Guarantee Review

Question 1

To be valid, an insurance policy must have a countersignature. True or false.

Answer 1

False.

In order to be enforceable in court, a contract must have a consideration, offer, acceptance and legal purpose.

Question 2

HOMELAND HOUSING CORP holds a mortgage on a property that JOHN AND CAROL THOMAS purchased. JOHN AND CAROL have a Homeowners policy with HOME PROTECTION INSURANCE which has a mortgagee clause naming HOMELAND as a loss payee. If JOHN AND CAROL suffer a fire to their home____

Answer 2

THE THOMASES and HOMELAND will be considered co-claimants and receive loss reimbursement from HOME PROTECTION INSURANCE.

Question 3

What term includes losses caused by the continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither indented nor expected?

Answer 3

Accident

Question 4

Policy Limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the

Answer 4

Policy

Question 5

The purpose of the Fair Credit Reporting Act is to

Answer 5

Protect consumers against the circulation of inaccurate or obsolete personal or financial information.

Question 6

An insured and his spouse were traveling down an icy road and hit a sign, accumulating $1,350 damage to their car. They have a $250 deductible. They already collected on a $1,500 claim earlier this year. How much will they collect on this claim?

Answer 6

$1,100
They will collect the difference between this claim and the amount of the deductible, which equals $1,100. Collision deductibles apply to every collision.

Question 7

An insured’s diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of water damage. The insured was without income for 4 weeks of repairs. The insured’s policy includes direct and indirect coverage. What part of the loss would be paid as indirect loss?

Answer 7

The loss of income for the time the diner was closed.

Question 8

What are the three types of insurable interest?

Answer 8

For any person or property covered under an insurance policy, insurable interest must exist. Insurable interest is broken into three categories which include financial (a monetary interest), blood (relative) and business (a business partner).

Question 9

An uninsured’s home catches fire. As a result, the insured’s family must stay in a motel until the home is repaired. The cost of the motel stay would be considered a

Answer 9

Consequential Loss

Also referred to as Indirect Loss.

Question 10

The transfer of a legal right or interest in an insurance policy is called

Answer 10

Assignment
In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer.

Question 11

Other-than-collision would cover financial losses due to damage to an insured’s car caused by wind or hail, true or false

Answer 11

True

Other-than-collision includes losses caused by falling objects, fire, theft, windstorms, hail and vandalism

Question 12

Describe ‘agreement’ as it relates to insurance contracts

Answer 12

One party accepts the exact terms of the other party’s offer

Question 13

Your reminder that if a question is going to talk about insured and insurer not agreeing on the AMOUNT of liability loss after an accident its…….

Answer 13

APPRAISAL!!!!!!!!!!!!!

Question 14

What HO covers mysterious disappearance as a theft loss?

Answer 14

HO-5

Question 15

When do binders expire?

Answer 15

As soon as the policy is issued.

Question 16

Are riots covered as an extended coverage written on the basic form dwelling policy?

Answer 16

Yes

Question 17

Is Coverage E - Additional Living Expenses covered under DP-1?

Answer 17

No, it must be obtained through an endorsement.

Question 18

A licensee who offers to examine a life insurance policy is known as?

Answer 18

A life and health insurance counselor.

Question 19

An insurer may decline to renew a Homeowners policy if the insured has filed how many claims under the policy in any 3-year period?

Answer 19

Three or more.

Not to be confused with two or more in a single year, which can result in a fee on the premium.

Question 20

Does the Texas Property and Casualty Insurance Guaranty Association cover Workers Compensation?

Answer 20

Yes

Question 21

Is the resident state of the claimants on a report required by the Texas Department of Insurance?

Answer 21

No

The resident state of the claimant does not need to be known

Question 22

What is the limit that the Texas Property and Casualty Insurance Guaranty Association will cover on all other claims arising from the same occurrence (except for Workers Comp)?

Answer 22

$300,000

Worker’s comp is covered for the full amount

Question 23

A Texas resident agent seeking to sell insurance to the customers in another state needs what kind of license?

Answer 23

A nonresident license in that state.

Question 24

Is Worker’s Compensation covered in Personal Injury Protection in auto policies?

Answer 24

No.

PIP covers medical, funeral, and rehabilitation losses, as well as loss of income and essential services.

Question 25

If the insurer has not heard back from the Commissioner in 60 days in regards to a filed new policy form, what can the insurer assume?

Answer 25

That the form was approved.

Commissioner will only respond if the form is disapproved.

Question 26

The recipient of a Cease and Desist Order wants to contest the Commissioner’s charges in court. Within what timespan must the request be made?

Answer 26

30 days

Question 27

A sublimit in a liability policy that sets the maximum amount that will be paid for all claims arising from a single limit

Answer 27

Per Occurrence

Question 28

Endorsements may only add coverage to a policy, not remove

Answer 28

True

Question 29

Liability is…

Answer 29

the insurer’s responsibility for payment under a policy, as stated in the common policy provisions.

Question 30

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

Answer 30

There is no additional premium.

Question 31

An agreement is when…

Answer 31

One party accepts the exact terms of the other party’s offer

Question 32

Define loss valuation

Answer 32

Determining the premium charged and the amount of insured required on a specific property