correct answer

Correct

Incorrect
Question 51 of 806

51. Question

Insurance coverage that is not ordinarily available from private insurers is sometimes called:

Residual market insurance
Correct Incorrect Correct answer

Outstanding coverage
Correct Incorrect Correct answer

Excess lines
Correct Incorrect Correct answer

Surplus lines
Correct Incorrect Correct answer

Correct

Incorrect
Question 52 of 806

52. Question

Which of the following is not provided by the federal government?

Crop insurance
Correct Incorrect Correct answer

Flood insurance
Correct Incorrect Correct answer

Homeowners insurance
Correct Incorrect Correct answer

War risk and nuclear energy liability insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 53 of 806

53. Question

All of the following are correct statements about insurance provided at the state level except:

Insurance may be provided by individual states.
Correct Incorrect Correct answer

State governments provide unemployment insurance.
Correct Incorrect Correct answer

State governments may provide workers compensation coverage.
Correct Incorrect Correct answer

States must provide workers compensation coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 54 of 806

54. Question

Which of the following is not one of the four broad categories or lines of insurance?

Property and casualty
Correct Incorrect Correct answer

Life
Correct Incorrect Correct answer

Health and Disability
Correct Incorrect Correct answer

Travel
Correct Incorrect Correct answer

Correct

Incorrect
Question 55 of 806

55. Question

A multi-line insurance company:

Writes more than one line of insurance
Correct Incorrect Correct answer

Writes only one line of insurance
Correct Incorrect Correct answer

Writes insurance for more than one market
Correct Incorrect Correct answer

Writes insurance for all lines of coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 56 of 806

56. Question

Risks that will suffer financial loss because something owned is damaged or destroyed is covered by:

Business insurance
Correct Incorrect Correct answer

Property insurance
Correct Incorrect Correct answer

Casualty insurance
Correct Incorrect Correct answer

Commercial insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 57 of 806

57. Question

Which of the following best describes liability risk?

Risk of financial loss as a result of actions toward others
Correct Incorrect Correct answer

Risk of loss as a result of actions toward others
Correct Incorrect Correct answer

Risk of financial loss as a result of negligence
Correct Incorrect Correct answer

Risk of loss as a result of accidental means
Correct Incorrect Correct answer

Correct

Incorrect
Question 58 of 806

58. Question

What is the primary difference between personal and commercial lines of property/casualty coverage?

Personal lines protect individuals; commercial lines protect businesses.
Correct Incorrect Correct answer

Personal lines protect an individual or family; commercial lines protect businesses.
Correct Incorrect Correct answer

Personal lines are simple; commercial lines are complex.
Correct Incorrect Correct answer

Personal lines have fewer regulations than commercial lines.
Correct Incorrect Correct answer

Correct

Incorrect
Question 59 of 806

59. Question

All of the following are duties of an insurance agent except:

Selling insurance policies
Correct Incorrect Correct answer

Collecting premiums
Correct Incorrect Correct answer

Advising customers to obtain additional coverage
Correct Incorrect Correct answer

Providing a link between the insurer and insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 60 of 806

60. Question

Insurance agent Inez signs each new policy prepared by her company before its delivery to an insured. Which of the following best describes this action?

Countersigning
Correct Incorrect Correct answer

Endorsing
Correct Incorrect Correct answer

Authorizing
Correct Incorrect Correct answer

Approving
Correct Incorrect Correct answer

Correct

Incorrect
Question 61 of 806

61. Question

When seeking acceptable business for an insurer, who is responsible for field underwriting each risk?

The insurer
Correct Incorrect Correct answer

The company underwriter
Correct Incorrect Correct answer

The insurance agent
Correct Incorrect Correct answer

The insurance agent's staff
Correct Incorrect Correct answer

Correct

Incorrect
Question 62 of 806

62. Question

Agent Aaron wants to protect himself against legal liability arising from making unintentional errors or omissions in his practice. Which of the following should Aaron purchase?

Liability coverage
Correct Incorrect Correct answer

E&O coverage
Correct Incorrect Correct answer

Accident coverage
Correct Incorrect Correct answer

Risk management coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 63 of 806

63. Question

When an agent is authorized to act on behalf of his or her principal, which of the following relationships exists?

Agency
Correct Incorrect Correct answer

Good faith
Correct Incorrect Correct answer

Authoritative
Correct Incorrect Correct answer

Representative
Correct Incorrect Correct answer

Correct

Incorrect
Question 64 of 806

64. Question

When an agent acts under the powers granted by the principal, which of the following is correct?

The principal is not liable for the acts of the agent.
Correct Incorrect Correct answer

These acts are considered to be the acts of the principal.
Correct Incorrect Correct answer

The principal may choose whether or not to accept liability for the agent's acts.
Correct Incorrect Correct answer

There is no connection between the principal and the acts of the agent.
Correct Incorrect Correct answer

Correct

Incorrect
Question 65 of 806

65. Question

Which of the following types of authority is specifically given to an agent, either orally or in writing, by the principal?

Express authority
Correct Incorrect Correct answer

Implied authority
Correct Incorrect Correct answer

Apparent authority
Correct Incorrect Correct answer

Ostensible authority
Correct Incorrect Correct answer

Correct

Incorrect
Question 66 of 806

66. Question

Which of the following best describes implied authority?

Authority that is specifically given to an agent, either orally or in writing, by the principal
Correct Incorrect Correct answer

Authority not formally expressed or communicated
Correct Incorrect Correct answer

Authority assumed by a reasonable person
Correct Incorrect Correct answer

Authority reasonably assumed by the public
Correct Incorrect Correct answer

Correct

Incorrect
Question 67 of 806

67. Question

Which of the following best describes apparent authority?

Authority assumed by a reasonable person
Correct Incorrect Correct answer

Authority that is obvious to a reasonable person
Correct Incorrect Correct answer

Authority specifically granted
Correct Incorrect Correct answer

Authority not formally expressed or communicated
Correct Incorrect Correct answer

Correct

Incorrect
Question 68 of 806

68. Question

Which are the four basic distribution systems used to market insurance?

Exclusive agency, direct writer, direct response, independent agency
Correct Incorrect Correct answer

Agency, brokerage, direct writer, direct response
Correct Incorrect Correct answer

Exclusive, nonexclusive, independent, dependent
Correct Incorrect Correct answer

Exclusive agency, exclusive brokerage, direct writer, direct response
Correct Incorrect Correct answer

Correct

Incorrect
Question 69 of 806

69. Question

Another term for exclusive agency is:

Direct agency
Correct Incorrect Correct answer

Limited agency
Correct Incorrect Correct answer

Independent agency
Correct Incorrect Correct answer

Captive agency
Correct Incorrect Correct answer

Correct

Incorrect
Question 70 of 806

70. Question

Which of the following insurance distribution systems has no agents?

Direct writer system
Correct Incorrect Correct answer

Direct response system
Correct Incorrect Correct answer

Captive system
Correct Incorrect Correct answer

Independent system
Correct Incorrect Correct answer

Correct

Incorrect
Question 71 of 806

71. Question

An agent who represents more than one company is called a(n):

Exclusive agent
Correct Incorrect Correct answer

Captive agent
Correct Incorrect Correct answer

Independent agent
Correct Incorrect Correct answer

Direct agent
Correct Incorrect Correct answer

Correct

Incorrect
Question 72 of 806

72. Question

In the insurance business, how does a solicitor differ from an agent?

A solicitor may not collect premiums while an agent may do so.
Correct Incorrect Correct answer

A solicitor has more limited authority than an agent.
Correct Incorrect Correct answer

A solicitor has greater authority than an agent.
Correct Incorrect Correct answer

A solicitor can countersign policies; an agent cannot.
Correct Incorrect Correct answer

Correct

Incorrect
Question 73 of 806

73. Question

Highly specialized lines of insurance are referred to as:

Excess or surplus lines
Correct Incorrect Correct answer

Dedicated lines
Correct Incorrect Correct answer

Specific or special lines
Correct Incorrect Correct answer

Expert lines
Correct Incorrect Correct answer

Correct

Incorrect
Question 74 of 806

74. Question

Which of the following is a general term used to describe anyone who sells insurance?

Solicitor
Correct Incorrect Correct answer

Broker
Correct Incorrect Correct answer

Producer
Correct Incorrect Correct answer

Agent
Correct Incorrect Correct answer

Correct

Incorrect
Question 75 of 806

75. Question

Which of the following statements best describes the work performed by insurance consultants and the way in which they are compensated?

Insurance consultants sell insurance and are compensated by commission.
Correct Incorrect Correct answer

Insurance consultants, for a fee, offer advice on the advantages and disadvantages of various insurance policies.
Correct Incorrect Correct answer

Insurance consultants are salaried employees offering insurance advice.
Correct Incorrect Correct answer

Insurance consultants sell insurance and are paid on a salaried basis.
Correct Incorrect Correct answer

Correct

Incorrect
Question 76 of 806

76. Question

All of the following are correct statements about loss ratio except:

Loss ratio compares company operations from year to year.
Correct Incorrect Correct answer

Loss ratio shows the percentage of losses incurred for every earned premium dollar.
Correct Incorrect Correct answer

Loss ratio is calculated by dividing incurred losses by earned premiums.
Correct Incorrect Correct answer

Loss ratio is calculated by dividing earned premiums by incurred losses.
Correct Incorrect Correct answer

Correct

Incorrect
Question 77 of 806

77. Question

The premium that an insurance company actually earns by providing insurance protection for a designated period of time is termed:

Incurred premium
Correct Incorrect Correct answer

Earned premium
Correct Incorrect Correct answer

Protection premium
Correct Incorrect Correct answer

Experience premium
Correct Incorrect Correct answer

Correct

Incorrect
Question 78 of 806

78. Question

Which of the following best describes the insurance underwriting process?

Selecting certain risks so that the company can produce desired results
Correct Incorrect Correct answer

Selecting and rejecting certain risks so that the company can produce desired results based on company standards
Correct Incorrect Correct answer

Selecting and rejecting certain risks, based on personal judgment and company standards, so that the company can produce desired results
Correct Incorrect Correct answer

An exact science
Correct Incorrect Correct answer

Correct

Incorrect
Question 79 of 806

79. Question

The person in the policy issue process who computes the premium to be charged to a new insurance applicant is called the:

Rater
Correct Incorrect Correct answer

Estimator
Correct Incorrect Correct answer

Assessor
Correct Incorrect Correct answer

Adjuster
Correct Incorrect Correct answer

Correct

Incorrect
Question 80 of 806

80. Question

Which of the following departments is responsible for seeing that an insurance company’s insureds are adequately indemnified for their losses?

Claims Department
Correct Incorrect Correct answer

Underwriting Department
Correct Incorrect Correct answer

Actuarial and Statistical Department
Correct Incorrect Correct answer

Loss Control Department
Correct Incorrect Correct answer

Correct

Incorrect
Question 81 of 806

81. Question

Which of the following departments in an insurance company determines the rates to be charged for various types of insurance?

Rating department
Correct Incorrect Correct answer

Underwriting department
Correct Incorrect Correct answer

Actuarial and statistical department
Correct Incorrect Correct answer

Loss control department
Correct Incorrect Correct answer

Correct

Incorrect
Question 82 of 806

82. Question

An insurance company’s purchase of insurance to cover its own exposure to loss is called:

Reinsurance
Correct Incorrect Correct answer

Subrogation
Correct Incorrect Correct answer

Self-underwriting
Correct Incorrect Correct answer

Self-indemnification
Correct Incorrect Correct answer

Correct

Incorrect
Question 83 of 806

83. Question

All of the following are correct statements about the National Association of Insurance Commissioners except:

The Association is made up of the insurance commissioners of each state.
Correct Incorrect Correct answer

The Association coordinates regulatory measures for the individual states.
Correct Incorrect Correct answer

The Association regulates the business of insurance.
Correct Incorrect Correct answer

The Association makes recommendations about insurance laws.
Correct Incorrect Correct answer

Correct

Incorrect
Question 84 of 806

84. Question

Which of the following best describes the difference between admitted and nonadmitted insurance companies?

Both meet state insurance department's standards, but only the admitted company may do business in the state.
Correct Incorrect Correct answer

The admitted company is authorized to do business in the state, the nonadmitted company is not.
Correct Incorrect Correct answer

Both may do business in the state, but the nonadmitted company's business is authorized on a transaction-by-transaction basis.
Correct Incorrect Correct answer

Only the admitted company may conduct business in the state.
Correct Incorrect Correct answer

Correct

Incorrect
Question 85 of 806

85. Question

Which of the following represents the three types of insurance companies formed as corporations?

Domestic, foreign, alien
Correct Incorrect Correct answer

Local, national, foreign
Correct Incorrect Correct answer

Local, foreign, alien
Correct Incorrect Correct answer

Local, state, national
Correct Incorrect Correct answer

Correct

Incorrect
Question 86 of 806

86. Question

Which of the following is a correct statement about the financial health of insurance companies?

State insurance departments watch and regulate insurers to preserve company solvency and to protect insureds.
Correct Incorrect Correct answer

The financial regulation of insurance companies takes place at the federal level.
Correct Incorrect Correct answer

The insurance industry is entirely self-regulated.
Correct Incorrect Correct answer

States have no authority over the insurance business conducted within their boundaries.
Correct Incorrect Correct answer

Correct

Incorrect
Question 87 of 806

87. Question

When may a person begin to sell insurance?

Once the state exam has been successfully passed
Correct Incorrect Correct answer

Once the educational requirements are met
Correct Incorrect Correct answer

Once an appointment has been received
Correct Incorrect Correct answer

Only after first obtaining a state license
Correct Incorrect Correct answer

Correct

Incorrect
Question 88 of 806

88. Question

Which of the following terms represents a person holding a special relationship of trust to another?

Agent
Correct Incorrect Correct answer

Fiduciary
Correct Incorrect Correct answer

Representative
Correct Incorrect Correct answer

Broker
Correct Incorrect Correct answer

Correct

Incorrect
Question 89 of 806

89. Question

Falsely advertising the terms or benefits of a policy is termed:

Misrepresentation
Correct Incorrect Correct answer

Twisting
Correct Incorrect Correct answer

Falsification
Correct Incorrect Correct answer

Deception
Correct Incorrect Correct answer

Correct

Incorrect
Question 90 of 806

90. Question

Agent Jones convinces a client to cancel a current policy and purchase another, and this purchase is to the insured’s detriment. Which of the following illegal practices has taken place?

Misrepresentation
Correct Incorrect Correct answer

Twisting
Correct Incorrect Correct answer

Churning
Correct Incorrect Correct answer

Unfair discrimination
Correct Incorrect Correct answer

Correct

Incorrect
Question 91 of 806

91. Question

Offering a benefit other than those specified in an insurance policy is the illegal act of:

Twisting
Correct Incorrect Correct answer

Churning
Correct Incorrect Correct answer

Misrepresentation
Correct Incorrect Correct answer

Rebating
Correct Incorrect Correct answer

Correct

Incorrect
Question 92 of 806

92. Question

State approval of policy forms, endorsements, and rates used by insurers doing business in the state is known as:

Ratification
Correct Incorrect Correct answer

Endorsement
Correct Incorrect Correct answer

Authorization
Correct Incorrect Correct answer

Admission
Correct Incorrect Correct answer

Correct

Incorrect
Question 93 of 806

93. Question

In which of the following states may a company begin using forms and rates as soon as they have been filed?

Prior approval states
Correct Incorrect Correct answer

File and use states
Correct Incorrect Correct answer

File and rate states
Correct Incorrect Correct answer

Open competition states
Correct Incorrect Correct answer

Correct

Incorrect
Question 94 of 806

94. Question

In order for insurance rates to be approved by a state, the rates must meet all of the following requirements except:

Adequate for the company to meet its obligations
Correct Incorrect Correct answer

Nondiscriminatory among classes of insureds
Correct Incorrect Correct answer

Not excessive
Correct Incorrect Correct answer

Excessive
Correct Incorrect Correct answer

Correct

Incorrect
Question 95 of 806

95. Question

Insurance rates must be adequate to pay all of the following except:

The cost of losses
Correct Incorrect Correct answer

The cost of conducting business
Correct Incorrect Correct answer

The cost of compensating insureds in the event of insolvency
Correct Incorrect Correct answer

A profit
Correct Incorrect Correct answer

Correct

Incorrect
Question 96 of 806

96. Question

Which of the following is not a correct statement about insurance department enforcement?

State insurance departments must investigate reported violations and assess appropriate penalties.
Correct Incorrect Correct answer

State insurance departments are responsible for seeing that business within their states is compliant with codes and standards.
Correct Incorrect Correct answer

License suspension or revocation, fines, or imprisonment may be in order for violators of state law.
Correct Incorrect Correct answer

States have limited authority over insurance business conducted in their states.
Correct Incorrect Correct answer

Correct

Incorrect
Question 97 of 806

97. Question

An oral or written statement made by an agent granting an insured immediate insurance protection temporarily for a specified period of time is called a(n):

Binder
Correct Incorrect Correct answer

Policy
Correct Incorrect Correct answer

Contract
Correct Incorrect Correct answer

Endorsement
Correct Incorrect Correct answer

Correct

Incorrect
Question 98 of 806

98. Question

Which of the following protects consumers by requiring that they be notified about certain credit situations and allowing them to have outdated or inaccurate credit information removed or updated?

Fair Credit Reporting Act
Correct Incorrect Correct answer

Fair Debt Collection Practices Act
Correct Incorrect Correct answer

Federal Trade Commission Act
Correct Incorrect Correct answer

Consumer Credit Act
Correct Incorrect Correct answer

Correct

Incorrect
Question 99 of 806

99. Question

Which of the following best describes adverse selection?

The tendency for people with greater than average exposure to loss to purchase insurance
Correct Incorrect Correct answer

The tendency for people who cannot afford insurance to go without coverage
Correct Incorrect Correct answer

The tendency for people with insurance to exploit their coverage
Correct Incorrect Correct answer

The tendency for people with less than average exposure to loss not to buy insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 100 of 806

100. Question

Which of the following represents ways in which insurance premiums can be computed?

Judgment, annual, merit
Correct Incorrect Correct answer

Judgment, manual, merit
Correct Incorrect Correct answer

Monthly, semi-annually, annually
Correct Incorrect Correct answer

Manual, automated, computerized
Correct Incorrect Correct answer

Correct

Incorrect
Question 101 of 806

101. Question

All of the following are correct statements about determining insurance rates except:

Judgment rating is determined by considering individual risk and through careful judgment.
Correct Incorrect Correct answer

Manual or class rating uses categories or classes of risk.
Correct Incorrect Correct answer

Merit rating modifies manual rates reflecting unique risk characteristics.
Correct Incorrect Correct answer

Merit rating is based solely on loss experience.
Correct Incorrect Correct answer

Correct

Incorrect
Question 102 of 806

102. Question

A fact that would cause an insurer to decline a risk, charge a different premium, or change the provisions of a policy that was issued is a:

Reasonable fact
Correct Incorrect Correct answer

Material fact
Correct Incorrect Correct answer

Immaterial fact
Correct Incorrect Correct answer

Reverent fact
Correct Incorrect Correct answer

Correct

Incorrect
Question 103 of 806

103. Question

How does concealment differ from misrepresentation?

Concealment does not involve a material fact.
Correct Incorrect Correct answer

Only concealment involves a material fact.
Correct Incorrect Correct answer

Concealment involves withholding rather than misstating a material fact.
Correct Incorrect Correct answer

There is no difference.
Correct Incorrect Correct answer

Correct

Incorrect
Question 104 of 806

104. Question

Which of the following is essential to fraud?

Misrepresentation
Correct Incorrect Correct answer

Intent
Correct Incorrect Correct answer

Conspiracy
Correct Incorrect Correct answer

Chance
Correct Incorrect Correct answer

Correct

Incorrect
Question 105 of 806

105. Question

As a condition of insurance, a fireworks factory agrees to have a security guard on duty during seasons when the factory is closed. Which of the following has taken place?

A representation has been made.
Correct Incorrect Correct answer

A warranty has been made.
Correct Incorrect Correct answer

A promise has been made.
Correct Incorrect Correct answer

A guarantee has been made.
Correct Incorrect Correct answer

Correct

Incorrect
Question 106 of 806

106. Question

The intentional relinquishment of a known right is termed a:

Waiver
Correct Incorrect Correct answer

Surrender
Correct Incorrect Correct answer

Forfeit
Correct Incorrect Correct answer

Penalty
Correct Incorrect Correct answer

Correct

Incorrect
Question 107 of 806

107. Question

Another word for estopped is:

Permitted
Correct Incorrect Correct answer

Accepted
Correct Incorrect Correct answer

Banned
Correct Incorrect Correct answer

Prevented
Correct Incorrect Correct answer

Correct

Incorrect
Question 108 of 806

108. Question

How does the short rate basis for returning a premium differ from the pro rata basis?

The short rate basis keeps an amount for expenses; the pro rata basis returns the full unearned premium.
Correct Incorrect Correct answer

Both keep an amount for expenses with the pro rata basis retaining more.
Correct Incorrect Correct answer

The short rate basis returns the full unearned premium; the pro rata basis keeps an amount for expenses.
Correct Incorrect Correct answer

The short rate basis is used when the policy is cancelled by the insured; the pro rata basis is used when the policy is cancelled by the insurer.
Correct Incorrect Correct answer

Correct

Incorrect
Question 109 of 806

109. Question

Which of the following is a correct statement about the description of covered property listed in the policy declarations?

The description must be very specific.
Correct Incorrect Correct answer

The property must be at a particular location.
Correct Incorrect Correct answer

The property may be described specifically or may be blanket coverage.
Correct Incorrect Correct answer

The description must be very specific, and the property must be at a particular location.
Correct Incorrect Correct answer

Correct

Incorrect
Question 110 of 806

110. Question

Which of the following is not part of a policy period?

The date that coverage begins and ends
Correct Incorrect Correct answer

The time that coverage begins and ends
Correct Incorrect Correct answer

The day of the week that coverage begins and ends
Correct Incorrect Correct answer

The time zone of the covered property
Correct Incorrect Correct answer

Correct

Incorrect
Question 111 of 806

111. Question

The maximum amount an insurance company will pay for a loss is called the:

Limit of coverage
Correct Incorrect Correct answer

Limit of liability
Correct Incorrect Correct answer

Limit of insurance
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 112 of 806

112. Question

If an item is insured under a valued or agreed amount policy, what is the maximum amount the insurer will pay in the event of a loss?

The value as determined at the time of loss
Correct Incorrect Correct answer

The value as agreed upon under the policy
Correct Incorrect Correct answer

The overall policy limit
Correct Incorrect Correct answer

The amount necessary to repair or replace the item
Correct Incorrect Correct answer

Correct

Incorrect
Question 113 of 806

113. Question

Which part of the insurance contract explains what property is covered and the perils the property is insured against?

The Declarations
Correct Incorrect Correct answer

The Insuring Agreement
Correct Incorrect Correct answer

The Definitions
Correct Incorrect Correct answer

The Conditions
Correct Incorrect Correct answer

Correct

Incorrect
Question 114 of 806

114. Question

How do named perils policies and open perils policies differ?

Named perils policies cover only specified losses; open perils policies cover every type of loss.
Correct Incorrect Correct answer

Named perils policies cover only specified losses; open perils policies cover all losses except those which are excluded.
Correct Incorrect Correct answer

Named perils policies cover more perils than open perils policies.
Correct Incorrect Correct answer

Open perils policies offer more coverage than named perils policies.
Correct Incorrect Correct answer

Correct

Incorrect
Question 115 of 806

115. Question

Open perils policies are sometimes called:

All risk or special coverage
Correct Incorrect Correct answer

Unlimited coverage
Correct Incorrect Correct answer

Entire or complete risk coverage
Correct Incorrect Correct answer

Exclusive risk coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 116 of 806

116. Question

How does direct loss differ from indirect loss?

Direct loss is a financial loss; indirect loss is a loss other than financial.
Correct Incorrect Correct answer

A direct loss is more costly than an indirect loss.
Correct Incorrect Correct answer

A direct loss is financial and results directly from loss to property; indirect loss is a consequence of the original loss.
Correct Incorrect Correct answer

Direct loss results from loss to real property; indirect loss results from loss to personal property.
Correct Incorrect Correct answer

Correct

Incorrect
Question 117 of 806

117. Question

All of the following are examples of nonaccidental losses and not covered by insurance except:

Wear and tear
Correct Incorrect Correct answer

Deterioration
Correct Incorrect Correct answer

Mechanical breakdown
Correct Incorrect Correct answer

Fire damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 118 of 806

118. Question

A situation where two or more perils act at the same time to cause a loss is known as:

Equal causation
Correct Incorrect Correct answer

Current causation
Correct Incorrect Correct answer

Concurrent causation
Correct Incorrect Correct answer

Identical causation
Correct Incorrect Correct answer

Correct

Incorrect
Question 119 of 806

119. Question

All of the following are found as common exclusions under insurance coverage except:

Losses controllable by the insured
Correct Incorrect Correct answer

Extra hazardous perils
Correct Incorrect Correct answer

Catastrophic losses
Correct Incorrect Correct answer

Hail damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 120 of 806

120. Question

Which of the following conditions of an insurance contract explains the insured’s responsibilities after a loss?

Duties of the Insured
Correct Incorrect Correct answer

Duties Following Loss
Correct Incorrect Correct answer

Insured's Responsibilities
Correct Incorrect Correct answer

Accountability for the Insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 121 of 806

121. Question

In the event of a loss, an insured can collect the lesser of:

Insurable interest or the policy limit
Correct Incorrect Correct answer

Actual cash value
Correct Incorrect Correct answer

Repair or replacement cost
Correct Incorrect Correct answer

Any of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 122 of 806

122. Question

The type of loss calculated by determining the item’s replacement value and allowing for depreciation is:

Replacement cost
Correct Incorrect Correct answer

Depreciated
Correct Incorrect Correct answer

Actual cash value
Correct Incorrect Correct answer

Downgraded
Correct Incorrect Correct answer

Correct

Incorrect
Question 123 of 806

123. Question

An insurance policy that pays for loss based on functional replacement cost basis is generally used to cover all of the following except:

Antiques
Correct Incorrect Correct answer

Ornate construction
Correct Incorrect Correct answer

Custom construction
Correct Incorrect Correct answer

Jewelry
Correct Incorrect Correct answer

Correct

Incorrect
Question 124 of 806

124. Question

Market value is best represented by:

The amount the item could be sold for
Correct Incorrect Correct answer

The amount needed to replace the item
Correct Incorrect Correct answer

The amount required to repair or replace the item
Correct Incorrect Correct answer

Actual cash value
Correct Incorrect Correct answer

Correct

Incorrect
Question 125 of 806

125. Question

Requiring that a property be insured for at least 80 percent of its value is an example of:

Coinsurance
Correct Incorrect Correct answer

Minimum policy limits
Correct Incorrect Correct answer

Minimum cash value coverage
Correct Incorrect Correct answer

Cooperative coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 126 of 806

126. Question

Which of the following is a correct statement about coinsurance?

It discourages partial losses.
Correct Incorrect Correct answer

It contributes to partial losses.
Correct Incorrect Correct answer

It encourages policy holders to insure property to value.
Correct Incorrect Correct answer

It discourages overinsurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 127 of 806

127. Question

Under a Pair or Set condition, how is part of a pair or set valued?

As the total value of the set
Correct Incorrect Correct answer

As a fair proportion of the total value of the set
Correct Incorrect Correct answer

As exactly half the value of the set
Correct Incorrect Correct answer

As the cost to restore the set
Correct Incorrect Correct answer

Correct

Incorrect
Question 128 of 806

128. Question

Which of the following reduces the cost of insurance by reducing the number of small claims?

A deductible
Correct Incorrect Correct answer

Cost sharing provisions
Correct Incorrect Correct answer

A copayment
Correct Incorrect Correct answer

Coinsurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 129 of 806

129. Question

Which of the following allows an insurer to take possession of damaged property after a loss?

The Salvage condition
Correct Incorrect Correct answer

The Abandonment condition
Correct Incorrect Correct answer

The Subrogation provision
Correct Incorrect Correct answer

The Coinsurance provision
Correct Incorrect Correct answer

Correct

Incorrect
Question 130 of 806

130. Question

Which of the following states that an insured may not give up property to the insurer and ask to be reimbursed for its full value?

The Salvage condition
Correct Incorrect Correct answer

The Abandonment condition
Correct Incorrect Correct answer

The Subrogation provision
Correct Incorrect Correct answer

The Coinsurance provision
Correct Incorrect Correct answer

Correct

Incorrect
Question 131 of 806

131. Question

Bruno sets William’s car on fire and refuses to pay for the damages. William’s insurer pays for the damage and then goes to court to collect from Bruno. This is an example of:

Subrogation
Correct Incorrect Correct answer

Coinsurance
Correct Incorrect Correct answer

Salvage
Correct Incorrect Correct answer

Right of recovery
Correct Incorrect Correct answer

Correct

Incorrect
Question 132 of 806

132. Question

Which of the following pays for the appraisal under the Appraisal provision of insurance policies?

The insurer pays for the appraisal.
Correct Incorrect Correct answer

The insured pays for the appraisal.
Correct Incorrect Correct answer

Each party must pay its chosen appraiser.
Correct Incorrect Correct answer

The party who loses the case must pay for both appraisals.
Correct Incorrect Correct answer

Correct

Incorrect
Question 133 of 806

133. Question

In the event of a dispute in which the insured insists a stolen item was worth $2,000 but the insurer is only willing to pay $800, which of the following will ultimately decide the claim’s value?

The insurer
Correct Incorrect Correct answer

An arbitrator
Correct Incorrect Correct answer

An appraiser
Correct Incorrect Correct answer

An umpire
Correct Incorrect Correct answer

Correct

Incorrect
Question 134 of 806

134. Question

Renee suffers a $100,000 loss that is covered by two policies. Primary Policy A has a $75,000 limit. Excess Policy B has a $50,000 limit. How much will each policy pay for the loss?

A will pay $75,000; B will pay $25,000.
Correct Incorrect Correct answer

A will pay $25,000; B will pay $75,000.
Correct Incorrect Correct answer

A will pay $50,000; B will pay $50,000.
Correct Incorrect Correct answer

It depends of the wording of the policies.
Correct Incorrect Correct answer

Correct

Incorrect
Question 135 of 806

135. Question

Two policies apply to an insured’s $12,000 loss. Policy A has a $75,000 limit, and Policy B has a $50,000 limit. How much will each insurer pay under a pro rata loss condition?

A will pay $7,200; B will pay $4,800
Correct Incorrect Correct answer

A will pay $4,800; B will pay $7,200
Correct Incorrect Correct answer

A will pay $6,000; B will pay $6,000
Correct Incorrect Correct answer

It depends on the wording of the policies.
Correct Incorrect Correct answer

Correct

Incorrect
Question 136 of 806

136. Question

The condition that specifies that an insurance policy may not be transferred without the written consent of the insurer is termed:

Transference
Correct Incorrect Correct answer

Assignment
Correct Incorrect Correct answer

Consignment
Correct Incorrect Correct answer

Appointment
Correct Incorrect Correct answer

Correct

Incorrect
Question 137 of 806

137. Question

Which of the following is addressed by the No Benefit to Bailee condition of an insurance policy?

The insured's property is not covered by the bailee's policy.
Correct Incorrect Correct answer

The insured is not covered under the bailee's policy.
Correct Incorrect Correct answer

The bailee is not covered under the insured's policy while the bailee has possession of the insured's policy.
Correct Incorrect Correct answer

The bailee's property is not covered while it is in the insured's possession.
Correct Incorrect Correct answer

Correct

Incorrect
Question 138 of 806

138. Question

In the event of a loss, which of the following is granted rights and given duties under the Mortgage or Loss Payable condition?

The insured
Correct Incorrect Correct answer

The mortgagor
Correct Incorrect Correct answer

The mortgagee or loss payee
Correct Incorrect Correct answer

The insurer
Correct Incorrect Correct answer

Correct

Incorrect
Question 139 of 806

139. Question

When insurance policies exclude or limit coverage for losses when property is vacant or unoccupied, how are the terms vacant and unoccupied distinguished?

Vacant means the absence of people and property; unoccupied is the absence of people.
Correct Incorrect Correct answer

Vacant refers to property loss; unoccupied refers to human loss.
Correct Incorrect Correct answer

Losses to vacant property have higher coverage limits than losses to unoccupied property.
Correct Incorrect Correct answer

Vacant means the absence of property; unoccupied is the absence of people.
Correct Incorrect Correct answer

Correct

Incorrect
Question 140 of 806

140. Question

Which of the following is not a correct statement about insurance policies issued on a reporting basis?

A flat premium is charged each time the policy is renewed.
Correct Incorrect Correct answer

Policies are issued on a reporting basis when it is difficult to determine the premium in advance.
Correct Incorrect Correct answer

A deposit or estimated premium is used with policies issued on a reporting basis.
Correct Incorrect Correct answer

The insurer calculates the premium based on reporting factors.
Correct Incorrect Correct answer

Correct

Incorrect
Question 141 of 806

141. Question

Which of the following best describes a tort?

A misdemeanor
Correct Incorrect Correct answer

A civil wrong
Correct Incorrect Correct answer

A criminal wrongdoing
Correct Incorrect Correct answer

A delicious pastry
Correct Incorrect Correct answer

Correct

Incorrect
Question 142 of 806

142. Question

The lack of reasonable care that is required to protect others from the unreasonable chance of harm is termed:

Neglect
Correct Incorrect Correct answer

Carelessness
Correct Incorrect Correct answer

Indifference
Correct Incorrect Correct answer

Negligence
Correct Incorrect Correct answer

Correct

Incorrect
Question 143 of 806

143. Question

Which of the following factors must be involved in order for a court to determine negligence?

Legal duty owed, breach of legal duty owed, proximate cause, damages
Correct Incorrect Correct answer

Standard of care owed, breach of standard of care, proximate cause, damages
Correct Incorrect Correct answer

Legal duty owed, breach of legal duty owed, direct cause, damages
Correct Incorrect Correct answer

Standard of care owed, breach of a degree of care owed, direct cause, damages
Correct Incorrect Correct answer

Correct

Incorrect
Question 144 of 806

144. Question

The belief that each of us is expected to behave like a reasonable or prudent person illustrates which of the following?

The standard of care
Correct Incorrect Correct answer

The prudent person rule
Correct Incorrect Correct answer

The anti-negligence rule
Correct Incorrect Correct answer

A degree of care
Correct Incorrect Correct answer

Correct

Incorrect
Question 145 of 806

145. Question

Which of the following best represents the degree of care owed-greatest to least-in order to establish negligence?

Invitee, licensee, trespasser
Correct Incorrect Correct answer

Ambassador, licensee, trespasser
Correct Incorrect Correct answer

Licensee, invitee, trespasser
Correct Incorrect Correct answer

Agent, licensee, trespasser
Correct Incorrect Correct answer

Correct

Incorrect
Question 146 of 806

146. Question

An action that, in a natural and continuous sequence, produces a loss is termed:

Direct cause
Correct Incorrect Correct answer

Indirect cause
Correct Incorrect Correct answer

Proximate cause
Correct Incorrect Correct answer

Approximate cause
Correct Incorrect Correct answer

Correct

Incorrect
Question 147 of 806

147. Question

When an independent action breaks the chain of causation and sets in motion a new chain of events, which of the following has taken place?

Intervening cause
Correct Incorrect Correct answer

Proximate cause
Correct Incorrect Correct answer

Indirect cause
Correct Incorrect Correct answer

Prevailing cause
Correct Incorrect Correct answer

Correct

Incorrect
Question 148 of 806

148. Question

If no one is adversely affected by an individual’s actions:

There can be no finding of negligence.
Correct Incorrect Correct answer

Damages will be limited.
Correct Incorrect Correct answer

No liability exists.
Correct Incorrect Correct answer

Damages cannot be measured.
Correct Incorrect Correct answer

Correct

Incorrect
Question 149 of 806

149. Question

Veronica is weaving in and out of traffic. Sarah, admitting she was driving too fast, hits Veronica’s vehicle from behind. If Sarah’s claim for damages to her car is denied by Veronica’s insurer, Sarah probably resides in which of the following?

A comparative negligence state
Correct Incorrect Correct answer

A contributory negligence state
Correct Incorrect Correct answer

A claims defective state
Correct Incorrect Correct answer

A malicious state
Correct Incorrect Correct answer

Correct

Incorrect
Question 150 of 806

150. Question

Vernon is weaving in and out of traffic. Sam, uninsured and admitting he was driving too fast, hits Vernon’s vehicle from behind. Vernon’s insurer settles the claim for damage to his car by paying him only half of the actual damages. Vernon probably resides in:

A comparative negligence state
Correct Incorrect Correct answer

A contributory negligence state
Correct Incorrect Correct answer

A claims defective state
Correct Incorrect Correct answer

A malicious state
Correct Incorrect Correct answer

Correct

Incorrect
Question 151 of 806

151. Question

Absolute or strict liability generally applies to all of the following except:

Dangerous materials
Correct Incorrect Correct answer

Hazardous operations
Correct Incorrect Correct answer

Dangerous animals
Correct Incorrect Correct answer

The transportation industry
Correct Incorrect Correct answer

Correct

Incorrect
Question 152 of 806

152. Question

A pizza delivery driver runs down two pedestrians while driving too fast. The injured parties file suit against the pizza company contending that the company had control over the employee/driver. Which of the following liability theories is being applied?

Absolute liability
Correct Incorrect Correct answer

Vicarious liability
Correct Incorrect Correct answer

Contributory negligence
Correct Incorrect Correct answer

Comparative negligence
Correct Incorrect Correct answer

Correct

Incorrect
Question 153 of 806

153. Question

How do first- and third-party losses differ?

A first-party loss is a property loss to the insured; a third-party loss is a liability loss to someone other than the insured.
Correct Incorrect Correct answer

First-party losses are generally more costly.
Correct Incorrect Correct answer

Third-party losses are generally more severe.
Correct Incorrect Correct answer

A first-party loss is a liability loss; a third-party loss is a property loss.
Correct Incorrect Correct answer

Correct

Incorrect
Question 154 of 806

154. Question

Which type of damages reimburse the injured party only for losses actually sustained?

Exemplary damages
Correct Incorrect Correct answer

Punitive damages
Correct Incorrect Correct answer

Compensatory damages
Correct Incorrect Correct answer

Injury damages
Correct Incorrect Correct answer

Correct

Incorrect
Question 155 of 806

155. Question

Monetary compensation to an injured party are best referred to as:

Damages
Correct Incorrect Correct answer

Reparation
Correct Incorrect Correct answer

Reimbursement
Correct Incorrect Correct answer

Settlement
Correct Incorrect Correct answer

Correct

Incorrect
Question 156 of 806

156. Question

How do special and general damages differ?

Special damages include direct expenses; general damages are more imprecise, for example, pain and suffering.
Correct Incorrect Correct answer

General damages are for specific expenses involved; special damages are less definable, for example, disfigurement.
Correct Incorrect Correct answer

Only general damages can be compensated.
Correct Incorrect Correct answer

Special damages are used to punish the wrongdoer.
Correct Incorrect Correct answer

Correct

Incorrect
Question 157 of 806

157. Question

When are punitive or exemplary damages awarded?

When the injuries or expenses exceed a certain threshold
Correct Incorrect Correct answer

To punish someone who acted wantonly and willfully in causing the damages
Correct Incorrect Correct answer

When the exact amount of harm cannot be easily determined
Correct Incorrect Correct answer

When the injuries or expenses are negligible
Correct Incorrect Correct answer

Correct

Incorrect
Question 158 of 806

158. Question

Most liability policies agree to pay on behalf of the insured all sums for which the insured:

Is responsible for
Correct Incorrect Correct answer

Becomes legally liable for
Correct Incorrect Correct answer

Admits to
Correct Incorrect Correct answer

Is guilty of
Correct Incorrect Correct answer

Correct

Incorrect
Question 159 of 806

159. Question

Which of the following involves injury, sickness, disease, or death?

Almost all insurance claims
Correct Incorrect Correct answer

Bodily injury claims
Correct Incorrect Correct answer

Personal injury claims
Correct Incorrect Correct answer

Property damage claims
Correct Incorrect Correct answer

Correct

Incorrect
Question 160 of 806

160. Question

Personal injury claims cover:

Emotional distress
Correct Incorrect Correct answer

Bodily injury
Correct Incorrect Correct answer

Injury, sickness, disease, or death
Correct Incorrect Correct answer

Slander, libel, false arrest, and invasion of privacy
Correct Incorrect Correct answer

Correct

Incorrect
Question 161 of 806

161. Question

Which of the following is a correct statement about settling negligence claims?

If an insurer believes its insured to be negligent, it is common to settle the claim out of court.
Correct Incorrect Correct answer

Insurers generally prefer a court finding of negligence before a claim will be paid.
Correct Incorrect Correct answer

Claims alleging negligence must be settled in court.
Correct Incorrect Correct answer

Insurers will only settle a negligence claim if negligence is proven in court.
Correct Incorrect Correct answer

Correct

Incorrect
Question 162 of 806

162. Question

Which of the following is a correct statement about defending a lawsuit under a liability policy?

The insurer may choose not to defend a suit that is obviously groundless.
Correct Incorrect Correct answer

Liability policies defend the insured against any suit seeking BI or PD damages, even if the charges are groundless or false.
Correct Incorrect Correct answer

Suits that are clearly groundless or false are not defended.
Correct Incorrect Correct answer

The defense of groundless suits is not required under a liability policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 163 of 806

163. Question

When does an insurer’s duty to defend cease?

Once a settlement has been reached
Correct Incorrect Correct answer

When policy limits have been exhausted
Correct Incorrect Correct answer

When the insured releases the insured from further defense proceedings
Correct Incorrect Correct answer

When so order by a court of law
Correct Incorrect Correct answer

Correct

Incorrect
Question 164 of 806

164. Question

Martha wins a long and contested verdict for damages against George. The court awards her an additional amount for interest she would have earned had she received compensation at the time of her injury. Which of the following has been awarded?

Exemplary damages
Correct Incorrect Correct answer

Punitive damages
Correct Incorrect Correct answer

Judgment interest
Correct Incorrect Correct answer

Prejudgment interest
Correct Incorrect Correct answer

Correct

Incorrect
Question 165 of 806

165. Question

All of the following are examples of supplemental payments made under a liability policy except:

Defense costs
Correct Incorrect Correct answer

Expenses incurred in the investigation of a claim
Correct Incorrect Correct answer

Premiums for bail and appearance bonds
Correct Incorrect Correct answer

Medical payments for the third-party claimant's injuries
Correct Incorrect Correct answer

Correct

Incorrect
Question 166 of 806

166. Question

All of the following are examples of supplemental payments made under a liability policy except:

Loss of earnings
Correct Incorrect Correct answer

Prejudgment interest
Correct Incorrect Correct answer

Postjudgment interests
Correct Incorrect Correct answer

Damages for pain and suffering of the third-party claimant
Correct Incorrect Correct answer

Correct

Incorrect
Question 167 of 806

167. Question

All of the following are correct statements about liability insurance policy limits except:

Split limits may apply to bodily injury and property damage.
Correct Incorrect Correct answer

One limit applies to both bodily injury and property damage.
Correct Incorrect Correct answer

Single or combined single limits may apply to bodily injury and property damage.
Correct Incorrect Correct answer

Different policies apply limits differently.
Correct Incorrect Correct answer

Correct

Incorrect
Question 168 of 806

168. Question

In a per occurrence policy, limits may be applied in which of the following ways?

To a loss that occurs over a period of time
Correct Incorrect Correct answer

To a loss that occurs at a specific time and place
Correct Incorrect Correct answer

To a loss that has recurred
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 169 of 806

169. Question

How do per person liability policy limits differ from an aggregate limit?

The per person limit pays for injury to any one person in an occurrence; aggregate applies to more than one person in an occurrence.
Correct Incorrect Correct answer

The per person limit pays for injury to any one person in an occurrence; aggregate applies to all losses within a policy period.
Correct Incorrect Correct answer

The per person limit can be greater than the aggregate limit.
Correct Incorrect Correct answer

The aggregate limit cannot exceed the per person limit.
Correct Incorrect Correct answer

Correct

Incorrect
Question 170 of 806

170. Question

All of the following are generally excluded from coverage under liability policies except:

Damage to property owned by the insured
Correct Incorrect Correct answer

Bodily injury to the insured
Correct Incorrect Correct answer

Damage to property in the insured's care, custody, or control
Correct Incorrect Correct answer

Damage caused by the insured to others' property
Correct Incorrect Correct answer

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Incorrect
Question 171 of 806

171. Question

All of the following are generally excluded from coverage under liability policies except:

Losses covered under workers compensation laws
Correct Incorrect Correct answer

Damages caused intentionally by the insured
Correct Incorrect Correct answer

Bodily injury to third parties
Correct Incorrect Correct answer

Losses covered under nuclear energy liability policies
Correct Incorrect Correct answer

Correct

Incorrect
Question 172 of 806

172. Question

Marge suffers a liability loss of $25,000. She has two liability policies. Policy A has a $5,000 limit. Policy B has a $25,000 limit. How will the policies respond if they both have a Contribution by Equal Shares provision?

Policy A will pay $5,000; Policy B will pay $20,000.
Correct Incorrect Correct answer

Policy A will pay $0; Policy B will pay $25,000.
Correct Incorrect Correct answer

Policy A will pay $20,000; Policy B will pay $5,000.
Correct Incorrect Correct answer

Policy A will pay $12,500; Policy B will pay $12,500.
Correct Incorrect Correct answer

Correct

Incorrect
Question 173 of 806

173. Question

Which of the following is a correct statement about a Dwelling policy compared to a homeowners policy?

The homeowners policy provides broader coverage than the Dwelling policy.
Correct Incorrect Correct answer

The Dwelling policy cannot be endorsed to provide liability coverage.
Correct Incorrect Correct answer

Both forms provide a package of property and liability coverages.
Correct Incorrect Correct answer

Neither form provides liability coverage absent an endorsement.
Correct Incorrect Correct answer

Correct

Incorrect
Question 174 of 806

174. Question

Which of the following is not one of the Dwelling forms?

Basic
Correct Incorrect Correct answer

Broad
Correct Incorrect Correct answer

Special
Correct Incorrect Correct answer

Renters
Correct Incorrect Correct answer

Correct

Incorrect
Question 175 of 806

175. Question

What is the maximum number of boarders a dwelling may have and still be eligible for coverage?

Two
Correct Incorrect Correct answer

Four
Correct Incorrect Correct answer

Five
Correct Incorrect Correct answer

Six
Correct Incorrect Correct answer

Correct

Incorrect
Question 176 of 806

176. Question

What is the maximum number of apartments a dwelling may have and still be eligible for coverage?

Two
Correct Incorrect Correct answer

Three
Correct Incorrect Correct answer

Four
Correct Incorrect Correct answer

Five
Correct Incorrect Correct answer

Correct

Incorrect
Question 177 of 806

177. Question

Which of the following is a correct statement about the Dwelling policy?

Townhouses and rowhouses may be covered under Dwelling policies.
Correct Incorrect Correct answer

The dwelling must be occupied by the owner in order to be eligible for coverage.
Correct Incorrect Correct answer

Homes under construction are not eligible for coverage.
Correct Incorrect Correct answer

A Dwelling policy cannot be used to insure a mobile home.
Correct Incorrect Correct answer

Correct

Incorrect
Question 178 of 806

178. Question

All of the following are correct statements about using a Dwelling policy to cover a mobile home except:

A mobile home must be permanently located in order to be eligible for coverage.
Correct Incorrect Correct answer

Mobile homes may not be covered under the Basic form.
Correct Incorrect Correct answer

A mobile home may be covered only under the Basic form.
Correct Incorrect Correct answer

Mobile homes are eligible for coverage under the Dwelling policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 179 of 806

179. Question

Which of the following is a correct statement about coverage under the Dwelling Basic form?

Liability coverage is provided under the Basic form.
Correct Incorrect Correct answer

Coverages A through D are sold as a package.
Correct Incorrect Correct answer

The insured is not required to purchase all coverages A through D.
Correct Incorrect Correct answer

Personal property coverage is not available under the Basic form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 180 of 806

180. Question

Which of the following are not covered under Coverage A-Dwelling of the dwelling Basic form?

Structures attached to the dwelling
Correct Incorrect Correct answer

Materials and supplies used in construction or repair of the dwelling
Correct Incorrect Correct answer

Outdoor equipment used to service the premises.
Correct Incorrect Correct answer

Other unattached structures
Correct Incorrect Correct answer

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Incorrect
Question 181 of 806

181. Question

Which of the following are covered under Coverage B-Dwelling of the Dwelling Basic form?

Structures separated from the dwelling by a clear space
Correct Incorrect Correct answer

Gravemarkers
Correct Incorrect Correct answer

Mausoleums
Correct Incorrect Correct answer

Structures containing commercial, manufacturing, or farming property storing gaseous or liquid fuel
Correct Incorrect Correct answer

Correct

Incorrect
Question 182 of 806

182. Question

When is the personal property of an insured’s guests or servants covered under the Dwelling Basic form?

When the policy is so endorsed
Correct Incorrect Correct answer

At the request of the insured
Correct Incorrect Correct answer

Automatically
Correct Incorrect Correct answer

When an additional premium is paid
Correct Incorrect Correct answer

Correct

Incorrect
Question 183 of 806

183. Question

Which of the following would be covered as personal property under the Dwelling Basic form?

Money, securities, currency, evidences of debt
Correct Incorrect Correct answer

Animals, birds, fish
Correct Incorrect Correct answer

Motor vehicles, large boats
Correct Incorrect Correct answer

Clothing
Correct Incorrect Correct answer

Correct

Incorrect
Question 184 of 806

184. Question

Which of the following best describes the purpose of Coverage D-Fair Rental value under the Dwelling Basic form?

To pay the insured's rent temporarily in the event he or she is forced to vacate the premises due to a covered peril
Correct Incorrect Correct answer

To compensate the insured for lost rent if a covered loss to the dwelling makes the building uninhabitable and rent cannot be collected
Correct Incorrect Correct answer

To compensate the insured during periods when a rental property is vacant
Correct Incorrect Correct answer

To partially compensate the insured during harsh economic times when rental values are low
Correct Incorrect Correct answer

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Incorrect
Question 185 of 806

185. Question

Which of the following perils is not automatically covered under the Dwelling Basic form?

Fire
Correct Incorrect Correct answer

Lightening
Correct Incorrect Correct answer

Internal explosion
Correct Incorrect Correct answer

Hail
Correct Incorrect Correct answer

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Incorrect
Question 186 of 806

186. Question

Which of the following types of internal explosions are excluded from coverage under the Dwelling Basic form?

Furnace explosion
Correct Incorrect Correct answer

Stove explosion
Correct Incorrect Correct answer

Hot water heater explosion
Correct Incorrect Correct answer

Steam equipment explosion
Correct Incorrect Correct answer

Correct

Incorrect
Question 187 of 806

187. Question

How are smoke, hail, civil commotion and other extended perils covered under the Dwelling Basic form?

Extended Perils Coverage is not available under the Basic Dwelling Form.
Correct Incorrect Correct answer

The extended perils must be shown on the declarations page.
Correct Incorrect Correct answer

The extended perils must be shown on the declarations page and an additional premium must be paid.
Correct Incorrect Correct answer

Such perils are automatically covered under the Dwelling Basic form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 188 of 806

188. Question

Which of the following perils may only be obtained under the Dwelling Basic form in conjunction with the extended coverage perils?

Acts of war
Correct Incorrect Correct answer

Neglect of the insured
Correct Incorrect Correct answer

Theft
Correct Incorrect Correct answer

Vandalism and malicious mischief
Correct Incorrect Correct answer

Correct

Incorrect
Question 189 of 806

189. Question

How are debris removal, property removed, reasonable repairs, and fire department service charge covered under the Dwelling Basic form?

These are not covered under the Dwelling Basic form.
Correct Incorrect Correct answer

These are Extended Coverage perils.
Correct Incorrect Correct answer

These are Additional Coverages.
Correct Incorrect Correct answer

These are Other Coverages.
Correct Incorrect Correct answer

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Incorrect
Question 190 of 806

190. Question

Does the Dwelling Basic form cover debris removal resulting from a covered loss?

Yes as an Other Coverage
Correct Incorrect Correct answer

Yes with an additional premium
Correct Incorrect Correct answer

Yes with its own deductible
Correct Incorrect Correct answer

No, debris removal is not covered.
Correct Incorrect Correct answer

Correct

Incorrect
Question 191 of 806

191. Question

Under the Dwelling Basic form, how many days does coverage apply for property that has been removed in order to protect it from a covered peril?

3 days
Correct Incorrect Correct answer

5 days
Correct Incorrect Correct answer

7 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 192 of 806

192. Question

Which of the following is the best example of the Reasonable Repairs of the Other Coverages found in Dwelling Basic form?

Meg's table saw in the garage is damaged when the water heater explodes and she files a claim to have the saw repaired.
Correct Incorrect Correct answer

Meg buys tarps to protect the inside of her home after the roof is damaged in a windstorm.
Correct Incorrect Correct answer

Leaving her auto in neutral Meg's car rolls into the garage destroying the door, and she files a claim for repairs to vehicle.
Correct Incorrect Correct answer

Meg files a claim for hail damage when hail damages part of the roof of her shed.
Correct Incorrect Correct answer

Correct

Incorrect
Question 193 of 806

193. Question

How much does the Dwelling Basic policy pay if a fire department charges a fee for protecting a home when a fire breaks out?

$500 after a deductible
Correct Incorrect Correct answer

$500 with no deductible
Correct Incorrect Correct answer

$1,000 after a deductible
Correct Incorrect Correct answer

$1,000 with no deductible
Correct Incorrect Correct answer

Correct

Incorrect
Question 194 of 806

194. Question

All of the following are excluded under the Dwelling Basic form except:

Losses that now require more expensive reconstruction than was used in the original structure
Correct Incorrect Correct answer

Losses resulting from earth movement
Correct Incorrect Correct answer

Flood
Correct Incorrect Correct answer

Fire
Correct Incorrect Correct answer

Correct

Incorrect
Question 195 of 806

195. Question

All of the following are excluded under the Dwelling Basic form except:

Losses due to power interruption occurring away from the insured location
Correct Incorrect Correct answer

Lightening
Correct Incorrect Correct answer

War
Correct Incorrect Correct answer

Nuclear hazard
Correct Incorrect Correct answer

Correct

Incorrect
Question 196 of 806

196. Question

All of the following are excluded under the Dwelling Basic form except:

The insured's failure to preserve property after a loss
Correct Incorrect Correct answer

The insured's failure to protect property after a loss
Correct Incorrect Correct answer

Internal explosion
Correct Incorrect Correct answer

Losses caused by the insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 197 of 806

197. Question

All of the following are correct statements about the Dwelling Basic form and the Broad form except?

The Broad form covers the standard and optional perils found in the Basic form and adds additional perils.
Correct Incorrect Correct answer

Both are named coverage forms.
Correct Incorrect Correct answer

The Broad form offers greater coverage and therefore has a higher deductible.
Correct Incorrect Correct answer

Both cover dwellings, other structures, and personal property.
Correct Incorrect Correct answer

Correct

Incorrect
Question 198 of 806

198. Question

Which of the following is a correct statement about the Dwelling Special form?

The Special form is considered an all risk policy.
Correct Incorrect Correct answer

The Special form provides named perils coverage on personal property.
Correct Incorrect Correct answer

The Special form is an open perils policy.
Correct Incorrect Correct answer

The Special form insures against all risks except those which are specifically excluded.
Correct Incorrect Correct answer

Correct

Incorrect
Question 199 of 806

199. Question

Which of the following coverages are found under the three dwelling forms?

Dwelling, Other Structures, Personal Property, Fair Rental Value
Correct Incorrect Correct answer

Dwelling, Other Structures, Broadened Perils, Fair Rental Value
Correct Incorrect Correct answer

Dwelling, Personal Property, Fair Rental Value, Liability
Correct Incorrect Correct answer

Dwelling, Personal Property, Broadened Perils, Liability
Correct Incorrect Correct answer

Correct

Incorrect
Question 200 of 806

200. Question

Which of the following is not a correct statement about the Trees, Shrubs, and Other Plants coverage under the DP-3?

The policy pays for up to 5 percent of the Coverage A limit for damaged caused by specified perils.
Correct Incorrect Correct answer

The limit of coverage is the policy limit.
Correct Incorrect Correct answer

The policy will not pay more than $500 for damage to any one tree, shrub, or plant.
Correct Incorrect Correct answer

Lawns are also covered.
Correct Incorrect Correct answer

Correct

Incorrect
Question 201 of 806

201. Question

When is collapse covered under the DP-3?

Only when the loss is covered by a specified peril.
Correct Incorrect Correct answer

All collapse losses are covered since the DP-3 is an all risk policy.
Correct Incorrect Correct answer

When the collapse is caused by an earthquake.
Correct Incorrect Correct answer

Collapse is not covered under the DP-3.
Correct Incorrect Correct answer

Correct

Incorrect
Question 202 of 806

202. Question

How are losses for personal property settled under the DP-2 and DP-3?

Actual cash value
Correct Incorrect Correct answer

Replacement value
Correct Incorrect Correct answer

Replacement value as long as the insured has coverage for at least 80 percent of the full replacement value
Correct Incorrect Correct answer

Personal property is not covered under these forms.
Correct Incorrect Correct answer

Correct

Incorrect
Question 203 of 806

203. Question

How are losses to the dwelling and other structures settled under the DP-2 and DP-3?

Actual cash value
Correct Incorrect Correct answer

Replacement cost basis
Correct Incorrect Correct answer

Replacement cost basis as long as the insured has coverage for at least 80 percent of the full replacement value
Correct Incorrect Correct answer

Replacement cost as long as the property has been insured for 100 percent of its replacement value
Correct Incorrect Correct answer

Correct

Incorrect
Question 204 of 806

204. Question

If an insured does not carry enough insurance to qualify for replacement cost coverage under DP-2 or DP-3, in the event of a loss he or she will be paid the larger of:

ACV or a proportion of the replacement cost
Correct Incorrect Correct answer

ACV or replacement cost
Correct Incorrect Correct answer

ACV or policy the limit
Correct Incorrect Correct answer

Replacement cost or the policy limit
Correct Incorrect Correct answer

Correct

Incorrect
Question 205 of 806

205. Question

Insurance policies that contain both property and casualty coverage in a single contract are termed:

Property and casualty policies
Correct Incorrect Correct answer

Multi-line or package policies
Correct Incorrect Correct answer

Single contract policies
Correct Incorrect Correct answer

Simplified policies
Correct Incorrect Correct answer

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Incorrect
Question 206 of 806

206. Question

The homeowners policy is a multi-line policy because:

It combines property and casualty insurance.
Correct Incorrect Correct answer

It combines property and liability insurance.
Correct Incorrect Correct answer

It combines casualty and liability insurance.
Correct Incorrect Correct answer

It combines homeowners and medical insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 207 of 806

207. Question

Which of the following is a not correct statement about homeowners and dwelling policies?

Homeowners policy rules are more strict than those that apply to dwelling policies
Correct Incorrect Correct answer

Neither policy requires that the owner be the occupant.
Correct Incorrect Correct answer

Under a homeowners policy, only owners (not renters) may purchase personal property coverage only.
Correct Incorrect Correct answer

Under a homeowners policy, only renters (not owners) may purchase personal property coverage only.
Correct Incorrect Correct answer

Correct

Incorrect
Question 208 of 806

208. Question

Which of the following is not considered an incidental occupancy and therefore is not insurable under a homeowners policy?

Office
Correct Incorrect Correct answer

Private school
Correct Incorrect Correct answer

Studio
Correct Incorrect Correct answer

Printing company
Correct Incorrect Correct answer

Correct

Incorrect
Question 209 of 806

209. Question

Which of the following may not be covered under a homeowners policy endorsed or unendorsed?

Farm
Correct Incorrect Correct answer

Mobile home
Correct Incorrect Correct answer

Office
Correct Incorrect Correct answer

Studio
Correct Incorrect Correct answer

Correct

Incorrect
Question 210 of 806

210. Question

Property is covered under the homeowners policy in which of the following sections?

Section I
Correct Incorrect Correct answer

Section II
Correct Incorrect Correct answer

Section III
Correct Incorrect Correct answer

Section IV
Correct Incorrect Correct answer

Correct

Incorrect
Question 211 of 806

211. Question

Section II of the homeowners policy covers:

Property
Correct Incorrect Correct answer

Liability only
Correct Incorrect Correct answer

Medical Payments only
Correct Incorrect Correct answer

Liability and Medical Payments
Correct Incorrect Correct answer

Correct

Incorrect
Question 212 of 806

212. Question

Which of the following homeowners policies is similar to the DP-1 with Extended Coverage Perils, V&MM coverage, broadened coverage for perils, and other perils added?

HO-2 Broad form
Correct Incorrect Correct answer

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-5 Comprehensive form
Correct Incorrect Correct answer

Correct

Incorrect
Question 213 of 806

213. Question

Which of the following homeowners policies is provides open perils coverage for loss to the dwelling and other structure and named perils coverage for loss to personal property?

HO-2 Broad form
Correct Incorrect Correct answer

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-6 Unit Owners form
Correct Incorrect Correct answer

Correct

Incorrect
Question 214 of 806

214. Question

Which of the following homeowners policies insures tenants?

HO-2 Broad form
Correct Incorrect Correct answer

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-6 Unit Owners form
Correct Incorrect Correct answer

Correct

Incorrect
Question 215 of 806

215. Question

Which of the following homeowners policies provides open perils coverage for the dwelling and other structures as well as for personal property?

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-5 Comprehensive form
Correct Incorrect Correct answer

HO-8 Modified Coverage form
Correct Incorrect Correct answer

Correct

Incorrect
Question 216 of 806

216. Question

Which of the following homeowners policies provides broad coverage for the personal property of condominium owners?

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-5 Comprehensive form
Correct Incorrect Correct answer

HO-6 Unit Owners form
Correct Incorrect Correct answer

Correct

Incorrect
Question 217 of 806

217. Question

Which of the following homeowners policies is suitable for homes with replacement values that exceed their market values?

HO-3 Special form
Correct Incorrect Correct answer

HO-4 Contents Broad form
Correct Incorrect Correct answer

HO-6 Unit Owners form
Correct Incorrect Correct answer

HO-8 Modified Coverage form
Correct Incorrect Correct answer

Correct

Incorrect
Question 218 of 806

218. Question

In which of the following scenarios is coverage excluded under Coverage B of the homeowners policy?

Mark uses part of his home for a private office.
Correct Incorrect Correct answer

Mark rents his garage apartment to a college student.
Correct Incorrect Correct answer

Mark rents the upstairs of the garage to his brother who is not otherwise a tenant.
Correct Incorrect Correct answer

Mark's wife operates an art studio out of their home.
Correct Incorrect Correct answer

Correct

Incorrect
Question 219 of 806

219. Question

In which of the following scenarios is coverage excluded under Coverage B of the homeowners policy?

Bill rents part of his three-car garage to his sister where she stores an extra car.
Correct Incorrect Correct answer

Bill's rents his garage apartment to a salesman who parks his car in the garage below.
Correct Incorrect Correct answer

Bill operates a private school in an other structure.
Correct Incorrect Correct answer

Bill rents an other structure to a man who uses it to operate a karate school.
Correct Incorrect Correct answer

Correct

Incorrect
Question 220 of 806

220. Question

Which of the following is a correct statement about Coverage A of the HO-6 Unit Owners form?

Alterations and improvements are covered the same way as under the HO-3 and HO-5.
Correct Incorrect Correct answer

The standard Coverage A limit under the HO-6 is $1,000.
Correct Incorrect Correct answer

Fixtures and appliances are covered the same way as under the HO-3 and HO-5.
Correct Incorrect Correct answer

The standard Coverage A limit under the HO-6 is 10 percent of Coverage A.
Correct Incorrect Correct answer

Correct

Incorrect
Question 221 of 806

221. Question

Which of the following best describes personal property coverage?

Personal property coverage covers the insured's personal residence.
Correct Incorrect Correct answer

Personal property coverage covers the insured's personal property only while it is on the premises.
Correct Incorrect Correct answer

Personal property coverage covers personal property owned by an insured while it is anywhere in the world.
Correct Incorrect Correct answer

Personal property coverage covers personal property owned or used by an insured while it is anywhere in the world.
Correct Incorrect Correct answer

Correct

Incorrect
Question 222 of 806

222. Question

All of the following types of personal property are automatically excluded from coverage under a homeowners policy except?

Animals, birds, and fish
Correct Incorrect Correct answer

Motorized vehicles
Correct Incorrect Correct answer

Jewelry
Correct Incorrect Correct answer

Aircraft
Correct Incorrect Correct answer

Correct

Incorrect
Question 223 of 806

223. Question

Certain classes of personal property have special limits under the homeowners policy because:

Especially high value items should be insured on a specified basis.
Correct Incorrect Correct answer

High value items are better suited for coverage under a different type of policy.
Correct Incorrect Correct answer

Structuring the policy this way offers more selling opportunities for agents.
Correct Incorrect Correct answer

Structuring the policy this way virtually eliminates moral and morale hazards.
Correct Incorrect Correct answer

Correct

Incorrect
Question 224 of 806

224. Question

What is the limit for money, coins, and precious metals under an unendorsed homeowners policy?

100
Correct Incorrect Correct answer

200
Correct Incorrect Correct answer

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

Correct

Incorrect
Question 225 of 806

225. Question

What is the limit for watercraft under an unendorsed homeowners policy?

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2000
Correct Incorrect Correct answer

Correct

Incorrect
Question 226 of 806

226. Question

What is the limit for jewelry, watches, and furs under an unendorsed homeowners policy?

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2000
Correct Incorrect Correct answer

Correct

Incorrect
Question 227 of 806

227. Question

What is the limit for silverware and goldware under an unendorsed homeowners policy?

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2000
Correct Incorrect Correct answer

2500
Correct Incorrect Correct answer

Correct

Incorrect
Question 228 of 806

228. Question

What is the limit for firearms under an unendorsed homeowners policy?

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2000
Correct Incorrect Correct answer

2500
Correct Incorrect Correct answer

Correct

Incorrect
Question 229 of 806

229. Question

Which of the following provides coverage under homeowners policies when the residence premises become uninhabitable?

Loss of Use
Correct Incorrect Correct answer

Inhabitability
Correct Incorrect Correct answer

Habitability
Correct Incorrect Correct answer

Loss of Function
Correct Incorrect Correct answer

Correct

Incorrect
Question 230 of 806

230. Question

What is the maximum available under the homeowners policy for tree and debris removal?

$1,000 for tree debris; $500 per tree
Correct Incorrect Correct answer

$500 for tree debris; $1,000 per tree
Correct Incorrect Correct answer

The policy limit
Correct Incorrect Correct answer

It depends on the individual policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 231 of 806

231. Question

Which of the following is the best example of the Reasonable Repairs coverage of the homeowners policy?

Most of Bob's power tools are damaged when the water heater explodes in the garage and he believes that is reasonable to expect the insurance company to repair them.
Correct Incorrect Correct answer

Bob buys tarps to protect the inside of his garage after the roof is torn off by a tornado.
Correct Incorrect Correct answer

Bob's unattended auto rolls into the garage destroying the door, and he files a claim for repairs to vehicle.
Correct Incorrect Correct answer

Bob files a claim for roof repair when a hail storm damages his roof.
Correct Incorrect Correct answer

Correct

Incorrect
Question 232 of 806

232. Question

How much does the homeowners policy pay if a fire department charges a fee for protecting a home when a fire breaks out?

$500 after a deductible
Correct Incorrect Correct answer

$500 with no deductible
Correct Incorrect Correct answer

$1,000 after a deductible
Correct Incorrect Correct answer

$1,000 with no deductible
Correct Incorrect Correct answer

Correct

Incorrect
Question 233 of 806

233. Question

Under the homeowners policy, how many days does coverage apply for property that has been removed in order to protect it from a covered peril?

3 days
Correct Incorrect Correct answer

7 days
Correct Incorrect Correct answer

15 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 234 of 806

234. Question

Which of the following marks the major distinction among homeowners forms?

The deductible
Correct Incorrect Correct answer

Policy limits
Correct Incorrect Correct answer

Perils covered
Correct Incorrect Correct answer

Number of covered insureds covered
Correct Incorrect Correct answer

Correct

Incorrect
Question 235 of 806

235. Question

Which of the following is not an additional broad named peril under the HO-2?

Weight of ice
Correct Incorrect Correct answer

Weight of snow
Correct Incorrect Correct answer

Weight of sleet
Correct Incorrect Correct answer

Windstorm or hail
Correct Incorrect Correct answer

Correct

Incorrect
Question 236 of 806

236. Question

Which of the following is a correct statement about the HO-3 Special form?

The HO-3 provides open perils coverage on the dwelling and named perils coverage on personal property.
Correct Incorrect Correct answer

The HO-3 provides open perils coverage on the dwelling and personal property.
Correct Incorrect Correct answer

The HO-3 provides named perils coverage on the dwelling and open perils coverage personal property.
Correct Incorrect Correct answer

The HO-3 provides named perils coverage on the dwelling and personal property.
Correct Incorrect Correct answer

Correct

Incorrect
Question 237 of 806

237. Question

Losses resulting from which of the following would be covered under a Homeowners form?

Riot or civil commotion
Correct Incorrect Correct answer

Ordinances regulating construction, repair, or demolition
Correct Incorrect Correct answer

Earthquake
Correct Incorrect Correct answer

Water damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 238 of 806

238. Question

Losses resulting from which of the following would be covered under a Homeowners form?

Power interruption that takes place away from the residence premises
Correct Incorrect Correct answer

The insured's failure to protect or preserve property
Correct Incorrect Correct answer

War
Correct Incorrect Correct answer

Smoke damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 239 of 806

239. Question

Losses resulting from which of the following would be covered under a Homeowners form?

Nuclear hazard
Correct Incorrect Correct answer

Losses caused intentionally by the insured
Correct Incorrect Correct answer

Vandalism and malicious mischief
Correct Incorrect Correct answer

Destruction, confiscation, or seizure of insured property by the government
Correct Incorrect Correct answer

Correct

Incorrect
Question 240 of 806

240. Question

How are losses to the dwelling and other structures settled under homeowners policies?

Actual cash value
Correct Incorrect Correct answer

Replacement cost basis
Correct Incorrect Correct answer

Replacement cost basis as long as the insured has coverage for at least 80 percent of the full replacement value
Correct Incorrect Correct answer

Replacement cost as long as the property has been insured for 100 percent of its replacement value
Correct Incorrect Correct answer

Correct

Incorrect
Question 241 of 806

241. Question

If an insured does not carry enough insurance to qualify for replacement cost coverage under a Homeowners form, he or she will be paid the larger of:

ACV or a proportion of the replacement cost
Correct Incorrect Correct answer

ACV or replacement cost
Correct Incorrect Correct answer

ACV or policy the limit
Correct Incorrect Correct answer

Replacement cost or the policy limit
Correct Incorrect Correct answer

Correct

Incorrect
Question 242 of 806

242. Question

Under homeowners forms, how is the limit of Coverage C determined on one- or two-family dwellings?

The limit of Coverage C is selected by the insured.
Correct Incorrect Correct answer

The limit of Coverage C is 30 percent of the Coverage A amount.
Correct Incorrect Correct answer

The limit of Coverage C is 50 percent of the Coverage A amount.
Correct Incorrect Correct answer

The limit of Coverage C is 25 percent of the Coverage A amount.
Correct Incorrect Correct answer

Correct

Incorrect
Question 243 of 806

243. Question

For most homeowners forms, the primary amount of insurance is the amount of:

Coverage A
Correct Incorrect Correct answer

Coverage B
Correct Incorrect Correct answer

Coverage C
Correct Incorrect Correct answer

Coverage D
Correct Incorrect Correct answer

Correct

Incorrect
Question 244 of 806

244. Question

For the HO-4 and HO-6 forms, the primary amount of insurance is the amount of:

Coverage A
Correct Incorrect Correct answer

Coverage B
Correct Incorrect Correct answer

Coverage C
Correct Incorrect Correct answer

Coverage D
Correct Incorrect Correct answer

Correct

Incorrect
Question 245 of 806

245. Question

Under the HO-4 Contents Broad form, how is the limit of Coverage D determined?

The limit of Coverage D is 10 percent of the Coverage A amount.
Correct Incorrect Correct answer

The limit of Coverage D is 50 percent of the Coverage A amount.
Correct Incorrect Correct answer

The limit of Coverage D is 30 percent of the Coverage C amount.
Correct Incorrect Correct answer

The limit of Coverage D is 50 percent of the Coverage C amount.
Correct Incorrect Correct answer

Correct

Incorrect
Question 246 of 806

246. Question

What are the two major coverages provided under Section II of the homeowners policy?

Coverage A-Dwelling; Coverage B-Other Structures
Correct Incorrect Correct answer

Coverage C-Personal Property; Coverage D-Loss of Use
Correct Incorrect Correct answer

Coverage E-Personal Liability; Coverage F-Medical Payments to Others
Correct Incorrect Correct answer

Coverage G-Medical Payments to Others; Coverage H-Personal Injury Protection
Correct Incorrect Correct answer

Correct

Incorrect
Question 247 of 806

247. Question

Which of the following parts of the homeowners policy covers damages that the insured becomes legally obligated to pay because of bodily injury or property damage to others?

Coverage D-Loss of Use
Correct Incorrect Correct answer

Coverage E-Personal Liability
Correct Incorrect Correct answer

Coverage E-Personal Injury Protection
Correct Incorrect Correct answer

Coverage F-Medical Payments to Others
Correct Incorrect Correct answer

Correct

Incorrect
Question 248 of 806

248. Question

When used in the homeowners policy, bodily injury refers to which of the following?

Bodily harm
Correct Incorrect Correct answer

Sickness
Correct Incorrect Correct answer

Sickness or disease
Correct Incorrect Correct answer

Bodily harm, sickness, or disease
Correct Incorrect Correct answer

Correct

Incorrect
Question 249 of 806

249. Question

Coverage E-Personal Liability of the Homeowners form applies to which of the following:

All activities that occur anywhere
Correct Incorrect Correct answer

Personal nonbusiness activities that occur on the residence premises
Correct Incorrect Correct answer

Personal nonbusiness activities that occur anywhere
Correct Incorrect Correct answer

Personal nonbusiness activities that occur anywhere or at insured locations
Correct Incorrect Correct answer

Correct

Incorrect
Question 250 of 806

250. Question

Which of the following is a correct statement about defending a lawsuit under the Coverage E-Personal Liability section of a homeowners policy?

The insurer may choose not to defend a suit that is obviously groundless.
Correct Incorrect Correct answer

The insurer must provide a defense to the insured even if the charges are groundless.
Correct Incorrect Correct answer

Suits that are clearly groundless or false are never defended.
Correct Incorrect Correct answer

The insured must pay for defense costs.
Correct Incorrect Correct answer

Correct

Incorrect
Question 251 of 806

251. Question

Under the terms of a homeowners policy, when does an insurer’s duty to defend cease?

Once a settlement has been reached
Correct Incorrect Correct answer

When policy limits have been exhausted
Correct Incorrect Correct answer

When the insured releases the insured from further defense proceedings
Correct Incorrect Correct answer

When so order by a court of law
Correct Incorrect Correct answer

Correct

Incorrect
Question 252 of 806

252. Question

Under homeowners forms, the standard liability limit provided for all bodily injury or property damage arising out of any one occurrence is:

50000
Correct Incorrect Correct answer

100000
Correct Incorrect Correct answer

500000
Correct Incorrect Correct answer

$ 1 million
Correct Incorrect Correct answer

Correct

Incorrect
Question 253 of 806

253. Question

Coverage F-Medical Payments to Others under the homeowners forms covers necessary medical expenses within how long of an accident that causes bodily injury?

1 year
Correct Incorrect Correct answer

18 months
Correct Incorrect Correct answer

2 years
Correct Incorrect Correct answer

3 years
Correct Incorrect Correct answer

Correct

Incorrect
Question 254 of 806

254. Question

What is the limit per person under Coverage F-Medical Payments to Others of the homeowners forms?

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2000
Correct Incorrect Correct answer

Correct

Incorrect
Question 255 of 806

255. Question

Which of the following is a correct statement about Coverage Fâ€”Medical Payments to others under homeowners forms?

Injury to the named insured and regular residents may be covered.
Correct Incorrect Correct answer

Resident employees are not covered.
Correct Incorrect Correct answer

The insured must be legally liable for the injuries.
Correct Incorrect Correct answer

Coverage applies regardless of whether the insured is legally liable.
Correct Incorrect Correct answer

Correct

Incorrect
Question 256 of 806

256. Question

Under homeowners forms, Damage to Property of Others pays how much per occurrence for property damaged or destroyed by the insured?

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2500
Correct Incorrect Correct answer

Correct

Incorrect
Question 257 of 806

257. Question

A homeowners policy may be cancelled by the insurer for any reason within the first?

7 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

60 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 258 of 806

258. Question

After a homeowners policy has been in force at least 60 days, an insurer may cancel the policy for all of the following reasons except:

Material misrepresentation by the insured
Correct Incorrect Correct answer

Substantial change in risk insured
Correct Incorrect Correct answer

Nonpayment of premium
Correct Incorrect Correct answer

Termination of the producer's contract
Correct Incorrect Correct answer

Correct

Incorrect
Question 259 of 806

259. Question

How much written notice must an insurer give an insured when it decides to nonrenew a homeowners policy?

7 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

60 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 260 of 806

260. Question

Under homeowners forms, which of the following is not one of the major categories of scheduled personal property?

Jewelry
Correct Incorrect Correct answer

Furs
Correct Incorrect Correct answer

Camera and equipment
Correct Incorrect Correct answer

Fine clothing
Correct Incorrect Correct answer

Correct

Incorrect
Question 261 of 806

261. Question

Under homeowners forms, which of the following is not one of the major categories of scheduled personal property?

Musical instruments
Correct Incorrect Correct answer

Silverware
Correct Incorrect Correct answer

Tennis racquets
Correct Incorrect Correct answer

Golf equipment
Correct Incorrect Correct answer

Correct

Incorrect
Question 262 of 806

262. Question

Under homeowners forms, which of the following is not one of the major categories of scheduled personal property?

Fine arts
Correct Incorrect Correct answer

Books
Correct Incorrect Correct answer

Postage stamps
Correct Incorrect Correct answer

Coins
Correct Incorrect Correct answer

Correct

Incorrect
Question 263 of 806

263. Question

When is a Business Pursuits endorsement most suitable under a homeowners policy?

When property coverage is desired for the business
Correct Incorrect Correct answer

When liability coverage is desired for a business conducted on the residence premises
Correct Incorrect Correct answer

When liability coverage is desired for a business conducted away from the residence premises
Correct Incorrect Correct answer

Specifically when a day care business is operated from the home
Correct Incorrect Correct answer

Correct

Incorrect
Question 264 of 806

264. Question

How are libel, slander, false arrest, invasion of privacy, and malicious prosecution covered under homeowners policies?

Automatically
Correct Incorrect Correct answer

Through the Personal Injury endorsement
Correct Incorrect Correct answer

Through the Libel/Slander endorsement
Correct Incorrect Correct answer

There is no coverage for these events.
Correct Incorrect Correct answer

Correct

Incorrect
Question 265 of 806

265. Question

How is personal auto property and liability coverage provided?

Under homeowners policies
Correct Incorrect Correct answer

Under homeowners policies with a special endorsement
Correct Incorrect Correct answer

Under the Personal Auto policy
Correct Incorrect Correct answer

Under the Universal Auto policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 266 of 806

266. Question

Which of the following are the four parts of the personal auto policy?

Part A-Liability Coverage, Part B-Medical Payments Coverage, Part C-Uninsured Motorists Coverage, Part D-Coverage for Damage to Your Auto
Correct Incorrect Correct answer

Part A-Liability Coverage, Part B-Medical Payments Coverage, Part C-Uninsured Motorists Coverage, Part D-Collision Coverage
Correct Incorrect Correct answer

Part A-Liability Coverage, Part B-Medical Payments Coverage, Part C-Uninsured Motorists Coverage, Part D-Other Than Collision Coverage
Correct Incorrect Correct answer

Part A-Bodily Injury, Part B-Medical Payments Coverage, Part C-Uninsured Motorists Coverage, Part D-Coverage for Damage to Your Auto
Correct Incorrect Correct answer

Correct

Incorrect
Question 267 of 806

267. Question

All of the following statements are correct about the parts of the PAP except:

All parts of the policy are required.
Correct Incorrect Correct answer

Not all parts of the policy are required.
Correct Incorrect Correct answer

Part C-Uninsured Motorists is mandatory in some states.
Correct Incorrect Correct answer

Part D-Collision and Other Than Collision may be written alone or with Liability Coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 268 of 806

268. Question

In the Definitions section of the PAP, “you” and “your” refer to:

The named insured only
Correct Incorrect Correct answer

The named insured and spouse
Correct Incorrect Correct answer

The named insured and insured family members
Correct Incorrect Correct answer

The named insured and additional insureds, if any
Correct Incorrect Correct answer

Correct

Incorrect
Question 269 of 806

269. Question

The PAP defines “family member” as someone residing in the insured’s household and related to the named insured by:

Blood, marriage, or friendship
Correct Incorrect Correct answer

Blood, marriage, or adoption
Correct Incorrect Correct answer

Marriage, adoption, or friendship
Correct Incorrect Correct answer

Marriage, blood, or guardianship
Correct Incorrect Correct answer

Correct

Incorrect
Question 270 of 806

270. Question

Under the PAP, which of the following cannot be considered a named insured’s covered auto?

A private passenger auto, pickup, or van the named insured acquires during the policy period
Correct Incorrect Correct answer

A trailer owned by the named insured
Correct Incorrect Correct answer

An auto or trailer not owned by the named insured used as a temporary substitute for a vehicle shown in the Declarations that is out of use because of breakdown, repairs, servicing, loss, or destruction
Correct Incorrect Correct answer

Any vehicle the named insured borrows
Correct Incorrect Correct answer

Correct

Incorrect
Question 271 of 806

271. Question

If a newly acquired auto replaces one listed in the Declarations of a PAP, what type of liability coverage does this vehicle have?

None until coverage is requested by the insured
Correct Incorrect Correct answer

The broadest coverage of any vehicle already listed in the Declarations
Correct Incorrect Correct answer

The most narrow coverage of any vehicle already listed in the Declarations
Correct Incorrect Correct answer

The minimum coverage as required by the state
Correct Incorrect Correct answer

Correct

Incorrect
Question 272 of 806

272. Question

With respect to liability coverage, if a new auto does not replace one listed in the Declarations of a PAP:

The insured automatically has the broadest liability coverage of any vehicle already listed in the Declarations.
Correct Incorrect Correct answer

The insured has 10 days to notify the insurer in order to be covered for liability.
Correct Incorrect Correct answer

Liability coverage does not apply until the insured notifies the insurer of the additional vehicle.
Correct Incorrect Correct answer

The insured has 14 days to notify his insurer in order to be covered for liability.
Correct Incorrect Correct answer

Correct

Incorrect
Question 273 of 806

273. Question

If an insured already has a vehicle insured for Physical Damage coverage and acquires another auto, coverage for the new vehicle begins on the date it is acquired as long as:

The new vehicle is not more expensive than any vehicle listed in the Declarations.
Correct Incorrect Correct answer

The insured requests coverage within 10 days of its acquisition.
Correct Incorrect Correct answer

The insured requests coverage within 14 days of its acquisition.
Correct Incorrect Correct answer

The insured requests coverage within 30 days of its acquisition.
Correct Incorrect Correct answer

Correct

Incorrect
Question 274 of 806

274. Question

Which of the following is not considered an insured under Part A of the PAP?

Named insured and family members
Correct Incorrect Correct answer

Anyone using the insureds car with permission
Correct Incorrect Correct answer

Others who share liability with the insured or who incur liability arising out of an accident involving an auto used by the insured
Correct Incorrect Correct answer

Anyone who uses the insured's car without permission.
Correct Incorrect Correct answer

Correct

Incorrect
Question 275 of 806

275. Question

Which of the following is not considered a supplementary payment under the PAP?

The cost of bail bonds and premiums on appeal bonds or bonds to release attachments
Correct Incorrect Correct answer

Postjudment interest
Correct Incorrect Correct answer

Prejudgment interest
Correct Incorrect Correct answer

Loss of earnings
Correct Incorrect Correct answer

Correct

Incorrect
Question 276 of 806

276. Question

Which of the following is not excluded from coverage under the Liability section of the PAP?

Bodily injury or property damage intentionally caused by the insured
Correct Incorrect Correct answer

Bodily injury to an insured's employee or occurring while the insured auto is being used in an auto business
Correct Incorrect Correct answer

Liability arising from an insured's ownership or operation of a vehicle used as a public or livery conveyance
Correct Incorrect Correct answer

Damages for which the insured is legally liable
Correct Incorrect Correct answer

Correct

Incorrect
Question 277 of 806

277. Question

Which of the following best describes the limit of liability under Part A of the PAP?

The most the company will pay during any policy period
Correct Incorrect Correct answer

The most the company will pay for damages resulting for any one auto accident, regardless of the number of insureds, claims filed, vehicles listed in the Declarations, or vehicles involved in the accident
Correct Incorrect Correct answer

The most the company will pay for damages resulting from any one auto accident, regardless of the number of insureds
Correct Incorrect Correct answer

The most the company will pay for damages resulting from any one auto accident, regardless of the number of vehicles involved in the accident
Correct Incorrect Correct answer

Correct

Incorrect
Question 278 of 806

278. Question

When liability limits are expressed as a series of numbers, they are referred to as:

Combined limits
Correct Incorrect Correct answer

Collective limits
Correct Incorrect Correct answer

Split limits
Correct Incorrect Correct answer

Separate limits
Correct Incorrect Correct answer

Correct

Incorrect
Question 279 of 806

279. Question

Which of the following best describes split limits 25/50/10?

$25,000 per person for BI; $50,000 per accident for BI; $10,000 per accident for PD
Correct Incorrect Correct answer

$25,000 per person for PD; $50,000 per accident for PD; $10,000 per accident for BI
Correct Incorrect Correct answer

$25,000 per person for BI; $50,000 per accident for PD; $10,000 per accident for PD
Correct Incorrect Correct answer

$25,000 per person for BI; $50,000 per accident for PD; $10,000 per accident for BI
Correct Incorrect Correct answer

Correct

Incorrect
Question 280 of 806

280. Question

When can a person collect duplicate payments for a loss covered under Part A and another coverage under the PAP or Uninsured Motorists coverage?

When the loss is covered under both parts
Correct Incorrect Correct answer

When the insured is at fault and his or her behavior is especially egregious
Correct Incorrect Correct answer

When the claimant files under Part A first
Correct Incorrect Correct answer

Never, a person cannot collect such duplicate payments.
Correct Incorrect Correct answer

Correct

Incorrect
Question 281 of 806

281. Question

What is the purpose of financial responsibility laws?

To ensure that auto owners have the means to meet their car note obligations
Correct Incorrect Correct answer

To substantiate that drivers can pay for bodily injury and property damage liability arising from auto accidents
Correct Incorrect Correct answer

To guarantee full payment to all auto accident victims
Correct Incorrect Correct answer

To guarantee full payment to those to which the insured is liable as a result of an auto accident
Correct Incorrect Correct answer

Correct

Incorrect
Question 282 of 806

282. Question

Diane is driving her vehicle in a neighboring state where the financial responsibility laws require higher limits than in her state. In the event she causes an accident in the neighboring state, how will her policy respond?

Her insurer will pay up to the limits of her policy.
Correct Incorrect Correct answer

Her insurer will pay up to the limits required by the neighboring state.
Correct Incorrect Correct answer

Her insurer and the other driver's insurer will split the difference between the two states' requirements.
Correct Incorrect Correct answer

Her insurer will pay up to the limits of her policy, and her state's guarantee fund will pick up the remainder.
Correct Incorrect Correct answer

Correct

Incorrect
Question 283 of 806

283. Question

Regardless of fault, all of the following are covered for injuries under Part B-Medical Payments Coverage of the PAP except:

The named insured
Correct Incorrect Correct answer

Family members of the named insured
Correct Incorrect Correct answer

Passengers in the named insured's auto
Correct Incorrect Correct answer

Passengers in another auto involved in an accident with the insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 284 of 806

284. Question

For how long does Part B-Medical Payments Coverage of the PAP cover reasonable expenses for necessary medical and funeral expenses?

6 months
Correct Incorrect Correct answer

1 year
Correct Incorrect Correct answer

3 years
Correct Incorrect Correct answer

5 years
Correct Incorrect Correct answer

Correct

Incorrect
Question 285 of 806

285. Question

All of the following are covered under Part B-Medical Payments Coverage of the PAP except:

The named insured while occupying a motor vehicle designed for public roads or a trailer
Correct Incorrect Correct answer

Family members of the named insured while occupying a motor vehicle designed for public roads or a trailer
Correct Incorrect Correct answer

Any person while occupying the named insured's covered auto when struck by a vehicle designed for public roads or a trailer
Correct Incorrect Correct answer

Bystanders traumatized, but not injured, by an accident caused by the named insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 286 of 806

286. Question

All of the following are excluded from coverage under Part B-Medical Payments Coverage of the PAP except:

Injuries sustained while occupying a vehicle wither fewer than four wheels
Correct Incorrect Correct answer

Injuries sustained while using a covered auto as a public or livery conveyance
Correct Incorrect Correct answer

Injuries that would be covered under workers compensation
Correct Incorrect Correct answer

Injuries sustained by passengers in the named insured's covered auto
Correct Incorrect Correct answer

Correct

Incorrect
Question 287 of 806

287. Question

Which of the following is not covered by Uninsured Motorists Coverage of the PAP?

Bodily injury as a result of an accident with a legally liable uninsured motorist
Correct Incorrect Correct answer

Property damage as a result of an accident with a legally liable uninsured motorist in some states
Correct Incorrect Correct answer

Compensatory damages as a result of an accident with a legally liable uninsured motorist
Correct Incorrect Correct answer

Punitive damages as a result of an accident with a legally liable uninsured motorist
Correct Incorrect Correct answer

Correct

Incorrect
Question 288 of 806

288. Question

Which of the following is an uninsured motorist under the PAP?

One who has no liability coverage or whose liability coverage is not sufficient to meet the state's financial responsibility requirement
Correct Incorrect Correct answer

One whose liability coverage is invalid because his or her insurer has become insolvent
Correct Incorrect Correct answer

A hit-and-run driver
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 289 of 806

289. Question

All of the following are examples of insureds for Uninsured Motorists purposes under the PAP except:

A brother of the named insured injured by an uninsured motorist when the brothers share an apartment
Correct Incorrect Correct answer

The father of a child insured injured by an uninsured motorist
Correct Incorrect Correct answer

A neighbor of the named insured when the insured is using his vehicle as a taxi
Correct Incorrect Correct answer

A woman who suffers damages for loss of consortium because her husband was killed in an accident caused by an uninsured motorist
Correct Incorrect Correct answer

Correct

Incorrect
Question 290 of 806

290. Question

Which of the following losses is not covered under Part Câ€”Uninsured Motorists Coverage of the PAP?

A car used as a taxi
Correct Incorrect Correct answer

A car used for pizza delivery
Correct Incorrect Correct answer

A pickup truck used on a farm
Correct Incorrect Correct answer

A van used in a school carpool
Correct Incorrect Correct answer

Correct

Incorrect
Question 291 of 806

291. Question

Paul uses his own car to make deliveries for his employer. In the event of an accident cause by an uninsured motorist, will Paul’s PAP provide coverage under Part C?

Yes if Paul's vehicle is insured for this type of coverage
Correct Incorrect Correct answer

Yes if Paul files the claim correctly
Correct Incorrect Correct answer

No because Paul is using his personal vehicle for business purposes
Correct Incorrect Correct answer

No because the loss should be covered under workers compensation or disability coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 292 of 806

292. Question

Which of the following terms describes adding limits of coverage from more than one policy in order to achieve higher limit of coverage?

Stacking
Correct Incorrect Correct answer

Loading
Correct Incorrect Correct answer

Packing
Correct Incorrect Correct answer

Piling
Correct Incorrect Correct answer

Correct

Incorrect
Question 293 of 806

293. Question

Direct and accidental loss to the named insured’s covered auto or any nonowned auto against loss caused by collision or other than collision is covered under which of the following parts of the PAP?

Part A-Liability Coverage
Correct Incorrect Correct answer

Part B-Medical Payments Coverage
Correct Incorrect Correct answer

Part C-Uninsured Motorists Coverage
Correct Incorrect Correct answer

Part D-Physical Damage Coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 294 of 806

294. Question

Which of the following best describes collision as covered under Part D-Physical Damage Coverage of the PAP?

The impact of an auto with another auto
Correct Incorrect Correct answer

The impact of an auto with another object or vehicle
Correct Incorrect Correct answer

The upset of a vehicle
Correct Incorrect Correct answer

The impact of an auto with another object or vehicle or the upset of a vehicle
Correct Incorrect Correct answer

Correct

Incorrect
Question 295 of 806

295. Question

Under the PAP, other than collision losses are caused by:

Other vehicles
Correct Incorrect Correct answer

People
Correct Incorrect Correct answer

Perils
Correct Incorrect Correct answer

Hazards
Correct Incorrect Correct answer

Correct

Incorrect
Question 296 of 806

296. Question

David, as a named insured, has an accident while driving his son’s pickup truck, and the front portion of the truck is damaged. How will coverage apply under David’s PAP?

The broadest coverage that applies to any of his covered autos will apply.
Correct Incorrect Correct answer

The most narrow coverage that applies to any of his covered autos will apply.
Correct Incorrect Correct answer

No coverage will apply since he does not own the truck.
Correct Incorrect Correct answer

An average of the coverages that apply to any of his covered autos will apply.
Correct Incorrect Correct answer

Correct

Incorrect
Question 297 of 806

297. Question

What is the maximum for Transportation Expense coverage under the PAP?

$20 per day up to $500
Correct Incorrect Correct answer

$20 per day up to $600
Correct Incorrect Correct answer

$25 per day up to $500
Correct Incorrect Correct answer

$25 per day up to $1,000
Correct Incorrect Correct answer

Correct

Incorrect
Question 298 of 806

298. Question

When an auto is stolen, what is the waiting period under the PAP before transportation expenses will be paid?

24 hours
Correct Incorrect Correct answer

48 hours
Correct Incorrect Correct answer

72 hours
Correct Incorrect Correct answer

There is no waiting period.
Correct Incorrect Correct answer

Correct

Incorrect
Question 299 of 806

299. Question

When transportation expenses are paid under a PAP, what is the waiting period when the loss is caused by a reason other than theft?

24 hours
Correct Incorrect Correct answer

48 hours
Correct Incorrect Correct answer

72 hours
Correct Incorrect Correct answer

There is no waiting period.
Correct Incorrect Correct answer

Correct

Incorrect
Question 300 of 806

300. Question

Which of the following is covered under Part D-Physical Damage of the PAP?

An auto that is being used as a public or livery conveyance
Correct Incorrect Correct answer

All types of audio, visual, and data electronic equipment
Correct Incorrect Correct answer

Permanently installed sound equipment and accessories
Correct Incorrect Correct answer

All audio, visual and data electronic accessories
Correct Incorrect Correct answer

Correct

Incorrect
Question 301 of 806

301. Question

Which of the following is within policy territory under the PAP?

United States territories and possessions
Correct Incorrect Correct answer

Puerto Rico
Correct Incorrect Correct answer

Canada
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 302 of 806

302. Question

Which of the following pays for the difference between the amount of liability carried by an at-fault driver and a person’s actual BI damages?

Uninsured Motorists
Correct Incorrect Correct answer

Underinsured Motorists
Correct Incorrect Correct answer

Gap coverage
Correct Incorrect Correct answer

In between coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 303 of 806

303. Question

All of the following are correct statements about Underinsured Motorists coverage except:

Underinsured Motorists is mandatory in all states.
Correct Incorrect Correct answer

Underinsured Motorists is mandatory in some states.
Correct Incorrect Correct answer

Underinsured Motorists is optional is some states.
Correct Incorrect Correct answer

Underinsured Motorists is added to the PAP by endorsement
Correct Incorrect Correct answer

Correct

Incorrect
Question 304 of 806

304. Question

All of the following are correct statements about towing and labor costs covered under a PAP except:

The basic coverage limit is $25.
Correct Incorrect Correct answer

Limits higher than the basic limit are generally available.
Correct Incorrect Correct answer

Coverage is added by endorsement.
Correct Incorrect Correct answer

Coverage is provided for labor performed after the vehicle is taken to a garage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 305 of 806

305. Question

All of the following can be covered by the Miscellaneous Type Vehicle endorsement except:

Motorcycles
Correct Incorrect Correct answer

Mopeds
Correct Incorrect Correct answer

SUVs
Correct Incorrect Correct answer

RVs
Correct Incorrect Correct answer

Correct

Incorrect
Question 306 of 806

306. Question

In which of the following states may an insured driver be reimbursed by his or her own insurance company for medical expenses and loss of wages regardless of who is at fault in an auto accident?

No-fault states
Correct Incorrect Correct answer

Financial responsibility states
Correct Incorrect Correct answer

No-liability states
Correct Incorrect Correct answer

No-blame states
Correct Incorrect Correct answer

Correct

Incorrect
Question 307 of 806

307. Question

Which of the following is a correct statement about no-fault states?

Subrogation from the other insurer is not allowed.
Correct Incorrect Correct answer

Subrogation from the other insurer is permitted.
Correct Incorrect Correct answer

Lost wages are not compensable.
Correct Incorrect Correct answer

The at-fault driver's insurer is liable for damages in the event of an accident.
Correct Incorrect Correct answer

Correct

Incorrect
Question 308 of 806

308. Question

All of the following are correct statements about no-fault plans except:

Pure no-fault plans do not exist.
Correct Incorrect Correct answer

Modified no-fault plans allow one party to sue another when damages exceed a specified amount.
Correct Incorrect Correct answer

Suits for damages are permitted in no-fault states.
Correct Incorrect Correct answer

Suits for damages are not permitted in no-fault states.
Correct Incorrect Correct answer

Correct

Incorrect
Question 309 of 806

309. Question

When insurance companies agree to share randomly assigned poor risks among themselves, which of the following is in effect?

Assigned risk or automobile insurance plans
Correct Incorrect Correct answer

Voluntary risk plans
Correct Incorrect Correct answer

Poor risk plans
Correct Incorrect Correct answer

Random risk plans
Correct Incorrect Correct answer

Correct

Incorrect
Question 310 of 806

310. Question

Which of the following best describes the purpose of the National Flood Insurance Program?

It was created to make flood insurance available to those in eligible communities through federal subsidization.
Correct Incorrect Correct answer

It was created to provide flood insurance to those in eligible communities through federal subsidization.
Correct Incorrect Correct answer

It was created to provide flood insurance to needy individuals in eligible communities through federal subsidization.
Correct Incorrect Correct answer

It was created to provide flood insurance to needy individuals in flood plains.
Correct Incorrect Correct answer

Correct

Incorrect
Question 311 of 806

311. Question

What are the maximum limits for flood insurance for a building through the National Flood Insurance Program?

$25,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

$35,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

$10,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

$15,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

Correct

Incorrect
Question 312 of 806

312. Question

What are the maximum limits for flood insurance for contents or personal property through the National Flood Insurance Program?

$10,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

$25,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

$10,000 under the emergency program; $100,000 under the regular program
Correct Incorrect Correct answer

$15,000 under the emergency program; $250,000 under the regular program
Correct Incorrect Correct answer

Correct

Incorrect
Question 313 of 806

313. Question

What is the standard deductible for each coverage under the National Flood Insurance Program?

$500 for both the emergency and regular programs
Correct Incorrect Correct answer

$1,000 for both the emergency and regular program
Correct Incorrect Correct answer

$500 under the regular program and $1,000 under the emergency program
Correct Incorrect Correct answer

$1,000 under the regular program and $500 under the emergency program
Correct Incorrect Correct answer

Correct

Incorrect
Question 314 of 806

314. Question

Which of the following is not covered by flood insurance?

Sewer backup into a dwelling
Correct Incorrect Correct answer

An overflow of inland or tidal waters
Correct Incorrect Correct answer

Mudslides caused by accumulation of water on the ground or underneath it
Correct Incorrect Correct answer

Collapse of land as a result of excessive erosion due to flood
Correct Incorrect Correct answer

Correct

Incorrect
Question 315 of 806

315. Question

All of the following are correct statements about the Write Your Own flood insurance program except:

Policies are sold by private insurance companies.
Correct Incorrect Correct answer

The Federal Insurance Association sets rates, eligibility requirements, and coverage limitations.
Correct Incorrect Correct answer

Each insurer sets rates, eligibility requirements, and coverage limitations.
Correct Incorrect Correct answer

If losses exceed the premiums collected by a private insurer, the FIA pays the difference.
Correct Incorrect Correct answer

Correct

Incorrect
Question 316 of 806

316. Question

What is the waiting period in order for flood insurance to become effective?

7 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

45 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 317 of 806

317. Question

All of the following are correct statements about earthquake coverage except:

It is available only by endorsement to a dwelling or homeowners policy.
Correct Incorrect Correct answer

It is available by endorsement to a dwelling or homeowners policy or as a separate policy.
Correct Incorrect Correct answer

When coverage is in place, it applies to both the structure and contents.
Correct Incorrect Correct answer

The dwelling and homeowners policies do not cover the earthquake peril.
Correct Incorrect Correct answer

Correct

Incorrect
Question 318 of 806

318. Question

Which of the following is not covered under a mobile home package policy or endorsement?

All original equipment and accessories
Correct Incorrect Correct answer

Equipment, additions, and appurtenant structures not originally included
Correct Incorrect Correct answer

Additional living expenses
Correct Incorrect Correct answer

Absent as optional coverage, damage from collision while in transit
Correct Incorrect Correct answer

Correct

Incorrect
Question 319 of 806

319. Question

Another term for the Inland Marine form is:

Floater
Correct Incorrect Correct answer

Maritime
Correct Incorrect Correct answer

Watercraft
Correct Incorrect Correct answer

Nautical
Correct Incorrect Correct answer

Correct

Incorrect
Question 320 of 806

320. Question

All of the following are commonly used Personal Inland Marine forms except:

Personal Articles form
Correct Incorrect Correct answer

Personal Property form
Correct Incorrect Correct answer

Personal Effects form
Correct Incorrect Correct answer

Personal Chattels form
Correct Incorrect Correct answer

Correct

Incorrect
Question 321 of 806

321. Question

Under the Inland Marine Personal Articles form, which of the following is not one of the major categories of scheduled personal property?

Musical instruments
Correct Incorrect Correct answer

Silverware
Correct Incorrect Correct answer

Bicycling equipment
Correct Incorrect Correct answer

Golf equipment
Correct Incorrect Correct answer

Correct

Incorrect
Question 322 of 806

322. Question

Under the Inland Marine Personal Articles form, which of the following is not one of the major categories of scheduled personal property?

Fine arts
Correct Incorrect Correct answer

Books
Correct Incorrect Correct answer

Postage stamps
Correct Incorrect Correct answer

Coins
Correct Incorrect Correct answer

Correct

Incorrect
Question 323 of 806

323. Question

Under the Inland Marine Personal Articles form, which of the following is not one of the major categories of scheduled personal property?

Jewelry
Correct Incorrect Correct answer

Furs
Correct Incorrect Correct answer

Fine clothing
Correct Incorrect Correct answer

Cameras
Correct Incorrect Correct answer

Correct

Incorrect
Question 324 of 806

324. Question

All of the following are correct statements about the Personal Property form under Inland Marine coverage except:

It provides open perils coverage on a blanket basis.
Correct Incorrect Correct answer

It is often used by condominium and apartment dwellers who cannot secure open perils coverage under their homeowners forms.
Correct Incorrect Correct answer

Most personal property found in a typical home is covered.
Correct Incorrect Correct answer

Coverage is provided on a named perils basis.
Correct Incorrect Correct answer

Correct

Incorrect
Question 325 of 806

325. Question

All of the following are correct statements about the Personal Effects form under Inland Marine coverage except:

It is designed for those who want to insure their belongings while traveling.
Correct Incorrect Correct answer

Open perils coverage is provided on an unscheduled basis.
Correct Incorrect Correct answer

Named perils coverage is provided on a scheduled basis.
Correct Incorrect Correct answer

Coverage does not apply while the property is on the insured's premises or while in storage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 326 of 806

326. Question

All of the following are purposes of umbrella coverage except:

To provide more extensive liability coverage than can be provided by personal lines policies
Correct Incorrect Correct answer

To provide additional liability coverage above basic coverage provided by the underlying liability policy
Correct Incorrect Correct answer

To cover losses that are excluded by the underlying policy
Correct Incorrect Correct answer

To cover property damage not covered by the underlying policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 327 of 806

327. Question

Harry has a homeowners policy with $200,000 in liability coverage and a $1 million umbrella policy. He has a $300,000 covered loss. How will the policies respond?

The homeowners policy will pay nothing; the umbrella policy will cover the entire loss.
Correct Incorrect Correct answer

The homeowners policy will pay $100,000; the umbrella policy will pay $100,000.
Correct Incorrect Correct answer

The homeowners policy will pay $200,000; the umbrella policy will pay $100,000.
Correct Incorrect Correct answer

The two policies will split the loss and pay $150,000 each.
Correct Incorrect Correct answer

Correct

Incorrect
Question 328 of 806

328. Question

What is the purpose of a retention limit under an umbrella policy?

To cover losses not covered by the underlying policy
Correct Incorrect Correct answer

To cover losses excluded by the underlying policy
Correct Incorrect Correct answer

To cause the insured to bear some portion of the loss
Correct Incorrect Correct answer

To cause the umbrella policy to cover the entire loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 329 of 806

329. Question

What do FAIR plans do?

They make insurance available to environmental risks previously considered uninsurable.
Correct Incorrect Correct answer

They make insurance premiums more competitive.
Correct Incorrect Correct answer

The make similar coverages among insurers easy to compare.
Correct Incorrect Correct answer

They make insurance available to all who desire it.
Correct Incorrect Correct answer

Correct

Incorrect
Question 330 of 806

330. Question

Which of the following is a correct statement about FAIR plans?

No application for insurance may be rejected.
Correct Incorrect Correct answer

No application for insurance may be rejected because of environmental hazards beyond the insured's control.
Correct Incorrect Correct answer

A property may not be inspected before it is accepted into the plan.
Correct Incorrect Correct answer

FAIR is a type of insurance policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 331 of 806

331. Question

All of the following are correct statements about the Commercial Package policy except:

The CPP provides very narrow coverage.
Correct Incorrect Correct answer

Almost all commercial risks are eligible for coverage under a CPP.
Correct Incorrect Correct answer

Ocean marine exposures are not included in CPPs.
Correct Incorrect Correct answer

Aviation exposures are not included in CPPs.
Correct Incorrect Correct answer

Correct

Incorrect
Question 332 of 806

332. Question

Which of the following is not found in the Declarations of a Commercial Package policy?

Name and mailing address of the insured
Correct Incorrect Correct answer

Policy period
Correct Incorrect Correct answer

The duties of the named insured
Correct Incorrect Correct answer

A description of the covered business
Correct Incorrect Correct answer

Correct

Incorrect
Question 333 of 806

333. Question

Which of the following is not found in the Declarations of a Commercial Package policy?

The coverage parts purchased
Correct Incorrect Correct answer

Premium amounts
Correct Incorrect Correct answer

A list of forms applicable to all coverage parts
Correct Incorrect Correct answer

Cancellation provisions
Correct Incorrect Correct answer

Correct

Incorrect
Question 334 of 806

334. Question

All of the following are correct statements about the first named insured under the Commercial Package Policy except:

The first named insured is the person listed first in the policy Declarations.
Correct Incorrect Correct answer

It is important to specify a first named insured because the CPP may be issued to more than one person, for example, business partners.
Correct Incorrect Correct answer

Policy responsibilities and obligations are assigned to the first named insured.
Correct Incorrect Correct answer

The first named insured has obligations no different from other named insureds.
Correct Incorrect Correct answer

Correct

Incorrect
Question 335 of 806

335. Question

Under a Commercial Package Policy, for how long may an insurer examine books and records of the insured after the end of a policy period?

6 months
Correct Incorrect Correct answer

1year
Correct Incorrect Correct answer

2 years
Correct Incorrect Correct answer

3 years
Correct Incorrect Correct answer

Correct

Incorrect
Question 336 of 806

336. Question

Under the terms of the Commercial Package policy, when can an insurance company make inspections or surveys of the insured business?

Only during the first month of the policy period
Correct Incorrect Correct answer

Only during the last month of the policy period
Correct Incorrect Correct answer

Only when the policy has lapsed and the insured desires to recommence coverage
Correct Incorrect Correct answer

Any time
Correct Incorrect Correct answer

Correct

Incorrect
Question 337 of 806

337. Question

What is the purpose of the Assignment clause found in most insurance policies?

To assign subrogation rights to the insurer
Correct Incorrect Correct answer

To assign the insured's rights and obligations to another party
Correct Incorrect Correct answer

To assign the insured's rights and obligations upon death
Correct Incorrect Correct answer

To assign the insurer's rights to another insurance company
Correct Incorrect Correct answer

Correct

Incorrect
Question 338 of 806

338. Question

How does the Businessowners policy differ from the Commercial Package policy?

The BOP is a package policy; the CPP is not.
Correct Incorrect Correct answer

The eligibility rules for a BOP are more stringent than those for a CPP.
Correct Incorrect Correct answer

BOP policies are intended for small, single location, well managed businesses; the CPP can be used to cover virtually any commercial risk.
Correct Incorrect Correct answer

All of the above.
Correct Incorrect Correct answer

Correct

Incorrect
Question 339 of 806

339. Question

Eligible risks for a Businessowners policy may not exceed:

10,000 square feet
Correct Incorrect Correct answer

20,000 square feet
Correct Incorrect Correct answer

25,000 square feet
Correct Incorrect Correct answer

50,000 square feet
Correct Incorrect Correct answer

Correct

Incorrect
Question 340 of 806

340. Question

Eligible risks for a Businessowners policy may not exceed:

$1 million in annual gross sales at each location
Correct Incorrect Correct answer

$1 million in annual gross sales
Correct Incorrect Correct answer

$3 million in annual gross sales at each location
Correct Incorrect Correct answer

$3 million in annual gross sales
Correct Incorrect Correct answer

Correct

Incorrect
Question 341 of 806

341. Question

Which of the following are the two property coverages found in the Businessowners policy?

Standard and special
Correct Incorrect Correct answer

Regular and special
Correct Incorrect Correct answer

Usual and unusual
Correct Incorrect Correct answer

Conventional and nonconventional
Correct Incorrect Correct answer

Correct

Incorrect
Question 342 of 806

342. Question

Which of the following is an example of real property?

Furniture
Correct Incorrect Correct answer

Machinery
Correct Incorrect Correct answer

Inventory
Correct Incorrect Correct answer

Office building
Correct Incorrect Correct answer

Correct

Incorrect
Question 343 of 806

343. Question

Which of the following is an example of business personal property?

Furniture
Correct Incorrect Correct answer

Office building
Correct Incorrect Correct answer

Factory
Correct Incorrect Correct answer

Warehouse
Correct Incorrect Correct answer

Correct

Incorrect
Question 344 of 806

344. Question

Each Commercial Property coverage part must include its own:

Commercial Property Declarations form
Correct Incorrect Correct answer

Commercial Property Conditions form
Correct Incorrect Correct answer

One or more Commercial Property coverage forms
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 345 of 806

345. Question

Each Commercial Property coverage part must include its own:

Cause of Loss form
Correct Incorrect Correct answer

Any mandatory endorsements
Correct Incorrect Correct answer

Commercial Property Declarations form
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 346 of 806

346. Question

Which of the following represents the four Cause of Loss forms found in the Commercial Property coverage part of the CPP?

Basic, Broad, Special, Earthquake
Correct Incorrect Correct answer

Basic, Broad, Special, Hail
Correct Incorrect Correct answer

Basic, Broad, Special, Windstorm
Correct Incorrect Correct answer

Basic, Broad, Special, Flood
Correct Incorrect Correct answer

Correct

Incorrect
Question 347 of 806

347. Question

How long after a direct physical does an insured have to bring legal action against his or her insurer under the Commercial Property coverage part of the CPP?

6 months
Correct Incorrect Correct answer

1year
Correct Incorrect Correct answer

2 years
Correct Incorrect Correct answer

3 years
Correct Incorrect Correct answer

Correct

Incorrect
Question 348 of 806

348. Question

Which of the following coverages is at the core of the Commercial Property coverage part of the CPP?

Building and Personal Property coverage form
Correct Incorrect Correct answer

Builders Risk coverage form
Correct Incorrect Correct answer

Condominium coverage form
Correct Incorrect Correct answer

Business Income coverage form
Correct Incorrect Correct answer

Correct

Incorrect
Question 349 of 806

349. Question

Which of the following is not covered under the Commercial Property coverage part of the CPP?

Buildings
Correct Incorrect Correct answer

The insured's personal property
Correct Incorrect Correct answer

The insured's business personal property
Correct Incorrect Correct answer

The personal property of others located at the business premises
Correct Incorrect Correct answer

Correct

Incorrect
Question 350 of 806

350. Question

All of the following are covered under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP except:

Personal property used to service or maintain the premises
Correct Incorrect Correct answer

Fixtures and completed additions
Correct Incorrect Correct answer

Permanently installed machinery and equipment
Correct Incorrect Correct answer

Roads, walks, and patios
Correct Incorrect Correct answer

Correct

Incorrect
Question 351 of 806

351. Question

Business personal property is covered under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP while it is:

In the building
Correct Incorrect Correct answer

In the open
Correct Incorrect Correct answer

In a vehicle within 100 feet of the premises
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 352 of 806

352. Question

Installations made part of a building that an insured tenant occupies but does not own, which are made at the insured’s expense, and which cannot be legally removed by the insured are termed:

Betterments
Correct Incorrect Correct answer

Enhancement
Correct Incorrect Correct answer

Upgrades
Correct Incorrect Correct answer

Advancements
Correct Incorrect Correct answer

Correct

Incorrect
Question 353 of 806

353. Question

Which of the following is a correct statement about coverage for the personal property of others under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP?

The insured and the property owner split the payment for the loss.
Correct Incorrect Correct answer

The insured, not the property owner, receives payment for the loss.
Correct Incorrect Correct answer

The insured must be legally liable for the loss.
Correct Incorrect Correct answer

The insured need not be legally liable for the loss.
Correct Incorrect Correct answer

Correct

Incorrect
Question 354 of 806

354. Question

All of the following statements are correct about debris removal under Additional Coverages of the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP except:

Coverage is provided for removing debris of covered property.
Correct Incorrect Correct answer

Coverage is provided for extraction of pollutants from land and water.
Correct Incorrect Correct answer

The policy pays up to 25 percent of the amount paid for the loss.
Correct Incorrect Correct answer

The insurer will pay up to an additional $10,000 if the loss and the debris removal exceed policy limits.
Correct Incorrect Correct answer

Correct

Incorrect
Question 355 of 806

355. Question

Under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP, which of the following is an Additional Coverage that pays for loss of property removed from the insured location in order to protect it?

Preservation of Property
Correct Incorrect Correct answer

Protection of Property
Correct Incorrect Correct answer

Conservation of Property
Correct Incorrect Correct answer

Safeguarding of Property
Correct Incorrect Correct answer

Correct

Incorrect
Question 356 of 806

356. Question

Under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP, the insurer will not pay for certain losses if a building:

Has been vacant for more than 60 days
Correct Incorrect Correct answer

Has been unoccupied for more than 60 days
Correct Incorrect Correct answer

Has been vacant for more than 30 days
Correct Incorrect Correct answer

Has been unoccupied for more than 30 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 357 of 806

357. Question

Under the Building and Personal Property coverage form of the Commercial Property coverage part of the CPP, which of the following is an Optional Coverage that increases coverage over the policy period?

Escalated coverage
Correct Incorrect Correct answer

Accelerated coverage
Correct Incorrect Correct answer

Inflation Guard coverage
Correct Incorrect Correct answer

Expanded coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 358 of 806

358. Question

Which of the following forms under the Commercial Property coverage part of the CPP covers commercial, residential, and farm buildings that are under construction?

Building and Personal Property
Correct Incorrect Correct answer

Builders Risk
Correct Incorrect Correct answer

Business Income
Correct Incorrect Correct answer

Extra Expense
Correct Incorrect Correct answer

Correct

Incorrect
Question 359 of 806

359. Question

Coverage under the Builders Risk coverage form of the Commercial Property coverage part of the CPP begins on:

The date of application for coverage
Correct Incorrect Correct answer

The date construction begins
Correct Incorrect Correct answer

The date construction begins if there is no basement or the date construction starts above the lowest basement floor
Correct Incorrect Correct answer

The date the builder secures the project
Correct Incorrect Correct answer

Correct

Incorrect
Question 360 of 806

360. Question

Coverage under the Builders Risk coverage form of the Commercial Property coverage part of the CPP is written:

For 6 months
Correct Incorrect Correct answer

For 1 year
Correct Incorrect Correct answer

On a month-to-month basis
Correct Incorrect Correct answer

As agreed between the insurer and insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 361 of 806

361. Question

Coverage under the Builders Risk coverage form of the Commercial Property coverage part of the CPP ceases when which of the following events takes place?

The property is accepted by the purchaser
Correct Incorrect Correct answer

90 days after construction is completed
Correct Incorrect Correct answer

The building is occupied
Correct Incorrect Correct answer

Any of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 362 of 806

362. Question

Coverage under the Builders Risk coverage form of the Commercial Property coverage part of the CPP ceases when which of the following events takes place?

The property is put to its intended use
Correct Incorrect Correct answer

The insured's interest in the property ceases
Correct Incorrect Correct answer

The insured abandons construction with no intention of completing it
Correct Incorrect Correct answer

Any of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 363 of 806

363. Question

All of the following are correct statements about coverage under the Builders Risk coverage form of the Commercial Property coverage part of the CPP except:

Coverage includes both the building and its foundation.
Correct Incorrect Correct answer

Available coverage is determined by anticipated completed value.
Correct Incorrect Correct answer

Coverage is for only the building and not its foundation.
Correct Incorrect Correct answer

Coverage is written for one year but may cease before that time.
Correct Incorrect Correct answer

Correct

Incorrect
Question 364 of 806

364. Question

Which of the following best describes the purpose of the Builders Risk Reporting form?

It allows coverage to be increased gradually as construction progresses.
Correct Incorrect Correct answer

It allows coverage to be decreased gradually with the purchaser carrying a greater percentage of the insurance as construction progresses.
Correct Incorrect Correct answer

It requires builders to report accidents occurring on the job.
Correct Incorrect Correct answer

It requires builders to report theft of materials.
Correct Incorrect Correct answer

Correct

Incorrect
Question 365 of 806

365. Question

Which of the following uses the Condominium Commercial Unit Owners coverage form?

Condominium associations
Correct Incorrect Correct answer

All condominium management companies
Correct Incorrect Correct answer

Owners of commercial condominiums
Correct Incorrect Correct answer

Owners of any condominiums
Correct Incorrect Correct answer

Correct

Incorrect
Question 366 of 806

366. Question

When is business income coverage called upon?

When a business's income is down over previous reporting periods
Correct Incorrect Correct answer

When a covered loss forces a business to suspend operations during restoration
Correct Incorrect Correct answer

When a business income is down due to increased competition
Correct Incorrect Correct answer

When a business owner desires to increase business income during difficult economic times
Correct Incorrect Correct answer

Correct

Incorrect
Question 367 of 806

367. Question

Under the Business Income coverage form of the Commercial Property coverage part of the CPP, which of the following terms describes a slowdown or cessation of business activities due to a covered loss?

Suspension
Correct Incorrect Correct answer

Termination
Correct Incorrect Correct answer

Sojourn
Correct Incorrect Correct answer

Stay
Correct Incorrect Correct answer

Correct

Incorrect
Question 368 of 806

368. Question

All of the following are correct statements about business income coverage except:

It provides coverage for business loss of income over a period of time.
Correct Incorrect Correct answer

It includes net income that would have been earned had the loss not occurred.
Correct Incorrect Correct answer

It includes the cost of continuing normal operations, including payroll.
Correct Incorrect Correct answer

Coverage applies to loss of furniture, machinery, and equipment.
Correct Incorrect Correct answer

Correct

Incorrect
Question 369 of 806

369. Question

The type of coverage provided under the Business Income forms of the Commercial Property coverage part of the CPP is termed:

Time element
Correct Incorrect Correct answer

Time reason
Correct Incorrect Correct answer

Time component
Correct Incorrect Correct answer

Time aspect
Correct Incorrect Correct answer

Correct

Incorrect
Question 370 of 806

370. Question

The period of restoration under the Business Income forms of the Commercial Property coverage part of the CPP ends on:

The date on which the property can be reasonably repaired
Correct Incorrect Correct answer

The date on which the property can be reasonably rebuilt
Correct Incorrect Correct answer

The date on which the property can be reasonably replaced
Correct Incorrect Correct answer

Any of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 371 of 806

371. Question

What is the difference between With Extra Expense and Without Extra Expense coverages under the Business Income forms of the Commercial Property coverage part of the CPP?

With Extra Expense covers only expenses the insured would not have incurred if not for the loss; Without Extra Expense allows additional coverage for expenses to reduce loss.
Correct Incorrect Correct answer

With Extra Expense covers only expenses the insured would not have incurred if not for the loss; Without Extra Expense replaces this with expenses to reduce loss.
Correct Incorrect Correct answer

With Extra Expenses covers more expenses than Without Extra Expense.
Correct Incorrect Correct answer

With Extra Expense is better coverage than Without Extra Expense Coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 372 of 806

372. Question

All of the following statements about the Business Income from Dependent Properties-Broad Form are correct except:

This form protects the insured from a loss at a contributing location.
Correct Incorrect Correct answer

This form protects the insured from a loss at a recipient location.
Correct Incorrect Correct answer

This form protects the insured from a loss at a manufacturing location.
Correct Incorrect Correct answer

This form protects the insured from at a loss at the insured's location.
Correct Incorrect Correct answer

Correct

Incorrect
Question 373 of 806

373. Question

Which of the following is an example of a contributing location under the Business Income from Dependent Properties-Broad Form?

A company takes this coverage because a single business is the sole supplier of raw materials that the company uses.
Correct Incorrect Correct answer

A company takes this coverage because it has other locations contributing revenue.
Correct Incorrect Correct answer

A company takes this coverage because it owns several income producing properties.
Correct Incorrect Correct answer

A company takes this coverage because the company employs and provides housing for several of the company president's children.
Correct Incorrect Correct answer

Correct

Incorrect
Question 374 of 806

374. Question

All of the following are candidates for the Business Income from Dependent Properties-Broad Form under the Commercial Property Coverage part of the CPP except:

An insured who depends on a supplier for co-op advertising money
Correct Incorrect Correct answer

An insured who depends on a particular business to buy its products
Correct Incorrect Correct answer

An insured who depends on a particular manufacturer to supply certain products or components to the insured's customers
Correct Incorrect Correct answer

An insured who depends on another business to attract customers to its own business
Correct Incorrect Correct answer

Correct

Incorrect
Question 375 of 806

375. Question

Which of the following is not a good candidate for the Extra Expense coverage form under the Commercial Property Coverage part of the CPP?

The only electricity supplier in a small town
Correct Incorrect Correct answer

The city's newspaper
Correct Incorrect Correct answer

A retail establishment
Correct Incorrect Correct answer

The local news station
Correct Incorrect Correct answer

Correct

Incorrect
Question 376 of 806

376. Question

All of the following are correct statements about the Extra Expense coverage form under the Commercial Property Coverage part of the CPP except:

It is a time element coverage
Correct Incorrect Correct answer

The coverage reimburses for lost business income.
Correct Incorrect Correct answer

The coverage reimburses the insured for extra expenses incurred to remain in operation.
Correct Incorrect Correct answer

Candidates for this coverage are those who, if their business were shut down, would likely never regain the lost business.
Correct Incorrect Correct answer

Correct

Incorrect
Question 377 of 806

377. Question

Which of the following is not covered under the Causes of Loss-Broad form of the Commercial Property Coverage part of the CPP?

Weight of ice
Correct Incorrect Correct answer

Weight of snow
Correct Incorrect Correct answer

Weight of sleet
Correct Incorrect Correct answer

Windstorm or hail
Correct Incorrect Correct answer

Correct

Incorrect
Question 378 of 806

378. Question

Which of the following are the two types of Marine insurance?

Ocean Marine, Inland Marine
Correct Incorrect Correct answer

Ocean Marine, Sea Marine
Correct Incorrect Correct answer

Transatlantic Marine, Inland Marine
Correct Incorrect Correct answer

International Marine, Domestic Marine
Correct Incorrect Correct answer

Correct

Incorrect
Question 379 of 806

379. Question

Physical Damage to the ship itself while in transit on oceans, rivers, and lakes is covered under which category of Ocean Marine insurance?

Hull
Correct Incorrect Correct answer

Cargo
Correct Incorrect Correct answer

Freight
Correct Incorrect Correct answer

Protection and Indemnity
Correct Incorrect Correct answer

Correct

Incorrect
Question 380 of 806

380. Question

Coverage for goods while they are in transit over water is covered under which category of Ocean Marine insurance?

Hull
Correct Incorrect Correct answer

Cargo
Correct Incorrect Correct answer

Freight
Correct Incorrect Correct answer

Protection and Indemnity
Correct Incorrect Correct answer

Correct

Incorrect
Question 381 of 806

381. Question

Under Ocean Marine policies, cargo coverage is extended to include coverage from the property’s point of origin to its point of destination through:

Point to Point clause
Correct Incorrect Correct answer

Warehouse to Warehouse clause
Correct Incorrect Correct answer

Origin to Destination clause
Correct Incorrect Correct answer

Start to Finish clause
Correct Incorrect Correct answer

Correct

Incorrect
Question 382 of 806

382. Question

Which of the following categories of Ocean Marine insurance protects the insured against loss of shipping costs?

Hull
Correct Incorrect Correct answer

Cargo
Correct Incorrect Correct answer

Freight
Correct Incorrect Correct answer

Protection and Indemnity
Correct Incorrect Correct answer

Correct

Incorrect
Question 383 of 806

383. Question

Which of the following categories of Ocean Marine insurance provides liability coverage for injuries to sailors and dock and harbor workers?

Hull
Correct Incorrect Correct answer

Cargo
Correct Incorrect Correct answer

Freight
Correct Incorrect Correct answer

Protection and Indemnity
Correct Incorrect Correct answer

Correct

Incorrect
Question 384 of 806

384. Question

Which of the following is not protected against liability under Protection and Indemnity coverage of Ocean Marine policies?

Job related injuries to sailors
Correct Incorrect Correct answer

Injuries to stevedores
Correct Incorrect Correct answer

Injuries to longshore workers and harbor workers
Correct Incorrect Correct answer

Injuries to sightseers
Correct Incorrect Correct answer

Correct

Incorrect
Question 385 of 806

385. Question

Which of the following is not protected against liability under Protection and Indemnity coverage of Ocean Marine policies?

Damage to cargo through negligence
Correct Incorrect Correct answer

Damage to other property not caused by collision
Correct Incorrect Correct answer

Damage to other property or another boat resulting from collision
Correct Incorrect Correct answer

Physical damage to insured's boat
Correct Incorrect Correct answer

Correct

Incorrect
Question 386 of 806

386. Question

An Ocean Marine insurance policy can be issued on:

A named perils only basis
Correct Incorrect Correct answer

An open perils only basis
Correct Incorrect Correct answer

Either a named perils or open perils basis
Correct Incorrect Correct answer

Both a named and open perils basis
Correct Incorrect Correct answer

Correct

Incorrect
Question 387 of 806

387. Question

The crew on a ship has thrown part of its cargo overboard in order to prevent it from further damage after the hull was damaged in a collision with another ship. Which of the following has taken place?

Jettison
Correct Incorrect Correct answer

Jetsam
Correct Incorrect Correct answer

Flotsam
Correct Incorrect Correct answer

Abandonment
Correct Incorrect Correct answer

Correct

Incorrect
Question 388 of 806

388. Question

When is jettison permitted on a ship in order for Ocean Marine coverage to apply?

When it is necessary to save remaining property
Correct Incorrect Correct answer

When the ship would be more efficient with less cargo
Correct Incorrect Correct answer

When the owner of the cargo is in debt to the ship owner
Correct Incorrect Correct answer

As a result of mutiny by crew members
Correct Incorrect Correct answer

Correct

Incorrect
Question 389 of 806

389. Question

How is jettison covered under Ocean Marine policies?

By reimbursement for the full amount of the cargo
Correct Incorrect Correct answer

By reimbursement for the sacrificed cargo
Correct Incorrect Correct answer

By reimbursement for 80 percent of the sacrificed cargo
Correct Incorrect Correct answer

Jettison is not covered by Ocean Marine insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 390 of 806

390. Question

All of the following are forms of barratry, a peril insured under Ocean Marine insurance, except:

Hijacking
Correct Incorrect Correct answer

Abandonment
Correct Incorrect Correct answer

Embezzlement
Correct Incorrect Correct answer

Piracy
Correct Incorrect Correct answer

Correct

Incorrect
Question 391 of 806

391. Question

Which of the following is not a correct statement about jettison as a loss under Ocean Marine policies?

This type of loss is known as a general average loss.
Correct Incorrect Correct answer

The jettison peril is insurable under Ocean Marine policies.
Correct Incorrect Correct answer

A partial loss is a loss only to the owner of the jettisoned property.
Correct Incorrect Correct answer

A partial loss is shared by all property owners including the ship owner.
Correct Incorrect Correct answer

Correct

Incorrect
Question 392 of 806

392. Question

In marine insurance, the term used to indicate a partial loss is:

Partial
Correct Incorrect Correct answer

Fractional
Correct Incorrect Correct answer

Average
Correct Incorrect Correct answer

Limited
Correct Incorrect Correct answer

Correct

Incorrect
Question 393 of 806

393. Question

Which of the following is a correct statement about a particular average loss under Ocean Marine policies?

It is a partial loss arising from other than a general sacrifice of property.
Correct Incorrect Correct answer

It refers to any loss shared by property owners.
Correct Incorrect Correct answer

It is a partial loss arising from a general sacrifice of property.
Correct Incorrect Correct answer

It represents the average of all property losses during the policy period.
Correct Incorrect Correct answer

Correct

Incorrect
Question 394 of 806

394. Question

Which of the following is not expressly written into an Ocean Marine insurance contract but carries the same weight as if it were?

Implied warranty
Correct Incorrect Correct answer

Express warranty
Correct Incorrect Correct answer

Voluntary
Correct Incorrect Correct answer

Intended
Correct Incorrect Correct answer

Correct

Incorrect
Question 395 of 806

395. Question

Breach of an implied warranty:

Is in bad form
Correct Incorrect Correct answer

Can void a contract
Correct Incorrect Correct answer

Is not good business but has no effect on the contract
Correct Incorrect Correct answer

Results in lawsuit
Correct Incorrect Correct answer

Correct

Incorrect
Question 396 of 806

396. Question

Which of the following is not one of the categories of eligible Marine risks?

Import
Correct Incorrect Correct answer

Exports
Correct Incorrect Correct answer

Domestic shipments
Correct Incorrect Correct answer

International shipments
Correct Incorrect Correct answer

Correct

Incorrect
Question 397 of 806

397. Question

Which of the following is not one of the categories of eligible Marine risks?

Instrumentalities of transportation or communication
Correct Incorrect Correct answer

Personal property floater risks
Correct Incorrect Correct answer

Commercial property floaters
Correct Incorrect Correct answer

Business property floaters
Correct Incorrect Correct answer

Correct

Incorrect
Question 398 of 806

398. Question

Ocean Marine insurance covers which of the following:

Imports and exports
Correct Incorrect Correct answer

Domestic shipments
Correct Incorrect Correct answer

Instrumentalities of transportation or communication
Correct Incorrect Correct answer

Personal property floater risks
Correct Incorrect Correct answer

Correct

Incorrect
Question 399 of 806

399. Question

Which of the following is not eligible for Commercial Inland Marine insurance?

Domestic shipments
Correct Incorrect Correct answer

Instrumentalities of transportation or communication
Correct Incorrect Correct answer

Personal property floater risks
Correct Incorrect Correct answer

Commercial property floater risks
Correct Incorrect Correct answer

Correct

Incorrect
Question 400 of 806

400. Question

Which of the following is a general rule about Inland Marine insurance?

It can cover virtually any type of property.
Correct Incorrect Correct answer

It usually does not cover stationary property.
Correct Incorrect Correct answer

The risk is generally not portable.
Correct Incorrect Correct answer

The risk must be portable.
Correct Incorrect Correct answer

Correct

Incorrect
Question 401 of 806

401. Question

Nonstandardized forms for Inland Marine coverage not specifically listed in the policy are known as:

Nonfiled classes or forms
Correct Incorrect Correct answer

Nonspecific classes or forms
Correct Incorrect Correct answer

Irregular classes or forms
Correct Incorrect Correct answer

Nonclassified classes or forms
Correct Incorrect Correct answer

Correct

Incorrect
Question 402 of 806

402. Question

Marshall’s heating and air conditioning business is damaged by a tornado, and all of his customer records are lost. Which of the following Inland Marine Commercial property floaters will indemnify Marshall if he has one in place?

Business property coverage form
Correct Incorrect Correct answer

Personal business property coverage form
Correct Incorrect Correct answer

Accounts Receivable coverage form
Correct Incorrect Correct answer

Accounts Payable coverage form
Correct Incorrect Correct answer

Correct

Incorrect
Question 403 of 806

403. Question

Which of the following is a correct statement about the Jewelers Block coverage form as a Commercial property floater under Inland Marine insurance?

It is an exception to the general rule about mobile property.
Correct Incorrect Correct answer

The Jewelers Block requires that insured property be stationary.
Correct Incorrect Correct answer

The Jewelers Block requires that insured property be mobile.
Correct Incorrect Correct answer

The form covers only jewelry.
Correct Incorrect Correct answer

Correct

Incorrect
Question 404 of 806

404. Question

Which of the following nonfiled Inland Marine Transportation forms protects the shipper or receiver against loss of goods in transit?

The Loss of Goods policy
Correct Incorrect Correct answer

The Goods in Transit policy
Correct Incorrect Correct answer

The Annual Transit policy
Correct Incorrect Correct answer

The Semi-annual Transit policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 405 of 806

405. Question

Which of the following nonfiled Inland Marine Transportation forms protects the shipper or receiver against loss of goods in transit with coverage extending only from origination to destination?

The Transit policy
Correct Incorrect Correct answer

The Trip Transit policy
Correct Incorrect Correct answer

The Origination to Destination policy
Correct Incorrect Correct answer

The Loss of Goods policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 406 of 806

406. Question

Which of the following nonfiled Inland Marine Transportation forms protects the carrier, not the shipper, for liability for loss to domestic shipments in transit?

The Carrier policy
Correct Incorrect Correct answer

The Trip Transit policy
Correct Incorrect Correct answer

The Motor Truck policy
Correct Incorrect Correct answer

The Loss to Domestic Shipments in Transit policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 407 of 806

407. Question

Owner’s goods on owner’s truck coverage as a nonfiled Inland Marine Transportation form provides which of the following types of coverage?

Direct damage coverage
Correct Incorrect Correct answer

Indirect damage coverage
Correct Incorrect Correct answer

Any type of property damage
Correct Incorrect Correct answer

Liability coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 408 of 806

408. Question

All of the following may be insured under the Instrumentalities of Transportation and Communication category of eligible marine risks except?

Bridges, tunnels, and oil pipelines
Correct Incorrect Correct answer

Loading docks
Correct Incorrect Correct answer

Radio and TV towers
Correct Incorrect Correct answer

Buildings and furnishings
Correct Incorrect Correct answer

Correct

Incorrect
Question 409 of 806

409. Question

Liability arising out of a business location or the activities of the business is termed which of the following types of exposure?

Products liability exposure
Correct Incorrect Correct answer

Premises and operations exposure
Correct Incorrect Correct answer

Products or completion operations exposure
Correct Incorrect Correct answer

Personal injury exposure
Correct Incorrect Correct answer

Correct

Incorrect
Question 410 of 806

410. Question

Personal and advertising injury under the premises and operations exposure of a Commercial General Liability policy includes all of the following except:

Slander and libel
Correct Incorrect Correct answer

Copyright infringement
Correct Incorrect Correct answer

Invasion of privacy and
Correct Incorrect Correct answer

Property damage due to negligence
Correct Incorrect Correct answer

Correct

Incorrect
Question 411 of 806

411. Question

Personal and advertising injury under the premises and operations exposure of a commercial general liability policy includes all of the following except:

False arrest
Correct Incorrect Correct answer

Wrongful entry onto another's premises
Correct Incorrect Correct answer

Vandalism and malicious mischief
Correct Incorrect Correct answer

Malicious prosecution
Correct Incorrect Correct answer

Correct

Incorrect
Question 412 of 806

412. Question

The actions of which of the following may cause a business to have indirect or contingent liability?

Employees
Correct Incorrect Correct answer

Neighboring businesses
Correct Incorrect Correct answer

Agents
Correct Incorrect Correct answer

Contractors and subcontractors
Correct Incorrect Correct answer

Correct

Incorrect
Question 413 of 806

413. Question

When a business is held liable for the actions of its employees, agents, contractors, or subcontractors, which of the following types of liability exists?

Indirect or contingent
Correct Incorrect Correct answer

Strict
Correct Incorrect Correct answer

Vicarious
Correct Incorrect Correct answer

Absolute
Correct Incorrect Correct answer

Correct

Incorrect
Question 414 of 806

414. Question

The liability existing when a business is held liable for the actions of its employees, agents, contractors, or subcontractors is sometimes called:

Owners and contractors protective
Correct Incorrect Correct answer

Vicarious
Correct Incorrect Correct answer

Owners and contractors defensive
Correct Incorrect Correct answer

Absolute
Correct Incorrect Correct answer

Correct

Incorrect
Question 415 of 806

415. Question

Which of the following liability exposures is suitable for broad coverage under a CGL policy?

Work related injuries to employees
Correct Incorrect Correct answer

Discharge of pollutants
Correct Incorrect Correct answer

Contractual liability
Correct Incorrect Correct answer

None of these
Correct Incorrect Correct answer

Correct

Incorrect
Question 416 of 806

416. Question

Which of the following cannot be covered under a Commercial General Liability policy?

Premises and operations exposures
Correct Incorrect Correct answer

Products completed operations exposures
Correct Incorrect Correct answer

Employee injuries when workers compensation is in force
Correct Incorrect Correct answer

Indirect or contingent liability exposures
Correct Incorrect Correct answer

Correct

Incorrect
Question 417 of 806

417. Question

All of the following must be included in a Commercial General Liability coverage part except:

Common Policy Declarations
Correct Incorrect Correct answer

Common Policy Conditions
Correct Incorrect Correct answer

CGL Declarations
Correct Incorrect Correct answer

Exclusions
Correct Incorrect Correct answer

Correct

Incorrect
Question 418 of 806

418. Question

All of the following must be included in a Commercial General Liability coverage part except:

CGL Declarations
Correct Incorrect Correct answer

One or more CGL coverage forms
Correct Incorrect Correct answer

Claim filing instructions
Correct Incorrect Correct answer

Any mandatory endorsements
Correct Incorrect Correct answer

Correct

Incorrect
Question 419 of 806

419. Question

How do CGL occurrence forms and claims made forms differ?

Their coverages are different.
Correct Incorrect Correct answer

They differ in how coverage is activated or triggered.
Correct Incorrect Correct answer

They contain different sets of exclusions.
Correct Incorrect Correct answer

The contain different sets of conditions.
Correct Incorrect Correct answer

Correct

Incorrect
Question 420 of 806

420. Question

Under the occurrence form of a CGL, how is liability coverage triggered?

By damage or injury that occurs during a policy period
Correct Incorrect Correct answer

By damage or injury that occurs during a reporting period
Correct Incorrect Correct answer

When a claim is filed
Correct Incorrect Correct answer

When the damage is confirmed or the injury is diagnosed
Correct Incorrect Correct answer

Correct

Incorrect
Question 421 of 806

421. Question

Which of the following is a correct statement about occurrence forms when making claims?

The policy in effect at the time the injury occurs will apply to the loss.
Correct Incorrect Correct answer

The claim must be made during the policy period.
Correct Incorrect Correct answer

The claim cannot be made after the policy expires.
Correct Incorrect Correct answer

Occurrence forms and claims made forms are identical.
Correct Incorrect Correct answer

Correct

Incorrect
Question 422 of 806

422. Question

How does coverage under claims made forms differ from occurrence forms?

Using the claims made form, coverage is triggered when a claim is made during the policy period regardless of when the injury or damage takes place; using the occurrence form, coverage is triggered by damage or injury occurring during the policy period.
Correct Incorrect Correct answer

Using the claims made form, damage or injury is covered under the policy in effect when the damage or injury occurred; using the occurrence form, damage or injury is covered under the policy in effect when the claim is filed.
Correct Incorrect Correct answer

There are more exclusions under the claims made form.
Correct Incorrect Correct answer

The insured must comply with more conditions under the claims made form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 423 of 806

423. Question

The date before which a claims made policy will not pay is termed the:

Trigger date
Correct Incorrect Correct answer

Retroactive date
Correct Incorrect Correct answer

Claims made date
Correct Incorrect Correct answer

Protection date
Correct Incorrect Correct answer

Correct

Incorrect
Question 424 of 806

424. Question

What is the purpose of the retroactive date under claims made forms?

It provides some measure of protection against previous losses.
Correct Incorrect Correct answer

It provides unlimited protection for the insured.
Correct Incorrect Correct answer

It makes it more difficult to file a claim.
Correct Incorrect Correct answer

It makes for fewer claims.
Correct Incorrect Correct answer

Correct

Incorrect
Question 425 of 806

425. Question

All of the following are options when choosing a retroactive date under claims made forms except:

Using the same date as the policy effective date
Correct Incorrect Correct answer

Using an earlier date than the policy effective date
Correct Incorrect Correct answer

Using a later date than the policy effective date
Correct Incorrect Correct answer

Using no retroactive date
Correct Incorrect Correct answer

Correct

Incorrect
Question 426 of 806

426. Question

When an expiring claims made form is being replaced with another claims made form, which of the following should occur in order to avoid a coverage gap?

The retroactive date of the new policy should be the same as the previous policy.
Correct Incorrect Correct answer

The retroactive date of the new policy should be the earlier than the previous policy.
Correct Incorrect Correct answer

The retroactive date of the new policy should be later than the previous policy.
Correct Incorrect Correct answer

The inception date of the new policy should be the same as the termination date of the previous policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 427 of 806

427. Question

What is the purpose of extended reporting periods under claims made policies?

To allow insureds more time to file reports
Correct Incorrect Correct answer

To help close potential coverage gaps
Correct Incorrect Correct answer

To make it easier to file a claim
Correct Incorrect Correct answer

To make the policy less likely to pay out
Correct Incorrect Correct answer

Correct

Incorrect
Question 428 of 806

428. Question

Under claims made forms, in which of the following cases does an extended reporting period apply?

The claims made form is cancelled or not renewed.
Correct Incorrect Correct answer

The insurer renews or replaces the form with coverage with a retroactive date later than the current form.
Correct Incorrect Correct answer

The insurer renews or replaces the form with an occurrence form.
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 429 of 806

429. Question

All of the following are correct statements about extended reporting periods under claims made forms except:

Once an extended reporting period is in effect, in cannot be cancelled.
Correct Incorrect Correct answer

Extended reporting periods help close coverage gaps.
Correct Incorrect Correct answer

A 60-day extended reporting period is automatic with no charge.
Correct Incorrect Correct answer

An extended reporting can be cancelled by either the insurer or the insured.
Correct Incorrect Correct answer

Correct

Incorrect
Question 430 of 806

430. Question

ABC Company has a claims made GCL policy. The policy is terminated when ABC sells the business. ABC is aware of a customer injured on the premises before the policy’s expiration and expects the claim to be filed after the 60-day basic extended reporting period. What should the company do?

Report the event to the insurer within 60 days to receive an automatic extended reporting period for five years
Correct Incorrect Correct answer

Renew the policy and wait for the claim to be filed
Correct Incorrect Correct answer

Report the event to the new owner's insurer so it can cover the potential claim
Correct Incorrect Correct answer

Nothing and hope the claim is not filed
Correct Incorrect Correct answer

Correct

Incorrect
Question 431 of 806

431. Question

Which of the following is a correct statement about the Supplemental Extended Reporting Period endorsement for claims made forms under a CGL?

It provides an unlimited extension of the reporting period.
Correct Incorrect Correct answer

The event causing the claim may occur anytime.
Correct Incorrect Correct answer

The endorsement is automatic.
Correct Incorrect Correct answer

The endorsement does not require an additional premium.
Correct Incorrect Correct answer

Correct

Incorrect
Question 432 of 806

432. Question

Which of the following is not one of the CGL forms?

Coverage A-Bodily Injury and Property Damage Liability
Correct Incorrect Correct answer

Coverage B-Personal and Advertising Injury Liability
Correct Incorrect Correct answer

Coverage C-Medical Payments
Correct Incorrect Correct answer

Coverage D-Automobile Liability
Correct Incorrect Correct answer

Correct

Incorrect
Question 433 of 806

433. Question

Which of the following is not a correct statement about Coverage A-Bodily Injury and Property Damage Liability under the CGL?

The insured must be legally liable before coverage applies.
Correct Incorrect Correct answer

The bodily injury or property must be caused by an occurrence.
Correct Incorrect Correct answer

The insurer has a duty to defend the insured against allegations of liability for which coverage applies.
Correct Incorrect Correct answer

The insured does not have to be legally liable in order for coverage to apply.
Correct Incorrect Correct answer

Correct

Incorrect
Question 434 of 806

434. Question

Which of the following is covered under Coverage A-Bodily Injury and Property Damage Liability of the CGL?

Liability arising out of intentional injury
Correct Incorrect Correct answer

Liability assumed by the insured under a contract or agreement
Correct Incorrect Correct answer

Liability imposed by law concerning alcoholic beverages (for those in the alcoholic beverage business)
Correct Incorrect Correct answer

Injury to a customer when poorly constructed shelving collapses on him
Correct Incorrect Correct answer

Correct

Incorrect
Question 435 of 806

435. Question

Which of the following is covered under Coverage A-Bodily Injury and Property Damage Liability of the CGL?

Work related injuries covered by workers compensation
Correct Incorrect Correct answer

Assault to a customer in an unlighted and unguarded parking lot
Correct Incorrect Correct answer

Most pollution losses
Correct Incorrect Correct answer

Liability resulting from the maintenance, operation, or use of aircraft, autos, or watercraft
Correct Incorrect Correct answer

Correct

Incorrect
Question 436 of 806

436. Question

When is contractual liability excepted from exclusion under Coverage A-Bodily Injury and Property Damage Liability of the CGL?

When the insured would have incurred the liability even without the contract
Correct Incorrect Correct answer

When the contract is an incidental
Correct Incorrect Correct answer

When the contract is insured
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 437 of 806

437. Question

Which of the following is covered under Coverage B-Personal and Advertising Injury Liability of the CGL?

Knowingly inflicting injury that violates the rights of another
Correct Incorrect Correct answer

Oral or written publication of material known to be false or material published before the effective policy date
Correct Incorrect Correct answer

Criminal acts committed by or at the direction of the insured
Correct Incorrect Correct answer

An advertisement comparing the insured's goods to those of another with the competitor claiming damage to his reputation
Correct Incorrect Correct answer

Correct

Incorrect
Question 438 of 806

438. Question

Which of the following is covered under Coverage B-Personal and Advertising Injury Liability of the CGL?

Contractual liability (except that the insured would have incurred even without the contract)
Correct Incorrect Correct answer

Breach of contract
Correct Incorrect Correct answer

Failure of goods, products, or services to conform with advertised quality or performance
Correct Incorrect Correct answer

An advertisement comparing the insured's services to those of another with the competitor claiming damage to his reputation
Correct Incorrect Correct answer

Correct

Incorrect
Question 439 of 806

439. Question

Which of the following is covered under Coverage B-Personal and Advertising Injury Liability of the CGL?

Incorrect price descriptions of goods, products, or services
Correct Incorrect Correct answer

A claim of using another's idea
Correct Incorrect Correct answer

An offense committed by an insured involved in advertising, publishing, broadcasting, or designing or determining Web sites for others
Correct Incorrect Correct answer

Infringement of intellectual property
Correct Incorrect Correct answer

Correct

Incorrect
Question 440 of 806

440. Question

Which of the following is covered under Coverage B-Personal and Advertising Injury Liability of the CGL?

An offense committed by an insured whose business is an Internet search, access, content, or service provider
Correct Incorrect Correct answer

A claim of stealing another's idea
Correct Incorrect Correct answer

An electronic chatroom or bulletin board the insured hosts, owns, or has control over
Correct Incorrect Correct answer

Unauthorized use of another's name or product in the insured's email address, domain name, or metatag
Correct Incorrect Correct answer

Correct

Incorrect
Question 441 of 806

441. Question

Which of the following is a correct statement about Supplementary Payments under Coverages A and B of the CGL?

They are paid in addition to the amounts paid under Coverages A and B.
Correct Incorrect Correct answer

They require a deductible.
Correct Incorrect Correct answer

They reduce the limits of insurance available.
Correct Incorrect Correct answer

There are no supplementary payments under Coverages A and B.
Correct Incorrect Correct answer

Correct

Incorrect
Question 442 of 806

442. Question

Nate owns a supermarket and is covered by a CGL. A customer trips over uneven sidewalk and breaks her leg. Will Nate’s policy respond?

Yes because the accident took place on premises Nate owns or rents or which arises from his operations
Correct Incorrect Correct answer

Yes because such injuries are not excluded by the policy
Correct Incorrect Correct answer

No because the customer should have been more careful
Correct Incorrect Correct answer

Only if Nate can be proven liable for the injury
Correct Incorrect Correct answer

Correct

Incorrect
Question 443 of 806

443. Question

What is the General Aggregate Limit found in the CGL?

The most that will be paid for the sum of Coverages A, B, and C
Correct Incorrect Correct answer

The most that will be paid for the sum of Coverages A, B, and C (except for damages arising from products completed operations)
Correct Incorrect Correct answer

The most that will be paid for any single occurrence in a policy period
Correct Incorrect Correct answer

The same as the policy limit
Correct Incorrect Correct answer

Correct

Incorrect
Question 444 of 806

444. Question

What is the Products Completed Operations Aggregate Limit found in the CGL?

The most that will be paid under Coverage A
Correct Incorrect Correct answer

The most that will be paid under Coverage A for this hazard
Correct Incorrect Correct answer

The most that will be paid for any single occurrence in a policy period under Coverage A
Correct Incorrect Correct answer

The same as the policy limit
Correct Incorrect Correct answer

Correct

Incorrect
Question 445 of 806

445. Question

What is the Per Occurrence Limit found in the CGL?

The most that will be paid under the policy for any one occurrence
Correct Incorrect Correct answer

The most that will be paid under the policy to one person for any one occurrence
Correct Incorrect Correct answer

The most that will be paid under Coverages A and C for any one occurrence
Correct Incorrect Correct answer

The most that will be paid to any one person under Coverages A and C for any one occurrence
Correct Incorrect Correct answer

Correct

Incorrect
Question 446 of 806

446. Question

Under the Other Insurance condition of the CGL, which are the two methods of apportioning a loss?

Contribution by equal shares; contribution by limits
Correct Incorrect Correct answer

Systematic contribution; random contribution
Correct Incorrect Correct answer

Contribution by equal shares; contribution by size
Correct Incorrect Correct answer

Contribution by limits; contribution by tenure
Correct Incorrect Correct answer

Correct

Incorrect
Question 447 of 806

447. Question

When does the contribution by equal shares method of apportioning a loss apply under the Other Insurance condition of the CGL?

When the oldest policy specifies this method
Correct Incorrect Correct answer

When the largest policy specifies this method
Correct Incorrect Correct answer

When all policies involved specify this method
Correct Incorrect Correct answer

When the insurer and the insured so agree
Correct Incorrect Correct answer

Correct

Incorrect
Question 448 of 806

448. Question

Which of the following is not one of the Commercial Auto coverage forms?

Business Auto
Correct Incorrect Correct answer

Business Auto Physical Damage
Correct Incorrect Correct answer

Business Auto Comprehensive
Correct Incorrect Correct answer

Garage
Correct Incorrect Correct answer

Correct

Incorrect
Question 449 of 806

449. Question

Which of the following is not one of the Commercial Auto coverage forms?

Garage
Correct Incorrect Correct answer

Truckers
Correct Incorrect Correct answer

Motor Carriers
Correct Incorrect Correct answer

Personal Auto
Correct Incorrect Correct answer

Correct

Incorrect
Question 450 of 806

450. Question

Which of the following exposures can the Business Auto coverage form insure?

Garages
Correct Incorrect Correct answer

Truckers
Correct Incorrect Correct answer

Motor carriers
Correct Incorrect Correct answer

Private passenger vehicles
Correct Incorrect Correct answer

Correct

Incorrect
Question 451 of 806

451. Question

Which of the following is covered by an unendorsed Business Auto coverage form?

Liability
Correct Incorrect Correct answer

Uninsured Motorists
Correct Incorrect Correct answer

Medical Payments
Correct Incorrect Correct answer

Underinsured Motorists
Correct Incorrect Correct answer

Correct

Incorrect
Question 452 of 806

452. Question

Which of the following is covered by an unendorsed Business Auto coverage form?

Medical Payments
Correct Incorrect Correct answer

Uninsured Motorists
Correct Incorrect Correct answer

Underinsured Motorists
Correct Incorrect Correct answer

Physical Damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 453 of 806

453. Question

Which of the following are covered by the Business Auto coverage form only by endorsement?

Uninsured Motorists
Correct Incorrect Correct answer

Medical Payments
Correct Incorrect Correct answer

Underinsured Motorists
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 454 of 806

454. Question

Symbol 7, specified described autos, of the Business Auto coverage form applies only to autos specifically listed in the:

Declarations
Correct Incorrect Correct answer

Insuring agreement
Correct Incorrect Correct answer

Definitions
Correct Incorrect Correct answer

Conditions
Correct Incorrect Correct answer

Correct

Incorrect
Question 455 of 806

455. Question

The Business Auto coverage form automatically provides coverage for all of the following autos during the coverage period except:

Symbol 4, owned autos other than private passenger autos
Correct Incorrect Correct answer

Symbol 5, owned autos subject to no-fault law
Correct Incorrect Correct answer

Symbol 7, specifically described autos
Correct Incorrect Correct answer

Symbol 8, hired autos
Correct Incorrect Correct answer

Correct

Incorrect
Question 456 of 806

456. Question

Under the Business Auto coverage form, how is a specifically described auto acquired during a policy period covered?

It is a covered auto for a particular coverage if the insured already insures all autos for this coverage or replaces a covered auto and the insurer is properly notified.
Correct Incorrect Correct answer

Coverage is provided if the insured notifies the insurer within 30 days of acquisition.
Correct Incorrect Correct answer

It is a covered auto for a particular coverage if the insured already insures all autos for this coverage or replaces a covered auto
Correct Incorrect Correct answer

Coverage is provided automatically.
Correct Incorrect Correct answer

Correct

Incorrect
Question 457 of 806

457. Question

When an insured is covered using Symbol 7, specifically described autos, under the Business Auto Coverage form, the insurer must be notified within how many days in order for coverage to apply to a replacement vehicle?

7 days
Correct Incorrect Correct answer

10 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 458 of 806

458. Question

All of the following are covered for liability under the Business Auto Coverage form except:

BI and PD the insured is legally liable for to third parties
Correct Incorrect Correct answer

Defense costs
Correct Incorrect Correct answer

Supplementary payments
Correct Incorrect Correct answer

BI to the insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 459 of 806

459. Question

All of the following are principal coverages found under the Physical Damage portion of the Business Auto policy except:

Comprehensive
Correct Incorrect Correct answer

Specified Causes of Loss
Correct Incorrect Correct answer

Collision
Correct Incorrect Correct answer

Upset
Correct Incorrect Correct answer

Correct

Incorrect
Question 460 of 806

460. Question

Which part of the Physical Damage portion of the Business Auto policy covers loss, other than collision or overturn, that is not excluded by the policy?

Comprehensive
Correct Incorrect Correct answer

Specified Causes of Loss
Correct Incorrect Correct answer

Specific Causes of Loss
Correct Incorrect Correct answer

Extended
Correct Incorrect Correct answer

Correct

Incorrect
Question 461 of 806

461. Question

Which of the following is not a correct statement about Specified Causes of Loss under the Business Auto coverage?

It is a limited type of Comprehensive coverage.
Correct Incorrect Correct answer

It covers only certain named perils.
Correct Incorrect Correct answer

It provides all risk coverage.
Correct Incorrect Correct answer

It is one of principal coverages under the Physical Damage Portion of Business Auto coverage form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 462 of 806

462. Question

Under the Physical Damage portion of the Business Auto coverage, collision covers:

Overturn of the covered auto only
Correct Incorrect Correct answer

Collision with another object only
Correct Incorrect Correct answer

Overturn of the covered auto and collision with another object
Correct Incorrect Correct answer

Overturn of the covered auto, collision with another object, and liability to third parties.
Correct Incorrect Correct answer

Correct

Incorrect
Question 463 of 806

463. Question

Which of the following is written with a deductible under the Physical Damage portion of the Business Auto coverage?

Collision
Correct Incorrect Correct answer

Collision and Comprehensive
Correct Incorrect Correct answer

Collision and Specified Causes of Loss
Correct Incorrect Correct answer

Comprehensive and Specified Causes of Loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 464 of 806

464. Question

If an insured carries Comprehensive coverage under the Physical Damage portion of the Business Auto coverage, which of the following losses are treated as Comprehensive losses?

Glass breakage
Correct Incorrect Correct answer

Hitting a bird or animal
Correct Incorrect Correct answer

Falling objects and missiles
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 465 of 806

465. Question

Is coverage available for towing and labor costs under the Physical Damage portion of the Business Auto policy?

No, such coverage is not available.
Correct Incorrect Correct answer

Yes, coverage is available for an additional premium.
Correct Incorrect Correct answer

Yes, coverage is available when a covered private passenger auto is disabled.
Correct Incorrect Correct answer

Yes, coverage is available when any covered vehicle is disabled.
Correct Incorrect Correct answer

Correct

Incorrect
Question 466 of 806

466. Question

When transportation expenses are covered through a coverage extension under the Physical Damage portion of the Business Auto policy, coverage begins how long after the theft of a vehicle?

12 hours
Correct Incorrect Correct answer

24 hours
Correct Incorrect Correct answer

48 hours
Correct Incorrect Correct answer

72 hours
Correct Incorrect Correct answer

Correct

Incorrect
Question 467 of 806

467. Question

When transportation expenses are covered under the Physical Damage portion of the Business Auto policy for expenses incurred because of theft of an insured vehicle, when do these expenses cease?

When the auto is returned
Correct Incorrect Correct answer

When the auto is returned or the insurer pays the loss
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

45 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 468 of 806

468. Question

Absent endorsement, all of the following are covered under the Garage coverage form of the Commercial Auto policy except:

Liability
Correct Incorrect Correct answer

Garagekeepers coverage
Correct Incorrect Correct answer

Physical Damage coverage
Correct Incorrect Correct answer

Uninsured motorists coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 469 of 806

469. Question

Which of the following endorsements can be added to the Garage coverage form of the Commercial Auto policy?

Uninsured Motorists
Correct Incorrect Correct answer

Underinsured Motorists coverage
Correct Incorrect Correct answer

Medical Payments coverage
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 470 of 806

470. Question

Although coverage for Garage Operations-Covered Autos is similar to the Business Auto coverage, which of the following is an important distinction?

Auto dealer garage customers are not covered if they have their own liability coverage.
Correct Incorrect Correct answer

If an auto dealer garage customer has his or her own liability coverage, any valid claim by the customer will be shared equally between the two insurers.
Correct Incorrect Correct answer

If an auto dealer garage customer has his or her own liability coverage, the Garage form pays only up to the minimum limits of financial responsibility.
Correct Incorrect Correct answer

If an auto dealer garage customer does not have his or her own liability coverage, the Garage form protects the customer up to policy limits.
Correct Incorrect Correct answer

Correct

Incorrect
Question 471 of 806

471. Question

If a garage customer with liability coverage has a valid claim against an auto dealer, what is the maximum the dealer’s Garage Operations-Covered Autos will pay out?

The amount of the claim
Correct Incorrect Correct answer

The policy limit
Correct Incorrect Correct answer

The minimum limits of the state's financial responsibility laws
Correct Incorrect Correct answer

Nothing
Correct Incorrect Correct answer

Correct

Incorrect
Question 472 of 806

472. Question

If a garage customer without liability coverage has a claim against an auto dealer, what is the maximum the dealer’s Garage Operations-Covered Autos will pay out?

The amount of the claim
Correct Incorrect Correct answer

The policy limit
Correct Incorrect Correct answer

The minimum limits of the state's financial responsibility laws
Correct Incorrect Correct answer

Nothing
Correct Incorrect Correct answer

Correct

Incorrect
Question 473 of 806

473. Question

If an insured under a Garage Operations-Covered Autos policy wants to provide customers with the liability limits of the policy, the insured:

May direct the insurer to add this coverage
Correct Incorrect Correct answer

May take out a supplemental policy for each customer who has a claim
Correct Incorrect Correct answer

May have the claim paid under an umbrella policy
Correct Incorrect Correct answer

Does nothing since this coverage is already provided
Correct Incorrect Correct answer

Correct

Incorrect
Question 474 of 806

474. Question

Why is damage to others’ property in the care, custody, or control of the insured excluded from coverage under the Garage Coverage form of the Commercial Auto policy?

There would be too many claims.
Correct Incorrect Correct answer

There would be too much paperwork.
Correct Incorrect Correct answer

Such claims are difficult to settle.
Correct Incorrect Correct answer

Coverage for this exposure is provided under the Garagekeepers section of the Garage form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 475 of 806

475. Question

Garagekeepers insurance covers:

Damage to customers' property when the insured is servicing, repairing, parking, or storing that property
Correct Incorrect Correct answer

The insured's liability for damage to customers' property when the insured is servicing, repairing, parking, or storing that property
Correct Incorrect Correct answer

Damage done to the garagekeeper's property by a customer
Correct Incorrect Correct answer

Damage done to the garagekeepers property by a customer who is legally liable
Correct Incorrect Correct answer

Correct

Incorrect
Question 476 of 806

476. Question

What is the purpose of Direct Damage Garagekeepers insurance?

To cover physical damage to customer's property in the insured's control
Correct Incorrect Correct answer

To cover physical damage to customers' property in the insured's control when the insured is liable
Correct Incorrect Correct answer

To cover physical damage to customers' property in the insured's control whether or not the insured is liable
Correct Incorrect Correct answer

To cover physical damage to the garagekeeper's property at the hands of a customer
Correct Incorrect Correct answer

Correct

Incorrect
Question 477 of 806

477. Question

What is the purpose of the Truckers coverage form of the Commercial Auto policy?

To insure businesses that are hired to haul the goods of others
Correct Incorrect Correct answer

To provide Medical Payments coverage for truckers injured in their line of work
Correct Incorrect Correct answer

To provide Liability and Physical Damage coverage to truckers' personal vehicles when driving them to and from the place that their rigs are kept
Correct Incorrect Correct answer

To provide insurance on truck cabs when they are not in use
Correct Incorrect Correct answer

Correct

Incorrect
Question 478 of 806

478. Question

Which of the following is not included in the Truckers coverage form of the Commercial Auto policy?

Liability
Correct Incorrect Correct answer

Trailer Interchange
Correct Incorrect Correct answer

Medical Payments
Correct Incorrect Correct answer

Physical Damage
Correct Incorrect Correct answer

Correct

Incorrect
Question 479 of 806

479. Question

In the event of a loss, the Trailer Interchange form covers damage to a specific trailer under the policy of the trucker in possession of the trailer when:

The trucker has permission to use the trailer
Correct Incorrect Correct answer

The trucker is liable for the damage
Correct Incorrect Correct answer

The trucker is liable under a written interchange agreement
Correct Incorrect Correct answer

The trucker has no insurance coverage of his own
Correct Incorrect Correct answer

Correct

Incorrect
Question 480 of 806

480. Question

Which of the following is the best description of a motor carrier?

Anyone who transports property by auto in a commercial enterprise
Correct Incorrect Correct answer

Anyone who transports property by auto in a commercial enterprise regardless of whether he or she was hired for that purpose
Correct Incorrect Correct answer

One who is hired to haul the goods of others
Correct Incorrect Correct answer

Anyone who transports property by auto
Correct Incorrect Correct answer

Correct

Incorrect
Question 481 of 806

481. Question

How does the Motor Carrier coverage from differ from the Truckers coverage form under the Commercial Auto policy?

Motor Carrier coverage carries greater risk and is more expensive.
Correct Incorrect Correct answer

Truckers coverage carriers a greater risk and is more expensive.
Correct Incorrect Correct answer

The difference is in those who can be covered.
Correct Incorrect Correct answer

The difference is in the type of goods hauled for hire.
Correct Incorrect Correct answer

Correct

Incorrect
Question 482 of 806

482. Question

When Motor Carrier insurance is used to establish proof of financial responsibility, which of the following is necessary?

Passing a test of competence in driving
Correct Incorrect Correct answer

Passing a test of competence in commercial driving
Correct Incorrect Correct answer

An MCS-90 endorsement
Correct Incorrect Correct answer

Paying a fee to the state
Correct Incorrect Correct answer

Correct

Incorrect
Question 483 of 806

483. Question

What is the purpose of attaching the Individual Named Insured endorsement to the Business Auto coverage form?

It provides broader coverage to the named insured.
Correct Incorrect Correct answer

It extends Personal Auto type coverage to immediate family members of the named insured.
Correct Incorrect Correct answer

It extends Personal Auto type coverage to anyone the named insured desires.
Correct Incorrect Correct answer

It extends Personal Auto type coverage specifically to employees.
Correct Incorrect Correct answer

Correct

Incorrect
Question 484 of 806

484. Question

What is the primary difference between the loss sustained form and the discovery form used for Commercial Crime insurance?

Cost
Correct Incorrect Correct answer

Coverage
Correct Incorrect Correct answer

Coverage trigger
Correct Incorrect Correct answer

Exclusions
Correct Incorrect Correct answer

Correct

Incorrect
Question 485 of 806

485. Question

Which of the following is a correct statement about the loss sustained form used for Commercial Crime insurance?

The loss sustained form covers losses sustained during the policy period and discovered either during the policy period or up to six months after its expiration.
Correct Incorrect Correct answer

The loss sustained form covers losses sustained during the policy period and discovered either during the policy period or up to one year after its expiration.
Correct Incorrect Correct answer

The loss sustained form covers losses sustained during the policy period and discovered either during the policy period or up to two years after its expiration.
Correct Incorrect Correct answer

The loss sustained form covers only losses sustained during the policy period.
Correct Incorrect Correct answer

Correct

Incorrect
Question 486 of 806

486. Question

When does the one-year discovery period terminate under a loss sustained form used for Commercial Crime insurance?

One year after the policy expiration
Correct Incorrect Correct answer

One year after the first claim is filed
Correct Incorrect Correct answer

One year after the insured obtains other Commercial Crime insurance
Correct Incorrect Correct answer

One year after the first claim is paid.
Correct Incorrect Correct answer

Correct

Incorrect
Question 487 of 806

487. Question

Under Commercial Crime insurance, will a loss sustained after the policy expiration be covered?

Yes if it is reported within one year
Correct Incorrect Correct answer

Yes if the loss is the result of a covered peril
Correct Incorrect Correct answer

Not unless the policy is endorsed to permit such coverage
Correct Incorrect Correct answer

No, losses that occur after policy expiration will not be covered.
Correct Incorrect Correct answer

Correct

Incorrect
Question 488 of 806

488. Question

Which of the following is a correct statement about Commercial Crime insurance written on a discovery basis?

The discovery form covers losses sustained during the policy period and discovered either during the policy period or up to 60 days after its expiration.
Correct Incorrect Correct answer

The discovery form covers losses sustained during the policy period and discovered either during the policy period or up to one year after its expiration.
Correct Incorrect Correct answer

The discovery form covers losses sustained at any time and discovered either during the policy period or up to 60 days after its expiration.
Correct Incorrect Correct answer

The discovery form covers only losses discovered during the policy period.
Correct Incorrect Correct answer

Correct

Incorrect
Question 489 of 806

489. Question

The taking of property from inside the premises by a person unlawfully entering or leaving the premises is termed:

Robbery
Correct Incorrect Correct answer

Larceny
Correct Incorrect Correct answer

Burglary
Correct Incorrect Correct answer

Stealing
Correct Incorrect Correct answer

Correct

Incorrect
Question 490 of 806

490. Question

Which of the following is an example of forcible entry or exit as required by the definition of burglary?

Marks made by tools
Correct Incorrect Correct answer

Marks made by explosives or chemicals
Correct Incorrect Correct answer

Marks made by electricity
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 491 of 806

491. Question

The taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry on its exterior is termed:

Burglary
Correct Incorrect Correct answer

Safe burglary
Correct Incorrect Correct answer

Vault burglary
Correct Incorrect Correct answer

Forcible entry
Correct Incorrect Correct answer

Correct

Incorrect
Question 492 of 806

492. Question

The unlawful taking of property from the care and custody of another person is termed:

Robbery
Correct Incorrect Correct answer

Larceny
Correct Incorrect Correct answer

Mugging
Correct Incorrect Correct answer

Burglary
Correct Incorrect Correct answer

Correct

Incorrect
Question 493 of 806

493. Question

By definition, which of the following necessarily requires causing or threatening to cause bodily harm?

Theft
Correct Incorrect Correct answer

Robbery
Correct Incorrect Correct answer

Burglary
Correct Incorrect Correct answer

Mugging
Correct Incorrect Correct answer

Correct

Incorrect
Question 494 of 806

494. Question

Which of the following encompasses burglary, safe burglary, and robbery?

Theft
Correct Incorrect Correct answer

Larceny
Correct Incorrect Correct answer

Stealing
Correct Incorrect Correct answer

Pilfering
Correct Incorrect Correct answer

Correct

Incorrect
Question 495 of 806

495. Question

Signing the name of another person or organization with the intent to deceive is termed:

Misrepresentation
Correct Incorrect Correct answer

Falsification
Correct Incorrect Correct answer

Counterfeiting
Correct Incorrect Correct answer

Forgery
Correct Incorrect Correct answer

Correct

Incorrect
Question 496 of 806

496. Question

For crime insurance purposes, a person who has care or custody of property inside the premises is termed a:

Watchman
Correct Incorrect Correct answer

Custodian
Correct Incorrect Correct answer

Guard
Correct Incorrect Correct answer

Warden
Correct Incorrect Correct answer

Correct

Incorrect
Question 497 of 806

497. Question

For crime insurance purposes, which of the following cannot be considered a custodian?

The insured
Correct Incorrect Correct answer

The insured's partners
Correct Incorrect Correct answer

An employee
Correct Incorrect Correct answer

A watchperson
Correct Incorrect Correct answer

Correct

Incorrect
Question 498 of 806

498. Question

For crime insurance purposes, which of the following cannot be considered a custodian?

The insured
Correct Incorrect Correct answer

The insured's partners
Correct Incorrect Correct answer

A janitor
Correct Incorrect Correct answer

An employee
Correct Incorrect Correct answer

Correct

Incorrect
Question 499 of 806

499. Question

For crime insurance purposes, someone who has care and custody of property while it is outside the premises is termed a:

Guardian
Correct Incorrect Correct answer

Custodian
Correct Incorrect Correct answer

Messenger
Correct Incorrect Correct answer

Courier
Correct Incorrect Correct answer

Correct

Incorrect
Question 500 of 806

500. Question

For crime insurance purposes, someone specifically retained by the insured whose sole duty it is to have care and custody of property inside the premises is termed a:

Guard
Correct Incorrect Correct answer

Security guard
Correct Incorrect Correct answer

Custodian
Correct Incorrect Correct answer

Watchperson
Correct Incorrect Correct answer

Correct

Incorrect
Question 501 of 806

501. Question

With respect to crime insurance, what happens when it is discovered than an employee of an insured has been involved in any theft or dishonest act?

The employee is fired.
Correct Incorrect Correct answer

The policy is cancelled
Correct Incorrect Correct answer

Coverage for the employee is cancelled.
Correct Incorrect Correct answer

The employee must take a polygraph test.
Correct Incorrect Correct answer

Correct

Incorrect
Question 502 of 806

502. Question

With respect to crime insurance, if it is discovered that an employee of an insured has been involved in any theft or dishonest act, will coverage for the employee be cancelled?

Yes if the theft or dishonest act took place on the job
Correct Incorrect Correct answer

Yes even if the theft or dishonest act took place before the employee was hired
Correct Incorrect Correct answer

Yes if the employee fails a polygraph test
Correct Incorrect Correct answer

No, coverage will not be cancelled
Correct Incorrect Correct answer

Correct

Incorrect
Question 503 of 806

503. Question

With respect to crime insurance, the insurer reserves the right to cancel coverage for any employee. How much written notice must the insured receive before the effective date of cancellation?

7 days
Correct Incorrect Correct answer

14 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

60 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 504 of 806

504. Question

How many are parties are there to a bond?

One
Correct Incorrect Correct answer

At least two
Correct Incorrect Correct answer

Two or more
Correct Incorrect Correct answer

Three
Correct Incorrect Correct answer

Correct

Incorrect
Question 505 of 806

505. Question

Which of the following are the three parties to a bond?

Principal, surety, obligee
Correct Incorrect Correct answer

Principal, surety, obligor
Correct Incorrect Correct answer

Principal, agent, obligee
Correct Incorrect Correct answer

Principal, agent, obligor
Correct Incorrect Correct answer

Correct

Incorrect
Question 506 of 806

506. Question

Under a contract of bond, which of the following promises to do-or not do-a specific thing, that is, the person or company bonded?

The principal
Correct Incorrect Correct answer

The surety
Correct Incorrect Correct answer

The obligee
Correct Incorrect Correct answer

The guarantor
Correct Incorrect Correct answer

Correct

Incorrect
Question 507 of 806

507. Question

Under a contract of bond, which of the following, often an insurance company, agrees to be responsible for loss that may result if the principal does not keep his or her promise?

Obligee
Correct Incorrect Correct answer

Surety
Correct Incorrect Correct answer

Guarantor
Correct Incorrect Correct answer

Agent
Correct Incorrect Correct answer

Correct

Incorrect
Question 508 of 806

508. Question

Under a contract of bond, which of the following is the party to whom the principal makes the promise and for whose protection the bond is being written?

Surety
Correct Incorrect Correct answer

Guarantor
Correct Incorrect Correct answer

Agent
Correct Incorrect Correct answer

Obligee
Correct Incorrect Correct answer

Correct

Incorrect
Question 509 of 806

509. Question

Which of the following types of fidelity bonds covers each employee named on a policy schedule for the amount listed?

A Name Schedule bond
Correct Incorrect Correct answer

A Position Schedule bond
Correct Incorrect Correct answer

A Commercial Blanket bond
Correct Incorrect Correct answer

A Blanket Position bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 510 of 806

510. Question

What is the limit of liability for employees under a Name Schedule bond?

$1 million
Correct Incorrect Correct answer

An amount determined by the insured and which may be different for different employees listed
Correct Incorrect Correct answer

An amount determined by the insured and which is the same for all employees listed
Correct Incorrect Correct answer

An amount determined by the employees listed
Correct Incorrect Correct answer

Correct

Incorrect
Question 511 of 806

511. Question

Which of the following types of fidelity bonds lists positions in the company that are covered rather than individuals who fill these positions?

A Name Schedule bond
Correct Incorrect Correct answer

A Position Schedule bond
Correct Incorrect Correct answer

A Commercial Blanket bond
Correct Incorrect Correct answer

A Blanket Position bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 512 of 806

512. Question

Under a Position Schedule bond, how are new hires covered?

New hires must wait 30 days before coverage begins.
Correct Incorrect Correct answer

New hires must wait 45 days before coverage begins.
Correct Incorrect Correct answer

New hires must wait 60 days before coverage begins.
Correct Incorrect Correct answer

New hires are automatically covered.
Correct Incorrect Correct answer

Correct

Incorrect
Question 513 of 806

513. Question

Which of the following is a correct statement about Blanket Position bonds?

Employees must be specifically listed.
Correct Incorrect Correct answer

The bond limit applies to each loss, regardless of the number of employees involved.
Correct Incorrect Correct answer

The bond limit applies separately to each employee involved in a loss.
Correct Incorrect Correct answer

Positions must be specifically listed.
Correct Incorrect Correct answer

Correct

Incorrect
Question 514 of 806

514. Question

What is the purpose of a discovery or cut-off period under a fidelity bond?

It is the period the bond is in effect.
Correct Incorrect Correct answer

It is the period during which losses are discovered and may be covered after the bond's termination.
Correct Incorrect Correct answer

It is the waiting period before losses are covered.
Correct Incorrect Correct answer

It is the bond's termination date.
Correct Incorrect Correct answer

Correct

Incorrect
Question 515 of 806

515. Question

All of the following are correct statements about Workers Compensation laws except:

Before the enactment of such laws, workers had to sue employers for compensation for a work related injury.
Correct Incorrect Correct answer

Before the enactment of such laws, workers had to prove employers negligent before compensation for a work related injury.
Correct Incorrect Correct answer

Before the enactment of such laws, employers were very successful in avoiding liability for work related injuries.
Correct Incorrect Correct answer

Before the enactment of such laws, work related injuries were charged directly to employers.
Correct Incorrect Correct answer

Correct

Incorrect
Question 516 of 806

516. Question

Which of the following common law defenses used by employers before the enactment of Workers Compensation laws denied liability based on the theory that the employee knew the work situation and therefore undertook the risk of injury?

Assumption of risk
Correct Incorrect Correct answer

Contributory negligence
Correct Incorrect Correct answer

The fellow servant rule
Correct Incorrect Correct answer

Comparative negligence
Correct Incorrect Correct answer

Correct

Incorrect
Question 517 of 806

517. Question

Which of the following common law defenses used by employers before the enactment of Workers Compensation laws denied liability based on the theory that no matter how negligent the employer, the employee had also been negligent and should be responsible for a work related injury?

Assumption of risk
Correct Incorrect Correct answer

Contributory negligence
Correct Incorrect Correct answer

The fellow servant rule
Correct Incorrect Correct answer

Comparative negligence
Correct Incorrect Correct answer

Correct

Incorrect
Question 518 of 806

518. Question

Which of the following common law defenses used by employers before the enactment of Workers Compensation laws denied liability based on the theory that an injury was caused by another worker and therefore the employer was not responsible?

Assumption of risk
Correct Incorrect Correct answer

Contributory negligence
Correct Incorrect Correct answer

Comparative negligence
Correct Incorrect Correct answer

The fellow servant rule
Correct Incorrect Correct answer

Correct

Incorrect
Question 519 of 806

519. Question

Which of the following best describes Workers Compensation laws?

They are based on the theory that the cost of most work related injuries and occupational diseases should be charged directly to the employer regardless of fault.
Correct Incorrect Correct answer

They are based on the theory that if the employer is at fault, the employer should compensate the injured employee.
Correct Incorrect Correct answer

They are based on the theory that whoever is at fault should bear the responsibility for injuries.
Correct Incorrect Correct answer

They are based on the theory of contributory negligence and if the employee contributed in some way to the injury, the employee should be held responsible.
Correct Incorrect Correct answer

Correct

Incorrect
Question 520 of 806

520. Question

How is the cost of Workers Compensation paid?

As a cost of production ultimately paid by consumers
Correct Incorrect Correct answer

Through a payroll tax on employees
Correct Incorrect Correct answer

Through the state sales tax
Correct Incorrect Correct answer

Through the income tax paid by the employer
Correct Incorrect Correct answer

Correct

Incorrect
Question 521 of 806

521. Question

Under Workers Compensation laws, the cost of most work-related injuries and occupational disease is borne by the employer. As a result:

Workers Compensation is the exclusive remedy for injured workers.
Correct Incorrect Correct answer

Employees cannot sue their employers to obtain additional compensation.
Correct Incorrect Correct answer

Complex court proceeding are done away with.
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 522 of 806

522. Question

Which of the following categories of workers is generally not exempt from Workers Compensation laws?

Farm and agricultural workers
Correct Incorrect Correct answer

Charitable organization workers
Correct Incorrect Correct answer

Domestic employees
Correct Incorrect Correct answer

Factory workers
Correct Incorrect Correct answer

Correct

Incorrect
Question 523 of 806

523. Question

Which of the following categories of workers is typically not exempt from Workers Compensation laws?

Casual laborers
Correct Incorrect Correct answer

Newspaper vendors
Correct Incorrect Correct answer

Domestic employees
Correct Incorrect Correct answer

Healthcare workers
Correct Incorrect Correct answer

Correct

Incorrect
Question 524 of 806

524. Question

Which of the following is a correct statement about workers exempt from Workers Compensation laws?

Hours worked or wages always determine whether an employee is exempt.
Correct Incorrect Correct answer

Employers are required to provide compensation benefits for exempt employees.
Correct Incorrect Correct answer

If workers are not covered by compensation benefits, they are precluded from legal claims against their employers.
Correct Incorrect Correct answer

Benefits may be voluntarily purchased by employers to cover exempt employees.
Correct Incorrect Correct answer

Correct

Incorrect
Question 525 of 806

525. Question

Which of the following is a correct statement about Workers Compensation laws and benefits?

Workers Compensation laws are the same in all states.
Correct Incorrect Correct answer

Workers Compensation laws vary from state to state.
Correct Incorrect Correct answer

All Workers Compensation is regulated at the federal level.
Correct Incorrect Correct answer

Workers Compensation benefits are the same in all states.
Correct Incorrect Correct answer

Correct

Incorrect
Question 526 of 806

526. Question

Which of the following categories of Workers Compensation benefits compensate employees who are unable to work as the result of a work related injury and replace a portion of lost income?

Disability/loss of income benefits
Correct Incorrect Correct answer

Medical benefits
Correct Incorrect Correct answer

Survivor/death benefits
Correct Incorrect Correct answer

Rehabilitation benefits
Correct Incorrect Correct answer

Correct

Incorrect
Question 527 of 806

527. Question

Which of the following categories of Workers Compensation benefits pays for the cost of medical services required because of an employment related injury without a dollar limit or expiration of coverage?

Disability/loss of income benefits
Correct Incorrect Correct answer

Medical benefits
Correct Incorrect Correct answer

Survivor/death benefits
Correct Incorrect Correct answer

Rehabilitation benefits
Correct Incorrect Correct answer

Correct

Incorrect
Question 528 of 806

528. Question

Which of the following categories of Workers Compensation benefits compensate a surviving spouse, children, or other relatives of an employee whose death results from a work related injury usually with a weekly benefit and an amount for funeral expenses?

Disability/loss of income benefits
Correct Incorrect Correct answer

Medical benefits
Correct Incorrect Correct answer

Survivor/death benefits
Correct Incorrect Correct answer

Rehabilitation benefits
Correct Incorrect Correct answer

Correct

Incorrect
Question 529 of 806

529. Question

Which of the following categories of Workers Compensation benefits include medical rehabilitation designed to improve physical functioning and vocational rehabilitation?

Disability/loss of income benefits
Correct Incorrect Correct answer

Medical benefits
Correct Incorrect Correct answer

Survivor/death benefits
Correct Incorrect Correct answer

Rehabilitation benefits
Correct Incorrect Correct answer

Correct

Incorrect
Question 530 of 806

530. Question

All of the following are correct statements about compensable injuries under Workers Compensation except:

Injuries must arise out of employment and in the course of employment.
Correct Incorrect Correct answer

The injury must occur at the place of employment or if away from the place of employment, while employment duties are being performed.
Correct Incorrect Correct answer

The place and circumstance of the injury are critical to determining whether benefits are compensable.
Correct Incorrect Correct answer

The injury must occur at the place of employment and nowhere else.
Correct Incorrect Correct answer

Correct

Incorrect
Question 531 of 806

531. Question

States where employers must accept and comply with all provisions of the state’s Workers Compensation laws are termed:

Compulsory
Correct Incorrect Correct answer

Compulsive
Correct Incorrect Correct answer

Elective
Correct Incorrect Correct answer

Discretionary
Correct Incorrect Correct answer

Correct

Incorrect
Question 532 of 806

532. Question

Which of the following are ways in which employers may meet their Workers Compensation liability requirements?

Self-insurance or insurance purchased from a private insurer
Correct Incorrect Correct answer

Monopolistic state funds which require the purchase of Workers Compensation insurance from the state
Correct Incorrect Correct answer

Competitive state funds which give employers a choice between purchasing Workers Compensation from a state fund or private insurer
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 533 of 806

533. Question

Nearly all states that allow private insurers to offer Workers Compensation coverage use the standardized Workers Compensation and Employers Liability policy filed by:

The National Association of Insurance Commissioners (NAIC)
Correct Incorrect Correct answer

American Insurance Association (AIA)
Correct Incorrect Correct answer

The National Council on Compensation Insurance (NCCI)
Correct Incorrect Correct answer

Insurance Information Institute (III)
Correct Incorrect Correct answer

Correct

Incorrect
Question 534 of 806

534. Question

Which of the following is covered under Part One-Workers Compensation of the standardized Workers Compensation and Employers Liability policy?

The insurer's promise to pay all compensation and other benefits required by the state(s) in which the business operates
Correct Incorrect Correct answer

Sums the insured is legally obligated to pay under common law because of a work related injury or occupational disease
Correct Incorrect Correct answer

The insured's duties if an injury occurs
Correct Incorrect Correct answer

An explanation of how the premium is determined
Correct Incorrect Correct answer

Correct

Incorrect
Question 535 of 806

535. Question

What is the policy limit under the standardized Workers Compensation and Employers Liability policy?

$1 million
Correct Incorrect Correct answer

No dollar limit applies.
Correct Incorrect Correct answer

It depends on the state.
Correct Incorrect Correct answer

It depends on the insured's line of business.
Correct Incorrect Correct answer

Correct

Incorrect
Question 536 of 806

536. Question

Which of the following is covered under Part Two-Employers Liability of the standardized Workers Compensation and Employers Liability policy?

Sums the insured is legally obligated to pay under common law because of a work related injury or occupational disease
Correct Incorrect Correct answer

The insured's duties if an injury occurs
Correct Incorrect Correct answer

An explanation of how the premium is determined
Correct Incorrect Correct answer

Conditions that apply to the policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 537 of 806

537. Question

How is Workers Compensation coverage rated?

Based on revenue
Correct Incorrect Correct answer

Based on sales
Correct Incorrect Correct answer

Based on payroll
Correct Incorrect Correct answer

Based on inventory
Correct Incorrect Correct answer

Correct

Incorrect
Question 538 of 806

538. Question

For each rate classification of Workers Compensation insurance, the manual provides a rate per:

$100 of payroll
Correct Incorrect Correct answer

$500 of payroll
Correct Incorrect Correct answer

$1,000 of payroll
Correct Incorrect Correct answer

Employee
Correct Incorrect Correct answer

Correct

Incorrect
Question 539 of 806

539. Question

All of the following are correct statements about Farm coverage except:

The Farm coverage part can be written as a mono-line policy.
Correct Incorrect Correct answer

The Farm coverage part can be included in the CPP.
Correct Incorrect Correct answer

Farm Property coverage forms cover both the personal and business property of the farmer.
Correct Incorrect Correct answer

Farm Property coverage forms cover only the business property of the farmer.
Correct Incorrect Correct answer

Correct

Incorrect
Question 540 of 806

540. Question

All of the following are correct statements about Farm coverage except:

The Farm coverage part can be written as a mono-line policy.
Correct Incorrect Correct answer

The Farm coverage part can be included in the CPP.
Correct Incorrect Correct answer

Farm Liability coverage forms cover only the business liability exposure of the farmer.
Correct Incorrect Correct answer

Farm Liability coverage forms cover both the personal and the business liability exposures of the farmer.
Correct Incorrect Correct answer

Correct

Incorrect
Question 541 of 806

541. Question

Which of the following are generally excluded from coverage under the Farm Property coverage form?

A dwelling
Correct Incorrect Correct answer

Appurtenant structures
Correct Incorrect Correct answer

Household personal property
Correct Incorrect Correct answer

Growing crops
Correct Incorrect Correct answer

Correct

Incorrect
Question 542 of 806

542. Question

All of the following are unique to the farm risk and are covered under the Covered Causes of Loss-Broad section of the Farm Property coverage form except:

Electrocution of livestock
Correct Incorrect Correct answer

Attacks by dogs or wild animals
Correct Incorrect Correct answer

Drowning of livestock
Correct Incorrect Correct answer

Fire to the dwelling
Correct Incorrect Correct answer

Correct

Incorrect
Question 543 of 806

543. Question

All of the following are unique to the farm risk and are covered under the Covered Causes of Loss-Broad section of the Farm Property coverage form except:

Accidents involving loading
Correct Incorrect Correct answer

Accidents involving unloading
Correct Incorrect Correct answer

Fire to appurtenant structures
Correct Incorrect Correct answer

Accidental shooting of livestock
Correct Incorrect Correct answer

Correct

Incorrect
Question 544 of 806

544. Question

All of the following are correct statements about boilers and Boiler and Machinery insurance except:

Boiler insurance is very difficult to obtain.
Correct Incorrect Correct answer

Most commercial lines policies exclude loss resulting from boiler explosions.
Correct Incorrect Correct answer

The focal point of Boiler and Machinery insurance is loss prevention rather than loss protection.
Correct Incorrect Correct answer

Regular inspections are an integral part of Boiler and Machinery insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 545 of 806

545. Question

The two basic Aviation coverages are:

Takeoff and Landing
Correct Incorrect Correct answer

Personal and Business
Correct Incorrect Correct answer

Physical Damage and Liability
Correct Incorrect Correct answer

Fire and Smoke
Correct Incorrect Correct answer

Correct

Incorrect
Question 546 of 806

546. Question

Aviation Physical Damage, similar to Comprehensive and Collision coverages provided by auto insurance coverage, is called:

Airplane insurance
Correct Incorrect Correct answer

Airline insurance
Correct Incorrect Correct answer

Flying insurance
Correct Incorrect Correct answer

Hull insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 547 of 806

547. Question

Does Aviation Physical Damage insurance, or hull insurance, cover personal effects?

Yes, personal effects are covered.
Correct Incorrect Correct answer

No, personal effects are not covered.
Correct Incorrect Correct answer

Yes when the policy is so endorsed.
Correct Incorrect Correct answer

Yes when the policy is so endorsed and an additional premium is paid.
Correct Incorrect Correct answer

Correct

Incorrect
Question 548 of 806

548. Question

Which of the following is covered under Aviation Liability insurance?

Bodily injury liability to passengers and to persons other than passengers
Correct Incorrect Correct answer

Property damage liability
Correct Incorrect Correct answer

Medical payments
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 549 of 806

549. Question

As candidates for Professional Liability policies, which of the following are legal duties that professionals have to their clients?

To perform services for which they were hired; to perform services in accordance with appropriate standards of conduct
Correct Incorrect Correct answer

To perform services for which they were hired; to perform services at reasonable rates
Correct Incorrect Correct answer

To perform services at reasonable rates; to perform services in accordance with appropriate standards of conduct
Correct Incorrect Correct answer

To perform services for which they were hired; to refer clients only to other practitioners who are insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 550 of 806

550. Question

As candidates for Professional Liability policies, why are professionals held to a higher standard of conduct?

Because of their special skills
Correct Incorrect Correct answer

Because of their education
Correct Incorrect Correct answer

Because of their high rate of pay
Correct Incorrect Correct answer

Because of their line of work
Correct Incorrect Correct answer

Correct

Incorrect
Question 551 of 806

551. Question

Which of the following is a broad term encompassing Professional Liability policies written for insurances agents, accountants, architects, stockbrokers, engineers, and attorneys?

Errors and Omissions (E&O) insurance
Correct Incorrect Correct answer

Professional Protection insurance
Correct Incorrect Correct answer

All Risk Professional insurance
Correct Incorrect Correct answer

All Professions insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 552 of 806

552. Question

Which of the following is appropriate for directors and officers of corporations who may be sued as individuals by stockholders?

Personal liability insurance under a CGL
Correct Incorrect Correct answer

Homeowners insurance for liability arising out of business pursuits
Correct Incorrect Correct answer

Directors and Officers Liability insurance
Correct Incorrect Correct answer

Professional Liability insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 553 of 806

553. Question

CGL and Workers Compensation and Employers Liability policies exclude:

Wrongful termination
Correct Incorrect Correct answer

Discrimination
Correct Incorrect Correct answer

Sexual harassment
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 554 of 806

554. Question

Employment Practices Liability insurance covers:

Wrongful termination
Correct Incorrect Correct answer

Discrimination
Correct Incorrect Correct answer

Sexual harassment
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 555 of 806

555. Question

Which of the following is a correct statement about Employment Practices Liability insurance?

EPL insurance may be issued as an endorsement to a Directors and Officers Liability policy.
Correct Incorrect Correct answer

EPL insurance cannot be issued as a standalone policy.
Correct Incorrect Correct answer

Losses from wrongful termination, discrimination, and sexual harassment are typically excluded from coverage under EPL policies.
Correct Incorrect Correct answer

Employment related practices are typically excluded from coverage under EPL policies.
Correct Incorrect Correct answer

Correct

Incorrect
Question 556 of 806

556. Question

Broad coverage to fill gaps in the Commercial Property coverage part can be provided by:

Difference in Coverage insurance
Correct Incorrect Correct answer

Difference in Condition insurance
Correct Incorrect Correct answer

Difference in Commercial Property insurance
Correct Incorrect Correct answer

Difference in Circumstance insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 557 of 806

557. Question

All of the following are correct statements about Difference in Conditions (DIC) insurance except:

It provides broad coverage to fill gaps in the Commercial Property coverage part.
Correct Incorrect Correct answer

It excludes the basic fire and extended coverage perils.
Correct Incorrect Correct answer

Other than basic fire and extended coverage perils, it includes most insurable perils.
Correct Incorrect Correct answer

It provides very limited coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 558 of 806

558. Question

All of the following are correct statements about Difference in Conditions (DIC) insurance except:

Other than basic fire and extended coverage perils, it includes most insurable perils.
Correct Incorrect Correct answer

It includes basic fire coverage.
Correct Incorrect Correct answer

It is written in conjunction with policies providing the coverage it excludes.
Correct Incorrect Correct answer

It is usually written on large risks with a high deductible.
Correct Incorrect Correct answer

Correct

Incorrect
Question 559 of 806

559. Question

A guarantee that certain acts will not be committed by employees takes the form of a:

Fidelity bond
Correct Incorrect Correct answer

Surety bond
Correct Incorrect Correct answer

Bail bond
Correct Incorrect Correct answer

Indemnity bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 560 of 806

560. Question

A bond assuring that a party will faithfully perform or a payment will be made as agreed is a:

Fidelity bond
Correct Incorrect Correct answer

Surety bond
Correct Incorrect Correct answer

Bail bond
Correct Incorrect Correct answer

Insurance bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 561 of 806

561. Question

Under the terms of a fidelity bond, which of the following parties is the obligee?

The employee
Correct Incorrect Correct answer

The employer
Correct Incorrect Correct answer

The guarantor
Correct Incorrect Correct answer

The insurance company
Correct Incorrect Correct answer

Correct

Incorrect
Question 562 of 806

562. Question

Under the terms of a fidelity bond, which of the following parties is the principal?

The employee
Correct Incorrect Correct answer

The employer
Correct Incorrect Correct answer

The guarantor
Correct Incorrect Correct answer

The insurance company
Correct Incorrect Correct answer

Correct

Incorrect
Question 563 of 806

563. Question

Which of the following is a key difference between fidelity bonds and surety bonds?

In fidelity bonding, the principal seeks and pays for the bond; in surety bonding the obligee arranges and pays for the bond.
Correct Incorrect Correct answer

Fidelity bonds provide more protection than surety bonds.
Correct Incorrect Correct answer

In fidelity bonding, the obligee seeks and pays for the bond; in surety bonding the principal arranges and pays for the bond.
Correct Incorrect Correct answer

There are no differences; these terms are synonymous.
Correct Incorrect Correct answer

Correct

Incorrect
Question 564 of 806

564. Question

Under the terms of a surety bond, the agreement through which the principal agrees to indemnify the surety for any loss sustained is called:

An indemnity agreement
Correct Incorrect Correct answer

A treaty
Correct Incorrect Correct answer

A treatise
Correct Incorrect Correct answer

A surety
Correct Incorrect Correct answer

Correct

Incorrect
Question 565 of 806

565. Question

If, under the terms of a surety bond, the surety requires a deposit from the principal, what is the term for the money deposited?

Consideration
Correct Incorrect Correct answer

Warranty
Correct Incorrect Correct answer

Collateral security
Correct Incorrect Correct answer

Pledge
Correct Incorrect Correct answer

Correct

Incorrect
Question 566 of 806

566. Question

Which of the following types of contract bonds is used to guarantee that a job will be completed by the contractor according to contract specifications?

Bid bond
Correct Incorrect Correct answer

Performance bond
Correct Incorrect Correct answer

Supply bond
Correct Incorrect Correct answer

Completion bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 567 of 806

567. Question

Which of the following types of contract bonds is used to guarantee that bills for labor and materials will be paid by the contractor as they are due?

Performance bond
Correct Incorrect Correct answer

Payment bond
Correct Incorrect Correct answer

Supply bond
Correct Incorrect Correct answer

Completion bond
Correct Incorrect Correct answer

Correct

Incorrect
Question 568 of 806

568. Question

Payment bonds, frequently used as part of performance bonds, are also called:

Compensation bonds
Correct Incorrect Correct answer

Labor and materials bonds
Correct Incorrect Correct answer

Supply bonds
Correct Incorrect Correct answer

Completion bonds
Correct Incorrect Correct answer

Correct

Incorrect
Question 569 of 806

569. Question

Which of the following types of insurer authority represents an insurer formed under the laws of Kentucky?

Domestic
Correct Incorrect Correct answer

Foreign
Correct Incorrect Correct answer

National
Correct Incorrect Correct answer

Alien
Correct Incorrect Correct answer

Correct

Incorrect
Question 570 of 806

570. Question

Which of the following types of insurer authority represents an insurer formed under the laws of any state other than Kentucky?

Domestic
Correct Incorrect Correct answer

Foreign
Correct Incorrect Correct answer

National
Correct Incorrect Correct answer

Alien
Correct Incorrect Correct answer

Correct

Incorrect
Question 571 of 806

571. Question

In Kentucky, which of the following types of insurer authority represents an insurer formed under the laws of any country other than a state in the United States?

Domestic
Correct Incorrect Correct answer

Foreign
Correct Incorrect Correct answer

National
Correct Incorrect Correct answer

Alien
Correct Incorrect Correct answer

Correct

Incorrect
Question 572 of 806

572. Question

An insurer that holds a current certificate of authority issued by the Director of Insurance in Kentucky is termed a(n):

Authorized insurer
Correct Incorrect Correct answer

Endorsed insurer
Correct Incorrect Correct answer

Sanctioned insurer
Correct Incorrect Correct answer

Formal insurer
Correct Incorrect Correct answer

Correct

Incorrect
Question 573 of 806

573. Question

Any insurer without a current certificate of authority issued by the Director of Insurance in Kentucky is termed a(n):

Foreign insurer
Correct Incorrect Correct answer

Unauthorized insurer
Correct Incorrect Correct answer

Illegal insurer
Correct Incorrect Correct answer

Unofficial insurer
Correct Incorrect Correct answer

Correct

Incorrect
Question 574 of 806

574. Question

The Executive Director of Insurance in Kentucky is appointed by the governor for a term not to exceed:

1 year
Correct Incorrect Correct answer

2 years
Correct Incorrect Correct answer

4 years
Correct Incorrect Correct answer

5 years
Correct Incorrect Correct answer

Correct

Incorrect
Question 575 of 806

575. Question

The Executive Director of Insurance in Kentucky is appointed by the governor with the consent of:

The legislature
Correct Incorrect Correct answer

The Senate
Correct Incorrect Correct answer

The attorney general
Correct Incorrect Correct answer

The people through a majority vote
Correct Incorrect Correct answer

Correct

Incorrect
Question 576 of 806

576. Question

In Kentucky, insurance licensees must inform the Executive Director in writing of any change in address or legal name within:

7 days of the change
Correct Incorrect Correct answer

10 days of the change
Correct Incorrect Correct answer

15 days of the change
Correct Incorrect Correct answer

30 days of the change
Correct Incorrect Correct answer

Correct

Incorrect
Question 577 of 806

577. Question

In Kentucky, what is the fine for insurance licensees who do not inform the Executive Director in writing of any change in address or legal name within the required time period?

$1,000 for agents; $1,000 for adjusters
Correct Incorrect Correct answer

$2,000 for agents; $2,000 for adjusters
Correct Incorrect Correct answer

$1,000 for agents; $2,000 for adjusters
Correct Incorrect Correct answer

$2,000 for agents; $1,000 for adjusters
Correct Incorrect Correct answer

Correct

Incorrect
Question 578 of 806

578. Question

In Kentucky, an individual or business entity appointed by an insurer to sell or solicit applications for insurance or annuity contracts or to negotiate such contracts is termed a(n):

Agent
Correct Incorrect Correct answer

Solicitor
Correct Incorrect Correct answer

Negotiator
Correct Incorrect Correct answer

Broker
Correct Incorrect Correct answer

Correct

Incorrect
Question 579 of 806

579. Question

An individual or business entity required to be licensed under Kentucky law to sell, solicit, or negotiate insurance or annuity contracts is termed a(n):

Solicitor
Correct Incorrect Correct answer

Broker
Correct Incorrect Correct answer

Producer
Correct Incorrect Correct answer

Agent
Correct Incorrect Correct answer

Correct

Incorrect
Question 580 of 806

580. Question

Which of the following is a required qualification for agent licensure in Kentucky?

18 years of age
Correct Incorrect Correct answer

Having fulfilled the residence requirements (or a nonresident who is not eligible for a nonresident license based on reciprocity)
Correct Incorrect Correct answer

May not have committed any act that is a ground for denial, suspension, or revocation of license
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 581 of 806

581. Question

Which of the following is a required qualification for agent licensure in Kentucky?

Must be trustworthy, reliable, and of good reputation
Correct Incorrect Correct answer

Is competent to exercise the license
Correct Incorrect Correct answer

Has completed any prelicensing requirements
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 582 of 806

582. Question

How many hours of prelicensing study must be completed for property and casualty licensure in Kentucky?

10
Correct Incorrect Correct answer

15
Correct Incorrect Correct answer

20
Correct Incorrect Correct answer

40
Correct Incorrect Correct answer

Correct

Incorrect
Question 583 of 806

583. Question

Kentucky law specifies that illegal inducements to any insurance transaction are prizes, goods, merchandise, or property over:

10
Correct Incorrect Correct answer

15
Correct Incorrect Correct answer

25
Correct Incorrect Correct answer

50
Correct Incorrect Correct answer

Correct

Incorrect
Question 584 of 806

584. Question

According to Kentucky law, when must insurable interest exist for purposes of property insurance?

At the inception of the insurance contract
Correct Incorrect Correct answer

At the time of loss
Correct Incorrect Correct answer

When a claim is filed
Correct Incorrect Correct answer

At the time of the application for insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 585 of 806

585. Question

A person convicted of fraud in Kentucky is guilty of a misdemeanor, and if the amount of money involved is $300 or less, which of the following penalties apply?

Imprisonment for no more than one year
Correct Incorrect Correct answer

A fine per occurrence of not more than $1,000 per individual or twice the gain received, whichever is greater
Correct Incorrect Correct answer

A fine per occurrence of not more than $5,000 per corporation or twice the gain received, whichever is greater
Correct Incorrect Correct answer

Both the imprisonment and the fines described above
Correct Incorrect Correct answer

Correct

Incorrect
Question 586 of 806

586. Question

If a person is convicted of fraud in Kentucky when the amount of money involved is more than $300, which of the following penalties apply?

Imprisonment for no less than one year and no more than five years
Correct Incorrect Correct answer

A fine per occurrence of not more than $10,000 per individual or twice the gain received, whichever is greater
Correct Incorrect Correct answer

A fine per occurrence of not more than $100,000 per corporation or twice the gain received, whichever is greater
Correct Incorrect Correct answer

Both the imprisonment and the fines described above
Correct Incorrect Correct answer

Correct

Incorrect
Question 587 of 806

587. Question

How long is a binder valid in Kentucky?

The policy period
Correct Incorrect Correct answer

90 days
Correct Incorrect Correct answer

The policy period or 90 days, whichever is longer
Correct Incorrect Correct answer

The policy period or 90 days, whichever is shorter
Correct Incorrect Correct answer

Correct

Incorrect
Question 588 of 806

588. Question

Under Kentucky’s no-fault auto insurance law, reimbursement for net loss is termed:

Basic reparation benefits
Correct Incorrect Correct answer

Net benefits
Correct Incorrect Correct answer

Net loss benefits
Correct Incorrect Correct answer

Net recompense
Correct Incorrect Correct answer

Correct

Incorrect
Question 589 of 806

589. Question

What is the minimum required auto liability coverage in Kentucky?

$25,000 / $50,000 / $10,000
Correct Incorrect Correct answer

$5,000 / $50,000 / $10,000
Correct Incorrect Correct answer

$15,000 / $50,000 / $10,000
Correct Incorrect Correct answer

$25,000 / $50,000 / $5,000
Correct Incorrect Correct answer

Correct

Incorrect
Question 590 of 806

590. Question

Which of the following meets the definition of safety equipment under Kentucky’s auto insurance law?

Glass used in the windshield, doors, and windows
Correct Incorrect Correct answer

Glass used in the lights required by law
Correct Incorrect Correct answer

Plastic or other material used in the lights required by law
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 591 of 806

591. Question

Comprehensive automobile coverage in Kentucky must provide for repair or replacement of damaged safety equipment:

Without regard to any deductible or minimum amount
Correct Incorrect Correct answer

After the insured's deductible is met
Correct Incorrect Correct answer

Only when the insured is not at fault
Correct Incorrect Correct answer

Only when the insured is at fault
Correct Incorrect Correct answer

Correct

Incorrect
Question 592 of 806

592. Question

The definition of Kentucky’s FAIR plan is a plan:

To make insurance premiums competitive
Correct Incorrect Correct answer

To make similar coverages easy to compare
Correct Incorrect Correct answer

To assure fair access to insurance requirements
Correct Incorrect Correct answer

To make insurance available to all who desire it
Correct Incorrect Correct answer

Correct

Incorrect
Question 593 of 806

593. Question

Who is required in Kentucky to be a member of the Plan and Reinsurance Association?

All insurers
Correct Incorrect Correct answer

All property and casualty insurers
Correct Incorrect Correct answer

All insurers who write property and casualty insurance on a direct basis
Correct Incorrect Correct answer

All authorized insurers who write property and casualty insurance on a direct basis
Correct Incorrect Correct answer

Correct

Incorrect
Question 594 of 806

594. Question

Which of the following is not covered by the Kentucky Insurance Guaranty Association?

Life, annuities, and disability insurance
Correct Incorrect Correct answer

Mortgage and financial guaranty insurance
Correct Incorrect Correct answer

Credit insurance and title insurance
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 595 of 806

595. Question

What is the Kentucky Insurance Guaranty Association’s obligation to cover workers compensation claims?

The full amount of a covered claim for benefits arising from a workers compensation policy
Correct Incorrect Correct answer

One-half the amount of a covered claim for benefits arising from a workers compensation policy
Correct Incorrect Correct answer

It depends on the injury.
Correct Incorrect Correct answer

The Association has no obligation to cover workers compensation claims.
Correct Incorrect Correct answer

Correct

Incorrect
Question 596 of 806

596. Question

What is the Kentucky Insurance Guaranty Association’s obligation with respect to the return of unearned premiums?

No more than $5,000 per policy for a covered claim
Correct Incorrect Correct answer

No more than $10,000 per policy for a covered claim
Correct Incorrect Correct answer

No more than $20,000 per policy for a covered claim
Correct Incorrect Correct answer

The Association has no obligation with respect to the return of unearned premiums.
Correct Incorrect Correct answer

Correct

Incorrect
Question 597 of 806

597. Question

What is the Kentucky Insurance Guaranty Association’s obligation with respect to covered claims other than workers compensation claims?

100000
Correct Incorrect Correct answer

250000
Correct Incorrect Correct answer

300000
Correct Incorrect Correct answer

500000
Correct Incorrect Correct answer

Correct

Incorrect
Question 598 of 806

598. Question

In order to collect under a P & C policy, an insurable interest must exist at which of the following times?
I At the time of application for the policy
II At the time of the loss

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I nor II
Correct Incorrect Correct answer

Correct

Incorrect
Question 599 of 806

599. Question

Gertrude has an insurable interest in all of the following EXCEPT

improvements she has made to her apartment.
Correct Incorrect Correct answer

the life of her husband, Lurch.
Correct Incorrect Correct answer

her automobile
Correct Incorrect Correct answer

property her uncle might leave her
Correct Incorrect Correct answer

Correct

Incorrect
Question 600 of 806

600. Question

All of the following are examples of insurable interest EXCEPT a

person's interest in property she intends to purchase next week.
Correct Incorrect Correct answer

dry cleaner's interest in his customer's clothing that is still in his custody.
Correct Incorrect Correct answer

person's interest in the home she owns.
Correct Incorrect Correct answer

person's interest in the improvements he has added to his leased apartment.
Correct Incorrect Correct answer

Correct

Incorrect
Question 601 of 806

601. Question

All of the following can improve the acceptability of a risk EXCEPT

deductibles.
Correct Incorrect Correct answer

coinsurance.
Correct Incorrect Correct answer

hazards.
Correct Incorrect Correct answer

limited peril protection.
Correct Incorrect Correct answer

Correct

Incorrect
Question 602 of 806

602. Question

To have an insurable interest in a property, the insured must

currently have some financial relationship to the property.
Correct Incorrect Correct answer

have had at some time a financial relationship to the property.
Correct Incorrect Correct answer

be the sole owner of the property.
Correct Incorrect Correct answer

be the only one who purchases insurance coverage on the property.
Correct Incorrect Correct answer

Correct

Incorrect
Question 603 of 806

603. Question

In P & C, the term used to describe situations or conditions that can increase risk, such as ice on streets or faulty wiring in buildings is/are called

risks.
Correct Incorrect Correct answer

Causes of loss.
Correct Incorrect Correct answer

hazards.
Correct Incorrect Correct answer

perils.
Correct Incorrect Correct answer

Correct

Incorrect
Question 604 of 806

604. Question

Which of the following insurance principles is designed to keep you from profiting by insuring and then destroying other people’s property?

Indemnification
Correct Incorrect Correct answer

Subrogation
Correct Incorrect Correct answer

Co-insurance
Correct Incorrect Correct answer

Insurable interest
Correct Incorrect Correct answer

Correct

Incorrect
Question 605 of 806

605. Question

There can be many Perils in an insurance policy. What is the definition of a peril?

Available Risk
Correct Incorrect Correct answer

Transfer Risk
Correct Incorrect Correct answer

Share Risk
Correct Incorrect Correct answer

The cause of the loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 606 of 806

606. Question

All of the following are types of hazards EXCEPT

Morale
Correct Incorrect Correct answer

Moral
Correct Incorrect Correct answer

Risk
Correct Incorrect Correct answer

Physical
Correct Incorrect Correct answer

Correct

Incorrect
Question 607 of 806

607. Question

Which of the following individuals would be classified as incompetent under insurance law?
I A 14-year-old honor student
II A man under the influence of alcohol
III A customer who buys a policy under duress

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

I and II only
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 608 of 806

608. Question

Which of the following is (are) essential elements of a contract?
I A “meeting of the minds” of the parties involved.
II An exchange of something of value.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I nor II
Correct Incorrect Correct answer

Correct

Incorrect
Question 609 of 806

609. Question

All of the following are essential parts of a contract EXCEPT a (an)

acceptance.
Correct Incorrect Correct answer

consideration.
Correct Incorrect Correct answer

offer.
Correct Incorrect Correct answer

written instrument.
Correct Incorrect Correct answer

Correct

Incorrect
Question 610 of 806

610. Question

Part of the insured’s consideration in a property insurance contract is the

payment of a loss by the company.
Correct Incorrect Correct answer

payment of the premium by the insured.
Correct Incorrect Correct answer

provision of a grace period.
Correct Incorrect Correct answer

offer of a preferred contract to the customer
Correct Incorrect Correct answer

Correct

Incorrect
Question 611 of 806

611. Question

All of the following are primary parts of an insurance policy EXCEPT the

declarations.
Correct Incorrect Correct answer

covered perils.
Correct Incorrect Correct answer

exclusions.
Correct Incorrect Correct answer

insurance agreement.
Correct Incorrect Correct answer

Correct

Incorrect
Question 612 of 806

612. Question

Which of the following is (are) legally competent and therefore able to enter into a legally binding contract?
I A 15-year-old female in Kentucky or a 16-year-old male in Indiana wanting to purchase insurance
II A person under the influence of drugs not administered by a physician

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I nor II
Correct Incorrect Correct answer

Correct

Incorrect
Question 613 of 806

613. Question

A contract in which only one of the parties to the contract sets forth the terms and conditions of the agreement and the other party to the contract must accept those terms and conditions on a “take it or leave it” basis is referred to as a contract of

adhesion.
Correct Incorrect Correct answer

utmost good faith
Correct Incorrect Correct answer

estoppel
Correct Incorrect Correct answer

material fact.
Correct Incorrect Correct answer

Correct

Incorrect
Question 614 of 806

614. Question

In P & C insurance, the part of the policy which defines and describes the type of property and the perils to be covered is called the

policy face.
Correct Incorrect Correct answer

insuring agreement.
Correct Incorrect Correct answer

declarations.
Correct Incorrect Correct answer

conditions.
Correct Incorrect Correct answer

Correct

Incorrect
Question 615 of 806

615. Question

The time limit for bringing suit against an insurance company is found in the policy

insuring agreement.
Correct Incorrect Correct answer

exclusions.
Correct Incorrect Correct answer

declarations.
Correct Incorrect Correct answer

conditions.
Correct Incorrect Correct answer

Correct

Incorrect
Question 616 of 806

616. Question

The part of the policy that defines and describes the scope of the coverages provided is referred to as the

insuring clause.
Correct Incorrect Correct answer

subrogation clause.
Correct Incorrect Correct answer

conditions.
Correct Incorrect Correct answer

declarations.
Correct Incorrect Correct answer

Correct

Incorrect
Question 617 of 806

617. Question

The portion of the policy that specifies exactly what items will be covered and the dollar amounts of coverages is called the

insuring clause.
Correct Incorrect Correct answer

exclusions.
Correct Incorrect Correct answer

declarations.
Correct Incorrect Correct answer

conditions.
Correct Incorrect Correct answer

Correct

Incorrect
Question 618 of 806

618. Question

The principle that maintains an individual should not be permitted to profit from the existence of an insurance contract, but should be restored to the same financial condition which existed before a loss would best describe:

The Principle of Indemnity.
Correct Incorrect Correct answer

Actual cash value.
Correct Incorrect Correct answer

Principle of Admission.
Correct Incorrect Correct answer

Concept of utmost good faith in a contract.
Correct Incorrect Correct answer

Correct

Incorrect
Question 619 of 806

619. Question

An insurance company, which is run primarily for the benefit of the policyowners, is referred to as

a stock company.
Correct Incorrect Correct answer

a mutual company.
Correct Incorrect Correct answer

an interinsurance exchange.
Correct Incorrect Correct answer

a surplus lines company.
Correct Incorrect Correct answer

Correct

Incorrect
Question 620 of 806

620. Question

A policy which requires a countersignature must be signed by

any duly licensed Property & Casualty insurance agent.
Correct Incorrect Correct answer

the issuing agent's manager.
Correct Incorrect Correct answer

the president of the issuing insurance company
Correct Incorrect Correct answer

a duly licensed Property & Casualty resident agent of that state.
Correct Incorrect Correct answer

Correct

Incorrect
Question 621 of 806

621. Question

Which of the following service bureaus is used to set rates and policy forms of Property and Casualty insurance companies?

IRS
Correct Incorrect Correct answer

NBA
Correct Incorrect Correct answer

ISO
Correct Incorrect Correct answer

OSI
Correct Incorrect Correct answer

Correct

Incorrect
Question 622 of 806

622. Question

If an insurance company is chartered in Ohio, it would be what kind of company in Kentucky?

Domestic
Correct Incorrect Correct answer

Alien
Correct Incorrect Correct answer

Foreign
Correct Incorrect Correct answer

Admitted
Correct Incorrect Correct answer

Correct

Incorrect
Question 623 of 806

623. Question

An individual who is responsible for the financial affairs of another individual is referred to as a(n)

fiduciary.
Correct Incorrect Correct answer

consultant.
Correct Incorrect Correct answer

financial planner.
Correct Incorrect Correct answer

investment advisor.
Correct Incorrect Correct answer

Correct

Incorrect
Question 624 of 806

624. Question

Which of the following is TRUE about the insurance binders?

They must be in writing to be legally enforceable.
Correct Incorrect Correct answer

They can be backdated up to six months.
Correct Incorrect Correct answer

They are legal evidence that coverage is in force.
Correct Incorrect Correct answer

They do not have to be reported to the insurance company.
Correct Incorrect Correct answer

Correct

Incorrect
Question 625 of 806

625. Question

Which of the following is true regarding oral binders?

They are illegal in most states.
Correct Incorrect Correct answer

Coverage will become effective when the proposed insured accepts the obligation to pay the premium.
Correct Incorrect Correct answer

Oral binders are a substitute for written binders.
Correct Incorrect Correct answer

They can only be used in personal lines coverages and not commercial lines coverages.
Correct Incorrect Correct answer

Correct

Incorrect
Question 626 of 806

626. Question

Under the doctrine of warranties, an insured must tell the insurance company

what he or she believes to be the truth.
Correct Incorrect Correct answer

the absolute literal truth.
Correct Incorrect Correct answer

an approximation of the truth.
Correct Incorrect Correct answer

only what the customer wants to disclose to the company.
Correct Incorrect Correct answer

Correct

Incorrect
Question 627 of 806

627. Question

A material fact is defined as one which

is important enough to affect the insurance company's decision whether to issue the policy or not.
Correct Incorrect Correct answer

is stated on an application for insurance.
Correct Incorrect Correct answer

the applicant knows is not the truth.
Correct Incorrect Correct answer

the applicant for a policy of insurance misrepresents or conceals from the insurance company in order to get coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 628 of 806

628. Question

An applicant who makes an untrue statement on an application for a Homeowners Policy would be guilty of

misrepresentation.
Correct Incorrect Correct answer

concealment.
Correct Incorrect Correct answer

fraud.
Correct Incorrect Correct answer

breach of warranty.
Correct Incorrect Correct answer

Correct

Incorrect
Question 629 of 806

629. Question

In P & C insurance, an interim insuring agreement between an insurance company and a new insured is called a(n)

conditional receipt.
Correct Incorrect Correct answer

rider.
Correct Incorrect Correct answer

binder
Correct Incorrect Correct answer

endorsement.
Correct Incorrect Correct answer

Correct

Incorrect
Question 630 of 806

630. Question

A binder may expire on all of the following dates EXCEPT the

effective date of the policy.
Correct Incorrect Correct answer

date prior to the receipt of the notice of cancellation of the binder.
Correct Incorrect Correct answer

date of the expiration of the binder itself.
Correct Incorrect Correct answer

day after the receipt of the notification of cancellation of the binder.
Correct Incorrect Correct answer

Correct

Incorrect
Question 631 of 806

631. Question

You own a building valued at $100,000. You have it insured for $85,000 and an annual premium of $1,000 for the policy. If you were to cancel the policy halfway through the policy year, you should receive a refund of

500
Correct Incorrect Correct answer

something more than $500.
Correct Incorrect Correct answer

something less than $500.
Correct Incorrect Correct answer

none of the above.
Correct Incorrect Correct answer

Correct

Incorrect
Question 632 of 806

632. Question

When an insurance company sues a negligent third party to recover a loss paid to an insured the company is exercising its right of

assignment.
Correct Incorrect Correct answer

arbitration.
Correct Incorrect Correct answer

indemnification.
Correct Incorrect Correct answer

subrogation.
Correct Incorrect Correct answer

Correct

Incorrect
Question 633 of 806

633. Question

Which of the following is part of the formula for calculating the ACV of a building?

Fair Market Value
Correct Incorrect Correct answer

Stated Value
Correct Incorrect Correct answer

Original Purchase Price
Correct Incorrect Correct answer

Replacement Cost
Correct Incorrect Correct answer

Correct

Incorrect
Question 634 of 806

634. Question

Every property insurance policy must clearly state how the insurance company will determine “value” under the contract. Which of the following definitions of “value” would normally result in the insured receiving the smallest settlement for a loss?

Actual Cash Value
Correct Incorrect Correct answer

Functional Replacement Cost
Correct Incorrect Correct answer

Agreed Value
Correct Incorrect Correct answer

Replacement Value
Correct Incorrect Correct answer

Correct

Incorrect
Question 635 of 806

635. Question

The ABC Insurance Company has a $60,000 fire policy on a factory. The XYZ Insurance Company has a $40,000 fire policy on the same factory. Assuming that the factory is worth $100,000, how much would the ABC Insurance Company pay on a $10,000 covered loss at the factory?

10000
Correct Incorrect Correct answer

6000
Correct Incorrect Correct answer

5000
Correct Incorrect Correct answer

It depends on the coinsurance clause.
Correct Incorrect Correct answer

Correct

Incorrect
Question 636 of 806

636. Question

The primary purpose for including a deductible in an insurance policy is to

keep the insured from over-utilizing the coverages contained in the policy.
Correct Incorrect Correct answer

eliminate small claims.
Correct Incorrect Correct answer

reduce the premiums that must be charged for the coverage.
Correct Incorrect Correct answer

reduce the company's risk under the policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 637 of 806

637. Question

Which of the following statements about All Risk coverage is or are TRUE?
I All Risk policies cover losses from any peril that is not specifically excluded.
II All Risk policies cost more because of the increase in the dollar amount of coverages.
III Under an All Risk policy the insurance company has the legal right to modify its claim settlement practices.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

I and II
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 638 of 806

638. Question

Most property insurance policies can be written to insure property on all of the following value basis EXCEPT.

ACV.
Correct Incorrect Correct answer

Fair Market Value.
Correct Incorrect Correct answer

Replacement Cost.
Correct Incorrect Correct answer

Stated Value.
Correct Incorrect Correct answer

Correct

Incorrect
Question 639 of 806

639. Question

Your new white car turns to rust during the next 3 years as the result of sitting outside. In P & C language, this phenomenon would be classified as a(n)

fortuitous event.
Correct Incorrect Correct answer

accident.
Correct Incorrect Correct answer

inherent vice.
Correct Incorrect Correct answer

proximate cause.
Correct Incorrect Correct answer

Correct

Incorrect
Question 640 of 806

640. Question

You purchase a property policy in order to insure your commercial building. Two months later, your insurance company offers the same policy to new customers with improved benefits, but the policies are sold for the same premium rate as your policy. Which of the following clauses in your policy would result in your policy automatically including these new improved benefits?

Additional Coverages
Correct Incorrect Correct answer

Extensions of Coverages
Correct Incorrect Correct answer

Liberalization
Correct Incorrect Correct answer

Other Insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 641 of 806

641. Question

The definition of Actual Cash Value includes which of the following?

Original Cost
Correct Incorrect Correct answer

Fair Market Value
Correct Incorrect Correct answer

Functional Replacement Cost
Correct Incorrect Correct answer

Depreciation
Correct Incorrect Correct answer

Correct

Incorrect
Question 642 of 806

642. Question

Which of the following insurance principles is designed to encourage you to purchase adequate insurance protection on your property?

Indemnification
Correct Incorrect Correct answer

Subrogation
Correct Incorrect Correct answer

Coinsurance
Correct Incorrect Correct answer

Insurable interest
Correct Incorrect Correct answer

Correct

Incorrect
Question 643 of 806

643. Question

The P & C term used to refer to damage to an individual’s reputation or mental state is called

bodily injury.
Correct Incorrect Correct answer

personal injury.
Correct Incorrect Correct answer

physical injury.
Correct Incorrect Correct answer

politics.
Correct Incorrect Correct answer

Correct

Incorrect
Question 644 of 806

644. Question

Negligence is the failure to act in a responsible or prudent manner. In order to be negligent, there must be four elements present. Which of the following items is not one of those four elements?

Duty and breach of duty
Correct Incorrect Correct answer

Damages
Correct Incorrect Correct answer

Subrogation
Correct Incorrect Correct answer

Proximate cause
Correct Incorrect Correct answer

Correct

Incorrect
Question 645 of 806

645. Question

The duty we owe others is sometimes expressed in terms of degree of care. To which of the following do we owe the greatest degree of care?

Licensee
Correct Incorrect Correct answer

Invitee
Correct Incorrect Correct answer

Trespasser
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 646 of 806

646. Question

There are times when a person may be held responsible for actions of others. Which example shows imputed liability?

Employee for employer
Correct Incorrect Correct answer

Children for parents
Correct Incorrect Correct answer

Father for son
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 647 of 806

647. Question

All liability losses are said to be third-party losses. Property losses are said to be

2nd party.
Correct Incorrect Correct answer

1st party.
Correct Incorrect Correct answer

3rd party.
Correct Incorrect Correct answer

2nd or 3rd party.
Correct Incorrect Correct answer

Correct

Incorrect
Question 648 of 806

648. Question

Which of the following list describes a tort?

A federal wrong
Correct Incorrect Correct answer

A civil wrong that violates the rights of others
Correct Incorrect Correct answer

What you eat
Correct Incorrect Correct answer

None of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 649 of 806

649. Question

Absolute liability is most frequently applied to activities involving

dangerous animals.
Correct Incorrect Correct answer

dangerous materials.
Correct Incorrect Correct answer

hazardous operations.
Correct Incorrect Correct answer

All of the aforementioned.
Correct Incorrect Correct answer

Correct

Incorrect
Question 650 of 806

650. Question

There are two types of compensatory damages: special and general. Which of the following is an example of a general damage?

Lost wages
Correct Incorrect Correct answer

Pain and suffering
Correct Incorrect Correct answer

Funeral expenses
Correct Incorrect Correct answer

The cost to repair or replace damaged property
Correct Incorrect Correct answer

Correct

Incorrect
Question 651 of 806

651. Question

All of the following are examples of personal injury, EXCEPT

Libel
Correct Incorrect Correct answer

Slander
Correct Incorrect Correct answer

False arrest
Correct Incorrect Correct answer

Injury, sickness or disease
Correct Incorrect Correct answer

Correct

Incorrect
Question 652 of 806

652. Question

In most states, a property owner owes the highest degree of care to:

A trespasser.
Correct Incorrect Correct answer

A licensee.
Correct Incorrect Correct answer

The same degree of care to all.
Correct Incorrect Correct answer

An invitee.
Correct Incorrect Correct answer

Correct

Incorrect
Question 653 of 806

653. Question

Mrs. Jones was involved in an automobile accident with Mr. Green. Both were considered to be partially at fault. Mrs. Jones could not collect for her damages for which of the following reasons:

The doctrine of contributory negligence.
Correct Incorrect Correct answer

The last clear chance rule.
Correct Incorrect Correct answer

The doctrine of comparative negligence.
Correct Incorrect Correct answer

Assumption of risk.
Correct Incorrect Correct answer

Correct

Incorrect
Question 654 of 806

654. Question

Suppose you own a duplex as an investment that you rent to two separate families. Which of the following policy types would your duplex be eligible for?

Renters
Correct Incorrect Correct answer

Tenants
Correct Incorrect Correct answer

2
Correct Incorrect Correct answer

1
Correct Incorrect Correct answer

Correct

Incorrect
Question 655 of 806

655. Question

Which of the following items are covered under a Dwelling Form Coverage C?

Birds or fish
Correct Incorrect Correct answer

Bank Notes
Correct Incorrect Correct answer

2
Correct Incorrect Correct answer

1
Correct Incorrect Correct answer

Correct

Incorrect
Question 656 of 806

656. Question

Under the Dwelling Policy Program, which of the following would be classified as part of the “dwelling”?
I Building Materials used to repair the dwelling
II Appurtenant
III Personal property of the insured
IV Equipment used to maintain the dwelling

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

I and IV
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 657 of 806

657. Question

Which of the following DP Forms would be called the Broad Form?

DP-3
Correct Incorrect Correct answer

DP-4
Correct Incorrect Correct answer

2
Correct Incorrect Correct answer

1
Correct Incorrect Correct answer

Correct

Incorrect
Question 658 of 806

658. Question

Which of the following DP Forms would give you All Risk coverage on the contents?

DP-2
Correct Incorrect Correct answer

DP-3
Correct Incorrect Correct answer

DP-4
Correct Incorrect Correct answer

It is not available
Correct Incorrect Correct answer

Correct

Incorrect
Question 659 of 806

659. Question

Which of the following DP forms would give you All Risk coverage on the dwelling?

DP-1
Correct Incorrect Correct answer

DP-2
Correct Incorrect Correct answer

DP-3
Correct Incorrect Correct answer

It is not available.
Correct Incorrect Correct answer

Correct

Incorrect
Question 660 of 806

660. Question

Maxwell Smart owns a Broad Named Peril policy that covers his house for losses caused by falling objects. The fair market value of the house is $60,000 and the replacement cost is $40,000. It is insured for $40,000 and there is a flat $500 deductible. If the house suffers a $30,000 loss as a result of a falling meteor, Maxwell should collect

40000
Correct Incorrect Correct answer

30000
Correct Incorrect Correct answer

29500
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 661 of 806

661. Question

An insured buys a house for $52,000. It is estimated that if the house were totally destroyed, it would cost approximately $47,000 to rebuild) because of the condition and age, the depreciated value is $39,000. The replacement cost of the house is

52000
Correct Incorrect Correct answer

47000
Correct Incorrect Correct answer

41000
Correct Incorrect Correct answer

39000
Correct Incorrect Correct answer

Correct

Incorrect
Question 662 of 806

662. Question

When determining the amount required to be coinsured, the second part of the formula in arriving at the claim payment of a dwelling policy is:

ACV x Coinsurance I = Claim, Payment
Correct Incorrect Correct answer

Amount carried divided by amount required x Loss = Claim, Payment
Correct Incorrect Correct answer

Amount carried divided by total insurance coverage x Loss = Claim, Payment
Correct Incorrect Correct answer

Amount carried x Amount required = Claim, Payment
Correct Incorrect Correct answer

Correct

Incorrect
Question 663 of 806

663. Question

Bill Jones has insured his house under a Dwelling-Building and Contents Broad Form for $24,000. A windstorm causes $4,000 damage to the building. Replacement cost of the dwelling is $30,000. The insurer will pay?

The actual cash value of the loss.
Correct Incorrect Correct answer

4000
Correct Incorrect Correct answer

Nothing, since windstorm is not a covered peril.
Correct Incorrect Correct answer

The full $5,000, less any deductible amount applicable.
Correct Incorrect Correct answer

Correct

Incorrect
Question 664 of 806

664. Question

You recently had a brand new detached garage built next to your home for $9,000. You have an HO-3 policy with $100,000 coverage on the dwelling, but you’ve never had a garage before. In order to have the garage covered; you should do which of the following?

Upgrade to an HO-5.
Correct Incorrect Correct answer

Buy a separate commercial policy for the garage.
Correct Incorrect Correct answer

Keep the HO-3 and add a garage endorsement.
Correct Incorrect Correct answer

Do nothing.
Correct Incorrect Correct answer

Correct

Incorrect
Question 665 of 806

665. Question

Which of the following is excluded from an unendorsed HO-2?

Fire
Correct Incorrect Correct answer

Earthquake
Correct Incorrect Correct answer

Weight of ice, snow and sleet
Correct Incorrect Correct answer

Falling objects
Correct Incorrect Correct answer

Correct

Incorrect
Question 666 of 806

666. Question

You upgrade your insured from an HO-1 to an HO-3. How has that changed the liability coverage?

From Named Peril to All Risk
Correct Incorrect Correct answer

From ACV to Replacement Cost
Correct Incorrect Correct answer

From a per person to a per occurrence basis
Correct Incorrect Correct answer

Not at all
Correct Incorrect Correct answer

Correct

Incorrect
Question 667 of 806

667. Question

All of the coverages are part of Section I of the Homeowners policy EXCEPT

Appurtenant Structures.
Correct Incorrect Correct answer

Medical Payments to Others
Correct Incorrect Correct answer

Dwelling
Correct Incorrect Correct answer

Loss of Use
Correct Incorrect Correct answer

Correct

Incorrect
Question 668 of 806

668. Question

All of the following are true concerning the Medical Payments to Others coverage EXCEPT it

pays on a per person per occurrence basis.
Correct Incorrect Correct answer

is part of Section II of the Homeowners policy.
Correct Incorrect Correct answer

has a standard limit of $1000.
Correct Incorrect Correct answer

pays to the family members of the named insured.
Correct Incorrect Correct answer

Correct

Incorrect
Question 669 of 806

669. Question

Your house has a replacement cost of $100,000. In order to have replacement cost coverage on the dwelling, your Homeowners policy must be written with a face amount equal to or greater than which of the following?

50000
Correct Incorrect Correct answer

80000
Correct Incorrect Correct answer

90000
Correct Incorrect Correct answer

100000
Correct Incorrect Correct answer

Correct

Incorrect
Question 670 of 806

670. Question

You are a tenant with an HO-4 policy. You have $20,000 worth of coverage on your personal property. How much coverage do you have for Loss of Use?

6000
Correct Incorrect Correct answer

20% of Coverage A
Correct Incorrect Correct answer

4000
Correct Incorrect Correct answer

There is no Loss of Use coverage with an HO-4.
Correct Incorrect Correct answer

Correct

Incorrect
Question 671 of 806

671. Question

All of the following are true regarding Medical Payments to Others coverage EXCEPT

It pays on a per person per occurrence basis.
Correct Incorrect Correct answer

Negligence does not have to be established
Correct Incorrect Correct answer

It covers medical expenses incurred within 4 years of an accident.
Correct Incorrect Correct answer

The basic limit is $1000.
Correct Incorrect Correct answer

Correct

Incorrect
Question 672 of 806

672. Question

Which of the following is true concerning the Homeowners policy coverage for your 200 horsepower motorboat?

There is no property or liability coverage.
Correct Incorrect Correct answer

There is $1,500 property coverage and no liability coverage.
Correct Incorrect Correct answer

There is $1000 property coverage and no liability coverage.
Correct Incorrect Correct answer

There is no property coverage and limited liability coverage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 673 of 806

673. Question

The homeowner’s policy excludes which of the following types of personal property?

Animals, birds and fish
Correct Incorrect Correct answer

Motorized vehicles and aircraft
Correct Incorrect Correct answer

Hovercrafts
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 674 of 806

674. Question

Which of the following types of personal property has a special limit of liability for theft losses only?

Watercraft
Correct Incorrect Correct answer

Money and related property
Correct Incorrect Correct answer

Silverware, gold ware and pewter ware
Correct Incorrect Correct answer

Property on the residence premises used for business purposes
Correct Incorrect Correct answer

Correct

Incorrect
Question 675 of 806

675. Question

The special limit of liability for securities, manuscripts and other valuable paper property is

1000
Correct Incorrect Correct answer

1500
Correct Incorrect Correct answer

2500
Correct Incorrect Correct answer

There is no special limit of liability
Correct Incorrect Correct answer

Correct

Incorrect
Question 676 of 806

676. Question

Which of the following has a special limit of liability?

An insureds rifle that suffers loss due to a fire at the insureds residence
Correct Incorrect Correct answer

The dwelling where the insureds resides
Correct Incorrect Correct answer

Gold ware that was stolen from the insureds dwelling
Correct Incorrect Correct answer

Property of Boarders
Correct Incorrect Correct answer

Correct

Incorrect
Question 677 of 806

677. Question

Which form would be best suited for a person who owns a condominium?

HO-2
Correct Incorrect Correct answer

HO-3
Correct Incorrect Correct answer

HO-4
Correct Incorrect Correct answer

HO-6
Correct Incorrect Correct answer

Correct

Incorrect
Question 678 of 806

678. Question

The HO-8 provides

Open peril coverage on the dwelling and other structures
Correct Incorrect Correct answer

Basic name peril coverage on Coverage A, B and C
Correct Incorrect Correct answer

Broad name peril coverage
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 679 of 806

679. Question

If the insured carries less than 80% of the replacement cost on the dwelling, he or she will be paid

Replacement cost
Correct Incorrect Correct answer

The lesser of the actual cash value or the proportional replacement cost
Correct Incorrect Correct answer

The actual cash value or the proportional replacement cost, whichever is larger
Correct Incorrect Correct answer

Actual cash value only
Correct Incorrect Correct answer

Correct

Incorrect
Question 680 of 806

680. Question

Which of the following is/are true concerning Section II of the homeowners policy?
I Coverage E covers damages that the insured becomes legally obligated to pay because of bodily injury and property damage
II Coverage F pays all necessary medical expenses, to someone other than the insured, with no requirement of legally liability.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I or II
Correct Incorrect Correct answer

Correct

Incorrect
Question 681 of 806

681. Question

Expenses incurred in defending a liability suit covered under Section II of the homeowners policy:

Are not payable if the suit is false or groundless.
Correct Incorrect Correct answer

Are not covered, but may be added to the policy by endorsement.
Correct Incorrect Correct answer

Are payable in addition to the limit of liability stated in the policy.
Correct Incorrect Correct answer

Are not payable under the policy.
Correct Incorrect Correct answer

Correct

Incorrect
Question 682 of 806

682. Question

Jess Smith has a standard homeowners form (HO-2) with $40,000 coverage on the dwelling. He has a major fire loss that causes him to incur additional living expenses of $12,000. His insurance company would pay:

4000
Correct Incorrect Correct answer

8000
Correct Incorrect Correct answer

12000
Correct Incorrect Correct answer

9600
Correct Incorrect Correct answer

Correct

Incorrect
Question 683 of 806

683. Question

Your neighbor’s son is severely injured while playing at your home. You feel morally obligated, but in a suit for $100,000, the jury renders an opinion that they agree the injury is severe, but you are not legally liable for the damages. Under the liability coverage of your homeowners policy, the insurance company would:

Deny any payment whatsoever.
Correct Incorrect Correct answer

Pay the $100,000 damages.
Correct Incorrect Correct answer

Only pay the legal cost of defending you.
Correct Incorrect Correct answer

Pay both your legal cost and damages at a comprised settlement because of your feeling of a moral obligation.
Correct Incorrect Correct answer

Correct

Incorrect
Question 684 of 806

684. Question

An insured has purchased insurance on a building with a replacement cost of $100,000. The coverage purchased is $40,000 and is written on a replacement cost basis, subject to an 80% coinsurance clause. There is a $40,000 loss. The company would pay:

40000
Correct Incorrect Correct answer

16000
Correct Incorrect Correct answer

20000
Correct Incorrect Correct answer

Nothing, since he did not meet the coinsurance requirements of the policy
Correct Incorrect Correct answer

Correct

Incorrect
Question 685 of 806

685. Question

Which of the following would be considered a “Named Insured” under a Personal Auto policy?
I The person listed on the Declarations
II That person’s spouse if living at the same address
III That person’s 18-year-old son is a licensed driver

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 686 of 806

686. Question

All of the following would be considered a “relative” under the Personal Auto Policy EXCEPT

your son living at home.
Correct Incorrect Correct answer

your daughter away at college.
Correct Incorrect Correct answer

a foster child living in your home.
Correct Incorrect Correct answer

your mom living in her own house.
Correct Incorrect Correct answer

Correct

Incorrect
Question 687 of 806

687. Question

The liability coverage of a Personal Auto policy can apply to which of the following?
I You or your family members using your auto.
II Your or your family members using someone else’s auto.
III Any person using your auto with reasonable belief that he had your permission to do so.

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 688 of 806

688. Question

Assume that you have auto liability limits of 25/50/10, and that you are responsible for an accident that causes bodily injury to three people in the amount of $30,000, $15,000 and $9,000. Further, assume that you damage a forth person’s property in the amount of $9,000. Which of the following amounts would your company pay?

58000
Correct Incorrect Correct answer

59000
Correct Incorrect Correct answer

60000
Correct Incorrect Correct answer

67000
Correct Incorrect Correct answer

Correct

Incorrect
Question 689 of 806

689. Question

Assume that Ralph is driving Ed’s car and causes an accident. If each has a Personal Auto policy, how would the claim be paid?
I Ed’s policy would be primary
II Ralph’s policy would be excess.
III Each policy would pay pro rata

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

III only
Correct Incorrect Correct answer

I and II
Correct Incorrect Correct answer

Correct

Incorrect
Question 690 of 806

690. Question

Which of the following is true concerning the Medical Payments coverage of a Personal Auto policy
I It provides medical expense coverage for you and those in your car.
II It pays regardless of fault.
III It can cover medical expenses incurred within three years of an accident.

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 691 of 806

691. Question

Assume that you lived in a state in which the minimum limits of liability are 25/50/10. Which of the following would be considered an “uninsured motorist?”
I A driver with no insurance
II A driver with insurance limits of 15/25/5
III A driver with limits of 25/50/10 issued by a bankrupt company.

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 692 of 806

692. Question

Assume that you live in a state in which the minimum limits of liability are 25/50/10. Assume that a negligent driver hits you as you walk across a parking lot. If you suffer $150,000 bodily injury loss, which of the following would be considered underinsured motorist?”

A driver with no insurance.
Correct Incorrect Correct answer

A driver with limits of 15/25/5.
Correct Incorrect Correct answer

A driver with limits of 25/50/10.
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 693 of 806

693. Question

Damage to your personal auto is known as which of the following?

Property damage
Correct Incorrect Correct answer

Physical damage
Correct Incorrect Correct answer

Personal damage
Correct Incorrect Correct answer

None of the aforementioned.
Correct Incorrect Correct answer

Correct

Incorrect
Question 694 of 806

694. Question

Which of the following is not considered a collision?

Your car smashes into another car.
Correct Incorrect Correct answer

Your car smashes into a parked car.
Correct Incorrect Correct answer

Your car smashes into a tree.
Correct Incorrect Correct answer

Your car smashes into a deer
Correct Incorrect Correct answer

Correct

Incorrect
Question 695 of 806

695. Question

Vehicles are usually driven in more than one state, and the PAP provides for such situations. Which provision addresses this issue?

Financial Responsibility Provision
Correct Incorrect Correct answer

Limit of Liability Provision
Correct Incorrect Correct answer

Other Insurance Provision
Correct Incorrect Correct answer

Out of State Coverage Provision
Correct Incorrect Correct answer

Correct

Incorrect
Question 696 of 806

696. Question

An insured has a Personal Automobile Policy (PAP) providing bodily injury and property damage liability. He runs through the rear wall of a garage in the dwelling he rents. Coverage would be afforded for:

Damage to the wall.
Correct Incorrect Correct answer

Bodily injury to the driver.
Correct Incorrect Correct answer

Damage to the insured's car.
Correct Incorrect Correct answer

None of the loss.
Correct Incorrect Correct answer

Correct

Incorrect
Question 697 of 806

697. Question

Under a Personal Automobile Policy, which of the following persons is not an insured?

The named insured and spouse, if spouse is a member of the same house.
Correct Incorrect Correct answer

A visitor who takes and uses the car without permission of the named insured
Correct Incorrect Correct answer

Residents of the same household
Correct Incorrect Correct answer

Any other person using the owned automobile with the permission of the named insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 698 of 806

698. Question

A man purchases $25,000/$50,000/$10,000 limits of bodily injury and property damage liability insurance on his auto. He has an accident wherein he is injured and has medical bills in the amount of $50,000. His passenger is killed and the passenger’s estate has a legal judgment rendered against the insured for $50,000. The owned automobile is damaged to the extent of $8,000, a parked vehicle whose owner carried Kentucky no-fault coverage is damaged to the extent of $7,000. Payment by the insurance company under bodily injury and property damage liability coverage excluding personal injury protection would be:

$32,000 plus defense costs.
Correct Incorrect Correct answer

$60,000 plus defense costs.
Correct Incorrect Correct answer

$28,000 plus defense costs
Correct Incorrect Correct answer

$25,000 plus defense costs
Correct Incorrect Correct answer

Correct

Incorrect
Question 699 of 806

699. Question

Mr. Jones borrows Mr. Smith’s car for a personal errand Mr. Jones is involved in an accident. Each has a personal automobile policy on his respective vehicle. Which of the following statements is correct?

Mr. Jones' insurance is primary.
Correct Incorrect Correct answer

The coverage held by both Jones and Smith would pay their pro-rata share of the loss.
Correct Incorrect Correct answer

Smith's insurance would be primary.
Correct Incorrect Correct answer

Neither policy would pay, since Smith or a member of his family was not driving.
Correct Incorrect Correct answer

Correct

Incorrect
Question 700 of 806

700. Question

The Personal Automobile Policy would provide coverage under the liability section in all of the following situations, EXCEPT:

The named insured borrows a motor home for a vacation.
Correct Incorrect Correct answer

A non-resident is operating the owned automobile with permission of the named insured
Correct Incorrect Correct answer

The named insured borrows a truck to move his furniture.
Correct Incorrect Correct answer

The named insured is driving in Mexico.
Correct Incorrect Correct answer

Correct

Incorrect
Question 701 of 806

701. Question

Which of the following is/are eligible for flood coverage?
I Residential dwellings
II Commercial buildings
III Contents of insured buildings

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 702 of 806

702. Question

In a regular Flood policy, which of the following is the standard deductible?

100
Correct Incorrect Correct answer

250
Correct Incorrect Correct answer

500
Correct Incorrect Correct answer

1000
Correct Incorrect Correct answer

Correct

Incorrect
Question 703 of 806

703. Question

A flood policy goes into effect at which of the following times?

When the agent binds the coverage.
Correct Incorrect Correct answer

Upon the date of application.
Correct Incorrect Correct answer

Thirty days after the date of application.
Correct Incorrect Correct answer

Ten days after the date of application.
Correct Incorrect Correct answer

Correct

Incorrect
Question 704 of 806

704. Question

Which statement best describes the FAIR plan?

Cannot be used for property that is located in environmentally hazardous areas.
Correct Incorrect Correct answer

Not sold in Kentucky or Indiana.
Correct Incorrect Correct answer

Used when an insured cannot get property insurance in the open market.
Correct Incorrect Correct answer

FAIR stands for Fair Access to Insurance Rates.
Correct Incorrect Correct answer

Correct

Incorrect
Question 705 of 806

705. Question

Which Personal Inland Marine form would best cover property while on vacation in Florida?

Personal Articles Form
Correct Incorrect Correct answer

Personal Property Form
Correct Incorrect Correct answer

Personal Effects Form
Correct Incorrect Correct answer

None of them would provide coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 706 of 806

706. Question

Which Personal Inland Marine form provides open peril coverage on a blanket basis for most kinds of personal property found in a typical home?

Personal Articles Form
Correct Incorrect Correct answer

Personal Property Form
Correct Incorrect Correct answer

Personal Effects Form
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 707 of 806

707. Question

Which Personal Inland Marine form covers the same type of property as the Scheduled Personal property endorsement?

Personal Articles Form
Correct Incorrect Correct answer

Personal Property Form
Correct Incorrect Correct answer

Personal Effects Form
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 708 of 806

708. Question

The insured is liable for $135,000 in bodily injury loss to his neighbor. The insured homeowners policy has a limit of $100,000 per occurrence and an Umbrella liability policy with limits of $1,000,000 and a $3,000 retention limit. The homeowner’s policy excludes the loss but the umbrella policy covers the loss. How much will the Umbrella policy pay for this loss

32000
Correct Incorrect Correct answer

100000
Correct Incorrect Correct answer

132000
Correct Incorrect Correct answer

135000
Correct Incorrect Correct answer

Correct

Incorrect
Question 709 of 806

709. Question

Which of the following is/are correct about the Flood insurance policy?
I The Emergency program provides a $35,000 limit on buildings and a $10,000 limit to cover contents.
II The Regular program provides a $250,000 limit on buildings and a $100,000 limit to cover contents.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I or II
Correct Incorrect Correct answer

Correct

Incorrect
Question 710 of 806

710. Question

Under the FAIR Plan the insurance company will

reject all risks due to environmental hazards that are beyond the insured's control.
Correct Incorrect Correct answer

absorb all of the losses to covered property
Correct Incorrect Correct answer

not have the right to inspect the property
Correct Incorrect Correct answer

not be able to reject risks due to environmental hazards that are beyond the insured's control
Correct Incorrect Correct answer

Correct

Incorrect
Question 711 of 806

711. Question

Which of the following is not excluded under the personal inland marine floater?

Loss caused by wear and tear.
Correct Incorrect Correct answer

Loss from theft with evidence of forcible entry.
Correct Incorrect Correct answer

Damage caused by negligence, vermin or inherent vice.
Correct Incorrect Correct answer

Damage caused by gradual deterioration.
Correct Incorrect Correct answer

Correct

Incorrect
Question 712 of 806

712. Question

Which of the following is true concerning the coverage provided by a Personal Articles floater?
I The coverage territory is worldwide.
II The coverage is All Risk.
III The exclusions are few

I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 713 of 806

713. Question

The Common Policy Declarations of a Commercial Package Policy do all of the following EXCEPT

Identify the Named Insured
Correct Incorrect Correct answer

Indicate the coverage modules utilized
Correct Incorrect Correct answer

State the premium for the entire package policy
Correct Incorrect Correct answer

Specify the property coverage, its construction and its usage.
Correct Incorrect Correct answer

Correct

Incorrect
Question 714 of 806

714. Question

There must be at least how many coverage parts in a Commercial Package Policy?

One
Correct Incorrect Correct answer

Two
Correct Incorrect Correct answer

Three
Correct Incorrect Correct answer

Four
Correct Incorrect Correct answer

Correct

Incorrect
Question 715 of 806

715. Question

The key insured in the Commercial Package Policy is which of the following?

The Named Insured
Correct Incorrect Correct answer

The First Named Insured
Correct Incorrect Correct answer

The Primary Insured
Correct Incorrect Correct answer

The Principal Insured
Correct Incorrect Correct answer

Correct

Incorrect
Question 716 of 806

716. Question

Which of the following is/are true concerning the refund of premium for a Commercial Package Policy?
I If the insurance company cancels the policy, the premium is refunded on a short rate basis.
II If the First Named Insured cancels the policy, the refund will be on a less than pro rata basis.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Both I and II
Correct Incorrect Correct answer

Neither I nor II
Correct Incorrect Correct answer

Correct

Incorrect
Question 717 of 806

717. Question

In the event of a claim under a Commercial Package Policy, the insurance company has the right to audit the insured’s books and records for the current year and up to how many years thereafter?

One
Correct Incorrect Correct answer

Two
Correct Incorrect Correct answer

Three
Correct Incorrect Correct answer

Four
Correct Incorrect Correct answer

Correct

Incorrect
Question 718 of 806

718. Question

The CPP requires that if a business is sold, the Commercial Package Policy may be transferred to the new owner only with the permission of which of the following?

The current First Named Insured
Correct Incorrect Correct answer

The proposed First Named Insured
Correct Incorrect Correct answer

The insurance company
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 719 of 806

719. Question

All of the following are eligible coverages under the CPP EXCEPT.

Aviation
Correct Incorrect Correct answer

Ocean Marine
Correct Incorrect Correct answer

Commercial Property
Correct Incorrect Correct answer

Both A & B
Correct Incorrect Correct answer

Correct

Incorrect
Question 720 of 806

720. Question

If the named insured cancels a CPP, unearned premium will be refunded on what basis?

Pro Rata
Correct Incorrect Correct answer

Something less than the Pro Rata
Correct Incorrect Correct answer

There will not be any refund
Correct Incorrect Correct answer

50% of the first 6 months' premium
Correct Incorrect Correct answer

Correct

Incorrect
Question 721 of 806

721. Question

Which of the following statements is FALSE concerning the Commercial Package Policy?

It is more flexible than the Businessowners Package (BOP)
Correct Incorrect Correct answer

It can be used for Farm operations
Correct Incorrect Correct answer

It can be used for Ocean Marine and Aviation
Correct Incorrect Correct answer

It can be used for Crime coverage
Correct Incorrect Correct answer

Correct

Incorrect
Question 722 of 806

722. Question

The Commercial Package Policy allows which of the following coverages to be included?

Employment Practices and Liability
Correct Incorrect Correct answer

Commercial Inland Marine
Correct Incorrect Correct answer

Boiler and Machinery
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 723 of 806

723. Question

Which part of the Commercial Package Policy describes how coverage can be cancelled?

Common Policy Declarations
Correct Incorrect Correct answer

Common Policy Conditions
Correct Incorrect Correct answer

Property Form
Correct Incorrect Correct answer

Under an Endorsement
Correct Incorrect Correct answer

Correct

Incorrect
Question 724 of 806

724. Question

What are the rules for cancellation of a Commercial Package Policy?

Only the first named insured may cancel.
Correct Incorrect Correct answer

Any of the business owners as long as they are listed as insureds.
Correct Incorrect Correct answer

At death of the first named insured, policy automatically cancels.
Correct Incorrect Correct answer

The insurance company may cancel at any time for any reason.
Correct Incorrect Correct answer

Correct

Incorrect
Question 725 of 806

725. Question

The Common Policy Conditions applies to which part of the Commercial Package Policy?

The Commercial Property part.
Correct Incorrect Correct answer

Only describes rules for policy changes and premium.
Correct Incorrect Correct answer

Applies only to Rules for Transfer of Rights and Duties in the CPP.
Correct Incorrect Correct answer

Applies to all coverage parts in the CPP
Correct Incorrect Correct answer

Correct

Incorrect
Question 726 of 806

726. Question

The Businessowner’s Property Form covers Preservation of Property for how long after it is first moved?

15 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

60 days
Correct Incorrect Correct answer

90 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 727 of 806

727. Question

A Businessowner’s Policy is:

Part of a commercial package policy
Correct Incorrect Correct answer

A monoline policy
Correct Incorrect Correct answer

A self-contained complete package policy
Correct Incorrect Correct answer

A special policy designed for large and small retail operations
Correct Incorrect Correct answer

Correct

Incorrect
Question 728 of 806

728. Question

Under the additional coverages of a Businessowners Policy, property removed to protect it from loss will be covered at another location for:

1 week
Correct Incorrect Correct answer

10 days
Correct Incorrect Correct answer

15 days
Correct Incorrect Correct answer

30 days
Correct Incorrect Correct answer

Correct

Incorrect
Question 729 of 806

729. Question

The Businessowner’s Policy liability coverage section excludes all of the following coverages EXCEPT:

Work related injuries
Correct Incorrect Correct answer

Most pollution losses
Correct Incorrect Correct answer

Alcoholic beverage business
Correct Incorrect Correct answer

Liability assumed under an insured contract
Correct Incorrect Correct answer

Correct

Incorrect
Question 730 of 806

730. Question

If no other insurance applies, the following items are covered under the building coverage portion of the Businessowners Policy EXCEPT

Additions under construction
Correct Incorrect Correct answer

Alterations and repairs to the building or structure
Correct Incorrect Correct answer

Materials within 100 feet of the premise used for additions, alterations or repairs
Correct Incorrect Correct answer

All of the above are covered
Correct Incorrect Correct answer

Correct

Incorrect
Question 731 of 806

731. Question

All of the following are Optional Coverages available under the Businessowners Policy EXCEPT

Employee Dishonesty
Correct Incorrect Correct answer

Mechanical Breakdown
Correct Incorrect Correct answer

Money and Securities
Correct Incorrect Correct answer

Building and Business Personal Property
Correct Incorrect Correct answer

Correct

Incorrect
Question 732 of 806

732. Question

All of the following are covered by the Liability form of the Businessowners Policy EXCEPT

Personal Injury
Correct Incorrect Correct answer

Bodily Injury
Correct Incorrect Correct answer

Professional Liability
Correct Incorrect Correct answer

Advertising Injury
Correct Incorrect Correct answer

Correct

Incorrect
Question 733 of 806

733. Question

Under the Commercial Property policy, an insured may bring legal action against the insurance company within

6 months.
Correct Incorrect Correct answer

12 months.
Correct Incorrect Correct answer

2 years.
Correct Incorrect Correct answer

3 years.
Correct Incorrect Correct answer

Correct

Incorrect
Question 734 of 806

734. Question

Under the Building and Personal property coverage form, all of the following would be considered as part of the building EXCEPT

completed additions to the building.
Correct Incorrect Correct answer

materials used to repair the building that is within 100 feet of the building.
Correct Incorrect Correct answer

fire extinguishing equipment in the building.
Correct Incorrect Correct answer

a tenant's equipment which is bolted to the floor of the building.
Correct Incorrect Correct answer

Correct

Incorrect
Question 735 of 806

735. Question

Which of the following types of property would not be excluded from coverage under a Commercial Property policy?

Contraband
Correct Incorrect Correct answer

The foundations of the building
Correct Incorrect Correct answer

Animals that are for sale to the public
Correct Incorrect Correct answer

IOUs, cash and currency
Correct Incorrect Correct answer

Correct

Incorrect
Question 736 of 806

736. Question

Under the Commercial Property policy, which of the following coverages is not a policy addition or extension?

Debris removal
Correct Incorrect Correct answer

Fire department service charges
Correct Incorrect Correct answer

Automobile liability
Correct Incorrect Correct answer

Newly acquired property
Correct Incorrect Correct answer

Correct

Incorrect
Question 737 of 806

737. Question

Under the Commercial Property policy, the maximum value that the insurance company will pay for any one tree, shrub, or plant is

1000
Correct Incorrect Correct answer

500
Correct Incorrect Correct answer

250
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 738 of 806

738. Question

Assume that a retail store is insured under a Commercial Property policy for its full replacement cost of $100,000. Further, assume that the store is totally destroyed by fire. There was a $2,000 fire department service charge. The Commercial Property policy would pay the owner of the store

100000
Correct Incorrect Correct answer

101000
Correct Incorrect Correct answer

102000
Correct Incorrect Correct answer

112000
Correct Incorrect Correct answer

Correct

Incorrect
Question 739 of 806

739. Question

Under the Commercial Property policy, which of the following is not an optional coverage?

Agreed Value
Correct Incorrect Correct answer

Replacement Cost
Correct Incorrect Correct answer

Inflation Guard
Correct Incorrect Correct answer

Fair Market Value
Correct Incorrect Correct answer

Correct

Incorrect
Question 740 of 806

740. Question

Which of the following perils would NOT be covered under the Basic Cause of Loss form?

Earthquake
Correct Incorrect Correct answer

Sprinkler Leakage
Correct Incorrect Correct answer

Vandalism
Correct Incorrect Correct answer

Sinkhole Collapse
Correct Incorrect Correct answer

Correct

Incorrect
Question 741 of 806

741. Question

Which of the following is NOT an exclusion under the Basic Cause of Loss Form?

Volcanic Action
Correct Incorrect Correct answer

Nuclear Hazards
Correct Incorrect Correct answer

Military Action
Correct Incorrect Correct answer

Flood and Water Damage caused by "natural" water
Correct Incorrect Correct answer

Correct

Incorrect
Question 742 of 806

742. Question

Which of the following perils is covered under the Broad form Causes of Loss but is not covered under the Basic form?

Weight of Ice, Snow and Sleet
Correct Incorrect Correct answer

Sprinkler Leakage
Correct Incorrect Correct answer

Aircraft or Vehicles
Correct Incorrect Correct answer

Riot or Civil Commotion
Correct Incorrect Correct answer

Correct

Incorrect
Question 743 of 806

743. Question

Under the Business Income coverage form, the definition of “business income” is

Gross income plus expenses
Correct Incorrect Correct answer

Net income plus continuing normal operating expenses, including payroll
Correct Incorrect Correct answer

Gross sales less cost of goods sold)
Correct Incorrect Correct answer

None of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 744 of 806

744. Question

Under the Property Form of the C.P.P., the vacancy condition will not pay for loss as a result due to vandalism, water damage, theft or attempted theft. What is the number of days the property must be vacant before this takes effect?

30 to 60 days
Correct Incorrect Correct answer

75 days
Correct Incorrect Correct answer

45 days
Correct Incorrect Correct answer

60 consecutive days
Correct Incorrect Correct answer

Correct

Incorrect
Question 745 of 806

745. Question

Business Income Coverage Forms pay for loss of income that the insured sustains due to a direct physical loss from a peril insured against. This is sometimes called?

Income Loss Form
Correct Incorrect Correct answer

Time Element Coverage
Correct Incorrect Correct answer

Loss Payment Form
Correct Incorrect Correct answer

Tough Luck Form
Correct Incorrect Correct answer

Correct

Incorrect
Question 746 of 806

746. Question

Under the Commercial Property form, all Earthquake shocks or volcanic eruptions that occur within a specified time period constitute a single earthquake or volcanic eruption. The time period specified is

24 hours
Correct Incorrect Correct answer

One year
Correct Incorrect Correct answer

72 hours
Correct Incorrect Correct answer

168 hours
Correct Incorrect Correct answer

Correct

Incorrect
Question 747 of 806

747. Question

The Commercial Property Increased Cost of Construction additional coverage covers the additional costs required to comply with which of the following:

Building codes when a building is damaged by a covered cause of loss
Correct Incorrect Correct answer

Pollutant Cleanup and Removal costs
Correct Incorrect Correct answer

Costs associated with newly acquired or constructed property
Correct Incorrect Correct answer

None of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 748 of 806

748. Question

The Commercial Property Increased Cost of Construction additional coverage is only available for buildings insured on which of the following value bases?

Fair Market Value
Correct Incorrect Correct answer

Agreed Value
Correct Incorrect Correct answer

Replacement Cost
Correct Incorrect Correct answer

Actual Cash Value
Correct Incorrect Correct answer

Correct

Incorrect
Question 749 of 806

749. Question

Under the Builders Risk coverage form, coverage is written for one year, but ceases, whenever which of the following occur?

90 days have elapsed since construction was completed
Correct Incorrect Correct answer

The building is occupied or put to its intended use
Correct Incorrect Correct answer

The insured's interest in the property ceases
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 750 of 806

750. Question

The Business Income coverage forms pay for loss of income that forces the insured to suspend operations during the period of restoration. “Suspension” is defined as which of the following?

The costs of continuing normal operations, including payroll
Correct Incorrect Correct answer

The time period beginning on the date of loss and ending on the date on which the property can be repaired, rebuilt, or replaced with reasonable speed
Correct Incorrect Correct answer

Loss of business .income over a period of time that results from direct physical loss
Correct Incorrect Correct answer

A slowdown or cessation of the insured's business activities
Correct Incorrect Correct answer

Correct

Incorrect
Question 751 of 806

751. Question

Inland Marine policies traditionally cover which of the following types of property?

Ships
Correct Incorrect Correct answer

Buildings
Correct Incorrect Correct answer

Factory contents
Correct Incorrect Correct answer

Property in transit
Correct Incorrect Correct answer

Correct

Incorrect
Question 752 of 806

752. Question

Which of the following is/are included in the 6 categories of marine insurance?

Imports
Correct Incorrect Correct answer

Exports
Correct Incorrect Correct answer

Domestic shipments
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 753 of 806

753. Question

Which of the following would be an Ocean Marine risk?

A boat transporting goods down the Ohio River.
Correct Incorrect Correct answer

A plane transporting goods across the Pacific Ocean.
Correct Incorrect Correct answer

A truck transporting goods across the San Francisco Bridge.
Correct Incorrect Correct answer

All of the above.
Correct Incorrect Correct answer

Correct

Incorrect
Question 754 of 806

754. Question

A distinguishing characteristic between Commercial Inland Marine filed and non-filed forms is which of the following?

Only filed forms can be included in the CPP
Correct Incorrect Correct answer

Only non-filed forms can be included in the CPP
Correct Incorrect Correct answer

There is no distinguishing characteristic
Correct Incorrect Correct answer

None of the above represents a distinguishing characteristic
Correct Incorrect Correct answer

Correct

Incorrect
Question 755 of 806

755. Question

Which of the following Commercial Inland Marine forms represents an exception to the general rule that loss to stationary property is not covered?

Instrumentalities of Transportation or Communication
Correct Incorrect Correct answer

Mail coverage form
Correct Incorrect Correct answer

Accounts Receivable coverage form
Correct Incorrect Correct answer

Jewelers Block coverage form
Correct Incorrect Correct answer

Correct

Incorrect
Question 756 of 806

756. Question

Mrs. Ervin owns part interest in a ship leased by Freight R Us. Which coverage would best protect her interest in the ship while it is in transit?

Hull
Correct Incorrect Correct answer

Jettison
Correct Incorrect Correct answer

Freight
Correct Incorrect Correct answer

Protection and Indemnity (P & I)
Correct Incorrect Correct answer

Correct

Incorrect
Question 757 of 806

757. Question

Freight insurance in Ocean Marine protects the insured against

the cargo aboard the ship while at sea.
Correct Incorrect Correct answer

the cargo aboard the ship from warehouse to warehouse.
Correct Incorrect Correct answer

loss of the shipping cost only.
Correct Incorrect Correct answer

open perils of the sea on all items defined in the policy as "freight".
Correct Incorrect Correct answer

Correct

Incorrect
Question 758 of 806

758. Question

All of the following are true of the Medical Payments coverage of the Commercial General Liability policy EXCEPT

coverage is triggered only if it is determined that the insured is legally obligated to pay.
Correct Incorrect Correct answer

the limits are fairly low.
Correct Incorrect Correct answer

the limits are expressed on a per person basis.
Correct Incorrect Correct answer

Medical Payments can be viewed as goodwill insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 759 of 806

759. Question

If you are the Insured, which of the following is covered by your CGL?

Your bodily injury
Correct Incorrect Correct answer

Your employees' bodily injury
Correct Incorrect Correct answer

Your property damage
Correct Incorrect Correct answer

None of the aforementioned.
Correct Incorrect Correct answer

Correct

Incorrect
Question 760 of 806

760. Question

You are a business owner with a Commercial General Liability policy. You are sued by a customer for bodily injury, property damage and lost wages. If a court determines that your customer’s suit is groundless, your CGL would pay for which of the following?

Bodily injury
Correct Incorrect Correct answer

Property damage
Correct Incorrect Correct answer

Lost wages
Correct Incorrect Correct answer

Defense costs
Correct Incorrect Correct answer

Correct

Incorrect
Question 761 of 806

761. Question

The Claims-Made policy may cover losses prior to the policy effective date. However, there may be a time before which the Claims-made policy will not cover a loss. What is that period of time called where losses will not be paid?

Any covered loss on or after the retroactive date.
Correct Incorrect Correct answer

Any loss prior to the retroactive date.
Correct Incorrect Correct answer

Any covered loss on or after the retroactive date and reported during the policy period
Correct Incorrect Correct answer

Any covered loss occurring after the retroactive date and reported during the policy period
Correct Incorrect Correct answer

Correct

Incorrect
Question 762 of 806

762. Question

Which of the following occurrences could create a gap in coverage for an insured with a Claims-Made policy?
I Changing companies
II Changing from a Claims-Made to an Occurrence form
III Stopping all coverage under any Claims-Made policy

I, II and III
Correct Incorrect Correct answer

I only
Correct Incorrect Correct answer

II and II only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

Correct

Incorrect
Question 763 of 806

763. Question

The Personal Injury and Advertising Injury coverages of the CGL could provide coverage for which of the following businesses?

CBS Television
Correct Incorrect Correct answer

WXRT Radio
Correct Incorrect Correct answer

Chicago Tribune
Correct Incorrect Correct answer

California Raisin Growers Association
Correct Incorrect Correct answer

Correct

Incorrect
Question 764 of 806

764. Question

The Supplementary Payments section of the CGL applies to which of the following coverages?
I Coverage A â€“ Bodily Injury and Property Damage
II Coverage B â€“ Personal and Advertising Injury
III Coverage C â€“ Medical Payments

I and II
Correct Incorrect Correct answer

I and III
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 765 of 806

765. Question

Which of the Extended Reporting periods extends the policy period of a CPP-CGL form?

BERP (60 day)
Correct Incorrect Correct answer

SERP
Correct Incorrect Correct answer

BERP (5 year)
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 766 of 806

766. Question

Which of the following exposures is NOT covered by a standard CGL?

Premises liability
Correct Incorrect Correct answer

Operations liability
Correct Incorrect Correct answer

Products liability
Correct Incorrect Correct answer

Professional liability
Correct Incorrect Correct answer

Correct

Incorrect
Question 767 of 806

767. Question

In a Claims-Made CGL form the insured can select one of the following retroactive dates EXCEPT

no retroactive date.
Correct Incorrect Correct answer

earlier date than the policy effective date.
Correct Incorrect Correct answer

any date later than the policy effective date.
Correct Incorrect Correct answer

same date as the policy effective date.
Correct Incorrect Correct answer

Correct

Incorrect
Question 768 of 806

768. Question

What must an agent be careful of when selling a new CGL policy?

Lost commission dollars
Correct Incorrect Correct answer

Renewal fees
Correct Incorrect Correct answer

Creating a gap in coverage
Correct Incorrect Correct answer

Violation of Rule 316:14 â€“ 76 of the (CPCU) code
Correct Incorrect Correct answer

Correct

Incorrect
Question 769 of 806

769. Question

To avoid gaps in coverage when selling a new CGL policy, which of the following methods can be used?

60 days E.RP.
Correct Incorrect Correct answer

5 year E.R.P.
Correct Incorrect Correct answer

S.E.R.P.
Correct Incorrect Correct answer

All of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 770 of 806

770. Question

Which of the following extended reporting periods is unlimited and must be added to the CGL within 60 days?

60 days B.E.R.P.
Correct Incorrect Correct answer

S.E.R.P.
Correct Incorrect Correct answer

5 year B.E.R.P.
Correct Incorrect Correct answer

Not available
Correct Incorrect Correct answer

Correct

Incorrect
Question 771 of 806

771. Question

Which of the following statements best describes what an aggregate limit is?

The amount the insured pays in any one policy period
Correct Incorrect Correct answer

The amount the insurer pays on any one claim.
Correct Incorrect Correct answer

The amount the insurer pays in any one policy period
Correct Incorrect Correct answer

Does not apply to insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 772 of 806

772. Question

A liability loss arising out of which of the following is covered under the Commercial General Liability (CGL) coverage part?

Premises and operations.
Correct Incorrect Correct answer

Fire-legal liability.
Correct Incorrect Correct answer

Products and completed operations.
Correct Incorrect Correct answer

All of the aforementioned.
Correct Incorrect Correct answer

Correct

Incorrect
Question 773 of 806

773. Question

The Personal Injury Liability coverage in the Commercial General Liability Policy would include:

Contractual coverage.
Correct Incorrect Correct answer

No-fault automobile coverage.
Correct Incorrect Correct answer

Libel, slander, defamation, or violation of the right of privacy.
Correct Incorrect Correct answer

Product liability.
Correct Incorrect Correct answer

Correct

Incorrect
Question 774 of 806

774. Question

Under the Commercial General Liability Policy which of the following are EXCLUDED for personal and advertising injury.

Oral or written publication of material that the insured knows is false but publishes anyway.
Correct Incorrect Correct answer

Violation of a penal statute.
Correct Incorrect Correct answer

Liability assumed under contract.
Correct Incorrect Correct answer

All of the above are excluded
Correct Incorrect Correct answer

Correct

Incorrect
Question 775 of 806

775. Question

Which of the following is/are exclusions under the personal and advertising injury liability coverage?

Publication of material the insured knows is false.
Correct Incorrect Correct answer

Breach of contract
Correct Incorrect Correct answer

Publishing incorrect price descriptions.
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 776 of 806

776. Question

Under the CGL Policy liability coverage section, fire legal liability is subject to

The "all other" aggregate limit
Correct Incorrect Correct answer

A per fire limit
Correct Incorrect Correct answer

An occurrence limit
Correct Incorrect Correct answer

The product-completed operation aggregate limit
Correct Incorrect Correct answer

Correct

Incorrect
Question 777 of 806

777. Question

A Business Auto policy would provide adequate coverage for which of the following businesses?

A car dealership
Correct Incorrect Correct answer

A parking garage
Correct Incorrect Correct answer

An automobile repair business
Correct Incorrect Correct answer

A business with 5 company cars
Correct Incorrect Correct answer

Correct

Incorrect
Question 778 of 806

778. Question

The Business Auto policy provides for all of the following EXCEPT

autos
Correct Incorrect Correct answer

trucks
Correct Incorrect Correct answer

mobile equipment
Correct Incorrect Correct answer

trailers
Correct Incorrect Correct answer

Correct

Incorrect
Question 779 of 806

779. Question

Which of the following coverages, of the Garage Coverage Form, covers the insureds liability for damage to property of others?

Garage Policy
Correct Incorrect Correct answer

Truckers Policy
Correct Incorrect Correct answer

Garagekeepers
Correct Incorrect Correct answer

Any of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 780 of 806

780. Question

Under Physical Damage coverage of the Business Auto Policy, which of the coverages offers losses on an all risk basis?

Special CAP-3
Correct Incorrect Correct answer

Comprehensive Physical Damage
Correct Incorrect Correct answer

Collision
Correct Incorrect Correct answer

Specified Cause of Loss
Correct Incorrect Correct answer

Correct

Incorrect
Question 781 of 806

781. Question

On the Business Auto Policy coverage extension, should your car be stolen, transportation expense begins

84 hours after the theft
Correct Incorrect Correct answer

72 hours after the theft
Correct Incorrect Correct answer

48 hours after the theft
Correct Incorrect Correct answer

24 hours after the theft
Correct Incorrect Correct answer

Correct

Incorrect
Question 782 of 806

782. Question

The Motor Carrier Act of 1980 requires trucking companies to certify that they are able to meet financial obligations if they become liable for injury or damage arising from their trucking operations. If insurance is used to establish proof of financial responsibility, which of the following endorsements must be attached?

Drive Other Car endorsement
Correct Incorrect Correct answer

Individual Named Insured endorsement
Correct Incorrect Correct answer

MCS-90 endorsement
Correct Incorrect Correct answer

Truckers coverage form endorsement
Correct Incorrect Correct answer

Correct

Incorrect
Question 783 of 806

783. Question

To protect his business properly, an employer who requests employees to use their own vehicles in the employer’s business should purchase:

Hired car insurance.
Correct Incorrect Correct answer

Named non-owner automobile liability insurance.
Correct Incorrect Correct answer

Employer's non-ownership automobile liability insurance.
Correct Incorrect Correct answer

Uninsured motorist insurance.
Correct Incorrect Correct answer

Correct

Incorrect
Question 784 of 806

784. Question

Which of the following is/are TRUE concerning fidelity bonds?
I The primary purpose of fidelity bonds is to provide protection from employee theft.
II Coverage on an individual employee automatically terminates when the employer becomes aware of any dishonest act by the employee.
III Fidelity bonds are two-party contracts between an employer and an employee.

I only
Correct Incorrect Correct answer

II only
Correct Incorrect Correct answer

I and II
Correct Incorrect Correct answer

I, II and III
Correct Incorrect Correct answer

Correct

Incorrect
Question 785 of 806

785. Question

A type of fidelity bond which covers all employees and whose limits are expressed on a per-employee basis is called a

Position schedule.
Correct Incorrect Correct answer

Named schedule.
Correct Incorrect Correct answer

Blanket position.
Correct Incorrect Correct answer

Commercial blanket.
Correct Incorrect Correct answer

Correct

Incorrect
Question 786 of 806

786. Question

Which of the following losses would be covered under a crime policy covering theft?

The forceful taking of property from a building, safe or vault.
Correct Incorrect Correct answer

The forceful taking of property from a person.
Correct Incorrect Correct answer

Any act of stealing.
Correct Incorrect Correct answer

All of the above.
Correct Incorrect Correct answer

Correct

Incorrect
Question 787 of 806

787. Question

A bad guy breaks in an office building after hours in order to steal office equipment. He successfully hides 5 mini-computers and himself in a large trash container that is removed from the building the next day by the maintenance people. Which of the following coverages would protect the owners of the property against this loss?

Burglary
Correct Incorrect Correct answer

Theft
Correct Incorrect Correct answer

Robbery
Correct Incorrect Correct answer

Removal
Correct Incorrect Correct answer

Correct

Incorrect
Question 788 of 806

788. Question

A person who has custody of property inside a store including the insured or any employee is defined as

Watchperson
Correct Incorrect Correct answer

Messenger
Correct Incorrect Correct answer

Custodian
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 789 of 806

789. Question

Don McClain works for the American Pie Company as Treasurer and is covered under a Fidelity Bond issued by ABC Insurance Company. Which statement is correct?

McClain is the Obligee
Correct Incorrect Correct answer

American Pie Company is the Surety
Correct Incorrect Correct answer

ABC Insurance Company is the Obligee
Correct Incorrect Correct answer

McClain is the Principal
Correct Incorrect Correct answer

Correct

Incorrect
Question 790 of 806

790. Question

Workers Compensation benefits are determined by which of the following?

Federal law
Correct Incorrect Correct answer

State law
Correct Incorrect Correct answer

Company discretion
Correct Incorrect Correct answer

None of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 791 of 806

791. Question

Workers Compensation is required in most states for which of the following?

All employees
Correct Incorrect Correct answer

Most employees
Correct Incorrect Correct answer

A few employees
Correct Incorrect Correct answer

No employees
Correct Incorrect Correct answer

Correct

Incorrect
Question 792 of 806

792. Question

Workers Compensation normally includes all of the following benefits EXCEPT

medical expenses.
Correct Incorrect Correct answer

retirement.
Correct Incorrect Correct answer

disability income.
Correct Incorrect Correct answer

death.
Correct Incorrect Correct answer

Correct

Incorrect
Question 793 of 806

793. Question

At one time a worker who was injured on the job had to sue the employer to collect for damages. Which of the following statements proved successful for the employer in not paying for those injuries?

Fellow Servant Rule
Correct Incorrect Correct answer

Contributory Negligence
Correct Incorrect Correct answer

Assumption of Risk
Correct Incorrect Correct answer

Any one of the aforementioned
Correct Incorrect Correct answer

Correct

Incorrect
Question 794 of 806

794. Question

Which of the losses would NOT be covered by Workers Compensation?

Loss of Income
Correct Incorrect Correct answer

Medical Expenses
Correct Incorrect Correct answer

Rehabilitation Expenses
Correct Incorrect Correct answer

Pain and Suffering
Correct Incorrect Correct answer

Correct

Incorrect
Question 795 of 806

795. Question

Workers Compensation and Employers Liability Policy contains several parts. Which is not included?

Workers Compensation
Correct Incorrect Correct answer

Employers Liability
Correct Incorrect Correct answer

Federal Workers Rights
Correct Incorrect Correct answer

Other State Insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 796 of 806

796. Question

Premium for Workers Compensation is based on

Workers payroll not including employer(s)
Correct Incorrect Correct answer

Job classification and per $100 of gross payroll
Correct Incorrect Correct answer

Job classification and per $1,000 of payroll
Correct Incorrect Correct answer

Total Payroll multiplied by a single rate factor based on the insured's business
Correct Incorrect Correct answer

Correct

Incorrect
Question 797 of 806

797. Question

Each of the following is a party to a Surety Bond EXCEPT the

principle.
Correct Incorrect Correct answer

obligee.
Correct Incorrect Correct answer

surety.
Correct Incorrect Correct answer

attorney.
Correct Incorrect Correct answer

Correct

Incorrect
Question 798 of 806

798. Question

Surety Bonds are written to assure an obligee which of the following?

Employee honesty
Correct Incorrect Correct answer

Adequate property insurance
Correct Incorrect Correct answer

Adequate liability insurance
Correct Incorrect Correct answer

That another person fulfills his promise
Correct Incorrect Correct answer

Correct

Incorrect
Question 799 of 806

799. Question

Unless endorsed differently, coverage in Boiler and Machinery policies is normally written on which basis?

Actual Cash Value
Correct Incorrect Correct answer

Replacement Cost
Correct Incorrect Correct answer

Fair Market Value
Correct Incorrect Correct answer

Agreed Value
Correct Incorrect Correct answer

Correct

Incorrect
Question 800 of 806

800. Question

All of the following are types of surety Bonds EXCEPT

contract bonds
Correct Incorrect Correct answer

judicial bonds
Correct Incorrect Correct answer

miscellaneous bonds
Correct Incorrect Correct answer

stocks and bonds
Correct Incorrect Correct answer

Correct

Incorrect
Question 801 of 806

801. Question

Which of the following types of bond guarantees that certain things will happen?

Judiciary Bond
Correct Incorrect Correct answer

Bon Bonds
Correct Incorrect Correct answer

Surety Bonds
Correct Incorrect Correct answer

Litigation Bonds
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Correct

Incorrect
Question 802 of 806

802. Question

A Labor and Materials Bond is usually included as part of what kind of bond?

Performance
Correct Incorrect Correct answer

Supply
Correct Incorrect Correct answer

Bid
Correct Incorrect Correct answer

Litigation
Correct Incorrect Correct answer

Correct

Incorrect
Question 803 of 806

803. Question

Which of the following statement(s) is(are) TRUE about the Farm Coverage Form of the C.P.P.?

Covers business property
Correct Incorrect Correct answer

Covers personal property
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Covers both business and personal liability
Correct Incorrect Correct answer

All of the above are covered under the Farm Coverage Form.
Correct Incorrect Correct answer

Correct

Incorrect
Question 804 of 806

804. Question

All of the following are covered under the Aviation Hull insurance EXCEPT

Airframe
Correct Incorrect Correct answer

Engines
Correct Incorrect Correct answer

Controls
Correct Incorrect Correct answer

Personal Property
Correct Incorrect Correct answer

Correct

Incorrect
Question 805 of 806

805. Question

Additional perils covered under the Farm Property – Broad Form, but not covered under the Farm Property – Basic Form deals with which of the following?

Fire
Correct Incorrect Correct answer

Explosion
Correct Incorrect Correct answer

Aircraft
Correct Incorrect Correct answer

Accidents involving livestock
Correct Incorrect Correct answer

Correct

Incorrect
Question 806 of 806

806. Question

Farm Liability Coverage provides all the following coverages for liability loss EXCEPT

Bodily Injury & Property Damage
Correct Incorrect Correct answer

Personal & Advertising Injury
Correct Incorrect Correct answer

Medical Payments
Correct Incorrect Correct answer

Pollutants
Correct Incorrect Correct answer

Correct

Incorrect

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