Property Casualty Insurance Basics Flashcards by Anh Tran

The provision in a property policy which states that the insured has been paid up to their insurable interest is:

a. Actual Cash Value
b. Guaranteed Replacement
c. stated valued
d. Valuation Clause

D. Valuation Clause

How well did you know this?

Not at all

Perfectly

Establishes limit upon the insurer and insured within the insurance policy is:

a. Conditions
b. Exclusions
c. Declarations
d. Insuring Agreements

A. Conditions

How well did you know this?

Not at all

Perfectly

Which are the characteristics of negligence?

a. Breach and Proximate Cause
b. Duty and Breach of the Duty
c. Duty, Breach, Proximate Cause, Damages
d. Breach of Duty and Damages Caused

C. Duty, Breach, Proximate Cause, Damages

How well did you know this?

Not at all

Perfectly

Absolute risk (liability) is imposed:

a. When there is intent to cause injury
b. When the insured party assumes the risk
c. When there’s negligence whether proven or not
d. None of above

C. When there is negligence whether proven or not

How well did you know this?

Not at all

Perfectly

Receive under contributory negligence rules?

a. $5k
b. $2k
c. $3k
d. $0

D. $0

How well did you know this?

Not at all

Perfectly

Which of the following is NOT considered an intentional tort?

A. Blasting operations
B. Unauthorized release of confidential information
C. Auto accident
D. Ownership of a pet rattlesnake

C. Auto accident

How well did you know this?

Not at all

Perfectly

The insurer decides not to renew an insured’s Personal Auto Policy. How much notice must the insurer provide to the insured?

A. 5 days
B. 30 days
c. 20 days
D. 10 days

b. 30 days

How well did you know this?

Not at all

Perfectly

An insurer’s loss reserve for a claim is:

A. The exact amount the insurer will have to pay to close the claim
B. The maximum amount the insurer will have to pay to close the claim
C. An estimate of the amount the insurer will pay for present and future losses
D. Equal to claims divided by earned premium reserve, not including loss of adjustment exp

C. An estimate of the amount the insurer will pay for present and future losses

How well did you know this?

Not at all

Perfectly

A person can be base his/her claim for legal liability on the basis of all of the following, EXCEPT,

A. Breach Liability
B. Negligence
C. Intentional tort
D. Absolute Liability

A. Breach of Liability

How well did you know this?

Not at all

Perfectly

The term Subrogation refers to:

A. The insurance policy applies separately to each insured
B. The transfer of the insured’s interest in a policy to another party
C. The insured right to receive broadened coverage at no extra charge
D. The Insurer’s right to recover payment from a responsible 3rd party

D. The insurer’s right to recover payment from a responsible 3rd party

How well did you know this?

Not at all

Perfectly

Insurer’s the right to recover the payment of a claim, after they paid the insured for their property losses from a negligent 3rd party is known as:

A. Liberalization
B. Subrogation
C. Arbitration
D. Assignment

B. Subrogation

How well did you know this?

Not at all

Perfectly

An Insurance deductible is:

A. The insurance payment for health care that is not considered a covered
B. The portion if the insurance premium paid
C. The amount of covered expenses that the insured pays before the insurer pays
D. The cost of a covered expense minus a co- payment

C. The amount of covered expense that the insured pays before the insurer pays

How well did you know this?

Not at all

Perfectly

All of the following are requirements for a notice by mail to an insured by an insurer, Except:

A. Notice must be sent w return receipt required
B. Notice must be addressed to the person being notified
C. Postage must be prepaid
D. Notice must be mailed to the residence or principal place of business

A. Notice must be sent w return receipt required..

How well did you know this?

Not at all

Perfectly

Which of the following is considered special damages?

A. Compensation for time away from work
B. Compensation for a person emotional suffering
C. Compensation for loss of a foot
D. Compensation for a scar

A. Compensation for time away from work

How well did you know this?

Not at all

Perfectly

Which advisory organization develop forms for the standard market?

A. Insurance Service Office and American Association of Ins Service
B. National Association of Ins Commissioners and the American Asso
C. National Associatin of insurance commissioners and ins
D. Insurance services office and the anerican association

A. ISO and AAIS

How well did you know this?

Not at all

Perfectly

Which of the following would be considered special wages?

A. Lost wages
B. Pain and suffering
C. Scarring
D. Loss of an index finger

A. Lost Wages

How well did you know this?

Not at all

Perfectly

Which of the following is NOT one of the three main types of insurance losses?

A. Liability loss
B. Human and personnel loss
C. Financial loss
D. Property loss

C. Financial loss

How well did you know this?

Not at all

Perfectly

What do the initials STARR represent?

A. A government program designing outstanding insurance comp
B. Types of coverage forms
C. Types of standard policies
D. Methods of risk management

D. Methods of risk management

How well did you know this?

Not at all

Perfectly

What gives an insured party the right to seek compensation if its proven that another with negligence contributed to the injury?

A. Tort law
B. Case law
C. Statutory code
D. Criminal code

A. Tort

How well did you know this?

Not at all

Perfectly

Under a special cause of loss form, if a landslide is caused by an unnatural flow of water due to improper grading the loss is:

A. Excluded under the concurrent causation
B. covered there are no exclusions for this type of loss
C. Excluded under the government action exclusion
D. Excluded under the utility service exclusion

A. Excluded under the concurrent causation

How well did you know this?

Not at all

Perfectly

An open peril policy protects against the loss from:

A. Mainly, perils of the sea
B. Perils found outside in the open
C. Only the perils openly named in the policy
D. Any peril, other than those specifically excluded

D. Any Perils, other than those specially excluded

How well did you know this?

Not at all

Perfectly

What factor supports the principle indemnity?

A. Utmost good faith
B. Insurable interest
C. Reasonable expectation
D. Contract if adhesion

B. Insurable interest

How well did you know this?

Not at all

Perfectly

Ideally insurable loss exposure, EXCEPT..

A. Losses that are definite and measurable
B. Losses that are catastrophic
C. Losses that are accidental
D. Large number of exposure units

B. Loss that are catastropic

How well did you know this?

Not at all

Perfectly

The amount to replace property with like property of the same quality and construction is the properties

A. Market Value
B. Actual cash value
C. Agreed amount
D. Replacement value

B. Actual cash value

How well did you know this?

Not at all

Perfectly

24. A possibity of financial loss resulting from the ownership of property is known as: A. Legal Liability B. Valuation C. Indemnity D. Insurable Interest

D. Insurable interest

25. In a commercial lines program policy, common conditions do not include which of the following as a condition? A. Cancellation B. Inspects and surveys C. Perils insured D. Examination of your book

C. Perils insured

26. Laura is driving her own car on behalf of her employer. Laura's negligent operation of her car injures a member of the public. The employer may be held liable because of what is called: A. Absolute liability B. Gross negligence C. Vicarious liability D. Contributory negligence

C. Vicarious liability

27. The exposure to financial loss is presented to a business owner by the injury, disability, death, or sickness of a valuable employee: A. Personal loss exposure B. Personal property loss exposure C. Personnel loss exposure D. Liability loss exposure

C. Personnel loss exposure

28. Human Loss Exposure: A. Liability loss exposure B. Indirect loss exposure C. Property loss exposure D. Personal loss exposure

D. Personal loss exposure

29. Which of the following best characterized a speculative risk? A. Insuring life with a policy B. A person who is careless and/or irresponsible C. Transferring the risk of loss to another party D. A situation that offers the possibility for a loss or a gain

D. A situation that offers the possibility for a loss or gain

30. In the state of CA, no rate will remain in effect if its considered to be any of the following, Except: A. Inadequate B. Impartial C. Unfairly discriminatory D. Excessive

B. Impartial

31. under tort law, a corporation can be subject to a claim for legal liability on the basis of: A. Contract liability B. Absolute liability C. Breach of warranty D. No-Fault auto law

B. Absolute liability

32. Risk management technique that eliminates a loss exposure and reduces the chance of loss to Zero is: A. Avoidance B. Retention C. loss reduction D. Loss Prevention

A. Avoidance

33. A situation in which there is only the possibility of loss or no loss. A. Speculative risk b. Pure risk C. Fundamental risk D. Particular risk

B. Pure risk

34. A wrongful act crime or Breach: A. Hazard B. Tort C. Liability D. Proximate clause

B. Tort

35. Which customer to insure and what coverage to offer? A. Marketing B. Rate making C. Underwriting D. Adverse selection

C. underwriting

36. A policy may not transferred to another without: A. Oral consent of the insurer B. Written consent of the insurer C. Oral consent of the insured D. Written consent of the insured

B. Written consent of the insurer

40. Type of loss exposure that would include land and property attached to it: A. Real property loss exposure B. Attachable property loss exposure C. Personal property loss exposure D. Liability loss exposure

D. liability loss exposure

41. What types of policy protects against loss from any peril except those that are specifically excluded? A. Named peril B. All risk or open peril C. Stated value D. Specified peril

B. All risk or open peril

42. Insurance contract a. The insurance company b. The insured c. The claimant d. The agent

B. The insured

43. A written provision that modifies of the original contract is known as: A. An endorsement B. A condition C. A miscellaneous provision D. An insuring agreement

A. An endorsement

44. Named insured on a commercial policies is "Sam Stone and Dan Sullivan, DBA S & S Bar and Grill. If the insurer cancels the policy, they are required to mail or deliver written notice to: A. Only Sam Stone B. Sam stone C. Only dan sullivan D. Anyof the above is Ok

A. Only Sam Stone

45. Type of exposure for any exposure or financial presented to an individual or family causes as injury, disability, death, or sickness? A. Personnel exposure B. Personal property loss exposure C. Liability loss exposure D. Personal loss exposure

D. Personal loss exposure

46. A common formula that is used to establish actual cash value is: A. Acv = replacement cost - depreciation B. ACV = market value - overhead C. ACV = state value minus depreciation

A. ACV= replacement cost - Depreciation

47. Which of the flowing coverage is a property insurance coverage? A. Property damage liability B. personal injury C. medical payments D. Other than collison

D. Other than collision

48. Unendorsed claims made general liability policy, how long an insured have to report a aim which occured during the policy period? A. 30 days B. 6 months C. 60 days D. Indefinity

C. 60days

49. What does a pure risk consist of? A. the chance of loss only b. The chance of neither of these C. The chance of gain only D. The chance of both of these

A. The chance of loss only

50. What will the mortgage holder do in the event that an insurer does not pay a claim as a result of the actions of the insured? A. Receive no payment for any loss B. Receive full payment for the loss, of the requirement premium has been paid C. Receive payment if an endorsement has been added to the policy D. Receive a coinsured amount of the loss

B. Receive full payment for the loss, if the requirement premium has been paid

51.How would a peril best be defined? A. Required to increase the likelihood of a loss occurring B. Remaining hazards after a loss occurs C. Reason for the loss event that leads up to a loss D. Result of the loss

C. Reason for the loss event that leads up to a loss

52. All of the following insurance comp are private insurers; EXCEPT, A. Reciprocal insurance comp B. Fraternal Insurance comp C. Mutual insurance comp D. Stock insurance comp

B. Fraternal Insurance comp

53. Nuclear power- plant is exposed.. A. legal B. morale C. moral D. physical

D. Physical

54. of the following, which is the true characteristic about insurance.. A. it's considered a way of retaining risk B. It's considered a type of gambling C. It's considered a method of transferring risk D. It has as its basis the law of level averages

C. Its considered a method of transferring risk

55. Warranty

Expressed or implied, but must be the truth

56. Implied Warranty

is included in contract even though not specifically stated

57. A representation as to the past, present, or future is.. A. Warranty B. Verified promise C. Unverified fact D. Misrepresentation

B. Verified promise

58. When may a representation be withdrawn? A. It can never be withdrawn B. Only after the policy is in effect C. At any time as long as both parties agree D. Only before the insurance is in effect

D. only before the insurance is in effect

59. A representation as to the future is? A. Promise b. Provision C. Liability D. Description

A. Promise

60. Certificate of Authority in Cal is? A. Authorized B. Admitted C. Allowed D. Approved

B. Admitted

61. The negotiation of a policy involves ? A. Adding an endorsement to the policy B. Signing an application form C. Making a premium payment D. Sending the prospect an email

D. Sending the prospect an email suggesting that they buy a certain type of policy

62. An applicant does not reveal info A. Boycott B. Concealment C. Intimidation D. Coercion

B. Concealment

63. Cali DOI uses to approve or disapprove rate filings A. Open competition method B. File and use method C. Mandated rates method D. Prior approval method

D. Prior approval mehod

64. Insurance commissioner uses while determining whether a rate is excessive or u fairly discriminatory A. How long the insurer has been admitted to do business B. Complaint history of the insurer C. The degree of competition D. Whether the rate mathematically reflects the insurance comp

D. Whether the rate mathematically reflects the insurance

65. An agent who diverts/commingles premium dollars for the agent own use is guilty of: A. Misrepresentation b. Fraud C. Forgery D. Theft

D. Theft

66. agent's appointment to an insurance comp is terminated and the agent has no other appt with any other ins comp.. A. The agents permanent license will be terminated simultaneously B. The agent permanent license remains i force for only 60 more days C. The agent permanent license remains fully active until exp D. The agents permanent license becomes inactive

D. The agent's permanent license becomes inactive

67. Surplus lines broker: A. Transacts insurance business only w admitted insurers B. Transacts specialty in marine insurance C. Transacts business only with non-admitted insurers D. Are always employees of insurance companies

C. Transacts business only with non-admitted insurers

68. What would the commissioner likely do if an agent induces a client to co-sign a loan? A. Force the agent to pay the loan back B. Impose a $1k fine C. Suspend the agent's license D. Force the agent to attend a state ethics course

C. Suspend the agent's license

69. Under 770 of the insurance Code true regarding unfair or deceptive trade practices, which of the following is an unfair trade practice? A. The penalties for mispre and twisting of insurance B. The restrictions on the activities of incorp C. A travel insurance agent cannot refer business D. An entity cannot demand the insurance be placed with a particular agency

D. An entity cannot demand the insurance be placed with a particular agency

70. Which of the following describes an insurer who has enough financial resources only to provide for all of its liabilities.. A. Insolvent B. Solvent C. Non-Participation D. Guaranteed

A. Insolvent

71. In Cali. excess and surplus lines coverage needs to be placed through: A. An excess and surplus lines solicitor B. A surplus lines broker C. An admitted insurer D. Lloyds of london

B. A surplus lines broker

72. What must a life agent, travel agent, or fire and casualty insurance agent do in order to act as an agent of a particular insurer? A. File proof of licensure with the state B. have the agent listed with the appropriate dept of the insurer C. File a notice of appt w the commissioner D. there are no legal requirements as long as the agent is legally licensed

C. File a notice of appt w the commissioner

73. In the business of insurance, the act of concealment is defined by all of the following statements, EXCEPT: A. Concealment can be intentional b. Concealment can be unintentional C. Concealment is grounds for declination by the insurer D. Concealment does not occur if no inquiry is made..

D. Concealment does not occur if no inquiry is made

74.. Which rate approval filing system is used in Cali for most lines of insurance? A. Open competition B. Prior approval C. File and use D. Mandatory rates

B. Prior approval

75.The CA insurance code: A. Requires agents to keep records of any compensation they may have received for their services involved w premium financing B. Requires agents to provide premium financing services C. Prohibits agents from receiving compensation for premium financing D. Sets the % of interest that may be charged in a premium finance contract

A. Requires agents to keep records of any compensation they may have received

76. What must an insurer do who accepts an application from an agent who is NOT specially appointed by the insurer, and then issues a policy from that application? A. Forward to the commissioner a notice of appt w/in 14 days of receipt of app B. Send the agent an appt approval w/in 30days of policy issuance C. The agent must become an employee of the comp w/in 30days of receiving app D. Name the agent to the list of the comp approval agents

A. Forward to the commissioner a notice of appt w/in 14 days of receipt

77. In the state of CA, no rate will remain in effect if its considered to be any of the following, EXCEPT: A. Inadequate B. Unfairly discriminatory C. Impartial D. Excessive

C. Impartial

78. A representation in an insurance contract qualifies as which of the following? A. An implied warranty B. An amendment C. An express warranty D. A policy provision

A. An implied warranty

79. According to the CA Insurance Code.. a binder is deemed a valid insurance policy for the purpose of providing that the insured had the insurance coverage specified in the binder for each.. EXCEPT: A. Marine insurance a B. Fire insurance C. Auto insurance D. Life insurance

D. Life Insurance

80. If an insurer pays an insured $25k in lost wages, $45k for physicians visits and hospital costs, and $15k for physical therapy treatments, and later finds out that the claim was fraudulent, the insured may be fined as much as.. A. $170k B. $60k C. $85k D. $150k

A. $170k

81. All of the following are characteristics of an ideally insurable loss exposure, EXCEPT: A. losses that are catastrophic B. Losses that are definite and measurable C. Losses that are accidental D. Large number of similar exposure units

A. Losses that are catastrophic

82. The types of transactions and insurers that a surplus lines broker is involved with is/are A. Admitted insurers, liability insurances only B. Admitted insurers, property insurance only C. Non-Admitted insurers, life and disability insurers D. Non-admitted insurers, property and casualty insurances..

D. Non-Admitted insurers, property and casualty insurances..

83. Under which of the following circumstances can the insurance commissioner deny the application for an agents license w/o a hearing? A. The applicant has previously been engaged in a fraudulent activity involving insurance sales B. The applicant has had a license application denied for a cause w/in the past 5 yrs C. The applicant has failed to pass the license exam 3 times in the past 2 yrs D. The applicant has no previous experience in the insurance business

B. The applicant has had a license application denied for cause w/in the past 5yrs

84. Insureds, especially those with higher premiums very often do not have the immediate funds to pay required premiums such as autombile liability ins.. Which of the following statements is correct regarding this financing, according to the requirements of the Cal Ins Code? A. Premium financing is prohibited B. Premium financing comp of any type is prohibited C. There are no requirements regarding premium financing D. Any agent that assists in premium financing services is required to maintain all records regarding such financing for 3 yrs after transaction

D. Any agent that assists in premium financing services is required to maintain all records regarding such financing for 3 yrs after transcation

85. For more serious offenses and convictions. an application for a license can be denied w/o a hearing.. Which of the following circumstances would allow for an application to be denied for an insurance license w/o a hearing A. The applicant for the license speaks English as a second language B. The applicant for the license has failed the required pre-license exam twice w/in a yr C. The applicant for the license had a license denied for a cause w/in the previous 5 yrs D. The applicant for the license has never been licensed to sell insurance and therefore has no experience in the industry..

C. The applicant for the license had a license denied for a cause w/in the previous 5yrs

86. Unearned premium.. An insurer endorses, rejects, declines, cancels, or surrenders a personal lines automobile or property ins.. The unearned premium must be refunded w/in 25 days to the insured.. If the premium is forwarded to agent, they'll have 15days to forward the unearned premium to the insured..

25 days to refund | 15 days to forward unearned premium

87. Section II.. Homeowner's policies two major coverages..

E is personal liability coverage provided $100k. per occurance F. Medical payments to others $1k per person

88. Mobile home endorsement to a homeowners policy:

Mobile home is treated as the dwelling unit insured.. Personal property and other coverages will be the same based on policy purchased

89. Losses coverage under homeowners' policy watercraft endorsement..

provide liability and medical payments to others for scheduled boats.. Sailboat must be less than 26 feet lenght

90. Worker comp- Residence Employee (CA) endorsement

This endorsement is mandatory.. The homeowner may mot decline the coverage..

91. Inland Marine

Used to cover personal or commercial property that is movable..

92. Inland Marine Boat Policy

coverages are liability ( operations liability, passenger liability, and flotilla liability) Medical ( the insured, family, and their passengers) Physical ( the boat, motor, and the trailer

93. Ocean Marine Coverage Yacht policies..

Cover hull and boat trailers.. Protection and Indemnity are more comprehensive than the boat owners policies..

94. Supplementary payments liability pays $250 max and up to $200 per day for loss of earnings

pays $250 max | $200 per day for loss earnings

95. Towing and Labor

Coverage added to an automobile policy that pays a specific amount for towing

96. Which of the following coverages may you buy with a named operator policy? A. Liability B. Liability, uninsured motorist, medical payments, collision, and other than collision C. Liability and uninsured motorist D. Liability, uninsured motorist, and medical payments

B. Liability, uninsured motorist, medical payments, collision, and other than collision..

97. The PAP collision deductible is $1k, and the other than collision deductible is $500. How much would the insurer pay for an accident involving the overturn of one vehicle, resulting in $2k of damage.. A. $2k B. $0 C. $1k D. $1,500

C. $1k

98. When an automobile ins policy is canceled at the request of the insured and the insurance comp keeps all earned premiums. in addition to an amount to pay for overhead exps incurred by the insurer. its referred to as what type of cancellation? A. The flat rate type of cancellation B. The short rate type of cancellation C. The pro-rata type of cancellation Dz Its none of these

B. The short rate type of cancellation

99. Which of the following coverages may you buy with a named non-owner liability policy? A. Liability, uninsured motorist, medical payments, collision, and other than collision.. B. Liability, medical payments, and uninsured motorist C. Liability and uninsured motorist D. Liability only

B. Liability, medical payments, and uninsured motorist

100. An insurer has a personal auto policy and did not pay the initial ins premium when it was due.. Insurer cancels the policy for non-payment.. How many days must the insurer give A. 20days B. 10days C. 15days D. 5days

B. 10days

101. If an individual does not own an auto, nor have regular use of an auto, what endorsement to a Personal Auto Policy could be used to properly protect that individual? A. No coverage available B. Extended non-owned liability coverage endorsement C. Miscellaneous type vehicle endorsement D. Named non-owned liability coverage

D. Named non-owned liability coverage

102. What coverage is available under the miscellaneous type vehicle endorsement? A. All coverage under the personal auto policy B. Physical damage only C. Liability and physical damage only D. Liability only

A. All coverage under the personal auto policy

103. If a motor home is scheduled on a misc type of vehicle endorsement. all of the following property is covered, EXCEPT.. A. Awings B. Refrig C. Cabanas D. Luggage

D. Luggage

104. Max Personal Auto Policy has liability and collision coverage. His neighbor's car has liability coverage only.. Max borrows his neighbor car to go to the store and has an accident that is his fault.. He damages his neighbor's car and another car. Max's PAP provides.. A. Liability coverage that is excess of this neighbor liability coverage.. His collision coverage also applies, but on a primary basis B. Collision coverage because neighbor does not have this coverage. Liability coverage does not apply C. Collision and liability coverage on a primary basis D. Liability coverage that is excess his neighbors liability coverage

A. Liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on a primary basis

105. if an insured rents an auto while on vacation, what coverage, if any, will be available for physical damage coverage under a personal auto policy. A. The broadest coverage in any auto show in the declarations B. The coverage of the last auto shown in the declarations C. The least coverage on any auto shown on the declarations D. No coverage available

A. The broadest coverage on any auto shown in the declarations..

106. All of the following are principal rating factors under pro 103 for personal auto policies, EXCEPT, A. Driver's safety record B. Number of listed drivers C. Years of driving experience D. Annual miles drive

B. Numberlisted drivers

107. All of the following expenses are covered, in addition to the limits of liability, under Coverage A of a Personal Auto Policy, EXCEPT: A. loss of earnings to attend trials at the comp request B. Cost of bail bonds related to a covered accident C. Premium for appeal bonds D. Pre-judgment interest

D. Pre-judgment interest

108. Jim, Unmarried homeowner's insured, does not own a car.. He's planning a vacation trip to Florida and will be renting a car.. He also drives cars belonging to friends occasionally. To protect Jim in these situation, you would recommend a Personal Auto Policy with/ A. Extended non-owned coverage endorsement B. Misc vehicle endorsement C. Extended transportation endorsment D. Name non- owner coverage endorsement

D. Name non-owner endorsement

109. Under a Personal Auto Policy, if a newly acquired auto is to replace the covered auto that has only liability coverage, how long does the i sured have to request collision coverage?? A. 30 days B. 14 days C. 4 days D. Immediately

C. 4days

110. If an insured requests coverage in a timely manner for a newly acquired auto under an existing Personal Auto Policy, what coverage is provided before the request is made? A. Statutory minimum required coverage s B. Average coverage for all vehicles show on the declarations C. Lowest coverage for any vehicle shown on the declarations D. Broadest coverage for any vehicle shown on the declarations

D. Broadest coverage for any vehicle shown on the declarations

111. A single person does not own or lease an automobile.. she occasionally drives her housemates's vehicle on an emergency basis.. She's going on vacation and will have to rent a car.. to obtain full automobile insurance coverage when this occurs, what should she purchase?? A. The transportation extension endorsement B. The misc vehicle endorsement C. The non-owner extension coverage endorsement D. The named non-owner coverage endorsement

D. The named non-owner coverage endorsement

112. Which of the following events w/in the last 3 yrs would disqualifying an individual from receiving a good driver discount? A. A not at fault accident resulting in the death of a passenger B. An at fault accident involving minor bodily injury C. An at fault accident involving only property damage D. a moving violation while driving a company car during business hours

B. An at fault accident involving minor bodily injury

113. What endorsement can be used to insure a motorcycle under a Personal Auto Policy? A. No endorsement is available to broaden a PAP to cover motorcycles B. Misc type vehicle endorsement C. Named non-owner coverage endorsement D. No endorsement is needed, the unendorsed PAP covers motorycles

B. Misc type vehicle endorsement

114. Cali has lower financial responsibility than most other states.. If Randy a Cali Personal Auto Policy insured, carrying minimum limits on coverage, has an accident in a state requires higher limits then: A. He is breaking the law of that state unless he has added the other state endorsement B. The policy will provide the higher limits retroactively, but only when he has paid the diff C. The unendorsed policy does not cover the out of state operation of the automobile D. The policy will automatically provide the higher required limits-at no extra charge

D. The policy will automatically the higher required limits at no extra charge

115. Which of the following is not an uninsured motor vehicle as defined by personal auto policies uninsured motorist coverage? A. A hit and run vehicle whose owner or operator cannot be identified B. A vehicle which is covered by an automobile liability policy or bond, but the insuring or bonding comp is insolvent C. A vehicle owned by a state agency which self-insures its auto D. A vehicle not covered by an automobile liability policy or bond

C. A vehicle owned by a state agency which self insures its auto

116. Under a personal auto policy, who qualifies as an insured while using a covered auto? A. Any person B. Only the named insured and resident relatives C. Only the named insured, resident relatives, and other entities responsible for the use of the auto D. Only the named insured, resident relatives, and passengers.

A. Any person

117. All of the following vehicles are eligible for coverage under a personal auto policy. Except: A. A pick up truck leased to a husband and wife B. An SUV owned by a 25 year old individual C. A conversion van leased to a 19 year old individual D. A private passenger auto owned by a partnership

D. A private passenger auto owned by a partnership

118. An insured living in Cal has the following coverages under a PAP.. liability, medical payments, and loss other than collision. The individual vehicle is stolen from her driveway and then totally wrecked. Which of the following covers this loss.. A. This loss is not covered B. Other than collision coverage C. Property damage covered D. Collision coverage

B. Other than collision coverage

119. Other than collision coverage of a personal auto policy includes which of the following types of losses? A. Theft of a permanently mounted radio from the insured vehicle B. Theft of the spare tire from the truck C. Theft of a hood ornament D. Theft of any of these would be covered

D. Theft of any of these would be covered

120. What's the requirement and what is provided under the Mexico coverage endorsement to a PAP in A. Provides required coverage for insureds that live within 25 miles of the US/Mexican border, in either country B. Provides liability coverage for any accident in Mexico within 25 miles of the US border C. Provides liability coverage (excess) for any accident in Mexico within 25 miles of US border D. None of these are coveres

C. Provides liability coverage (excess) for any in Mexico within 25 miles of US border

121. Which property is excluded under an HO3 policy? A. Firearms B. Jewelry C. Securities D. Guard dog

D. Guard dog

122. Which is an additional benefit that is included in a DP2 that is not included a DP1? A. Debris removal B. Lawns, trees, and Shrubs C. Reasonable repairs D. Fire dept Services

B. Lawns, trees, and shrubs

123. What additional coverage does a DP2 have compared to a DP1? A. Debris removal B. Improvements, alterations, and additions C. Personal liability D. Additional living expenses

D. Additional living expenses

124. Which of the following loss exposures is not covered by Section II of Ron's Homeowners policy? A. Ron's use of a riding lawnmower while he is mowing his lawn B. Ron's registered/license personal auto while used on his own property C. Ron's use of a motorized golf cart, while playing golf on a golf course D. Ron's activities while rebuilding a car for fun in his garage at home. The car does not have an engine

B. Ron's Registered/licensed personal auto

125. The ordinance or law limitation in a Homeowners Policy may cause a gap in coverage in which of the following situations? A. The insured's hime is damaged by fire and must be rebuilt to meet present building codes.. The additional cost of complying with the codes is 50% B. A community ordinance requires dogs to be in a leash C. The insured has a business occupancy that is permitted by homeowner's rule and does not affect his coverage D. A law requires all swimming pools on a residential property to be fenced and to have self closing

A. The insured's home is damaged by fire and must be rebuilt to meet present

126. What is one way in which the HO2, HO4, and HO6 are similar? A. perils insured against under coverage C B. The limits provided for under coverage C C. Perils insured against under coverage A D. Limits provided for under coverage B

A. Perils insured against under coverage C

127. Which of the following perils is coverage by a "caused of lass basic form? A. Riot or civil commotion B. War C. Ordinance or law D. Governmental action

A. Riot or civil commotion

128. How are the HO3 and the HO5 similar? A. Both provide open peril coverage for the dwelling B. Both provide replacement cost coverage for contents C. Both provide named peril coverage for personal property D. Both are designed to cover condominiums

A. Both provide open peril coverage for the dwelling

129. The watercraft endorsement on a Homeowners policy extends coverage for: A. Physical damage and liability coverage for all owned watercraft B. Liability coverage for watercraft on the schedule C. Liability coverage for all owned watercraft D. Physical damage and liability coverage for watercraft listed on the schedule

B. Liability coverage for watercraft listed on the schedule

130. What is the primary diff between an HO3 and an HO5? A. Coverage D Limits b. Coverage C broad named perils C. Coverage A property D. Coverage A and B perils

B. Coverage C broad named perils

131. Which of the following is most likely to be eligible for the CA FAIR Plan? A. An insured that has had a driver's license for less than two yrs B. A well maintained dwelling located in a hazardous brush area C. A poorly maintained dwelling with faulty wiring D. An insured with a very bad driving record

B. A well maintained dwelling located in a hazardous brush area

131. What perils are insured against under the additional coverages property removed of a Homeowners Policy? A. Basic form perils B. Broad form perils C. Perils of transportation D. All Perils

D. All Perils

132. Which exclusion in the causes of loss special form excludes coverage for mudflow? A. Governmental action B. Water (flood) C. Utility service D. Ordinance or law

B. Water (Flood)

132. How much coverage if any is available under HO3 for landlords's furnishings? A. $2,500 B. $1,000 C. $2,000 D. No coverage available

A. $2,500

133. Ordinance or law coverage provides protection for which of the following losses? A. The cost of demolition and debris removal of undamaged property B. The residual property value of a home that must be demolished to comply with building code C. The increased expense incurred for the insurer to repair or rebuild property according to building code specifications D. All of the above are covered

C. The increased expense incurred

134. If the named insured has been charged w arson in reference to a total fire loss to the insured's building, what effect will the insured action have on the mortgage holder claims for damages? A. The mortgage holder is entitled to receive 80% of their loss B. The mortgage holder claim is excluded C. The mortgage holder is entitled to 50% of their loss D. The mortgagee is entitled to receive 100% of their loss

D. the mortgagee is entitled to receive 100% of their loss

135. What is one peril included in a DP2 that is not included in a DP1? A. Fire B. Explosion C. Falling objects D. Lightning

C. Falling objects

136. The ordinance or law exclusion/limitation found in property policies such as the commercial property coverage and in the Homeowner's policy has the following effect: A. It reduces the coverage on any loss if the loss was caused by the insured violating the ordinance or law B. The insured may not remove or modify the effect of the exclusion C. It warrants that an insured has not knowingly violated an ordinance or law D. It excluded that part of the loss resulting from the enforcement of a building ordinance or law

D. It excludes that part of the loss resulting from the enforcement

137. All of the following loss exposures are covered under the liability section of a Homeowner's policy, Except: A. The insured is driving a motorized golf cart while playing golf at the local country club B. The insured is using his new personal auto, fully registered and licensed, on his premises which includes a large parcel of undeveloped land.. C. The insured is restoring an unregistered antique truck in his garage D. The insured is using a riding lawn mower to mow his own lawn

B. the insured is using his new personal auto

138. What type of homeowner's policy provides open peril coverage? A. HO6 B. HO4 C. HO3 D. HO2

C. HO3

139. How can an insured ensure that she has protection against possible claims for libel, slander, and false arrest under an HO3 policy? A. Its covered automatically B. By adding ordinance or law coverage C. By adding a personal injury endorsement D. This type of coverage is not available in a Homeowner policy

C. By adding a personal injury endorsement

140. The coverage found under both a homeowner's Section II and a comprehensive personal liability policy extends to which of the following? A. Just the personal premises of the insured B. Just the personal activities of the insured C. Both the personal activities and premises of the insured on a professional D. Both personal activities and premises of the insured as well as any activities of the insured that occur off the named premises

D. Both personal activities and premises as well as any activities of the insured that occur off the named premises

141. Under a standard ISO homeowners HO3, real property and personal property are covered for the perils of: A. All risks coverage applies to real property. Broad form named perils B. Broad form name perils coverage applies to personal property. C. Broad form named perils coverage applies both D. All risks coverage applies to both

A. All risk coverage applies to person property. There is no coverage for reL property

142. An applicant would like to buy a personal Umbrella Policy: A. Your insurer may require he maintain underlying liability B. Your insurer may require that he maintain underlying liability coverage by carrying auto and personal liability coverage C. maintain personal liability coverage. Underlying auto liability coverage is not required D. There's no requirement for underlying policies

B. Your insurer may require underlying liability coverage by carrying auto and personal liability coverage

143. What is self insured retention under umbrella policy? A. The limits of liability of the umbrella policy B. A deductible application to losses excluded by the underlying coverage and covered by the umbrella C. The amount of the underlying limits of liability D. A deductible application to all covered losses

B. A deductible application to losses excluded by the underlying coverage

144. Under a personal umbrella policy, what underlying coverages must an insured typically maintain? A. Auto only B. Personal liability only C. Auto, personal liability, and professionally liability D. Auto and personal liability only

D. Auto and personal liability only

145. Umbrella policies provide coverage for and are best defined aa which of the following? A. High Risk commercial business exposures that are not able to be insured elsewhere B. Physical damage coverage, written as excess and broader coverage over an underlying primary policy C. Excess liability coverage on a broader basis, above an underlying primary policy D. Coverage on an all risk basis for damage that occurs to both personal and commercial property risks

E. Excess liability coverage, on a broader basis,

146. Inland marine policies nearly always provide what? A. Broad Peril b. Standard peril C. Basic peril D. Open peril/All Risk/Special form

D. Open Peril/All risk/Special form

147. What is the primary diff between umbrella and excess liability policies? A. The umbrella covers most liability exposures; the excess liability will cover only one line B. The umbrella has fewer supplementary features and is less expensive than the excess policy C. The umbrella covers intentional acts; the excess liability does not D. The umbrella affords defense costs; the excess liability does not

A. the umbrella covers most liability exposures; the excess liability will cover only one line

148. An Umbrella policy: A. Provide broad primary coverage for most personal or commercial B. Provides broad excess liability coverage over one or more primary policies C. Provides excess physical damage coverage D. Provides coverage for outdoor fairs and exhibitions in case of bad weather

B. Provides broad excess liability coverage over one or more primary policies

149. If the vacancy permit endorsement is added to a building and personal property coverage form, the vacancy condition under the basic policy is: A. Waived after the policy period B. Waived only for designated perils during the policy period C. Waived only designated perils during the permit period D. Waived during the permit

C. Waived only for designated perils during the permit period

150. Under the commercial building and personal property coverage extensions, property off premises is covered while the property is located: A. At a trade show or a Fair B. In a building the named insured has leased C. In a delivery truck D. At a salesperson home

A. At a trade show or a fair

151. Which of the following is eligible for business owners policy? A. A sports bar B. A credit union C. A furniture store D. An auto repair shop

C. A furniture store

152. Insurance which covers ship owners against vicarious liability claims, due to operations of the insured vessel is: A. A voyage policy B. The sue and labor laws C. Protection and indemnity insurance D. Hull insurance

C. Protection and indemnity insurance

153. Abstracts, maps, and mortgages are covered under which of the following? A. Builders Risk policy B. Inland marine C. Business owners policy D. Commercial General liability

B. Inland Marine

154. A bulldozer an insured is using to level a property for a customer overturns, causing fuel to leak and pollute the ground.. Where would this pollution loss be covered? A. Professional liability B. Commercial general liability C. Auto liability D. Inland marine

B. Commercial general liability

155. Yacht policies typically provide for: A. Hull, protection and indemnity B. Physical damage, liability, and contingent medical payments C. Hull and collision D. Property, Liability, and contingent medical payments

A. Hull, protection and indemnity

156. Inland marine policies nearly always provide what coverage? A. Broad peril B. Standard peril C. basic peril D. Open per

D. Open peril

157. Which Inland marine policy provides coverage for any loss unless it is specifically excluded, it would be considered which of the following? A. Controlled B. Open perils C. Uncontrolled D. Named peril

B. Open perils

158. The liability coverage in a yacht policy is referred to as: A. Inchmaree cause B. Personal liability protection C. Hull coverage D. Protection and indemnity

D. Protection and Indemnity

159. Commercial lines program policy common policy conditions- do not include which of the following as a condition? A. Cancellation B. Inspections and surveys C. Perils insured D. Examination of your books and records

C. Perils insured

160. Which of the following types of insurance were designed to cover domestic shipments, floater risks, and commercial property? A. Ocean Marine B. Auto liability C. Inland Marine D. Business personal property

C. Inland Marine

161. All of the following types of business would beed special inland marine coverage for their stock, Except: A. Furriers B. GrocerS C. Jewelers D. Stamp and coin collectors

B. Grocers

162. A commercial property policy can provide coverage for all of the following, Except: A. Indirect losses B. Tangible losses C. Direct losses D. Intangible Losses

D. Intangible losses

163. Which of the following types of coverage would pay for a theft which occurred during the policy period and is found for up to one year after policy termination? A. Claims made B. Discovery C. Loss sustained D. Occurance

C. Loss sustained

164. Which of the following would best be described as using forcible entry to steal property when a business is closed? A. Robbery B. Theft C. Burglary D. Extortion

C. Burglary

165. Which inland marine floaters is most similar to the scheduled personal property endorsement on a Homeowner's policy? A. Personal insurance floater B. Personal articles floater C. Personal effects floater D. Personal property floater

B. Personal articles floater

166. Under the common policy conditions, who is authorized to make changes to a commercial insurance policy? A. Any insured named on the policy B. The first named insured (with insurers consent) C. The insurance company D. The producer

B. The first named insured (with insurer's consent)

169. Where would an insured find insurance coverage to protect against damage to s shipment of televisions shipped on a semi-truck for the insured business? A. Commercial general liaBility B. Commercial auto liability C. Inland marine D. Fire and allied lines

C. Inland marine

167. Diamond Toy Company is being sued for a death caused from child choking on a piece from one of its transformers. Where would diamond find coverage for the defenses of this law suit? A. Life Insurance B. Professional liability insurance C. Crime insurance D. Commercial general liability i surance

D. Commercial general liability insurance

168. The broadest form of crime coverage is: A. Burglary B. Theft C. Robbery D. Safe Burglary

B. Theft

170. Coverage A and or B of the commercial general liability contract contains coverage for: A. Advertising injury B. Professional liability C. Workers Comp D. Losses arising from the ownership

A. Advertising injury

171. Under the commercial property coverage program, which causes of loss forms include coverage for the peril of windstorm? A. Basic, broad, and special B. Broad and special only C. Broad only D. Special only

A. Basic, broad, and special

172. Which of the following is best defined as the taking of property from a persona by someone who has caused, or threatened to cause that person bodily harm? A. Extortion B. Burglary C. Theft D. Robbery

D. Robbery

173. Which cause of loss form, under commercial property coverage, includes coverage for the peril of windstorm? A. Special and broad B. Basic, Broad, and Special C. Broad form D. Basic form

B. Basic, broad, and special..

174. A pick up van with a gross vehicle weight of 9,500lbs.May be eligible for a personal policy if it was used in the.. A. Farming or ranching B. Claims adjusting C. Hauling property for a fee D. Floral delivery

A. Farming or Ranching

175. Thomas Fry has insured a building under his commercial policy. The building was vacant for 75 consecutive days before a loss.. The policy will not pay for the loss if caused by the perils of: A. Fire B. Riot C. Windstorm or Hail D. Building glass breakage and Vandalism

D. Building glass breakage and vandalism

176. Which of the following types of crime insurance is the broadest in terms of coverage? A. Theft B. Robbery C. Safe burglary D. Burglary

A. Theft

177. Under an unendorsed commercial property form with no optional coverages, on what basis arw buildings valued? A. Replacement cost b. Guaranteed replacement cost C. Functional replacement cost D. Actual cash value

D. Actual cash value

178. Coverage parts A, B, and C of a CGL are which of the following? A. Bodily injury and property damage liability, personal and advertising injury, and medical payments B. Medical payments, bodily injury, property damage liability C. Personal injury liability, Advertising injury liab, and medical payments D. Bodily injury and property damage liability and medical payments

A. Bodily injury and property damage liability, personal and advertising injury, and medical payments

179. What type of coverage is usually provided by an Inland Marine Policy? A. Scheduled perils B. Basic perils C. Broad perils D. Open or all risk coverage

D. Open or all risk coverage

180. The syymbol "4" on a Business Auto Policy indicates coverage for which of the following categories of vehicles? A. Described autos exclusively B. Owned autos other than private passenger autos C. All drivers and autos are converted, except for those driven my driver under age 25 D. Vehicles of 2-tons or less, that are used for business purposes

B. Owned autos other than private passenger autos

181. What does Ocean Marine hull insurance cover? A. Freight B. The vessel itself C. Cargo D. These are all covered

B. The vessel itself

Property Casualty Insurance Basics Flashcards

(181 cards)