Final Review Flashcards by Brianna Castillo

All of the following would be covered
under section I of the homeowner
policy, EXCEPT:
A. Foreign exchange student’s clothes
B. Your lawnmower
C. Your sailboat is stolen
D. The insured’s pet bird, fish or dog

D. The insured’s pet bird, fish or dog

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What type of loss is loss of rental
income?

Indirect Loss

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C has a homeowner policy with a personal articles floater.
The personal articles floater has a limit of $5000 for her fur
coat. While traveling, her coat is stolen. How would her
insurance company pay?
A. $5000 under the personal articles floater only
B. $5000 under both the personal articles floater
and the homeowner policy
C. $5000 under the personal articles floater minus
the policy deductible
D. A theft would not be covered

A. $5000 under the personal articles floater only

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What is the name of the clause that
prohibits the insured from
transferring any rights or duties to
another insured without the
insurer’s written permission?

Assignment Clause

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Which of the following is NOT
required to appear on a written
binder?
A. Name of the insured/insureds
B. Dates the property is covered
C. Policy premium
D. Amount of insurance on the property

C. Policy premium

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Which of the following would NOT
be considered a negligent act?
A. An unintentional act
B. A careless act
C. An accidental act
D. An intentional act

D. An intentional act

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What is the highest limit offered for
a residential structure on a flood
policy?

$250,000

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What coverage on the homeowner
policy will provide protection for
damage caused by your pets to
others?

Section II -
Coverage E
Personal Liability

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What are the minimum credit hours
of ethics an agent must complete?

Three credits

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How many days notice are required
when an auto policy is being
cancelled for non payment of
premium?
A. 10
B. 15
C. 30
D. 45

A. 10

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How many days notice are required
to cancel an auto policy after 60
days?
A. 10
B. 15
C. 30
D. 45

C. 30

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How often can the commissioner
examine an insurance company in
Texas?

Whenever he/she wants

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What are the requirements to become a resident producer?

Pass the state exam
Eighteen or older
A resident of TX
(PEA)

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Someone drives into P’s house with
their vehicle and they do not have
auto insurance. Which coverage on
the HO-2 policy would cover the
damage to the outside of P’s home?
Coverage:
A, D, E or F

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A statement by the insured that the
facts as stated on the application are
true and correct

Representation

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What is the purpose
of the TX Insurance Guaranty
Association?

It protects policyholders in the
event an insurance company is
unable to pay their claims

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Where in the policy would the
insured find the duties, rules,
and regulations?

The Conditions

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Which of the following is NOT an
example of extended coverage on
a DP-1 policy?
A. Wind
B. Hail
C. Smoke
D. Vandalism

D. Vandalism

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What coverage pays if a 3rd party is
killed in an accident?

Bodily Injury

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What is the limit for property damage
when the coverage limits are
30/60/25?

$25,000

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What type of loss will pay for hotel
expenses when an insured’s home
has been damaged?

Indirect Loss

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What is the formula for actual cash
value?

Replacement cost less
depreciation

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When insurance to value is met, what
loss value is retained?

Replacement Cost

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The act of stealing is:

Theft

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What is the loss valuation of Coverage A and B on a DP2 Broad Cause of Loss Form? A. Actual Cash Value B. Functional Replacement Cost C. Replacement Cost D. Agreed Value

C. Replacement Cost

Neglecting to clean your dryer vents and letting them become clogged with lint is an example of what type of hazard?

A morale hazard

What condition is used to resolve a disagreement between the insured and the insurer?

The appraisal clause

Physical harm due to someone's negligence A. Bodily injury B. Personal injury C. Physical damage D. Libel

A. Bodily injury

Which of the following is a contract that is not negotiable? A. Contract of adhesion B. Aleatory contract C. Primary D. Excess

A. Contract of adhesion

An underwriter: A. Rates risks B. Investigates claims C. Reviews coverage D. Counsels coverage

A. Rates risks

Which of the following is NOT a moral hazard? A. Filing a fraudulent claim B. Leaving your home unlocked while away on vacation C. Trying to get paid more for a claim than what was actually lost D. Criminal behavior associated a claim

B. Leaving your home unlocked while away on vacation

A written amendment that broadens or restricts coverage:

Endorsement

Define blanket coverage

Having more than one property on a single policy with each property covered for a specific amount

What are the consequences of a material misrepresentation made by an applicant for insurance?

The policy will be voided

Which of the following is an example of a temporary substitute? A. A vehicle being test driven by a customer who is considering a possible purchase B. A vehicle borrowed from a neighbor that is used for the weekend C. A rental vehicle that the insured is using for a cross-country trip D. A dealer loaner vehicle that is used while the insured's vehicle is being repaired

D. A dealer loaner vehicle that is used while the insured's vehicle is being repaired

Which item is NOT covered by a personal articles floater? A. A musical instrument B. Jewelry C. Camera D. Your home

D. Your home

The insured must notify all of the following parties after a loss EXCEPT: A. All insureds listed on the declaration page B. The insurance company or agent C. The police, if the loss is a theft D. Credit card company for a stolen card or fraudulent use

A. All insureds listed on the declaration page

Money and securities are all covered up to what limit by a dwelling policy? A. $100 B. $200 C. $500 D. $0

B. $200

If you have a customer that wants higher liability limits than you are able to offer, what would you offer as an option? A. An umbrella policy B. A FAIR policy C. Texas Auto Insurance Plan-TAIPA D. National Flood Insurance Plan-NFIP

A. An umbrella policy

The insured’s policy has a deductible clause. This means: A. Losses paid to a 3rd party are deducted from the policy limits B. The insured deducts any claim payment received from the next payment submitted to the insurance company C. The insured deducts a claim payment from the policy limit D. The insured must pay a certain amount of each loss incurred under the policy

D. The insured must pay a certain amount of each loss incurred under the policy

All of the following are true about an auto’s supplemental payments EXCEPT: A. The policy pays up to $200 for loss earnings to attend a hearing and testify in court B. Payments of all supplemental payments are deducted from the liability limits C. There is no limit for investigation costs D. Traffic fines are not included

B. Payments of all supplemental payments are deducted from the liability limits

Which of the following is TRUE regarding coverage E on HO policies? A. Negligence does not need to be established B. Coverage E on a homeowner policy is a no fault coverage because it pays out regardless of fault C. Coverage E on a homeowner policy is medical payments to others D. Coverage E on a homeowner policy is personal liability

D. Coverage E on a homeowner policy is personal liability

Leaving your home or vehicle unlocked is an example of: A. Inherent vice hazard B. Moral hazard C. Morale hazard D. Physical hazard

C. Morale hazard

What is the name of the insured’s obligation to notify the insurance company of a loss?

Duties after a loss clause

Through the appraisal clause, which entity pays the cost of hiring the umpire? A. It is shared by the insured and the insurance company B. The insured C. The insurance company D. The court

A. It is shared by the insured and the insurance company

What is the name of the policy provision that allows the insurer to recoup its losses by taking possession of the vehicle?

Salvage

Types of autos - definitions Owned auto – Non-Owned auto - Hired auto – Temporary substitute auto –

Owned auto – A private passenger vehicle that is owned or leased Non-Owned auto – A private passenger vehicle not owned by you or a family member and NOT available for regular use Hired auto – Rented or borrowed auto Temporary substitute auto – A vehicle you are driving while your vehicle is being repaired

What is transportation expense coverage?

Automatically provided if physical damage coverage for your stolen automobile. The insured is provided a rental car after 48hrs with a limit of $20 day/$600 max

What are the parts of the policy?

Declarations Insuring agreement Conditions Exclusions

An insured's home is a total loss and the insured decides not to rebuild. What would the mortgagee need to do to collect? A. Sue the insurance company B. Submit a proof of loss within 60 days C. Nothing, they can not collect D. Obtain an attorney

B. Submit a proof of loss within 60 days

Where in the policy is the insurance company's promise of protection? A. Declarations B. Insuring Agreement C. Conditions D. Exclusions

B. Insuring Agreement

Water seeped in through gutters and damaged the interior walls of C’s house. Her HO-2 will: A. Pay if C pays an additional deductible B. Not cover her under any circumstances C. Pay if she has the personal property replacement cost endorsement D. Pay because she has special perils

B. Not cover her under any circumstances

Insurance =

Transfer of Risk

Explain a newly acquired auto and what coverages apply

Adding a car to your existing policy. You have 20 days of the broadest coverage listed on the dec page

Which loss would be covered under uninsured motorist property damage or collision? A. Hit and run B. Sugar put in your gas tank C. Colliding with a cow D. Hail damage

A. Hit and run

A homeowner policy covers removal of property under which section I additional coverage?

Debris Removal

When the company terminates the policy at the end of the policy period

Non Renewal

Which of the following would NOT be covered by a homeowner policy? A. Bodily injury at the insured’s home B. First aid provided to an insured C. Intentional acts of an insured minor under the age of 13 D. Theft of property

B. First aid provided to an insured

Which is NOT an essential element of an insurance contract? A. Conditions B. Consideration C. Legal Purpose D. Offer

A. Conditions

Under the National Flood Program, if premium has been paid when does coverage become effective?

30 days after the application has been completed

Type of contract where only one party has a promise that is enforced

Unilateral

What type of perils insure against all risks except those that are excluded in the policy?

Special, Open, All Risk

An unoccupied building with no contents is defined as:

Vacant

Under the HO-3, coverage C is what percentage of coverage A?

50%

A continued exposure to a harmful situation over a period of time

Occurrence

A landlord’s loss of rental income due to a direct loss is which type of loss?

Indirect loss

The destruction of property caused by a peril

Direct loss

Property ownership is defined as: A. A mortgage B. Insurable risk C. Indemnity D. Insurable interest

D. Insurable interest

If an insured testifies during a homeowner trial, up to what daily limit for missed work can they receive?

$250

What is the limit for headstones under the homeowner policy?

$5000

If the policy is cancelled by the policyholder, how is unearned premium returned?

Short rate

What are the DP1 perils?

Internal explosion, lightning and fire

Where in the policy would you find the rules regarding recovered property?

Conditions

On an auto policy, what coverage pays for vandalism and malicious mischief?

Other than collision

What type of damages are intended to punish an individual?

Punitive damages

The cause of the loss

Peril

Which of these locations would NOT provide coverage through the personal auto policy? A. Puerto Rico B. The Hawaiian Islands C. Canada D. North America

D. North America

Which of the following homeowners would NOT be eligible to purchase a homeowner policy? A. A homeowner that currently has a home under construction and plans on living in it once construction is completed B. A 1- 4 family home that the owner lives in C. A 1-10 family home that the owner lives in D. A co-owned duplex that the homeowner lives in

C. A 1-10 family home that the owner lives in

Rust on a bumper or water seeping in are examples of: A. An accident B. An occurrence C. A basic peril D. A speculative risk

B. An occurrence

Which would be covered by the liability section of a homeowner’s policy? A. Your dog chews up your couch and you have to buy a new one. B. Your child trips and falls in your front yard and needs stitches. C. Your 12 year old takes the car and runs into the neighbor’s fence. D. Your 10 year old strikes a neighboring child resulting in the child needing stitches. The neighbor requests that you pay the Dr. bills.

D. Your 10 year old strikes a neighboring child resulting in the child needing stitches. The neighbor requests that you pay the Dr. bills.

What is Transportation Network Company?

Provides transportation services compensation using a digital app to connect to a TNC driver using a personal vehicle for a pre-arranged ride. Ie: Uber and Lyft

All of the following are covered under the Terrorism Risk Insurance Act (TRIA) EXCEPT: A. Commercial insurance B. Worker’s comp C. Health Insurance D. None of the above

C. Health Insurance

Final Review Flashcards

(82 cards)