Simulate Exam Flashcards
(28 cards)
What is the purpose of a stated value contract?
To pre-establish the amount of coverage available for property items that are difficult to value
What info would be found in a policy’s insuring agreement?
Renewal dates
Parties to contract, effective and renewal dates, and perils
Which method of loss valuation is contrary to the basic concept of indemnity?
Replacement cost
because there’s a possibility the insured may get a settlement greater than the ACV
If more than one person has an insurable interest in a property covered by a dwelling policy:
The insurer will be liable only for the insured’s interest in the damaged property
Texas BI/PD limits?
30/60/25
Dividends paid to policyholders insured by a mutual insurance company:
are not taxable by the IRS, they are return of a portion of the paid premium
Insurers must file all rates and forms for commission’s approval within how many days prior to use?
60 days
And insurer may cancel an auto policy if it’s been in effect for how many days?
60 days
The endorsement that provides coverage for losses arising from sudden collapse of earth arising from underground limestone created by the action of water on rock formations is a/an
Sinkhole collapse endorsement
While cutting grass in your yard with your brother’s borrowed lawnmower, the fuel line ruptures and the lawnmower is destroyed in the fire. How will your HO liability react?
It will cover the damage
According to the Insured Duties after a Loss provision in homeowners policies, if the insurer requires a signed, sworn proof of loss, the insured must provide within how many days?
60 days
Losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected is the definition of which of the following terms?
Occurrence
The part of a property policy that shows the amount of insurance, premium, and policy term is the
Declarations
How much is covered for debris removal under the HO property additional coverages?
All reasonable costs
Which of the following is NOT a possible penalty for a violation of the Insurance Code?
a) Payment of restitution
b) A cease and desist order
c) A fine up to $100,000
d) An administrative penalty
A fine up to $100,000
In addition to the suspension or revocation of a license, the Commissioner may impose any of all of the following penalties: issue a cease and desist order; order the payment of an administrative penalty; and order the licensee to make restitution. The penalty for a violation may not exceed $25,000.
What is a required notice of cancellation of a Homeowners policy to the insured?
10 days
An insurer may cancel a personal auto policy if the policy has been in effect for at least how many days?
60 days
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15
Which dwelling coverage forms would pay replacement cost for the dwelling?
DP-2 and DP-3
DP-2 and DP-3 pay replacement cost as long as the house is insured for at least 80% of its value on the date of loss.
Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT
Damage to a third-party property for which the insured is legally liable.
Legal liability coverage is a primary liability coverage, not an additional coverage.
Why would a loss of A coin collection valued at $500 NOT be covered by a homeowners policy?
An HO policy will pay no more than $200 for coins.
What is the limit of liability?
The limit of liability is the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.
A home is insured under an HO-2 policy. The homeowner decides to replace the roof on the house. He wasn’t able to complete the roof in one day and left a portion of it unfinished overnight. A heavy rainstorm caused $20,000 of damage to the interior of the house and some furniture. In this situation, the homeowners will pay
Nothing.
HO-2 is a named peril policy and rain is not a covered peril. It would pay for the damage caused by rain if the hole was caused by a covered peril (wind or hail).
What is a required notice of cancellation of a Homeowners policy to the insured?
10 days
