Download Personal Lines Insurance Exam Questions And 100% Correct Answers 2024-2025 and more Exams Advanced Education in PDF only on Docsity!
Personal Lines Insurance Exam Questions And 100%
Correct Answers 2024-
Risk _________ is when one takes action to prevent or reduce potential loss. - Answer Reduction
As one increases the number of similar units, according to the rule of _____ ________ the predictability of the loss improves. - Answer Large Numbers
The insuring of risks that are more prone to losses than average risks is known as? - Answer Adverse Selection
A ___________ contract is an arrangement where one insurer transfers or shares risks with another insurer. - Answer Reinsurance
_____________ Reinsurance is accepted or rejected by a case by case basis. - Answer Facultative
The fact that an insured would profit from a loss, would be a violation of the principle of ___________. - Answer Indemnity
The determination of acceptable risks is the primary function of the ___________. - Answer Underwriter
Underwriters prefer to select insureds whose actual losses will be similar to expected losses. True or False? - Answer True
When rates cannot be used until they are improved by the department or division of insurance, they are called ____ ________ rates. - Answer Prior Approval
The termination of a policy by either the insured or insurer before its expiration date is known as ___________. - Answer Cancellation
When the insurer cancels a property policy, the unearned premium is returned ___ ____.
When an insured requests cancellation of a policy, the unearned premium is refunded to the insured on a _____ _____. - Answer Short Rate
A fire is considered to be a _____ of a potential loss. - Answer Cause
A document that provides temporary insurance coverage until a policy is issued is called a ______. - Answer Binder
A process in which a disputed claim is decided by a neutral third party is called ___________. - Answer Arbitration
Concurrent Causation refers to a situation where there are two causes resulting in a loss, with one of the causes excluded and the other cause of loss not excluded. - Answer Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are considered to be __________. - Answer Concurrent
Policy A is written for $100,000 and an excess Policy B is written for $200,000 on the same property. If there is a $20,000 loss, how much will each pay? - Answer A= $20, ; B= $
A building which contains neither occupants nor personal property is ______. - Answer Vacant
What part or portion of a property policy would contain the effective or expiration dates of the policy? -Answer Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part of the policy? -Answer No
The __________ part or portion of a property policy sets forth the rights, rules, duties, and obligations of the insurer and insured to be followed throughout the policy period. - Answer Conditions
The ______________ Clause allows insurers to automatically broaden coverage without endorsement on existing policies with no increase in premium. - Answer Liberalization
If a property policy has been in effect for less than 60 days and the insurer cancels for the nonpayment of premium, the insurer must give the insured ____ days written notice. - Answer 10
Could an order to vacate the property possibly cause an insurer to cancel a commercial property policy? - Answer Yes
An insurer may nonrenew a homeowners policy by oral notice to the insured. True or False? - Answer False
The insured's transfer of right of ownership or interest in an insurance policy to another party with the insurer's written consent is referred to as an __________. - Answer Assignment
___________ transfers an insured's legal right of recovery to the insurer that paid the claim. - Answer Subrogation
When an insured has a loss, they are obligated to make an inventory of damaged property at the ________request. - Answer Insurers
If there is a loss under a homeowner's policy, a proof of loss is to be signed and sworn to by the _______. - Answer Insured
Company A has issued a policy in the amount of $200,000 and company B has issued a policy in the amount of $300,000. Under the other insurance or pro rata liability condition or provision, how much will Company A pay of a $100,000 loss? - Answer $40,
The _________ portion of the policy specifies the causes of loss perils not covered, or property not covered. - Answer Exclusions
An amendment that is attached to a property insurance policy to broaden or restrict coverage, or further define certain policy provisions is known as a(n) ___________. - Answer Endorsement
Under a commercial lines property policy, who is responsible for making the premium payments in a timely manner? - Answer First Named Insured
Under a commercial lines property policy, who may demand changes to the policy and the right to any return of premium? - Answer First Named Insured
Basically, the higher the deductible that is selected by the insured, the higher the premium will be. True or False? - Answer False
Whenever a personal property policy is cancelled or surrendered the unearned premium is to be tendered to the insured, or insurance agent of record for the transmittal to the insured, within ____ days of the cancellation or surrender. - Answer 25
A dwelling containing 5 apartment units would be eligible for coverage under a dwelling policy. True or False? - Answer False
Under the DP-2, and DP-3, endangered property removed to another location is covered for 30 days while at the removed location. True or False? - Answer True
Collapse of a structure due to hidden decay is covered under all dwelling forms. True or False? - Answer False
The earth movement exclusion does not exclude damage by an explosion that ensues from the earth movement. True or False? - Answer True
Water that backs up through sewers and drains causing damage is covered under a DP-3. True or False? - Answer False
Under the HO-2, would the explosion of a hot water heater that causes major damage to the house be covered? - Answer Yes
Under a homeowners policy, for a claim of more than $2,500 on the dwelling to be paid on a replacement cost basis, the repairs must ____ __________. - Answer Be Completed
Does an HO-3 policy provide coverage against damage caused by falling objects? - Answer Yes
The perils included in the HO-3 policy for coverages A and B are the special _____ perils.
The HO-4 policy provides _____ ____ peril coverage on the personal property. - Answer Broad Form
Does the HO-4 provide coverage for real property? - Answer No
A client wants open peril coverage for their dwelling and personal property under their homeowners policy. What homeowners form would provide them with this? Answer
Form 5
The critical difference between a HO-3 and HO-5 is the HO-3 insures personal property for broad form perils and the HO-5 insures personal properties for open perils. Answer True
The HO-6 provides _____ ____ _____ peril coverage on personal property. - Answer Broad Form Named
The HO-6 condominium unit-owners form provides coverage for common grounds which are next to the insured's property. True or False? - Answer False
A homeowner has an insured loss of $10,000 damage to the home, $2,000 damage to personal property and $2,000 additional living expenses. The policy carries a $ deductible. How much will the policy pay? - Answer $13,
The HO-3 policy provides theft coverage for building supplies that are next to the house which are to be used in construction. True or False? - Answer False
Under the homeowners policy, vandalism and malicious mischief coverage is excluded if the property is ______ for more than 60 days. - Answer Vacant
The homeowners policy that is written for $100,000, has the detached garage completely destroyed by fire. what is the most the policy will pay? - Answer $10,
What percentage of coverage A is allowed for coverage B-other structures-under a homeowners policy? - Answer 10
The territorial limits for personal property under the homeowners policy is ________. - Answer Worldwide
that has collected on the roof. True Or False? Answer False
Under a homeowners policy, landslides would be covered. True or False? - Answer False
Ensuing loss by fire, explosion or glass breakage resulting from earth movement is covered under a homeowners policy even though the earth movement itself is excluded. True or False? - Answer False
Is the backing up of sewers covered under a homeowners policy? - Answer No
If an insured has kept heat in an unoccupied dwelling, any damage caused by freezing of the plumbing system would also be covered under the policy, HO-3. True or False? - Answer True
A television set would be covered on a replacement cost basis under the replacement cost endorsement. - Answer Yes
Under the homeowners policy, the personal property replacement cost endorsement would provide replacement cost on an insured's pet. True or False? Answer False
Under the scheduled personal property endorsement, newly acquired fine arts have to be reported to the insurer within ____ days. Answer 90
The California residential property insurance disclosure form is required by California statute and becomes an actual part of an insured's homeowner's policy. True or False? -Answer False
____ insurance covers physical damage to machinery and fitting of the vessel. - Answer Hull
Ocean marine hull insurance is usually written for a specific voyage or for one year. True or False? - Answer True
If cargo is shipped FOB point of destination, the seller retains the cost of transportation and insurance during shipping. True or False? - Answer True
What basis of valuation is typically used when writing hull and cargo insurance? - Answer Valued
The fine arts floater provides automatic coverage for ____ days for newly acquired items. - Answer 90
Under a musical instrument floater, how many days of automatic coverage exists for newly acquired musical instruments? - Answer 30
Most boat owners policies provide physical damage coverage on an open peril basis. True or False? - Answer True
A yacht policy is an inland marine form and provides property hull coverage only. True or False? - Answer False
Homeowners in participating communities can purchase flood insurance. True or False? -True
Mudslides caused by the accumulation of water are a covered peril for the national flood insurance program. True or False - true
The national flood insurance program covers kitchen appliances. -Yes
Wharves, piers and docks are, or are not covered under a national flood insurance program. - Answer Are Not
A willful, wanton or reckless disregard of the consequences affecting the life or property of another is the definition of _____ negligence. - Answer Gross
Do specific damages include pain and suffering? - Answer No
__________ damages are damages awarded as punishment for extreme objectional conduct by a negligent party. - Answer Punitive
Would bodily injury coverage also include a breach of contract? - Answer No
Bodily injury claims may include loss of earnings. True or False? - Answer True
Personal injury includes bodily injury. True or False? - Answer False
Publication of any written or printed matter that is injurious to a person's reputation, defines _____. - Answer Libel
A person owes the duty of a certain standard of conduct for the protection of others by legal duty. True or False? - Answer True
When a stairway does not contain enough lighting, the owner has not fufilled the required standard of care. True or False? - Answer True
________ ______ is defined as an unbroken, natural and continuous sequence that produced injury and without which the result would not have occured. - Answer Proximate Cause
____________ negligence, under common law, denies recovery for damages caused by a negligent party if the claimant was also negligent. - Answer Contributory
_________ defense in liability insurance are determined by the legislature. - Answer Statutory
under __________ negligence, damages are reduced in proportion to the degree of negligence. - Answer Comparative
Under comparative negligence, damages awarded vary depending on each states statues. True or False? - Answer True
Employers are __________ liable for employees work-related injuries. - Answer Absolutely
______ liability is a legal doctrine that holds a manufacturer legally liable for injuries to a customer whether or not the manufacturer's product was defective. - Answer Strict
The two types of no fault systems are _____ and ________. - Answer Pure Modified
Pure no fault abolishes the tort system in its entirety for bodily injuries resulting from auto accidents. True or False? - Answer True
Supplementary payments are not paid in addition to other limits of liability. True or False? - Answer False
Exclusions may deny coverage for certain locations as well as certain persons. True or False? - Answer True
When the limits of bodily injury and property damage are specified separately, they are known as _____ limits. - Answer Split
When the limit of the policy can be applied to either bodily injury or property damage, wherever needed, or in any combination, this is a ________ ______ limit. - Answer
True
Section 2 of a homeowners policy covers damage to property of the insured. True or False? Answer False
A motorized golf cart used by a retired homeowner to make trips to the corner grocery would meet the definition of covered vehicle under section 2 of a homeowners policy. True or False? Answer False
Would a 12 foot kayak automatically be considered covered watercraft under section 2 of a homeowners policy? - Answer Yes
Section 2 of a homeowners policy excludes payment for bodily injury or property damage arising out of the use, sale, manufacture, delivery, or possession of a controlled substance. True or False? - Answer True
Under the business pursuits endorsement, does the business have to be named on the endorsement? - Answer Yes
Malicious prosecution would meet the definition of personal injury and be a covered act under the personal injury endorsement. True or False? - Answer True
A liability loss arising out of the use of a sailboat in a racing competition would be covered under the watercraft liability endorsement to the homeowners policy. True or False? - Answer True
The home business endorsement provides coverage for the professional liability for services rendered by the insured for a business conducted form, the dwelling. True or False? - Answer False
Under the personal auto policy, a motorcycle would be included in the definition of newly acquired auto. True or False? - Answer False
Part A- liability coverage of a personal auto policy includes both bodily injury and ________ ______ coverage. - Answer Property Damage
Auto _________ coverage would provide coverage when the insured is involved in an at-fault accident. - Answer Liability
Part A-liability coverage of a personal auto policy would provide both property damage and bodily injury liability in the event that the insured's 16 year old son was driving the car. True or False? - Answer True
A private passenger automobile policy has been issued with one limit for liability of $100,000. Six persons are injured and the total amount is $150,000. How much will the policy pay? - Answer $100,
The personal auto policy is excess in respect to liability coverage when the insured leaves their vehicle at a garage and the vehicle is involved in an accident. True or False?
The limit for medical payments under coverage B is the most the insurer will pay for ___ person injured in any ___ accident. - Answer One One
_________ ________ laws are designed to protect an insured in case he is involved in an accident with drivers who have no insurance. - Answer Uninsured Motorists
Would an insured's uninsured motorists coverage provide coverage to the driver of the uninsured vehicle? - Answer No
Does a vehicle owned by a self insurer constitute an uninsured motor vehicle? No
Underinsured motorists coverage protects the insured when the other driver's car has inadequate bodily injury coverage. True or False? Answer True
electronic equipment designed for the reproduction of sound. True or False? -Answer False
Standard basis of valuation under Part D coverage for damage to your auto, is the lesser of the ______ ____ ____ of the vehicle, or the amount necessary to repair, or replace the vehicle. - Answer Actual Cash Value
After an accident, the insured is required to obtain a complete physical examination at the insured's expense. True or False? - Answer False
When an insured is involved with a hit and run driver, he / she must immediately notify the ______. - Answer Police
A non endorsed personal auto policy provides coverage in mexico. True or False? - Answer False
In california an auto insurer may cancel the policy by giving at least ____ days notice for nonpayment of premium, and at least ____ days in all other cases. - Answer 10 20
_________ coverage applies when the extended non owned coverage for a named individual is used. - Answer Liability
The towing and labor endorsement limit applies per __________. - Answer Occurrence
The miscellaneous type vehicle endorsement is not intended to be used for snowmobiles. True or False? - Answer True
The miscellaneous type vehicle endorsement amends the definition of covered auto to include recreational type vehicles such as motor homes. True or False? - Answer True
The named non owner endorsement may be used to provide liabilty, _______ ________,
and _________ motorists coverages. - Answer Medical Payments and Uninsured
The type of insurance offered by most auto dealerships and lessors that insures for the difference between what the insured owes on the vehicle and what the insurer says the vehicles actual cash value is in the event of a loss is called ___ insurance. - Answer GAP
Minimum financial responsibility requirements in California for auto insurance is $15, per person for BI, $30,000 per accident for BI, and $_____ per accident for PD. - Answer $5,
Any broker-agent licensed to transact auto insurance in California and certified by the manager, may submit applications to the California Automobile Assigned Risk Plan. True or False? - Answer True
Any person qualifying for a good driver discount policy shall be charged a rate at least ____% below the rate an insured would otherwise be charged for the same coverage. - Answer 20
Low cost auto insurance is a pilot auto insurance program available to residents of certain counties who live in a household that gross annual income does not exceed ___% of the federal poverty level. - Answer 250
The purpose for a personal umbrella policy is to cover large and catastrophic losses. True or False? - Answer True
Umbrella policies may cover losses excluded by the underlying policy. True or False? - Answer True
Umbrella liability policys typically only cover losses insured by the primary insurance. True or False? - Answer False
Would a personal umbrella policy cover libel and slander? - Answer Yes
