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The Real Set Third attempt, second set
Michael notes
Quiz by Michael notes, updated more than 1 year ago
Michael notes
Created by Michael notes almost 2 years ago
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Resource summary

Question 1

Question
1. A commercial building and Personal Property form provides coverage for:
Answer
  • a. A Patio attached to the building
  • b. Business personal property
  • c. Personal Auto Held for Sale
  • d. Guard Dogs

Question 2

Question
2. Special Form or Open Perils Coverage
Answer
  • a. Provides Coverage against the name perils
  • b. Provides coverage against scheduled risks
  • c. Is limited by the name exclusions
  • d. Includes no exclusion

Question 3

Question
3. Which of the following terms is defined as the uncertainty of future outcome?
Answer
  • a. Risk
  • b. Hazard
  • c. Peril
  • d. Cause

Question 4

Question
4. A commercial Package Policy must include at least how many coverages parts?
Answer
  • a. One
  • b. Two
  • c. Three
  • d. Four

Question 5

Question
5. S is purchasing a commercial property policy to cover a commercial building with a replacement cost of $100,000. The policy includes an 80 percent Coinsurance clause. To avoid a coinsurance penalty in the event of a particle loss, S should purchase a policy with minimum, limits of at LEAST which of the following amount?
Answer
  • a. $100,000
  • b. $90.000
  • c. $80,000
  • d. $20,000

Question 6

Question
Which of the following policy forms would best protect a business that musk keep operating after a loss?
Answer
  • a. Extra Fees
  • b. Business Income
  • c. Gross Earnings
  • d. Contingent Business Interruption

Question 7

Question
7. Pro-Rata cancellation occurs when:
Answer
  • a. A policy is nonrenewed
  • b. A mortgage has been satisfied
  • c. An insurer cancels a policy at inception
  • d. An insure cancel a policy at any time

Question 8

Question
8. An insurer HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 personal property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured’s premises, the insured will collect a MAXIUM of which of the following amounts?
Answer
  • a. $1,000
  • b. $1,250
  • c. $1,400
  • d. $1,500

Question 9

Question
9. The maximum amount a policy will pay in the event of a loss is called the:
Answer
  • a. Coinsurance amount
  • b. Deductible
  • c. Limit of liability
  • d. Pro rata return

Question 10

Question
10. Which of the following homeowners coverages does not generally contain a deductible?
Answer
  • a. Personal property
  • b. Other structures
  • c. liability
  • d. Dwelling

Question 11

Question
11. All of the following perils are coverage under a building and Business Personal Property Coverage Form with a cause of Loss-Basic Form attached Excepts
Answer
  • a. Smoke
  • b. Sprinkler Leakage
  • c. Sinkhole Collapse
  • d. Earth movement

Question 12

Question
12. The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences except:
Answer
  • a. Mudslides
  • b. Runoff from heavily rain
  • c. Overflow of tidal waters
  • d. Watermain breakage

Question 13

Question
13. Under A homeowners policy, an insured is required to take all of the following actions when a coverage loss occurs excepts
Answer
  • a. A give prompt notice to the insurer or its producer
  • b. Hire an appraiser to determine the amount of loss
  • c. Notify the police if the loss is the loss is the result of theft
  • d. Protect the property from further loss

Question 14

Question
14. During a tornado, a ban is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the.
Answer
  • a. Fire
  • b. Collapse of the wall
  • c. Tornado
  • d. Smoke

Question 15

Question
15. A fire in an insured’s restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fires cause extensive damage to floors and furnishings, The water damage is best described as:
Answer
  • a. A time element loss
  • b. A consequential loss
  • c. A direct loss
  • d. An indirect loss

Question 16

Question
16. Which of the following business would be eligible for a businessowner policy?
Answer
  • a. Auto body shop
  • b. Theater
  • c. Branch bank
  • d. Barber shop

Question 17

Question
17. An insurer owns a set of six drawing pens designed and used by Benjiam Franklin. Each pen is worth $1,000 alone, but set is worth $12,000. One pen is destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which of the following amounts?
Answer
  • a. $1.000
  • b. $2.000
  • c. $7,000
  • d. $12,000

Question 18

Question
18. X insurance a home for $100,000 under a dwelling Property Broad From (DP-2). If a flood causes a $1,000 in damage to the home’s content, which of the following Maximum amount will X’s insurance Pay?
Answer
  • a. $0
  • b. $800
  • c. $900
  • d. $1,000

Question 19

Question
19. All of the following options are examples of insurable EXCEPT.
Answer
  • a. A persons interest in property she is buying on contract
  • b. A tenant interest in improvement she has made to a leased building
  • c. A tv repairmen interest in a customer TV which has been repaired but is still in premise
  • d. An individual interest in property her parents will someday leave to her

Question 20

Question
20. A Commercial Property policy services which of the following responsibilities as a duty of the insured?
Answer
  • a. To return the policy of it is cancel by the insurer
  • b. To proved a sworn Proof of loss statement of requested by the company
  • c. To pay the mortgage in full in the event of a total loss
  • d. To pay premiums within thirty days after receiving an invoice

Question 21

Question
21. In order to issue a written binder for a commercial property policy what is the MINIMUM consideration a product must secure from an applicant?
Answer
  • a. A promise to pay the premium
  • b. A signature on premium finance agreement
  • c. Payment of six months premium
  • d. Payment of twelve months premium,

Question 22

Question
22. The producer for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy?
Answer
  • a. Declaration
  • b. Insuring agreement
  • c. Conditions
  • Exclusions

Question 23

Question
23. Which of the following statement about a mortgage rights under the dwelling property basic form (DP-1) in Incorrect?
Answer
  • a. No act by the insured will jeopardize repairs the mortgagee’s rights.
  • b. The mortgagee may file a Proof of Loss if the inured fails to do so.
  • c. The mortgage is entitled to receive prior notice of a policy’s cancellation
  • d. The mortgage may abandon the insured property to the insurer

Question 24

Question
24. An insured has an HO-3 Form. When using a snowblower borrowed from a neighbor, the insured strikers a large rock and causes $2,000 worth of damage to the snowblower. Under which section for the policy could payment be made on the insured’s behalf?
Answer
  • a. Personal property
  • b. Building
  • c. Personal liability
  • d. Loss of use

Question 25

Question
25. Who of the following perils is covered under the Commercial Property Basic Cause of Loss form?
Answer
  • a. Collapse
  • b. Sinkhole collapse
  • c. Falling object
  • d. Breakage of glass

Question 26

Question
26. A deer jumps through the window of an insured’s home, damaging the interior and exterior walls, Which of the following Homeowners Forms listed below is the LEAST comprehensive form the will still provide coverage for this loss?
Answer
  • a. HO-1 form
  • b. HO-2 Form
  • c. HO-3 Form
  • d. HO-5 From

Question 27

Question
27. A family take their 50 horsepower outboard boat to the lake on a trailer towed behind their personal auto. The pleasure boat is appropriately covered for physical damage under which of the following policies?
Answer
  • a. Dwelling
  • b. Homeowners
  • c. Boatowners
  • d. Yachts

Question 28

Question
28. A primary obligation of an insure is to:
Answer
  • a. Pay the claims covered under the policy
  • b. Provide a finical statement with each policy
  • c. Make inspections and surveys on insured property
  • d. Prepare an inventory after a loss

Question 29

Question
29. DP-2 is considered to be which of the following types of form?
Answer
  • a. Special
  • b. Basic
  • c. All-risk
  • d. broad

Question 30

Question
30. The principal of indemnity is designed to avoid:
Answer
  • a. two policies sharing payments for a loss
  • b. overpayment of a claim
  • c. the return of earned premiums
  • d. a coinsurance clause of less than 80 percent

Question 31

Question
31. The owner-operator of a computer store often leaves expensive computers balanced negligently on the edges of tables, believing that any damage to the computer will be paid by the insurance policy. This situation is BEST described as a:
Answer
  • a. moral hazard
  • b. morale hazard
  • c. catastrophic hazard
  • d. Psychological Hazard

Question 32

Question
32. Which of the following phrases BEST defines a hazard?
Answer
  • a. A condition that increases the chance of a loss
  • b. The uncertainty of a loss
  • c. The cause of a loss
  • d. An unexpected loss

Question 33

Question
33. Which of the following statements is CORRECT about the Fair Credit Reporting Act?
Answer
  • a. It requires an insure to send an applicant a copy of the application credit report.
  • b. If requires an insure to obtain a credit report on an application.
  • c. It allows an insurer to obtain a credit report without the application’s permission.
  • d. It provides a method for an application to correct any incorrect information in the credit report.

Question 34

Question
34. Inland marine insurance is commonly used to insure all of the following items EXCEPT:
Answer
  • a. Automobiles
  • b. Stamps
  • c. Camera equipment
  • d. Jewelry

Question 35

Question
35. In a commercial property form if a building is a left vacant coverage for vandalism will continue for up to how many days?
Answer
  • a. Thirty
  • b. Forty-five
  • c. Sixty
  • d. Ninety

Question 36

Question
36. Which of the following coverage may be added by endorsement to a Boiler and Machinery Policy?
Answer
  • a. Expediting expenses
  • b. Extra expense
  • c. Property damage liability
  • d. Damage to property of the inured

Question 37

Question
37. Which of the following source may be used it provide property insurability information?
Answer
  • a. Police records
  • b. Physical inspections
  • c. Checking account statements
  • d. Lie detector tests

Question 38

Question
38. Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the inure?
Answer
  • a. Negligence
  • b. Liability
  • c. Accident
  • d. Occurrence

Question 39

Question
39. An insured owns an antique marble statue valued at $3,000 which is covered under a Personal Articles Floater. Damage to the state would be covered in all the following situations EXCEPT:
Answer
  • a. It was accidentally damage by a housekeeper
  • b. It was damage in a flood
  • c. A guest of the inured maliciously damage it
  • d. The inured threw it

Question 40

Question
40. A company promise to pay for damage caused by or resulting from any covered Cause of Loss would be found in which of the following sections of Commercial Property policy?
Answer
  • a. Declarations
  • b. Insuring Agreement
  • c. Conditions
  • d. Exclusions

Question 41

Question
41. Actual Cash Value is most often defined as which of the following options?
Answer
  • a. Replacement cost less depreciation
  • b. Amount paid less depreciation
  • c. Fair market value plus appreciation
  • d. Appraised Value

Question 42

Question
42. The Personal Liability section of a Homeowners policy covers which of the following options?
Answer
  • a. Damage to an insured property caused by a visitor
  • b. Bodily injury to a resident cause by a neighbor’s dog
  • c. Property damage cause by war
  • d. Bodily insurer caused by the personal activities of an insured

Question 43

Question
43. G insures G’s television repair shop under a Building and Personal Property Coverage form with limits of $100,000 on the building and $50,000 on business personal property. A fire causes $10,000 in damage to the building and $20,000 in losses to the contents. G also have $1,000 for debris removal. If the policy has a deductible of $250, G will receive a Maximum of which of the following amounts of the insurer?
Answer
  • a. $29,750
  • b. $30,000
  • c. $30,750
  • d. $31,100

Question 44

Question
44. A building adjacent to an insurer business is servilely damaged by fire. Because of the nature of the damage to the adjoining property, the inured is denied access to the business by the fire department. If the insured’s property is covered under a Business Income Coverage Form the insure will cover the loss of earnings for a MAXIUM of:
Answer
  • a. three weeks
  • b. thirty days
  • c. sixty days
  • d. six months

Question 45

Question
45. An applicant statement included in the insurance contract that the property to be insured has an operable sprinkler system is:
Answer
  • a. agent binding authority
  • b. a warranty
  • c. a representation
  • d. an affidavit

Question 46

Question
46. Information provided by the insured in a Proof of Loss is considered:
Answer
  • a. a warranty
  • b. a representation
  • c. an assignment
  • d. an agreement

Question 47

Question
47. Which if the following perils is covered by Broad Form periled but is not covered by the Basic Form?
Answer
  • a. Vandalism
  • b. Weight of ice and snow
  • c. Riot
  • d. Windstorm

Question 48

Question
48. Under a Personal Property Floater, a loss is covered when it occurs:
Answer
  • a. in the insured’s home only
  • b. in the United States only
  • c. in the United States or Canada only
  • d. anywhere in the world

Question 49

Question
49. N’s next door neighbor, S, dumps hot ashes in N’s trash dumpster starting a fire and causing servicing damages to N’s home. N’s company pays the loss and then goes after S for payment this is an example of
Answer
  • a. Pro rata liability
  • b. Assignment
  • c. Appraisal
  • d. Subrogation

Question 50

Question
50. Which of the following terms can be defined as a policy provision that omits certain risks from coverage?
Answer
  • a. Declarations
  • b. Insurance Agreement
  • c. Conditions
  • d. Exclusions

Question 51

Question
51. In order to be reimbursed for a covered loss under a Standard fire policy in this state, an insured MUST
Answer
  • a. Contact an independent claims adjuster
  • b. Protect the property from further loss
  • c. Provide a proof of loss statement when ten days
  • d. Obtain a written appraisal of the damages

Question 52

Question
52. After an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment its due within a MAXIMUM of how many days?
Answer
  • a. Five
  • b. Thirty
  • c. Sixty
  • d. Ninety

Question 53

Question
53. Coverage of good in transit is usually provided by which of the following types of insurance?
Answer
  • a. Casualty
  • Surety
  • c. Inland Marine
  • d. Automobile

Question 54

Question
54. Under the standard flooded insurance policy, all of the following loss avoidance are covered up to $1,000 when damage to the insured property due to the flooding is imminent EXCEPT:
Answer
  • a. Sandbags, including the sand to fill then
  • b. Tools required to secure the property
  • c. Plastic sheeting and lumber
  • d. The value of work, at the federal minimum wage, that a member of the household performs

Question 55

Question
55. Which of the fowling situations is considered an insurance transaction?
Answer
  • a. Two insurance companies share actuarial data
  • b. Two parties negotiate the term of coverage when executing an insurance contract
  • c. An independent audit company reviews a domestic insurance’s records for a fee.
  • d. An insured sends a policy to the bank in preparation for a mortgage closing

Question 56

Question
56. The purpose of the FAIR Plan is to provide:
Answer
  • a. Automobile insurance for high-risk drivers
  • b. Crime insurance for residents of high-risk neighborhoods
  • c. Property insurance on recreational vehicles for which such coverage is unavailable in the regular market
  • d. Basic property insurance for which coverage is not available in the regular market

Question 57

Question
57. XYZ Insurance Company recently received its certification of authority to sell property insurance in Illinois, XYZ is an Iowa insurer but will sell its products through its licensed Illinois producers. Which of the following statements is CORRECT about XYZ Company’s involvement in the FAIR Plan?
Answer
  • a. XYZ may not join the FAIR Plan, because it is a foreign company
  • b. XYZ may not join the FAIR Plan, because its producers are licensed in Illinois
  • c. Membership in the FAIR Plan is optional for XYX.
  • d. XYZ must belong to the FAIR Plan because it has a certification of authority to sell homeowners insurance in Illinois.

Question 58

Question
58. The Insurance Commissioner is empowered to:
Answer
  • a. enforce state laws relating to insurance
  • b. pass state laws relating to insurance
  • c. write policy forms for mandatory insurance coverages
  • d. set rate for mandatory insurance coverages

Question 59

Question
59. To obtain coverage from this state’s FAIR plan, an applicant MUST:
Answer
  • a. Show that a diligent search was made through established markets
  • b. Apply at least thirty days prior to the desired effective date of the coverage
  • c. Pay a premium surcharge based on the applicant’s past claims experience
  • d. Pay a premium surcharge based on the type of property to be insured

Question 60

Question
60. An insurer that generally fails to affirm or deny coverage of claims within a reasonable period if time after receiving Proof of Loss may be found guilty of
Answer
  • a. A breach of fiduciary responsibility
  • b. An improper claims practice
  • c. Defamation
  • d. misrepresentation

Question 61

Question
61. If a commercial insurer fails to meet the requirements of the forty-five days Notice of Nonrenewal Rule prior to the expiration date of the existing policy, the company “must”
Answer
  • a. extend the current policy for one year and waive the premium
  • b. reduce coverage to develop a new premium that does not exceed the expiring policy premium
  • c. provide a renewal policy that matches the expiring policy coverage and premium
  • d. pay a $3,000 fine per violation to the Division of Insurance

Question 62

Question
62. After an insurance producer license is issued, a licensee MUST complete how many hours of approval continuing education course every two years?
Answer
  • a. Ten
  • b. Fifteen
  • c. Twenty
  • d. Twenty-four

Question 63

Question
63. The insurance Commissioner may issue a limited insurance representative license to an individual who wants to sell which of the following types of policies?
Answer
  • a. Fire
  • b. Automobile
  • c. Mortgage Guaranty
  • d. Health

Question 64

Question
64. An individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy on its behalf is know as:
Answer
  • a. An adjuster
  • b. A consultant
  • c. An insurance broker
  • d. An insurance producer

Question 65

Question
65. Making false or misleading statements about dividends or shares of surplus previously paid on an insurance policy is know as:
Answer
  • a. Unfair discrimination
  • b. Rebating
  • c. Coercion
  • d. misrepresentation

Question 66

Question
66. Upon determining that a producer has violated the insurance law, the Insurance Commissioner is required to take which of the following actions:
Answer
  • a. Place the license on probation immediately
  • b. Publish notice of violation
  • c. Hold a hearing of the violation
  • d. Submit the infraction to the Department of Insurance

Question 67

Question
67. An incorporated insurer with capital divided into shares and owned by its shareholder is know as:
Answer
  • a. A stock company
  • b. A mutual company
  • c. A fraternal benefit society
  • d. An association group

Question 68

Question
68. If an owner-occupied dwelling is totally destroyed without criminal fault on the part of the insured. The amount of the loss covered by a property policy would be “based on”
Answer
  • a. A depreciated value of the dwelling
  • b. The policy limits
  • c. The market value of the dwelling
  • d. The assessed value of the dwelling

Question 69

Question
69. Which of the following persons may assign a Standard Fire policy?
Answer
  • a. A claims adjuster
  • b. The Superintendent of Insurance
  • c. The insured with permission of the insurance company
  • d. The insured only

Question 70

Question
70. In this state, a domestic insurer is defined as a company that:
Answer
  • a. Operates in this state but its incorporate in another state
  • b. Operates in this state but is domiciled in another state
  • c. Is headquarters in this state
  • d. Is incorporated in this state

Question 71

Question
71. An insurer that permits different rate classifications for individuals of the same class and same hazard may be guilty of:
Answer
  • a. Boycotting
  • b. Unfair discrimination
  • c. Misrepresentation
  • d. Defamation

Question 72

Question
72. All of the following item contained in a basement are covered under the standard flood insurance policy EXCEPT:
Answer
  • a. Drywall for walls and ceilings and the cost of labor to nail it, unfinished and not taped, to the framing
  • b. Function electrical outlets and switches
  • c. Carpet permanently installed over unfinished flooring
  • d. Fuel tanks, it installed in their functions locations and connected to a power source

Question 73

Question
73. A Candidate for licensure as property insurance producer must have completed a MINIMUM of how many hours of pre-licensing education?
Answer
  • a. 45
  • b. 30
  • c. 15
  • d. 7.5

Question 74

Question
74. An insurer that intends to nonrenewed a Homeowners policy MUST take which of the following actions?
Answer
  • a. Obtain coverage for the policyholder from another insurer
  • b. Obtain coverage for the policy holder under FAIR plan
  • c. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy expiration date
  • d. Send a notice stating the reason for nonrenewal to the insured

Question 75

Question
75. The Insurance Commissioner may suspend, revoke, or deny producer’s license for all the following reasons EXCEPT:
Answer
  • a. Untrue statements on the license application
  • b. Conviction of a misdemeanor
  • c. Incompetency
  • d. Converting funds

Question 76

Question
1. The attempt to restore an insured to the insured’s provision financial condition before the loss occurred is BEST described as:
Answer
  • a. Indemnification
  • i. Subrogation
  • b. Coinsurance
  • c. Self-insurance

Question 77

Question
2. The Conditions section of an insurance policy state the:
Answer
  • a. deductible amount; if any
  • b. Policy term
  • c. Policy provisions
  • d. duties of the insured

Question 78

Question
3. In the event of a loss under a Personal Auto Policy, an insured is required to submit to the insurance company all of the following information EXCEPT:
Answer
  • a. A Proof of Loss statement if requested
  • b. A Notice of Claim
  • c. A list of any know witnesses
  • d. An appraisal of the damaged property

Question 79

Question
4. Which of the following individuals is a named insured under a Personal Auto policy?
Answer
  • a. A person who is listed in the Declaration section
  • b. A valet who parks an insured’s car
  • c. An insured’s employer who drives the insured’s car for personal use
  • d. A neighbor who drives an insured's car with permission

Question 80

Question
5. Under a Commercial General Liability policy, Personal and Advertising Injury Liability coverage does NOT apply to damage resulting from
Answer
  • a. Slanderous statements made by an advertising firm
  • b. Copyright infringement by a department store
  • c. Harmful, truthful information published by a realtor
  • d. Invasion of an individual’s privacy

Question 81

Question
6. In an application for marine insurance, a yacht owner states that the yacht will only be sailed on inland waters. If the insured subsequently sail the yacht on the seas, coverage may be denied because the insured has breached:
Answer
  • a. The Inchmaree clause
  • b. The policy clause
  • c. A representation
  • d. A warranty

Question 82

Question
7. Which if the following occurrence would be included under the definition of a personal injury
Answer
  • a. A customer injured in a department store when a sign falls on her shoes for medical cost and pain and suffering
  • b. An employee injured lifting a heavy carton sues hie employer for costs
  • c. An individual fired from her job sues her employer for unemployment benefits
  • d. A tenant evicted by his landlord sued the landlord for invasion of privacy and wrongful eviction

Question 83

Question
8. Premium costs for standard Workers Compensation insurance are paid by:
Answer
  • a. employers only
  • b. employees only
  • c. employers and employees jointly
  • d. The Workers Compensation Board

Question 84

Question
9. W, an electrician, caused damage to the main wiring of a shopping center while working on another building. As a result, the shopping center was forced to close early for the day. The loss resulting from this damage would be considered which of the following types under W’s Commercial General Liability policy?
Answer
  • a. Products
  • b. Completed Operations
  • c. Premises
  • d. Operations

Question 85

Question
10. Which of the following statements best describes a representative in an insurance application?
Answer
  • a. It is a statement made by the insured that certain conditions exist at the time of application
  • b. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term.
  • c. It explains the promise of the insurance company
  • d. Is its part if the insuring Agreement

Question 86

Question
11. The Arbitration clause in a Personal Auto policy would be used in which of the following circumstances?
Answer
  • a. The insurance company and a pedestrian struck by the insured’s auto cannot reach an agreement regarding the settlement of a claim
  • b. The insured and an injured third party cannot reach an agreement regarding the settlement of a claim
  • c. The insured and the insurance company cannot reach an agreement regarding the settlement for a claim
  • d. The court have ruled against an injured third party

Question 87

Question
12. Which of the following injuries is covered under the medical payments section of an insured’s Commercial General Liability policy?
Answer
  • a. An employee breaks an ankle in the insured’s warehouse
  • b. An individual is injured participating in an athletic event on the insured property
  • c. A supplier is injured while visiting the insured showroom
  • d. A Tenant in the insured apartment building slips in their apartment and requires x-rays

Question 88

Question
13. An insurance binder is best described as:
Answer
  • a. A large bound volume of rules, rates, and forms
  • b. A rate manual supplied by one of the rating organizations
  • c. A temporary agreement to pay a claim pending final settlement
  • d. Temporary short-term evidence of coverage

Question 89

Question
14. Which of the following individuals is likely to have a vailed Workers Compensation claim?
Answer
  • a. A retired employee injured while visiting his old workplace
  • b. An employee who suffers a diabetic coma from failure to take prescribed medicine
  • c. A sole proprietor injure in auto accident while driving to a friend’s house
  • d. An employee injured while undergoing job training

Question 90

Question
15. A Commercial General Liability policy provides coverage for which of the following hazards?
Answer
  • a. Professional liability
  • b. Employee Injury Liability
  • c. Pollution Liability
  • d. Premises Liability

Question 91

Question
16. Insurance purchased to protect an insured from death. Injury, disability or property damage of another is defined as:
Answer
  • a. Credit Insurance
  • b. Property Damage Legal Insurance
  • c. Liability Insurance
  • d. Accident and Health insurance

Question 92

Question
17. In a state where minimum auto bodily injury liability limits are 20/40, S is driving with limits of 20/40. S is responsible for an accident with T in which T suffers bodily injury in the amount of $120.000. T has non-stacked Underinsured Motorists limits of 100/300. How much will T’s policy pay toward T’s injury
Answer
  • a. $20,000
  • b. $80,000
  • c. $100,000
  • d. $120,000

Question 93

Question
18. Which of the following claims may be covered by under Bodily Injury Liability coverage?
Answer
  • a. Physical equipment
  • b. False arrest
  • c. Libel
  • d. Suicide

Question 94

Question
19. Which of the following coverages may be written with Worker’s Compensation?
Answer
  • a. Products
  • b. Contractual
  • c. Employers Liability
  • d. Completed Operations

Question 95

Question
20. An insured has an automobile policy with a combined single limit of $500,000 for Bodily Injury and Property Damage. After an accident a court awards $300,000 bodily injury and $25,000 property damage to Claimant A, and $200,000 bodily injury and $25,000 property damage to Claimant B. In this situation, the insurance company’s limits for liability is:
Answer
  • a. $300,000
  • b. $350,000
  • c. $500,000
  • d. $550,000

Question 96

Question
21. Which of the fowling vehicles is considered a covered auto under a Personal Auto Policy?
Answer
  • a. A vehicle used by the insured to transport passengers to and form an airport for a fee
  • b. The insured’s all-terrain vehicle with three wheels
  • c. A replacement car purchase by the insured a week aga but not yet reported the insurance company
  • d. A company car provided to the insured by an employer

Question 97

Question
22. Which of the following policies is intended to broaden the coverages and increase the limits of underwriting insurance?
Answer
  • a. Owners and Contracts Protective Liability
  • b. Umbrella liability
  • c. Excess lability
  • d. Commercial General Liability

Question 98

Question
23. J drives L’s car. Both J and L have a personal Auto Policy. Which of following statements is CORRECT concerning coverage if J causes an accident?
Answer
  • a. J’s policy only will pay for any damage
  • b. L’s policy only will pay for any damage
  • c. L’s policy is primary and J’s is excess
  • d. J’s policy is primary and L’s is excess

Question 99

Question
24. A legal obligation for injuries that are sustained due to failure to preform a duty is know as:
Answer
  • a. negligence
  • b. liability
  • c. physical hazard
  • d. claims payment

Question 100

Question
25. in a commercial General Lability policy, medical payment expense must be:
Answer
  • a. caused by the negligence of the insured
  • b. caused by the product manufactured by the insured
  • c. report withing one year of the date of the accident
  • d. report withing two years of the policy expiration

Question 101

Question
26. After paying a claim, an insurance company may have the right to purchase legal action against the negligent party. This right is called
Answer
  • a. Assignment
  • b. Other insurance
  • c. Subrogation
  • d. Action against the company

Question 102

Question
27. Which of the following sections of a policy limits coverage?
Answer
  • a. Policy summary
  • b. Conditions
  • c. Binders
  • d. Exclusions

Question 103

Question
28. The principal of a actual cash value is applied to claims for which of the following polices?
Answer
  • a. Accidental Death
  • b. Auto Physical Damage
  • c. Variable Annuity
  • d. Workers’ Compensation

Question 104

Question
29. In insurance, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor interned?
Answer
  • a. An accident
  • b. An occurrence
  • c. An event
  • d. A condition

Question 105

Question
30. In insurance, all of the following losses are examples of pure risk EXCEPT:
Answer
  • a. Auto accident
  • b. Flood damage to a home
  • c. Decline of stock values on the stock market
  • d. Fire damage

Question 106

Question
31. The limits of liability are found in which of the following sections of a casualty policy?
Answer
  • a. Conditions
  • b. Insuring Agreement
  • c. declarations
  • d. Definition

Question 107

Question
32. The acts of intentionally withholding from an insurance application a fact that would affect insurance of the policy is referred to as:
Answer
  • a. Concealment
  • b. Misrepresentation
  • c. Defamation
  • d. twisting

Question 108

Question
33. a bond guaranteeing the obligation of one party to another by a third party know as a:
Answer
  • a. municipal bond
  • b. fiduciary bond
  • c. surety bond
  • d. guarantee bond

Question 109

Question
34. Products Liability coverage would insure damages that arise from which of the following situations?
Answer
  • a. A manufacturer is required to recall a defective product
  • b. a contractor installs inferior-grade siding on a budling
  • c. A customer receives an electrical shock from a curling iron during an in-store demonstration
  • d. A bicycle rider is injured when a wheel manufacturers

Question 110

Question
35. The Fair Credit Reporting Act requires the:
Answer
  • a. Insurance company to review the applicating’s credit history prior to underwriting a policy
  • b. Insurance producer to summarize a policy for the insured
  • c. Insurance producer to review the applicant a credit report may be obtained
  • d. Insurance company to inform the application a credit report may be obtained

Question 111

Question
36. Which of the following liability coverages may require the insured’s consent company settles and pays a loss?
Answer
  • a. Professional
  • b. Automobile
  • c. Products
  • d. Contractual

Question 112

Question
37. An employer wishes to purchase liability coverage to protect against employees who bring suit due to an employment-related offense. What type of policy would be most appropriate for the employer?
Answer
  • a. Employment practices liability (EPLI
  • b. Commercial General Liability (CGL)
  • c. Owners and Contractors Protective Liability (OCP)
  • d. Bodily Injury Liability (BI)

Question 113

Question
38. An insured is required to take which of the following actions immediately after an occurrence?
Answer
  • a. Request a subrogation statement from the producer
  • b. Give notice of a claim to the insurance
  • c. Notify an independent adjuster
  • d. Obtain a written report from the police department

Question 114

Question
39. A person is acting negligently if they:
Answer
  • a. Buy a sportscar
  • b. Fail to act prudently
  • c. Work at home
  • d. Spend more than they earn

Question 115

Question
40. Anything that increase the chance the chance of loss is know as(n)
Answer
  • a. Risk
  • b. Hazard
  • c. Direct loss
  • d. Indirect loss

Question 116

Question
41. Under a Fidelity Bond, which of the following individuals is considered the oblige?
Answer
  • a. An employer
  • b. An employee
  • c. A subcontractor
  • d. A creditor

Question 117

Question
42. Which of the following losses would be covered under an Inside the Premises- Robbery and Safe Burglary of Other Property form?
Answer
  • a. Valuable papers kept in a locked safe are destroyed by fire
  • b. Cash is stolen form a locked safe that shows no sings of forced entry
  • c. jewelry is stolen from a locked safe that shows no sings of forced entry
  • d. Gold bards are stolen from a locked safe that shows no sings of forced entry

Question 118

Question
43. If an insured intentionally conceals a material fact about an auto to be covered by a policy, coverage may be:
Answer
  • a. Voided
  • b. Suspended
  • c. Reduced
  • d. Restricted

Question 119

Question
44. Actual cash Value is most often defined as:
Answer
  • a. Replacement cost less depreciation
  • b. Original purchase price less depreciation
  • c. Sted amount a policy will pay
  • d. Cost to replace

Question 120

Question
45. A policyholder would except to find which of the following information in the insuring agreement section of an auto policy?
Answer
  • a. Bodily injury limit of ability
  • b. The insurance company’s promise to pay on the behalf on the insured
  • c. Exclusions regarding certain uses of the auto
  • d. The obligation of the insured on the event of the loss

Question 121

Question
46. Investment consultants should purchase which of the fowling protect themselves from errors and omissions claims?
Answer
  • a. Owner’s and Contractors Protective Liability
  • b. Premise and Operations Liability
  • c. Professional Liability
  • d. Products and Completed Operations Liability

Question 122

Question
47. A business insured under a commercial general liability policy has a General Aggregate limits of $1,000,000 and Occurrence limit of $100,000. An injured party is awarded $100,000. What limits will remain available to the insured?
Answer
  • a. General Aggregate of $1,000,000. Occurrences limit of $100,000
  • b. General Aggregate of $900,000. Occurrences limit of $100,000
  • c. General Aggregate of $1,000,000. Occurrences limit of $0
  • d. General Aggregate of $900,000. Occurrences limit of $0

Question 123

Question
48. Which of the following vehicles is considered a temporary substitute auto under a Personal Auto policy?
Answer
  • a. A neighbor’s pickup truck borrowed by an insured to run an errand
  • b. An auto purchased by an insured to replace a previously owned vehicle
  • c. An auto rented by an insured when the insured is on vacation
  • d. An auto rented by an insured when the insured’s car is in a garage for repairs

Question 124

Question
49. Which of the following sections of an insurance policy would explain the term “ auto”?
Answer
  • a. Declaration
  • b. Definitions
  • c. Insuring agreement
  • d. Obligations of the insurance company

Question 125

Question
50. In a store, all of the following situations would be considered theft EXCEPT:
Answer
  • a. Merchandise being stolen with evidence of forced entry
  • b. A clerk witnessing a customer shoplifting merchandise
  • c. A clerk being robbed at gunpoint
  • d. The store’s year-end inventory coming up short by 5 percent

Question 126

Question
51. Which of the following statements is a considered an insurance transaction?
Answer
  • a. Two insurance companies share actuarial data
  • b. Two parties negotiate the term of coverage when executing an insurance contract
  • c. An independent audit company revies a domestic insurance company’s records for a free
  • d. An insured spends a policy to the bank in preparation for a mortgage closing

Question 127

Question
52. An incorporated insurance company with capital divided into shares and owned by its shareholders is know as:
Answer
  • a. A stock company (TXPg.44)
  • b. A mutual company
  • c. A fraternal benefit society
  • d. An association group

Question 128

Question
53. Making false or misleading statement about dividends or shares of surplus previously paid on an insurance policy is known as:
Answer
  • a. unfair discrimination
  • b. rebating
  • c. coercion
  • d. misrepresentation (TXPg.60)

Question 129

Question
54. In this state, a domestic insurance company is defined as a company that
Answer
  • a. Operates in this state but its incorporated in another state
  • b. Operates in this state but is domiciled in another state
  • c. Is headquartered in this state
  • d. Is incorporated in this state (TXPg,10)

Question 130

Question
55. An insurance company may deny an employee’s claim for Workers Compensation benefits if the employee was:
Answer
  • a. Traveiling on company business when the injury occurred
  • b. Drunk and caused the injury
  • c. Careless and caused the injury
  • d. Injured through the actions of a fellow employee

Question 131

Question
56. An insurance company that generally fails to affirm or deny coverage of claims withing a reasonable period of time after receiving Proof of Loss may be found guilty of
Answer
  • a. A breach of fiduciary responsibility
  • b. An improper claims practice
  • c. Defamation
  • d. misrepresentation

Question 132

Question
57. Which of the following companies MUST participate in the Auto Insurance Plan?
Answer
  • a. All companies that sell auto insurance in this state
  • b. Only companies that sells more than 1,000 auto polices per year in this state
  • c. Only the ten largest auto insurance companies in this state
  • d. Only surplus lines insurance companies that sell auto insurance in this state

Question 133

Question
58. The Workers Compensation Act provides coverage for all of the following losses EXCEPT:
Answer
  • a. A personal injury arising out of, of in the course of, employment
  • b. an on-the-job injury sustained by an employee who was intoxicated (TXPg.32)
  • c. an on-the-job injury inflicted by a third party against an employee
  • d. death that occurs at an employee’s home but results from a lung disease that is job-related

Question 134

Question
59. An employer who has been refused Workers Compensation coverage by at least four insurance companies may apply for covered with:
Answer
  • a. the FAIR Plan
  • b. the Assigned Risk Plan
  • c. the Joint Underwriters Association (JUA)
  • d. a reinsurance facility

Question 135

Question
60. Proof of Motor Vehicle Liability insurance is requested of a driver:
Answer
  • a. When registering a vehicle
  • b. When applying for a driver license (TXPg.79)
  • c. After acquiring a vehicle
  • d. After an automobile accident involving bodily injury

Question 136

Question
61. Which of the following statements is CORRECT about Uninsured/Underinsured Motorist coverage in this state?
Answer
  • a. It is required coverage in all policies in any amount
  • b. It must be issued at limits equal to the Bodily injury/Physical Damage policy limits.
  • c. It is required in all policies in the amount chosen by the insured only
  • d. It is subject to rejection by the policyholder in writing

Question 137

Question
62. If an insured has more than one auto policy that provides, Uninsured Motorist coverage, which of the following statements about the recovery of benefits is CORRECT?
Answer
  • a. Benefits are limited to the requirements established by the Financial Responsibility Act
  • b. Benefits are paid only by the policy with the highest limits
  • c. Total recovery is restricted to the average limits of this coverages
  • d. Total recovery is restricted to the highest limits of those coverages

Question 138

Question
63. The nonrenewal of an auto policy does not become effective until how may days after the insured notice from the insurance company?
Answer
  • a. 10
  • b. 25
  • c. 30 (TXPg.72)
  • d. 45

Question 139

Question
64. Under the Automobile Insurance Plan (AIP), all of the following coverages are available to the eligible owner of a private passenger vehicle EXECPT:
Answer
  • a. Rental Reimbursement (TXPg.32)
  • b. Personal injury protection (PIP)
  • c. Underinsured Motorist
  • d. Bodily injury

Question 140

Question
65. The amount if an injured employee’s Workers Compensation disability payments is based on the employee’s:
Answer
  • a. Severity of injury
  • b. Degree of occupational hazard
  • c. Years of covered employment
  • d. Average weekly wage (TXPg.88)

Question 141

Question
66. A candidate for license as a casualty insurance producer must have completed a MINIMUM of how many hours of relicensing educational?
Answer
  • a. 45
  • b. 30
  • c. 15 (TXPg.53,24)
  • d. 7.5

Question 142

Question
67. After an insurance producer license is issued, a licensee MUST complete how many of approved continuing education courses every two years?
Answer
  • a. Ten
  • b. Fifteen
  • c. Twenty
  • d. Twenty-four (TXPg.53)

Question 143

Question
68. The insurance Commissioner is empowered to:
Answer
  • a. Enforce state laws, relating to insurance (Pg.39)
  • b. Pass sate laws relating to insurance
  • c. Write point form for mandatory insurance coverages
  • d. Set rates for mandatory insurance coverages

Question 144

Question
69. Proof of financial responsibility for damages caused by automobile accident may be shown by all of the following documents EXCEPT:
Answer
  • a. An automobile insurance policy
  • b. A certification of self-insurance
  • c. A deposit of securities
  • d. A certified finance statement (TXPg.78,79)

Question 145

Question
70. An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:
Answer
  • a. Boycotting
  • b. Unfair discrimination (TXPg.61)
  • c. Misprinting
  • d. defamation

Question 146

Question
71. An induvial appointment by an insurance company to solicit applications for a policy of insurance or to negotiate a policy on its behalf is know as:
Answer
  • a. an adjuster
  • b. a consult
  • c. an insurance broker
  • d. an insurance producer

Question 147

Question
72. A private passenger auto policy may be cancelled more than sixty days after the effective date for which of the following reason?
Answer
  • a. A change in the insured’s occupation
  • b. The addition of a teenage driver to the policy
  • c. Suspension of the insured’s driver’s license
  • d. A change in the insured’s martial status

Question 148

Question
73. The insurance Commissioner may suspend, revoke, or deny a producer’s license for all of the following reason EXCPET:
Answer
  • a. Untrue statements on the license application
  • b. Conviction of a misdemeanor
  • c. incompetency
  • d. converting funds

Question 149

Question
74. The insurance commissioner may issue a limited insurance representative license to a individual who wants to sell which following types of policies?
Answer
  • a. Fire
  • b. Automobile
  • c. Morage Guaranty
  • d. Health

Question 150

Question
75. Upon determining that a producer has violated the insurance law , the insurance Commissioner is required to take which of the following actions?
Answer
  • a. Place the license on prohibition immediately
  • b. Publish notice of the violation
  • c. Hold a hearing on the infraction (TX Pg. 8)
  • d. Submit the infraction toe the Department of Insurance for review

Question 151

Question
1. Which of the following Homeowners coverage does not generally on the following , homeowners coverage does not generally contain a deductible?
Answer
  • i. Liability
  • random

Question 152

Question
2. In a commercial property form, if a guideline is left vacant, coverage of vandalism will contain for up to how many days?
Answer
  • i. 60 Days
  • random

Question 153

Question
3. Which of the following perils is covered under the Commercial property basic cause of loss form?
Answer
  • i. Sinkhole Collapse
  • random

Question 154

Question
4. Commercial Building and Personal Property form provides policy, what is the minimum consideration a producer must secure from an applicant
Answer
  • i. Payment of twelve months premium
  • Random

Question 155

Question
6. A Commercial Package policy must include at least how many coverage parts?
Answer
  • i. Two
  • random

Question 156

Question
7. The personal liability sections of homeowners policy covers when of the following?
Answer
  • i. Bodily injury covered by the personal activities of an insured
  • random

Question 157

Question
16. If the insure is unilateral increase premiums of decreasing benefits at the renewal of – commercial policy , the named insured must be notified (blank) days after the renewal
Answer
  • i. 45 (days)
  • random

Question 158

Question
18. The personal liability section of a homeowners policy covers which of the following options
Answer
  • i. Bodily injury caused by the personal activities or an insured
  • random

Question 159

Question
19. All of the following perils are covered under a building and business personal property coverage form with a cause of loss basic form attached except
Answer
  • i. Earth movement
  • random

Question 160

Question
20. A building adjacent to an insured business a surety damaged by fire, because of the native of the damage to the adjoining dropped, the insured is denied access to the business by the dire department. If the insured property is covered under which if a Business income coverage form, the insurer will cover the full of earrings for a maximum of
Answer
  • i. Three weeks
  • random

Question 161

Question
21. Which of the following coverage may be added by endorsement to a boiler an machinery policy?
Answer
  • i. Extra expense
  • random

Question 162

Question
22. When an insurer plan to nonrenewal a commercial property insurance policy, it must be given the policyholder a written floater of its intent to non renewal as least ow may days in advanced?
Answer
  • i. 45 Days
  • random

Question 163

Question
23. Within how many days must a property insurer pay an a claim after the settlement is reached
Answer
  • i. 20 days
  • random

Question 164

Question
24. Can an insurer cancel a property policy for nonpayment of premium?
Answer
  • i. Which 10 days written notice and reason of cancellation given to the insured
  • random

Question 165

Question
36. The non renewal of an auto policy does not become effective until, how many days after the insured receives notice from the insurance companies?
Answer
  • 37. 45 (days)
  • random
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