Term
1. What course of action does a party to a contract have if the other party is found to be in breach of that contract?
A. Nothing, unless the injured party can prove the damages are substantial
B. Reasonable attorney fees and costs only
C. Damages for breach, reasonable attorney fees and costs
D. Damages caused by the breach only |
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Definition
| C. Damages for breach, reasonable attorney fees and costs |
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Term
2. A representation in an insurance contract qualifies as which of the following?
A. An amendment
B. An express warranty
C. A policy provision
D. An Implied warranty |
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Definition
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Term
3. What does it mean if an agent's license is inactive?
A. The agent can transact insurance business if it is done with another agents approval
B. The agent can transact any insurance business for which the agent is licensed
C. The agent can still transact insurance business in CA, but not in any other state until it is reactivated
D. The agent cannot transact any insurance business for which a valid, active license is required |
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Definition
| D. The agent cannot transact any insurance business for which a valid, active license is required |
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Term
4. The ordinance and law exclusion/limitation found in property policies such as the commercial property coverage,
and in the homeowner's policy have the following effect:
A. It warrants that an insured has not knowingly violated an ordinance or law
B. The insured may not remove or modify the effect of the exclusion
C. It reduces the coverage on any loss if the loss was caused by the insured violating the ordinance or law
D. It excludes that part of the loss resulting from the enforcement of a building ordinance or law |
|
Definition
| D. It excludes that part of the loss resulting from the enforcement of a building ordinance or law |
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Term
5. Extra expense insurance covers:
A. Increased expense of repairing property that has appreciated
B. The extra expense that a business incurs to continue a business while damage to the premises are being restored
C. The loss of profit a business incurs when it is shut down after a loss by a covered peril
D. Payroll and other overhead incurred when a business is shut down after a loss |
|
Definition
| B. The extra expense that a business incurs to continue a business while damage to the premises are being restored |
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Term
6. A plate glass/glass coverage form is needed by some insureds. Which of the following statements about the
coverage for the peril of glass breakage in commercial property for a "building and personal property" basic, broad
and special causes of loss forms is true?
A. There is limited glass breakage coverage in both of the broad and special forms
B. There is limited glass breakage coverage in the basic form
C. No policy limits apply to glass breakage coverage in the special form, all named perils
D. There is no glass breakage coverage in the broad or special forms |
|
Definition
| A. There is limited glass breakage coverage in both of the broad and special forms |
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Term
7. In the state of CA, no rate will remain in effect if it is considered to be any of the following, except:
A. Impartial
B. Unfairly discriminatory
C. Excessive
D. Inadequate |
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Definition
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Term
8. The amount paid for damage to property which is equal to the price for which it could have been sold is:
A. Actual cash value
B. Stated amount
C. Replacement amount
D. Market value |
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Definition
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Term
9. The limited Mexico endorsement applies to trips to Mexico with a duration of:
A. 7 days or less
B. 10 days or less
C. 2 days or less
D. 14 days or less |
|
Definition
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Term
10. Which of the following types of coverage would pay for losses which occurred during the policy period and are
found for up to one year after policy termination?
A. Occurrence
B. Loss sustained
C. Claims made
D. Discovery |
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Definition
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Term
11. Which coverage is needed to protect physicians, surgeons, and dentists for their professional activities?
A. Commercial general liability
B. Employer's liability
C. Malpractice coverage
D. Errors and omissions coverage |
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Definition
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Term
12. What must an insurer do who accepts an application from an agent who is not specifically appointed by that
insurer, and then issues a policy from that application?
A. The agent must become an employee of the company within 30 days of receiving the application
B. Name the agent to the list of the company's approved agents
C. Send the agent an appointment approval notice within 30 days of policy issuance
D. Forward to the Commissioner a notice of appointment within 14 days of receipt of application |
|
Definition
| D. Forward to the Commissioner a notice of appointment within 14 days of receipt of application |
|
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Term
13. X is in an accident with Y, X suffers $5,000 of damage but it is determined that Y is 60% responsible for the
accident. How much would X receive under contributory negligence rules?
A. $0
B. $2,000
C. $3,000
D. $5,000 |
|
Definition
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Term
14. If an insured borrows a neighbor's vehicle to run a personal errand, how do the policies respond in the event of an
auto accident?
A. Both policies respond on a pro-rata basis
B. Only the neighbor's policy provides coverage; there is no coverage by the driver's policy
C. The driver's policy is primary and the neighbor's policy is excess
D. The neighbor's policy is primary and the driver's policy is excess |
|
Definition
| D. The neighbor's policy is primary and the driver's policy is excess |
|
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Term
15. The equipment dealer's coverage form covers all of the following types of property, except:
A. Dealer's used stock
B. Customer's equipment in for service
C. Motor vehicles designed for highway use
D. Dealer's new stock |
|
Definition
| C. Motor vehicles designed for highway use |
|
|
Term
16. The insurer decides not to renew an Insured’s Personal Auto Policy, PAP, How much notice must the insurer
provide to the insured?
A. 10 days
B. 30 days
C. 20 days
D. 5 days |
|
Definition
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Term
17. A reporting form is used for property insurance
A. To maintain the correct limits of coverage without over or under insuring when the value or volume of the
property varies during the policy term
B. To report losses and adjust insurance in force to conform
C. When the insured's premises are subject to periodic safety inspections
D. To establish a guaranteed amount of insurance based upon a report of values submitted before the beginning
of the policy term |
|
Definition
A. To maintain the correct limits of coverage without over or under insuring when the value or volume of the
property varies during the policy term |
|
|
Term
18. All of the following contribute to the rising cost of Worker's Compensation Insurance, except:
A. The growing population
B. Employers who fail to secure the payment of workers compensation as required by law
C. Under-reported payroll by employers
D. Fraudulent claims |
|
Definition
| A. The growing population |
|
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Term
19. Which type of exposure can be best defined as a condition or situation where the exposure to financial loss is
presented to an individual or family from causes such as injury, disability, death, sickness, or unemployment?
A. Personnel loss exposure
B. Personal loss exposure
C. Personal property loss exposure
D. Liability loss exposure |
|
Definition
| B. Personal loss exposure |
|
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Term
20. All of the following would be considered benefits of insurance, except:
A. They can be a source of investment funds
B. Retention of the loss by the insured
C. Redemption of the financial uncertainty of the insured
D. Payment for the cost of covered losses |
|
Definition
| B. Retention of the loss by the insured |
|
|
Term
21. Which of the following is also known as a human loss exposure?
A. Personnel loss exposure
B. Indirect loss exposure
C. Personal loss exposure
D. Liability loss exposure |
|
Definition
| C. Personal loss exposure |
|
|
Term
22a. If a tenant is insured under a building personal property coverage form, when is the property considered vacant?
A. When the structure is being renovated as the result of a fire
B. When the insured's operation is halted due to a strike
C. When there is insufficient business personal property present to conduct customary operations
D. When less than 31% of the total building space is rented to others or in use by the insured |
|
Definition
| C. When there is insufficient business personal property present to conduct customary operations |
|
|
Term
22b. If an owner is insured under a building personal property coverage form, when is the property considered
vacant?
A. When the structure is being renovated as the result of a fire
B. When the insured's operation is halted due to a strike
C. When there is insufficient business personal property present to conduct customary operations
D. When less than 31% of the total building space is rented to others or in use by the insured |
|
Definition
| D. When less than 31% of the total building space is rented to others or in use by the insured |
|
|
Term
23. A commercial property policy can provide coverage for all of the following, except:
A. Tangible losses
B. Indirect losses
C. Intangible losses
D. Direct losses |
|
Definition
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Term
24. Which of the following types of coverage would be needed to cover a contractor's bulldozers which are used in
the contractor's business but are not held for sale?
A. Older truck cargo floater
B. Annual transit policy
C. Contractor's equipment floater
D. Installment sales floater |
|
Definition
| C. Contractor's equipment floater |
|
|
Term
25. It is a violation of the CA Insurance Code to act as a producer for a non-admitted carrier unless:
A. The producer is an insurance solicitor
B. It is always a violation, no matter what type of producer
C. The producer is dually licensed in at least two states
D. The producer is a surplus lines broker |
|
Definition
| D. The producer is a surplus lines broker |
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Term
26. In California, excess and surplus lines coverage needs to be placed through:
A. An admitted insurer
B. Lloyds of London
C. An excess and surplus lines solicitor
D. A surplus lines broker |
|
Definition
| D. A surplus lines broker |
|
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Term
27. Under a scheduled personal property endorsement, loss to stamps are excluded when they are:
A. Located in Canada
B. Being shipped by registered mail
C. Being shipped with a freight company
D. While the insured is temporarily in Japan |
|
Definition
| C. Being shipped with a freight company |
|
|
Term
28. Which of the following is most likely to be eligible for the CA Fair Plan?
A. An insured with a very bad driving record
B. A poorly maintained dwelling with faulty wiring
C. An insured who has had a drivers license for less than two years.
D. A well-maintained dwelling located in a hazardous brush area |
|
Definition
| D. A well-maintained dwelling located in a hazardous brush area |
|
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Term
29. What items of personal property are included in Coverage A under a HO-3 policy?
A. Detached fences
B. Lawnmower used to maintain the exterior premises
C. Paint on the premises to be applied to the interior
D. Decorative fountains |
|
Definition
| C. Paint on the premises to be applied to the interior |
|
|
Term
30. Mitchell's (unendorsed) personal auto policy liability coverage would pay for:
A. Mitchell's broken windshield caused by a rock thrown by the tire of a passing car
B. Mitchell's rental car expense, when his car is unusable due to a collision that was not his fault
C. The cost of repairing the neighbor's fence that Mitchell damaged due to the negligent operation of his car
D. Damage or injury caused intentionally by Mitchell |
|
Definition
| C. The cost of repairing the neighbor's fence that Mitchell damaged due to the negligent operation of his car |
|
|
Term
31. All Workers Compensation policies provide
A. Major medical coverage with 20% co-payment; co-payment has an annual stop-loss of $1,500
B. Compensation for worker related injuries without regard to fault
C. Adequate retirement benefits
D. 24-hour on and off the job coverage for workers |
|
Definition
| B. Compensation for worker related injuries without regard to fault |
|
|
Term
32. All of the following are principal rating factors under Proposition 103 for personal auto policies, except:
A. Years of driving experience
B. Driver's safety record
C. Annual miles driven
D. Number of listed drivers |
|
Definition
| D. Number of listed drivers |
|
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Term
33. Under a builders risk form, how much insurance is required to pay any loss without a penalty for underinsurance?
A. 100% of the completed value
B. 80% of the value at the time of the loss
C. 100% of the value at the time of the loss
D. 80% of the completed value |
|
Definition
| A. 100% of the completed value |
|
|
Term
34. Which of the following persons is not an insured under Section I of a homeowner's policy?
A. The named insured
B. The named insured's (resident) spouse
C. The named insured's (resident) 25 year old nephew
D. The named insured's (non-resident) spouse |
|
Definition
| D. The named insured's (non-resident) spouse |
|
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Term
35. An umbrella policy
A. Provides coverage for outdoor fairs and exhibitions in case of bad weather
B. Provides excess physical damage coverage
C. Provides broad primary coverage for most personal or commercial loss exposures
D. Provides broad excess liability coverage over one or more primary policies |
|
Definition
| D. Provides broad excess liability coverage over one or more primary policies |
|
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Term
36. All of the following expenses are covered in addition to the limits of liability under Coverage A of a personal auto
policy, except:
A. Pre-judgment interest
B. Loss of earnings to attend trials at the company's request
C. Premium for appeal bonds
D. Cost of bail bonds related to a covered accident |
|
Definition
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Term
37. Under a commercial property coverage form, all of the following properties are included in the definition of
"building," except:
A. Patio
B. Permanently installed fixtures
C. Outdoor fixtures
D. Personal property used to maintain the premises |
|
Definition
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Term
38. Carmen is driving her own car on behalf of her employer. Carmen's negligent operation of her car injures a
member of the public. The employer may be held liable because of what is called:
A. Vicarious liability
B. Gross negligence
C. Absolute liability
D. Contributory negligence |
|
Definition
|
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Term
39. Which of the following perils is insured against in the Special form but not in the Basic form?
A. Fire
B. Internal explosion
C. Lightning
D. Collapse |
|
Definition
|
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Term
40. Which of the following types of policies pays for bodily injury or property damage which occurs, or is discovered
during the policy period?
A. Pollution liability policy
B. Auto liability policy
C. Claims made commercial liability policy
D. Occurrence general liability policy |
|
Definition
| D. Occurrence general liability policy |
|
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Term
41. If an armored car carrying an insured's bank deposit is robbed, what insurance would the insured need to be
covered?
A. Money orders and counterfeit money
B. Outside the premises-theft of money and securities
C. Funds transfer fraud
D. Employee theft |
|
Definition
| B. Outside the premises-theft of money and securities |
|
|
Term
42. Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured
is operating a company car on a regular basis?
A. The coverage of the vehicle primarily operated by the named insured
B. The financial responsibility coverage limitations
C. The broadest coverage of any of the autos listed in the declarations
D. The policy excludes this usage |
|
Definition
| D. The policy excludes this usage |
|
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Term
43. A possibility of financial loss resulting from the ownership of property is known as:
A. Insurable interest
B. Valuation
C. Indemnity
D. Legal liability |
|
Definition
|
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Term
44. If the vacancy permit endorsement is added to a building and personal property coverage form, the vacancy
conditions under the basic policy is:
A. Waived only for designated perils during the permit period
B. Waived during the permit period
C. Waived during the policy period
D. Waived only for designated perils during the policy period |
|
Definition
| A. Waived only for designated perils during the permit period |
|
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Term
45. You are to meet with a small furniture manufacturer and make property and liability insurance recommendations.
You have insured many risks of this type in the past and have a good idea of what their needs may be. There are
several popular ways of determining business loss exposures. Which of the following ways are the least professional
and the least likely to correctly identify the loss exposures? You:
A. Take a walk through the business to observe operations and work flow, and ask their key people about the
company and its operations.
B. Meet with key people and complete a loss exposure questionnaire developed for their general type of risk
C. Get a copy of all current policies and determine what coverage they have been carrying and how much they
have been paying |
|
Definition
C. Get a copy of all current policies and determine what coverage they have been carrying and how much they
have been paying |
|
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Term
46. Where would an insured who is in the business of importing exotic animals from Africa most likely go to obtain
insurance coverage?
A. State Competitive Fund
B. Alien insurer
C. Foreign insurer
D. Excess and surplus lines insurer |
|
Definition
| D. Excess and surplus lines insurer |
|
|
Term
47. A commercial building and a personal property coverage form covers three kinds of property, one which has "your
business personal property." "Your" refers to:
A. Only the first named insured shown in the declarations
B. Any party who has an insurable interest in the property located at the insured address
C. The named insured and others whose property is in the care, custody or control of the insured
D. Only the named insured(s) shown in the declarations |
|
Definition
| D. Only the named insured(s) shown in the declarations |
|
|
Term
48. Which of the following losses is not covered by either the personal auto policy collision or other than collision
coverage?
A. Sean's car is severely damaged by a storm when a sign is blown off the roof of a building and hits his car
B. Sean's car is washed away during a flood
C. Sean's car is stolen when he leaves the keys in the ignition, and the doors and windows are unlocked while he
runs into the grocery store.
D. Sean leaves his personal (non-business) laptop computer in his car overnight. His car is parked in the
driveway in front of his house. The computer is stolen from his car. |
|
Definition
D. Sean leaves his personal (non-business) laptop computer in his car overnight. His car is parked in the
driveway in front of his house. The computer is stolen from his car. |
|
|
Term
49. A is in an accident with B. A suffers $10,000 of damage but it is determined that A is 25% responsible for the
accident. How much would A receive under comparative negligence rules?
A. $0
B. $2,500
C. $7,500
D. $10,000 |
|
Definition
|
|
Term
50. Ordinance or law coverage provides protection for which of the following losses?
A. The residual property value of a home that must be demolished to comply with building code requirements.
B. The cost of demolition and debris removal of undamaged property.
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. |
|
Definition
C. The increased expense incurred for the insurer to repair or rebuild property according to building code
specifications. |
|
|
Term
51. What is the primary difference between a HO-2 and a HO-4 policy?
A. Perils insured against under Coverage C
B. Inside limits of liability for specified personal property
C. Property insured under Coverage A
D. Description of an insured premises |
|
Definition
| C. Property insured under Coverage A |
|
|
Term
52. A commercial lines program policy, common policy conditions, do not include which of the following as a
condition?
A. Perils insured
B. Inspections and surveys
C. Cancellation
D. Examination of your books and records |
|
Definition
|
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Term
53. Jack, a condo owner, wants a fire and allied lines coverage for personal property, liability coverage for himself and
family members, and protection for assessments or damage for the building structure and other common areas.
Which homeowners form would you recommend?
A. HO-6
B. HO-3
C. HO-2
D. HO-4 |
|
Definition
|
|
Term
54. Which property coverage form is best suited for a structure under construction?
A. Standard property policy
B. Building and personal property coverage form
C. Reporting form
D. Builders risk coverage form |
|
Definition
| D. Builders risk coverage form |
|
|
Term
55. What perils are insured against under the "additional coverages - property removed" of a homeowners policy?
A. All perils
B. Broad form perils
C. Perils of transportation
D. Basic form perils |
|
Definition
|
|
Term
56. Equipment Breakdown insurance covers all of the following, EXCEPT:
A. Tools subject to regular replacement
B. Communications equipment
C. Mechanical equipment used to produce energy
D. Equipment powered by internal pressure |
|
Definition
| A. Tools subject to regular replacement |
|
|
Term
57. Hull coverage in an ocean marine policy covers which of the following?
A. The ship owner’s liability
B. The vessel itself, including engines and fuel
C. The freight charged for the transportation of the cargo
D. Cargo being transported on the ship |
|
Definition
| B. The vessel itself, including engines and fuel |
|
|
Term
58. The CA Insurance Code:
A. Prohibits agents from receiving compensation for premium financing
B. Sets the percentage of interest that may be charged in a premium finance contract
C. Requires agents to keep records of any compensation they may have received for their services involved
with premium financing
D. Requires agents to provide premium financing services. |
|
Definition
C. Requires agents to keep records of any compensation they may have received for their services involved
with premium financing |
|
|
Term
59. The Commercial General Liability (CGL) contract contains an exclusion for liquor liability. The purpose of this
exclusion is to exclude coverage for law liability losses arising from:
A. An insured serving alcohol at such functions as company picnics and holiday office parties
B. The illegal manufacture, sale, or possession of alcoholic beverages
C. An insured's special loss exposures resulting from the insured being involved in the alcoholic beverage
business
D. The serving of alcoholic beverages by any insured at any business function |
|
Definition
C. An insured's special loss exposures resulting from the insured being involved in the alcoholic beverage
business |
|
|
Term
60. Which of the following is commonly found in liability policies, thus creating the need for inland marine coverage?
A. A coinsurance clause
B. A valuation clause
C. A care, custody, and control exclusion
D. A debris removal coverage |
|
Definition
| C. A care, custody, and control exclusion |
|
|
Term
61. The measure of loss potential which is used for pricing of insurance is known as:
A. An exposure unit
B. A claim
C. A covered loss
D. Loss transfer |
|
Definition
|
|
Term
62. Coverage on an annual transit policy is usually provided on which of the following basis?
A. Theft only
B. Extended coverage
C. Open peril
D. Named peril |
|
Definition
|
|
Term
63. A newly acquired motorcycle is not automatically covered under a personal auto policy (PAP) because:
A. Motorcycles are insured under a homeowners policy
B. The unendorsed policy does not cover two-wheeled vehicles
C. Motorcycles are too dangerous to insure
D. Motorcycles cannot be insured under the PAP |
|
Definition
| B. The unendorsed policy does not cover two-wheeled vehicles |
|
|
Term
64. Which of the following is not a federal program?
A. Workers’ Compensation
B. Federal Deposit Insurance Corporation
C. Federal Crop Insurance Corporation
D. National Flood Insurance Program |
|
Definition
|
|
Term
65. Under the "examination of your books and records" condition of a commercial policy, when may an insurer
examine an insured's books and records?
A. At any time during the policy period and up to three years afterwards
B. Only when authorized by the insured
C. At any time
D. Only upon receiving a court order allowing the inspection |
|
Definition
| A. At any time during the policy period and up to three years afterwards |
|
|
Term
66. Which type of loss is a business exposed to death, retirement, resignation, or disability of a key employee?
A. Human loss exposure
B. Personal loss exposure
C. Personnel loss exposure
D. Workers compensation exposure |
|
Definition
| C. Personnel loss exposure |
|
|
Term
67. The applicant wants a homeowners policy that has open peril coverage on his home (building structure). Assuming
he is eligible for the policy, which policy would you recommend?
A. HO-2
B. HO-3
C. HO-6
D. HO-8 |
|
Definition
|
|
Term
68. What is the limit for sound reproducing equipment under the coverage endorsement for excess sound
reproducing equipment, audio, visual and data electronics, tapes, records, disks, and other media endorsement in a
PAP?
A. $200
B. $500
C. The amount scheduled on the endorsement
D. $1,000 |
|
Definition
|
|
Term
69. The state law that regulates insurer practices regarding underwriting, sales, rate-making, and claims handling are
called:
A. Insurer policing
B. Standard regulation
C. Ethical standards surveillance
D. Market conduct regulation |
|
Definition
| D. Market conduct regulation |
|
|
Term
70a. Under a building and personal property coverage form, if the insured building has
been vacant for more than 60 consecutive days. What effect will this have on a vandalism loss?
A. There is no effect
B. The amount of the loss will be reduced by 60%
C. The loss is excluded
D. The amount of the loss will be reduced by 15% |
|
Definition
|
|
Term
70b. Under a building and personal property coverage form, if the insured building has
been vacant for more than 60 consecutive days. What effect will this have on a property loss?
A. There is no effect
B. The amount of the loss will be reduced by 60%
C. The loss is excluded
D. The amount of the loss will be reduced by 15% |
|
Definition
| D. The amount of the loss will be reduced by 15% |
|
|
Term
71a. Which of the following is a true statement about CAARP?
A. Only agents with two or more years of experience are eligible to place business with CAARP
B. CAARP offers dwelling coverage, but not homeowners
C. Commercial risks are not eligible for CAARP
D. The minimum liability for CAARP policies are $15,000/$30,000/$5,000 |
|
Definition
| D. The minimum liability for CAARP policies are $15,000/$30,000/$5,000 |
|
|
Term
71b. Which of the following is a true statement about CLCA?
A. Only agents with two or more years of experience are eligible to place business with CLCA
B. CLCA offers dwelling coverage, but not homeowners
C. Commercial risks are not eligible for CLCA
D. The minimum liability for CLCA policies are $10,000/$20,000/$3,000 |
|
Definition
| D. The minimum liability for CLCA policies are $10,000/$20,000/$3,000 |
|
|
Term
72. Which exclusion in the causes of loss — special form - excludes coverage for mudflow?
A. Ordinance or law
B. Water (flood)
C. Utility service
D. Governmental action |
|
Definition
|
|
Term
73. What additional coverage is provided in a DP3 that is not included in a DP1?
A. Collapse
B. Fire department service charge
C. World-wide coverage
D. Other structures |
|
Definition
|
|
Term
74A. The PAP collision deductible is $1,000 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 $2,000 of damage?
A. $1,000
B. $1,500
C. $0
D. $2,000 |
|
Definition
|
|
Term
74B. The PAP collision deductible is $1,000 and the other than collision deductible is $500. How much would the
insurer pay for an accident involving a tree falling on your vehicle resulting in $2,000 of damage?
A. $1,000
B. $1,500
C. $0
D. $2,000 |
|
Definition
|
|
Term
75. Why would an insured need an inland marine policy if she is shipping stock on her own trucks?
A. Stock is only covered if it is being shipped through an insured delivery service
B. Stock is only covered if it is in the building or within 100 ft. of the building premises
C. An inland marine policy is not needed; insured stock is covered anywhere within the coverage territory
D. Stock is never covered under a business personal property form |
|
Definition
| B. Stock is only covered if it is in the building or within 100 ft. of the building premises |
|
|
Term
76. A dwelling fire policy's coverage is to a homeowner's policy, as a commercial property policy coverage is to a:
A. Business auto policy
B. Business owner's policy
C. Commercial general liability policy
D. Business income — extra expense policy |
|
Definition
| B. Business owner's policy |
|
|
Term
77. The amount to replace an insured's damaged property, less depreciation, is known as the:
A. Actual cash value
B. Replacement value
C. Stated amount
D. Agreed amount |
|
Definition
|
|
Term
78. Which of the following types of loss would result in a claim for monetary damages due to injury to another or
damage to another's property?
A. Real property loss
B. Physical loss
C. Personal property loss
D. Liability loss |
|
Definition
|
|
Term
79. What is the difference between the per accident limit in a split limits policy and the single limits?
A. The per accident limit applies to all claims, and the single limit applies only to bodily injuries
B. The per accident limit applies only to bodily injuries, and the single limit applies to all claims
C. There is no difference
D. The per accident limit applies to property damage, and the single limit applies to all claims |
|
Definition
| C. There is no difference |
|
|
Term
80. Which peril(s) may be included in the vacancy permit endorsement?
A. Building glass breakage
B. Sprinkler leakage
C. Vandalism
D. All of the above |
|
Definition
|
|
Term
81. 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 least coverage on any auto shown on the declarations
B. No coverage available
C. The coverage of the last auto shown in the declarations
D. The broadest coverage on any auto shown in the declarations |
|
Definition
| D. The broadest coverage on any auto shown in the declarations |
|
|
Term
82. If an insured signs a claim form for a claim which is fraudulent, the insured may be guilty of
A. Nothing, if the claim is never paid
B. Misrepresentation
C. Obstruction of justice
D. Perjury |
|
Definition
|
|
Term
83. When is a fire and casualty agent required to inform an insured of any conditions which may be precedent to
coverage regarding a personal auto policy?
A. At proposal
B. At application
C. At renewal
D. At policy delivery |
|
Definition
|
|
Term
84. In reference to the coverages provided in the basic form, the boat owner's policy is similar to what other policy?
A. A commercial inland marine policy
B. The personal auto policy
C. The homeowner's policy
D. The commercial ocean marine policy |
|
Definition
| B. The personal auto policy |
|
|
Term
85. If an insured with a personal auto policy has an accident in a state with personal injury protection (PIP), how does
the policy respond?
A. The insured may apply for the additional PIP coverage within 10 days of the accident
B. PIP coverage is provided only for medical providers in that state
C. Coverage automatically is broadened to provide PIP
D. Coverage remains as written |
|
Definition
| C. Coverage automatically is broadened to provide PIP |
|
|
Term
86. What is the minimum discount percentage for the "good driver" discount?
A. 5%
B. 10%
C. 25%
D. 20% |
|
Definition
|
|
Term
87. What is the primary difference between umbrella and excess liability policies?
A. The umbrella has fewer supplementary features and is less expensive than the excess policy
B. The umbrella covers most liability exposures; the excess liability may cover only one line
C. The umbrella covers intentional acts; the excess liability does not
D. The umbrella affords defense costs; the excess liability does not |
|
Definition
| B. The umbrella covers most liability exposures; the excess liability may cover only one line |
|
|
Term
88. What additional coverages are available under the scheduled personal property endorsement that is not available
under an unendorsed homeowner's policy
A. Vandalism to artwork
B. Damage to a camera in an auto accident
C. Theft
D. Breakage of glassware caused by an earthquake |
|
Definition
| D. Breakage of glassware caused by an earthquake |
|
|
Term
89. The intentional relinquishment of a known right is:
A. Warranty
B. Waiver
C. Concealment
D. Estoppel |
|
Definition
|
|
Term
90. The commercial property conditions include a condition called "liberalization." The effect of this condition is:
A. To protect the insured from policy cancellation once the policy has been in effect for 90 days
B. To require the insurer to liberally construe the other commercial property conditions in case of disagreement
between the insurer and the insured
C. Allow the insurer to set property values based upon current data as long as it does not reduce the loss payment
D. To automatically apply broader coverage to the commercial property coverage part if a policy form revision
would broaden coverage without an additional premium |
|
Definition
D. To automatically apply broader coverage to the commercial property coverage part if a policy form revision
would broaden coverage without an additional premium |
|
|
Term
91. What does a release bill of lading do for a common carrier
A. Provides insurance coverage to the customer by the shipper
B. Releases the customer from all responsibility
C. Limits the carriers liability on the shipment
D. Releases the carrier from all responsibility |
|
Definition
| C. Limits the carriers liability on the shipment |
|
|
Term
92. What is one reason a person may purchase a dwelling form policy instead of a homeowner's policy?
A. The dwelling form provides greater flexibility in selecting coverage
B. The dwelling is occupied by two families
C. The dwelling form provides broader coverages
D. The owner does not reside in the dwelling |
|
Definition
| D. The owner does not reside in the dwelling |
|
|
Term
93. An open-peril policy protects against the loss from:
A. Perils found outside in the open
B. Mainly, perils of the sea
C. Only the perils openly named in the policy
D. Any peril, other than those specifically excluded |
|
Definition
| D. Any peril, other than those specifically excluded |
|
|
Term
94. Which of the following types of insurance was designed to cover domestic shipments, means of transportation,
personal property floater risks, and commercial property floater risks?
A. Inland marine
B. Ocean marine
C. Business personal property
D. Auto liability |
|
Definition
|
|
Term
95. What is the primary difference between an HO-3 and an HO-5?
A. Coverage A and B perils
B. Coverage A property
C. Coverage C perils
D. Coverage D limits |
|
Definition
|
|
Term
96. Which of the following statements is not true? A fire & casualty managing agent:
A. Has the power to accept or decline risks
B. Does not have the authority to collect premiums from producing broker-agents
C. Has the power to appoint, supervise and terminate the contracts of agents
D. Holds a license as a fire and casualty agent |
|
Definition
| B. Does not have the authority to collect premiums from producing broker-agents |
|
|
Term
97. In the business of insurance, concealment is defined by all of the following statements, except:
A. Concealment does not occur if no inquiry is made
B. Concealment is grounds for declination by the insurer
C. Concealment can be unintentional
D. Concealment can be intentional |
|
Definition
| A. Concealment does not occur if no inquiry is made |
|
|
Term
98. All of the following are characteristics of an "ideally insurable loss exposure," except
A. Losses that are accidental
B. Losses that are definite and measurable
C. Losses that are catastrophic
D. Large number of exposure units |
|
Definition
| C. Losses that are catastrophic |
|
|
Term
99. The liability coverage in a yacht policy is referred to as:
A. Protection and indemnity
B. Hull coverage
C. Personal liability protection
D. Inchmaree Clause |
|
Definition
| A. Protection and indemnity |
|
|
Term
100. All of the following types of businesses would need a special inland marine coverage for their stock, except:
A. Jewelers
B. Stamp and coin collectors
C. Furriers
D. Grocers |
|
Definition
|
|
Term
101. What else must an applicant for a fire and casualty license, life agent license, or personal lines agent license
complete in addition to pre-licensing classroom study?
A. A diversity awareness course provided by the State of CA
B. A contract law course at any approved college location
C. A sales training course provided by the insurance department
D. A 12-hour course on ethics and the CA code |
|
Definition
| D. A 12-hour course on ethics and the CA code |
|
|
Term
102. The personal auto policy territory limits include:
A. Tokyo, Japan
B. Mexico City, Mexico
C. London, England
D. Montreal, Canada |
|
Definition
|
|
Term
103. The amount to replace property with a like property of the same quality and construction is the:
A. Actual cash value
B. Market value
C. Replacement cost
D. Stated value |
|
Definition
|
|
Term
104. The collision coverage of a personal auto policy covers:
A. A desert sand storm pitting the car windshield
B. Damage caused by the insured by driving into a tree that had fallen during a recent storm
C. A vandal making a deep scratch on the car with a screwdriver
D. Collision coverage does not cover any of these losses |
|
Definition
| B. Damage caused by the insured by driving into a tree that had fallen during a recent storm |
|
|
Term
105. Which of the following perils is included in the broad form, but not in the basic form.
A. Volcanic action
B. Sink hole collapse
C. Sprinkler leakage
D. Falling objects |
|
Definition
|
|
Term
106. Which type of a crime policy will pay for a loss, which is found during the policy period, even if the loss occurred
prior to the effective date of the policy?
A. Occurrence
B. Claims made
C. Loss sustained
D. Discovery |
|
Definition
|
|
Term
107. A personal auto policy (PAP) insured's car was a total loss when the car was stolen and wrecked. The insured has
the following coverages: liability, medical payments and "other than collision." Her PAP:
A. "Other than collision" will pay for the loss
B. Will not pay for this loss — no coverage
C. Medical payments will pay for the loss
D. Liability coverage will pay for the loss |
|
Definition
| A. "Other than collision" will pay for the loss |
|
|
Term
108. The watercraft endorsement on a homeowner's policy extends coverage for:
A. Physical damage and liability coverage for all owned watercraft
B. Liability coverage for all owned watercraft
C. Physical damage and liability coverage for watercraft listed on the schedule
D. Liability coverage for watercraft listed on the schedule |
|
Definition
| D. Liability coverage for watercraft listed on the schedule |
|
|
Term
109. Mary has an HO-3 policy with replacement cost coverage on the insured buildings. The cost of replacement on
the dwelling is $100,000, and the other structure (a garage) is $20,000. To be certain of replacement cost coverage on
a partial loss to either structure, she must carry a minimum of:
A. $80,000 on the dwelling; $16,000 on the garage
B. $80,000 on the dwelling; $8,000 on the garage
C. $100,000 on the dwelling; $20,000 on the garage
D. $100,000 on the dwelling; $10,000 on the garage |
|
Definition
| A. $80,000 on the dwelling; $16,000 on the garage |
|
|
Term
110. Which of the following loss exposures is not covered by Section II of Ron's homeowner's policy?
A. 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 while used on his own property which includes 10 acres of
undeveloped land.
C. Ron's use of a motorized golf cart, while playing golf on a golf course
D. Ron's use of a riding lawnmower while he is mowing his lawn |
|
Definition
B. Ron's registered/licensed personal auto while used on his own property which includes 10 acres of
undeveloped land. |
|
|
Term
111. The medical expense coverage in a Workers Compensation Policy
A. Does not have a time limit, but has a maximum dollar limit
B. Does not have a dollar limit nor a time limit
C. Does not have a dollar limit, but has a maximum time limit
D. Has both a maximum dollar and time limit |
|
Definition
| B. Does not have a dollar limit nor a time limit |
|
|
Term
112. If an inland marine policy provides coverage for any loss unless it is specifically excluded, it would be considered
which of the following?
A. Named peril
B. Open perils
C. Controlled
D. Uncontrolled |
|
Definition
|
|
Term
113. Inland marine policies nearly always provide what type of coverage?
A. Broad peril
B. Basic peril
C. Open peril
D. Standard peril |
|
Definition
|
|
Term
114a. Both the commercial general liability policy and the business auto policy have definitions of the term
"automobile" and mobile equipment. These definitions:
A. Are the same, showing the policy writers are not very imaginative. This has no effect on gaps or overlaps
between the two policies.
B. Are the same, thus avoiding overlaps or gaps in coverage between the two policies.
C. Are very different; thus avoiding overlaps or gaps in coverage between the two policies.
D. Are very different; however, this has no effect on gaps or overlaps between the two policies |
|
Definition
| B. Are the same, thus avoiding overlaps or gaps in coverage between the two policies. |
|
|
Term
114b. Both the commercial general liability policy and the business auto policy have definitions of the term
"automobile" and mobile equipment. These coverages:
A. Are the same, showing the policy writers are not very imaginative. This has no effect on gaps or overlaps
between the two policies.
B. Are the same, thus avoiding overlaps or gaps in coverage between the two policies.
C. Are very different; thus avoiding overlaps or gaps in coverage between the two policies.
D. Are very different; however, this has no effect on gaps or overlaps between the two policies |
|
Definition
| C. Are very different; thus avoiding overlaps or gaps in coverage between the two policies. |
|
|
Term
115. Kim's car is insured with a personal automobile policy. The coverage includes medical payments with $2,000
limits. Which of the following is a true statement about the medical payment coverage for necessary medical
expenses?
A. Kim's daughter is struck by a car while crossing the street. Kim's policy will pay nothing because Kim's daughter
was not in a car at the time of the accident.
B. Kim gives her neighbor a ride to the store in the insured car. She has an auto accident in which they each
incur over $2,000 in medical expenses. The maximum amount that Kim's policy will pay is $2,000 to her and $2,000 to
her neighbor.
C. Kim is injured in an accident while riding in her neighbor's car. The neighbor's policy covers $2,000 in medical
payments. The maximum amount that would be paid by both policies for Kim's injuries is a total of $2,000.
D. Kim's daughter is struck by a car. Kim's policy will pay nothing because she was riding her bicycle in the street. |
|
Definition
B. Kim gives her neighbor a ride to the store in the insured car. She has an auto accident in which they each
incur over $2,000 in medical expenses. The maximum amount that Kim's policy will pay is $2,000 to her and $2,000 to
her neighbor. |
|
|
Term
116. What must a life agent, travel agent, or fire & casualty insurance agent do in order to act as an agent of a
particular insurer?
A. File proof of licensure with the state
B. File a notice of appointment with the Commissioner
C. Have the agent listed with the appropriate department of the insurer
D. There are no legal requirements as long as the agent is legally licensed |
|
Definition
| B. File a notice of appointment with the Commissioner |
|
|
Term
117. Your HO-3 insured wants to make sure he has liability protection against claims for false arrest, libel and slander.
You should:
A. Tell him this coverage is not available under a homeowner's policy. He must buy a commercial liability coverage.
B. Tell him he should add the personal injury endorsement
C. Suggest he add the ordinance or law coverage
D. Tell him not to worry; there is coverage in the policy |
|
Definition
| B. Tell him he should add the personal injury endorsement |
|
|
Term
118a. If the limits of liability on a structure are $75,000, and the structure is worth $125,000, how much would be
owed on a fire loss of $50,000 if the policy has an 80% coinsurance requirement (disregard any deductibles)?
A. $37,500
B. $40,000
C. $50,000
D. $32,000 |
|
Definition
|
|
Term
118b. If the limits of liability on a structure are $75,000, and the structure is worth $125,000, how much would be
owed on a fire loss of $50,000 if the policy has an 80% coinsurance requirement and a $1,000 deductible?
A. $37,500
B. $37,000
C. $36,500
D. $36,000 |
|
Definition
|
|
Term
118c. If the limits of liability on a structure are $300,000, and the structure is worth $500,000, how much would be
owed on a fire loss of $120,000 if the policy has an 80% coinsurance requirement and a $1,000 deductible?
A. $80,000
B. $89,000
C. $99,000
D. $119,000 |
|
Definition
|
|
Term
118d. If the limits of liability on a structure are $400,000, and the structure is worth $600,000, how much would be
owed on a fire loss of $120,000 if the policy has an 80% coinsurance requirement and a $1,000 deductible?
A. $89.000
B. $90,000
C. $99,000
D. $119,000 |
|
Definition
|
|
Term
119. If an insured's employee embezzles $10,000 from the company's bank account, which of the following coverages
would need to be in force for the loss to be covered?
A. Inside the premises — theft of money and securities
B. Employee theft
C. Forgery and alteration
D. Money orders and counterfeit paper currency |
|
Definition
|
|
Term
120. Which of the following is a valid reason for an applicant to purchase a HO-3 policy instead of a dwelling policy?
A. The insured desires broader coverage
B. The insured wants to pay a lower premium
C. The insured does not want to have personal liability coverage
D. The property is a six-unit building with the owner occupying one of the units |
|
Definition
| A. The insured desires broader coverage |
|
|
Term
121. What is a self-insured retention under an umbrella policy?
A. A deductible applicable to losses excluded by the underlying coverage yet still covered by the umbrella
B. A deductible applicable to all covered losses
C. The limits of liability of the umbrella policy
D. The amount of the underlying limits of liability |
|
Definition
| A. A deductible applicable to losses excluded by the underlying coverage yet still covered by the umbrella |
|
|
Term
122. A personal auto policy is written for Lisa providing liability coverage. Which of the following auto liability
situations would not be covered unless Lisa had an endorsement attached and paid an additional premium?
A. Lisa trades in her car, and runs over a pedestrian while driving her new car home from the dealership. She did
not let her agent know of the new car at the time of the accident.
B. Lisa's car is being repaired. She drives into a telephone pole while driving a "temporary substitute" auto.
C. Lisa destroys a mailbox while driving a (non-owned) company car furnished for Lisa's regular use.
D. Lisa has an accident while towing her rowboat trailer. The trailer breaks loose and damages a parked car. |
|
Definition
| C. Lisa destroys a mailbox while driving a (non-owned) company car furnished for Lisa's regular use. |
|
|
Term
123. Which of the following does not have a standard coverage form?
A. Umbrella policy
B. Professional liability
C. Claims made commercial general liability
D. Homeowner's policy |
|
Definition
|
|
Term
124. An insured's business auto policy specifies that the liability coverage applies to covered autos —symbol 7. This
means:
A. Specifically described autos are covered
B. Only owned autos, other than private passenger autos are covered
C. All owned autos, including trucks not larger than two tons are covered
D. Only owned, private passenger autos are covered, with the exception of those private passenger autos driven
by youthful operators. |
|
Definition
| A. Specifically described autos are covered |
|
|
Term
125. If a motor home is scheduled on a miscellaneous type vehicle endorsement, all of the following property is
covered, except:
A. Awnings
B. Refrigeration facilities
C. Luggage
D. Cabanas |
|
Definition
|
|
Term
126. What is the primary medical payments coverage difference between a boat owner's policy and a HO-3 policy?
A. There is no difference
B. The HO-3 excludes losses and that the boat owner's covers losses while the boat is on the water
C. The HO-3 has a lower limit of liability
D. The boat owners covers injuries to the insureds, and the HO-3 covers injuries to others |
|
Definition
| D. The boat owners covers injuries to the insureds, and the HO-3 covers injuries to others |
|
|
Term
127. The CA Insurance Code requires property insurance policies specify all of the following, except:
A. The insured's address
B. The policy period
C. The insured's risks or perils
D. A description of the insured property |
|
Definition
|
|
Term
128. Which of the following describes an insurer who has enough financial resources only to provide for all of its
liabilities and for all reinsurance of all outstanding risks:
A. Non-participating
B. Insolvent
C. Guaranteed
D. Solvent |
|
Definition
|
|
Term
129. Under a standard ISO homeowner's HO-3, real property and personal property are covered for the perils of:
A. Broad form named perils — coverage applies to both
B. "All risks" — Coverage applies to both
C. "All risks" coverage applies to real property. Broad form named perils coverage applies only to personal
property.
D. Broad form named perils — Coverage applies to personal property. There is no coverage for real property, since
this is a tenant's form |
|
Definition
C. "All risks" coverage applies to real property. Broad form named perils coverage applies only to personal
property. |
|
|
Term
130. Which of items of real property under HO-3 are valued on an actual cash value basis?
A. Wallpaper
B. Roofing
C. Built-in appliances
D. Exterior paint |
|
Definition
|
|
Term
131. What is the primary difference between a HO-2 and a HO-3 policy?
A. The liability coverage
B. The property covered
C. The perils insured against
D. The policy territory |
|
Definition
| C. The perils insured against |
|
|
Term
132. What factor supports the principle of indemnity?
A. Utmost good faith
B. Reasonable expectations
C. Insurable interest
D. Contract of adhesion |
|
Definition
|
|
Term
133. Yacht policies typically provide for:
A. Property, liability, and contingent medical payments
B. Hull, protection and indemnity
C. Physical damage, liability, and contingent medical payments
D. Hull and collision |
|
Definition
| B. Hull, protection and indemnity |
|
|
Term
134. Max's personal auto policy (PAP) has liability and collision coverage. His neighbor's car has liability coverage
only. Max borrows his neighbor's 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. Collision coverage because the neighbor does not have this coverage. Liability coverage does not apply.
B. Liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on
a primary basis.
C. Collision and liability coverages on a primary basis.
D. Liability coverage that is excess of his neighbor's liability coverage; the collision coverage does not apply. |
|
Definition
B. Liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on
a primary basis. |
|
|
Term
135. Medical payment coverage in a boat owner's policy covers injuries to:
A. Permissive occupants of the insured's boat
B. Fare-paying passengers on the insured's boat
C. Passengers on another boat struck by the insured's boat
D. Employee's of the insured |
|
Definition
| A. Permissive occupants of the insured's boat |
|
|
Term
136. Under a personal umbrella policy, what underlying coverages must an insured typically maintain?
A. Auto and personal liability only
B. Personal liability only
C. Auto, personal liability, and professional liability
D. Auto only |
|
Definition
| A. Auto and personal liability only |
|
|
Term
137. Section 770 of the Insurance Code refers to which of the following?
A. An entity cannot demand that insurance be placed with a particular agency
B. The penalties for misrepresentation of policies
C. The restrictions on the activities of incorporated insurers
D. A travel insurance agent cannot refer business to unincorporated insurers |
|
Definition
| A. An entity cannot demand that insurance be placed with a particular agency |
|
|
Term
138. A person with a commercial policy is burning leaves. The fire gets out of control causing smoke damage to a
neighboring property. The loss is covered by:
A. Pollution liability
B. Building and Personal Property form
C. Not covered as it is not a direct loss
D. Commercial General liability |
|
Definition
| D. Commercial General liability |
|
|
Term
139. What would the Commissioner likely do if an agent induces a client to co-sign a loan?
A. Suspend the agent's license
B. Force the agent to pay the loan back with interest
C. Impose a $1,000 fine
D. Force the agent to attend a state ethics course |
|
Definition
| A. Suspend the agent's license |
|
|
Term
140. Which of the following is NOT one of the three main types of loss?
A. Property loss
B. Liability loss
C. Human and Personnel loss
D. Financial loss |
|
Definition
|
|
Term
141. Which of the following would be used for a new single-family dwelling?
A. HO-8
B. HO-6
C. HO-5
D. HO-4 |
|
Definition
|
|
Term
142. Abstracts, maps and mortgages are covered under which of the following?
A. Inland marine
B. Business owner's policy
C. Commercial General Liability
D. Builder's risk policy |
|
Definition
|
|
Term
143. What type of crime form covers losses that occur during the policy period regardless of when the loss is
discovered?
A. Discovery form
B. Commercial crime form
C. Loss sustained form
D. Robbery and safe burglary form |
|
Definition
|
|
Term
144. What do the initials S.T.A.R.R. stand for?
A. Types of standard policies
B. Methods of risk management
C. A government program designating outstanding insurance companies
D. Types of coverage forms |
|
Definition
| B. Methods of risk management |
|
|
Term
145. Under a special form cause of loss, if a landslide is caused by an unnatural flow of water due to improper grading,
the loss is
A. Excluded under the governmental action exclusion
B. Covered; there are no exclusions for this type of loss
C. Excluded under the utility service exclusion
D. Excluded under the concurrent causation exclusion |
|
Definition
| D. Excluded under the concurrent causation exclusion |
|
|
Term
146. 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. Inland marine
B. Professional liability
C. Auto liability
D. Commercial general liability |
|
Definition
| D. Commercial general liability |
|
|
Term
146. 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. Inland marine
B. Professional liability
C. Auto liability
D. Commercial general liability |
|
Definition
| D. Commercial general liability |
|
|
Term
147. Grace has a homeowner's policy that includes Section 1 coverages: A, B, and C. A, B and C provide coverage for:
A. Dwelling, additional living expenses and loss of use
B. Dwelling, personal property and loss of use
C. Medical payments, personal liability, and damage to property of others
D. Dwelling, other structures, and personal property |
|
Definition
| D. Dwelling, other structures, and personal property |
|
|
Term
148. How are the HO-3 and the HO-5 similar?
A. Both provide open peril coverage for the dwelling
B. Both are designed to cover condominiums
C. Both provide named peril coverage for personal property
D. Both provide replacement cost coverage for contents |
|
Definition
| A. Both provide open peril coverage for the dwelling |
|
|
Term
149. The personal auto policy towing and labor endorsement pays for:
A. The expense of towing a disabled car to a garage nearest the insured's home
B. The cost of labor only if the labor is performed at the place of disablement
C. Towing and labor charges up to $1000 per year
D. The cost of towing the disabled car to the garage, and up to two hours of labor expenses at the garage |
|
Definition
| B. The cost of labor only if the labor is performed at the place of disablement |
|
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Term
150. Which of the following losses would be covered under Dick's personal auto policy other than collision coverage?
A. Dick's suitcase is stolen from his car while the car is parked at the airport
B. Someone shoots Dick's car rear window while the car is parked on the street overnight
C. The sides and top of Dick's car is damaged when it rolls over on an icy curve
D. Dick locks his keys in the car, and then breaks a window to gain quick access |
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Definition
| B. Someone shoots Dick's car rear window while the car is parked on the street overnight |
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Term
151. Of the following, the one eligible for the business owners program is a:
A. Camera store which is 9,000 square feet in area.
B. 5-story office building which is 200,000 square feet in total area
C. 30-story hotel with 60 units and 5,000 square feet of mercantile space.
D. 5-story apartment complex with 60 dwelling units and 5,000 square feet of mercantile space. |
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Definition
| D. 5-story apartment complex with 60 dwelling units and 5,000 square feet of mercantile space. |
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Term
152. A glass insurance policy would not cover:
A. Replacement of a shelving unit which had to be moved in order to replace a broken window.
B. Replacement of a shelving unit which was damaged by falling glass when a window was broken.
C. Repairs to the window frame which splintered when the glass broke.
D. Earthquake aftershock that breaks the windows. |
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Definition
| B. Replacement of a shelving unit which was damaged by falling glass when a window was broken. |
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Term
153. The term “time element coverage” is used when the amount of the loss depends on:
A. The time between the date of the loss and expiration date
B. The time between the effective date and the date of the loss
C. The time of the year when a seasonal business suffers a loss
D. The time it takes to repair, rebuild or restore damaged property |
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Definition
| D. The time it takes to repair, rebuild or restore damaged property |
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Term
154. Which of the Commercial Property cause of loss forms provide theft coverage?
A. The basic, broad and special forms
B. The broad and special forms only
C. The special form only
D. None of the forms provide theft coverage |
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Definition
| D. None of the forms provide theft coverage |
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Term
155. Which of the following is not considered a consequential loss?
A. loss of rental value
B. damage to personal property
C. extra expense incurred while rebuilding damaged property
D. loss of business income while a building is closed for repairs |
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Definition
| B. damage to personal property |
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Term
156. Interline endorsements apply or could apply:
A. only to inland marine coverage
B. to more than one coverage part of a package policy
C. to property and liability coverages only
D. only when a broad cause of loss form is attached to a hull policy |
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Definition
| B. to more than one coverage part of a package policy |
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Term
157. Under the Commercial Package policy, who may cancel the policy in writing, is authorized to make changes to
the policy with the consent of the insurer and is responsible for paying premiums?
A. The first named insured
B. The last named insured
C. Any named insured
D. Any insured |
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Definition
| A. The first named insured |
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Term
158. Under a business income policy, loss of income is defined as which of the following?
A. Net income after income taxes
B. Gross income after income taxes
C. Net income before income taxes
D. Gross income before income taxes |
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Definition
| C. Net income before income taxes |
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Term
159. An insurance company has made an underwriting profit when:
A. its combined ratio is greater than 100%
B. its combined ratio is less than 100%
C. its loss ratio is less than its expense ratio
D. its expense ratio is less than its loss ratio |
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Definition
| B. its combined ratio is less than 100% |
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Term
160. Under Section II of a homeowners policy, damage to the property of others will not be covered if it is caused
intentionally by and insured who is at least:
A. 18 years of age
B. 16 years of age
C. 13 years of age
D. 10 years of age |
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Definition
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Term
161. An employer purchases a fidelity bond to protect against potential losses by employee dishonesty. In this
situation, each of the employees covered by the bond is:
A. A fiduciary
B. A guarantor
C. A principal
D. An oblige |
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Definition
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