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0

Which of the following is a covered water peril under property insurance policies?


A backup of a sewer

A tidal spray

Breakage of pipes

Flood

Breakage of pipes

1

Evergreen Lawn Care has two lawn maintenance crews on separate job sites. Coverage for the lawn maintenance equipment on the way to the site, while at the site and in transit back to the shop can be covered by which of the following forms?


Commercial Articles Coverage Form

Contractors Equipment Floater

Floor Plan Coverage Form

All the Responses are Correct

Contractors Equipment Floater

2

Under the specified causes of loss coverage in the garagekeeper's coverage, which of the following losses is excluded as a covered loss?


Several teenagers use baseball bats to break out windshields of covered autos when dared to do so as part of initiation into a club.

A suppliers auto suffers flood damage when torrential rains cause a stream to overflow as he is making a delivery.

----

-----

A suppliers auto suffers flood damage when torrential rains cause a stream to overflow as he is making a delivery. .

(The supplier would have to carry comprehensive coverage on his owned vehicle)

3

Which of the following losses to perishable stock would be covered by the commercial property Spoilage Endorsement?

Power Outage

Mechanical Breakdown or Contamination

Changes in temperature, humidity, or contamination resulting from a power outage on or off the premises

All of the responses are correct

All of the responses are correct!!!

4

A contractor in need of a bid bond to obtain a contract is an example of a(n):


Principal.

Obligee.

Surety.

Fiduciary.

PRINCIPLE

5

Which of the following would be covered under a multi-peril crop policy?


Crop Revenue Insurance

Group Risk Plan

Low Yields

Revenue Assurance

Low Yields!!!

(The multi-peril crop insurance program provides protection against low yields and poor quality crops as well as prevented planting, late planting and replanting costs for most crops subject to the perils insured against. The coverage applies to income protection. Crop revenue insurance goes a step further than multi-peril crop insurance by guaranteeing farms a certain income, which allows them to manage both yield and price risk)

6

Offering any return of premium, valuable consideration or inducement when purchasing an insurance policy is an example of:

I. Illegal Inducement

II. Rebating

III. False Advertising


I only

I and II only

I and III only

I, II, and III

I and II only

7

A medical expense policy would cover expenses for all of the following, EXCEPT:


Charges covered under workers compensation.
Doctor's fees for an operation.

Hospital room and board charges.

Charges for cosmetic surgery necessitated by an accident.

Charges covered under workers compensation!!!

8

When an insurance company broadens coverage under a homeowners policy, that change automatically applies to those policies currently in effect under a policy provision called the:


Waiver of Change of Policy Provisions

Liberalization Clause

Severability of Insurance

Insurable Interest and Limit of Liability

Liberalization Clause

(This is the Definition!)

9

Under the HO-3 form, an “insured location” includes all of following, EXCEPT:


A furnished garage used as a residence

A hotel room where the insured is temporarily residing

Family cemetery plots

Property in an apartment rented to others away from the insured’s residence premises.

Property in an apartment rented to others away from the insured’s residence premises.

10

All of the following are excluded under the commercial crime "Inside the Premises - Theft of Money and Securities" insuring agreement, except:


Dishonest acts of customers.

Fire.

Vandalism.

Accounting errors.

Dishonest acts of customers!!!

DUH!!!!!

11

Medical coverage under a Personal Auto policy will cover the insured if he/she is injured while:


Passenger on a streetcar

Passenger on a bus

Passenger on a subway

Passenger on an airplane

Passenger on a bus!!!

12

In a contract of adhesion, how are disputes between the parties generally resolved in court?


Unclear provisions in the contract will be resolved in favor of the non-writing party's reasonable interpretation of those provisions.
Both parties must adhere strictly to the contract terms for the contract to be valid.

The party which most closely adhered to the contract provisions will win the dispute.

The dispute must be resolved by binding arbitration.

Unclear provisions in the contract will be resolved in favor of the non-writing party's reasonable interpretation of those provisions.

13

What are the legal implications of the mandatory health provision "physical examination and autopsy?"


This provision is used by the insurer to determine claim malingering or claim denial for injury sustained through intoxication or illegal drug use.

This provision enables the insurer to use a physical examination in the underwriting process and autopsy to determine cause of death.

This provision enables the insurer to accumulate demographic data.

This provision is significant only in reinstatement underwriting.

This provision is used by the insurer to determine claim malingering or claim denial for injury sustained through intoxication or illegal drug use.

14

Which of the following pollution losses would be covered by garage policy liability coverage?


Pollution of a stream caused by gasoline
leaking from the ruptured fuel tank of a covered auto following a collision.

Escape of toxic sludge from a dump site used by the named insured to store waste produced in its garage operations.

The cost of a governmentally ordered clean-up of the pollution from a dump site used by the named insured.

None of the losses described would be covered.

Pollution of a stream caused by gasoline
leaking from the ruptured fuel tank of a covered auto following a collision.

15

Under the farm forms, theft of certain types of property has a theft coverage limitation. The theft limitation on firearms and other related equipment is:


$1,500.

$500.

$3,000.

$5,000.

$3000!!!

16

The claims made form of the CGL is designed to cover losses that are reported during the policy period. In order to limit the insurer's exposure to events that happened prior to the inception of the current policy, a ________is used to excldue coverage for anything that occurred prior to that point.


Pre-existing condition clause

Retro active date

Prior acts exclusion clause

None of the choices are correct

Retro active date

(retro active date is negotiated at the inception of the policy and would deny coverage for anything that occurred prior to that date even if the incident was reported during the current policy period)

17

hich of the following is correct regarding the Foreign Coverage Endorsement?


Coverage applies to employees that are hired within the limits of the USA while they are traveling or temporarily residing outside the United States, its territories or possessions, or Canada.

All of the answer choices are correct.

Employees hired outside the limits of the United States are not covered.

Employees hired within the United States can be covered abroad for 90 days or less.

All of the answer choices are correct.

18

The root word "pathos" means:


Growth or formation

Abnormal condition

Sickness or disease

Tumor or swelling

Sickness or disease!!!

19

Which one of the following is a key factor in determining workers compensation premium?


Annual sales

Annual payroll

Federal tax liability

Number of employees

Annual payroll!!!

20

Homeowner policies provide additional coverage for loss of trees, shrubs and other plants. However, the coverage is limited to:


$500 for any one tree, shrub, or plant.

$250 for any one tree, shrub, or plant.

$750 for any one tree, shrub, or plant.

$1,000 for any one tree, shrub, or plant.

$500

(Most homeowner policies provide a maximum limit of 5% of coverage A and a maximum of $500 for any one tree, shrub or plant)

21

On an unendorsed special form BOP, how much coverage is there for theft of money & securities?


$5000 on the premises only

$5000 on the premises but only $2500 off

$1000 on and off the premises

Nothing

Nothing!!!

(Even though the special BOP is "open peril" coverage which includes theft, the loss of money and securities are still not a covered form of property. The endorsement for Money & Securities is necessary to cover this exposure)

22

A new home costing $500,000 to build would have to be covered for what minimum limit according to the loss settlement provision of the policy in order for the insured to receive full replacement cost coverage in the event of a $50,000 fire loss?


$400,000

$50,000

$250,000

$500,000

$400,000

(The loss settlement provision requires a home to be covered with a limit of at least 80% of the home's full replacement value)

23

The ABC Office Supply Co. carries $100,000 insurance on a storage building held under a $50,000 mortgage acknowledged in the policy. ABC stores dynamite in the building without informing the insurance company. An explosion destroys the building. What is the maximum the mortgagee can recover?


$50,000

$0

$25,000

$100,000

$50,000!!!

24

The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences, EXCEPT:


Water-main breakage.

Mudflow.

Runoff from heavy rain.

Overflow of tidal waters.

Waster main Breakage!!!

(It is not the intent of flood insurance to cover losses such as water-main breakage)

25

You and your son, who lives with you, are crossing the street when both of you are struck by a drunk driver. The Medical Payments coverage under your auto policy will:


Provide coverage for you, but not your son

Provide coverage for both you and your son

Will not apply as you were pedestrians when struck

Will be deferred to the driver of the vehicle that struck you

Provide coverage for both you and your son!!!

(Auto medical payments cover the insured and members of the household who are relatives)

26

What is the income tax consequence to Marissa if her employer pays for her group disability income coverage?

I. The premium payments are taxable income to her.

II. The premium payments are tax deductible by her.


Neither I nor II

I only

II only

Both I and II

Neither I nor II

(Premium payments, under this arrangement, are neither income nor tax deductible by the employee. However, any claim benefit received is taxed as income to the insured)

27

Employers in New York have _____days from the date of the initial penalty for failing to comply with the compliance provisions of workers compensation coverage for eligible employees to appeal the penalty.

10

30

15

20


The employer has 30 days to appeal the penalty for non-compliance in the providing of workers compensation coverage.

30

(The employer has 30 days to appeal the penalty for non-compliance in the providing of workers compensation coverage)

28

An insurance company may change the wording of a Uniform Policy Provision in its health insurance policies only if:


The modified provision is not less favorable to the insured.

The company's board of directors approves the change.

The modified provision is not less favorable to the insurer.

The applicant directs that it be changed.

The modified provision is not less favorable to the insured!!!

29

What is the difference between a witness and an expert witness?


An expert witness can draw conclusions from observations.

A witness can testify as to his or her observations.

In the eyes of the court there is no difference.
An expert witness can deviate from his or her field of expertise.

An expert witness can draw conclusions from observations.