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Flashcards in 3 - Practice Test Ques Deck (91)
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0

What does an employer's non-ownership coverage under the BAP cover?


Covers the employer when the employee is using their vehicle on company business.

Covers the employee while using their vehicle on company business.

Covers hired employee autos.

Covers all non-owned vehicles.

Covers the employer when the employee is using their vehicle on company business.

(The purpose of the coverage is to protect the employer and not the employee when the employee uses his or her vehicle on company business and is involved in an at-fault accident that may bring the employer into a claim with the claimant)

1

Under an Equipment Breakdown Protection policy with $500,000 in coverage, a covered "accident" resulted in the following:

I. $500,000 worth of damage to the property.

II. $10,000 damage to the property of another in the insured's care.

III. $5,000 in legal fees to defend the insured in this case.

The policy will pay a total of:


$505,000.

$500,000.

$510,000.

$515,000.

$505,000..

(The maximum that can be paid is the limit of the policy. Legal expenses are in addition to the limit of coverage)

2

Which of the following would be considered a consequential loss under a dwelling policy?


Water damage to a house as a result of a fire.
A tree falling on a roof and a branch breaks a window.

Food spoilage in a freezer as a result of a fire in the house.

Smoke damage to a detached garage as a result of a fire.

Food spoilage in a freezer as a result of a fire in the house..

(Food spoilage resulting from a covered peril cutting off the electricity would be an example of a consequential loss)

3

n the ocean marine insurance policy, the term "average" means:


Loss or damage.

The ACV of the ship.

The average value of the claim insured against by the perils of the sea .

That coverage is written on a named peril basis.

Loss or Damage!!!

4

An insured purchases a $1 million umbrella policy with a $1,000 self insured retention (SIR) and agrees to maintain the following underlying limits: auto liability - $100/300/50 and personal liability limits of $300,000. The insured is involved in an at-fault auto accident and the claimant is awarded $200,000 for his bodily injuries. What will the umbrella pay if the insured only carries $50/100/50 auto limits?


$100,000

$200,000

$50,000

Nothing because the insured violated the maintenance of the policy’s underlying provision.

$100,000

(When the insured does not maintain underlying limits as stated in the umbrella policy, the umbrella carrier pays as though those limits were in effect. The insured would have to pay $50,000, the underlying carrier would pay $50,000 and the umbrella carrier would pay the remainder)

5

What is the percentage that the insured can apply to coverage A of the DP-2 and DP-3 dwelling forms for ordinance or law coverage?


10%.

5%.

20%.

15%.

10%

6

Under the Personal Auto Form, Uninsured Motorist Coverage is excluded for claims settled without the insurer's consent only if:


The claim was settled before an investigation could be completed.

The claim was adjusted by an unlicensed adjuster.

The claim settlement prejudiced the insurer's subrogation rights.

The claim was settled for an amount that was more th

The claim settlement prejudiced the insurer's subrogation rights.

7

Aircraft medical payments can be amended by endorsement to include injury to:


The crew.

The general public.

The officers of a corporation.

Non occupants.

The Crew!!!

8

A person asserting a right to payment under an insurance policy is referred to as:


A first party claimant

A third party claimant

An insurer

An agent

A first party claimant

9

A partner in a firm authorized to have custody of the insured property outside the premises would be called a:


Messenger.

Custodian.

Guard.

Watchman.

Messenger!!!

(A messenger is one who has custody of the insured’s property outside the premises. An example is a person going to the bank to make a night deposit)

10

An insured has a BOP and desires to add the endorsement that provides Utility Servises-Direct Damage coverage. What types of property must be listed for coverage to apply?


Overhead transmission lines

Water Supply Services

Wastewater Removal Property

All of the responses are correct

All of the responses are correct

11

Making false statements regarding anyone in the business of insurance is known as:


Misrepresentation

False Advertising

Defamation

Coercion

Defamation!!!

(Making any false statements regarding the financial status of an insurer or any false statements regarding anyone in the business of insurance is considered defamation)

12

The standard deductible for each coverage under the "emergency flood program" is:


$2,000

$500

$1,000

$250

$2000

13

When two or more persons are legally responsible for injuries to another party, collectively, the persons responsible are referred to as:


Co-Culpable

Co-Defendants

Joint Tort-Feasors

Class Action Defendants

Joint Tort-Feasors

14

An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:


Unfair discrimination.

Boycotting.

Misrepresentation.

Defamation.

Unfair discrimination.

(Persons in the same underwriting group with equal or the same characteristics must be treated the same for the rating of premiums)

15

What is the purpose of an installation floater?


To cover property belonging to a contractor or others that is intended to become a part of a structure

To cover property to be installed at the insured's location

To cover property that has been installed when the contractor has completed the job and the work has been accepted

To cover the insured's machinery, tools and other equipment used to install property to become a part of a building

To cover property belonging to a contractor or others that is intended to become a part of a structure.


(The policy is used to supplement coverage provided by the commercial property forms. It covers property off an insured's location and in transit or at the job site awaiting installation or when it has been installed. Coverage ceases when the property has been accepted by the purchaser)

16

If an insured has a hospital expense policy providing for room and board reimbursement on an "expense incurred" basis with a $245-a-day limit, and the daily rate charged is $230, how much will the insurance company pay?


$230.

$475.

$15.

$245.

$230

17

A valued policy is


A policy sold for less than the normal premium
What a policy becomes once coverages are confirmed

A guaranteed amount payable if a loss occurs
A policy which provides minimal coverage for a nominal premium

A guaranteed amount payable if a loss occurs

18

Homeowner policies have "special limits" on all the following losses, EXCEPT:


Fire damage to guns

Theft of coins

Theft of silverware

Theft of furs

Fire damage to guns

19

Which of the following is true regarding the HO-5 form?


Provides open peril coverage on the buildings and their contents.

Provides open peril coverage on buildings and broad form peril coverage on their contents.

Provides broad form peril coverage on the buildings and their contents.

Provides broad form peril coverage on the
buildings and named peril coverage on their contents.

Provides open peril coverage on the buildings and their contents.

20

A personal auto policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr. Jones involves a $75,000 liability judgment to Mr. Allen for his injuries and $25,000 liability judgment for his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay:


$120,000.

$25,000.

$75,000.

$100,000.

$120,000.

(Legal expenses are in addition to the limit of liability. The single limit covers both bodily injury and property damage liability. Therefore, the policy can pay the $120,000)

21

The requirement included in a health policy enabling an insured to review an issued policy for a specific period of time, permitting the insured to return that policy for a full refund of the paid premium, if desired, is called:

The free look/right to return provision..


(The free look provision in health insurance, also known as the "right to return" provision, allows for a 10 day review of the issued policy. The exceptions are long-term care insurance, and medicare supplement insurance, whose "free look periods" are 30 days)

22

Aircraft liability coverage is very similar to auto insurance coverage with the following exception:

Usually written with a deductible

Does not apply to property damage of others
Liability to passengers is treated as a separate exposure

Cannot exclude passenger liability

Liability to passengers is treated as a separate exposure

23

Coverage E under the farm forms covers which of the following?


Unscheduled personal property

Scheduled personal property

Scheduled real property coverage

Blanket real property coverage

Scheduled personal property

24

There are two versions of the commercial general liability policy. They are known as:


Claims-made and occurrence.

Claims-made and claims-paid.

Claims-paid and occurrence.

Occurrence and acceptance.

Claims-made and occurrence!!!

25

Which of the following time periods is ordinary payroll coverage limited to in case of a business income loss under the BOP?


30 days

60 days

90 days

180 days

60 days

26

To minimize adverse selection in dental plans, a company may do all of the following, EXCEPT:

Choose not to write contributory coverage.

Impose longer probationary periods.

Increase the minimum percent of participation to 80% or 85%.

Eliminate coverage for original participants.

Eliminate coverage for original participants.

27

Which of the following would be found in a yacht policy?


Cargo belonging to others coverage

Liability coverage

Sails, oars, and ballast

Earth movement

Liability coverage

28

In New York, automobile insurers are required to offer supplementary uninsured motorists coverage (SUM) but are not required to provide more than a maximum limit of:


$250,000 per person/$500,000 each accident.
$100,000 per person/$300,000 each accident.
$50,000 per person/$100,000 each accident.

$200,000 per person/$500,000 each accident.

$250,000 per person/$500,000 each accident.

29

The three parties to a contract bond are:


Principal, obligee, surety.

Obligor, principal, surety.

Principal, obligee, employee.

Employee, obligor, principal.

Principal, obligee, surety.