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Property and casualty insurance Exam
Questions and Answers Part one
Already Graded A
Which of the following are the authorities that an agent can hold? ✔✔Express and implied
Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight? ✔✔Permanent partial disability
Who is NOT considered an employee in an commercial general liability (CGL) policy? ✔✔Temporary worker
The major portion of the premium of an equipment breakdown policy pays? ✔✔For inspections and examinations
An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much should he insure the property for? ✔✔80% of the property's replacement cost or more
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must ✔✔Respond to the consumer's complaint.
All of the following are found in the declarations section of a policy EXCEPT the ✔✔Exclusions.
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? ✔✔Up to $2,
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT ✔✔Dividends from a mutual insurer.
Which of the following may be covered by electronic data processing coverage form under an inland marine policy? ✔✔a) Computer hardware that is specifically scheduled.
b) Extra expense the insured incurs to continue the business following a loss.
c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
The party to a surety or fidelity bond who promises to fulfill the obligation is the ✔✔Principal
The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? ✔✔Computer fraud
In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by ✔✔The insurer.
Which of the following entities must approve all continuing education courses in this state? ✔✔The Commissioner
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of ✔✔Concealment
A common exclusion found under physical damage to your auto includes ✔✔Mechanical breakdown.
Which of the following is true regarding a risk retention group? ✔✔It is a liability insurance company owned by its members.
Which of the following best describes a misrepresentation? ✔✔Issuing sales material with exaggerated statements about policy benefits
A builder's risk form is most often written as which of the following? ✔✔Completed value form
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? ✔✔Per occurrence
Which of the following is an example of a protective safeguard in a businessowners policy? ✔✔Automatic sprinkler system
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? ✔✔The change must be reported to the Commissioner.
If more than one person has an insurable interest in the property covered under a dwelling policy, ✔✔The insurer will be liable for only the insured's interest in the damaged property.
Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20, damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay ✔✔$100,000.
An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if ✔✔A joint ownership coverage endorsement is added.
Which of the following is defined as a covered cause of loss in businessowners property coverage? ✔✔Leakage from fire-extinguishing equipment
Under the workers compensation system, who is responsible for the expenses resulting from work- related injuries and occupational diseases? ✔✔The employer, regardless of whether it was at fault for the injury or disease
A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT ✔✔Be responsible for at least 25% of total commissions collected by the office that he or she manages.
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? ✔✔They do not change.
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called ✔✔Self-insured retention.
Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? ✔✔The insured is injured while driving his motorcycle on his resident premises.
Which of the following is NOT an essential element of an insurance contract? ✔✔Counteroffer
Which of the following persons is required to hold a producer license? ✔✔A person who negotiates insurance contracts
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's ✔✔Ancestry
Which of the following would NOT be classified as personal property for insurance purposes? ✔✔A house
Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS ✔✔The injuries fall within the definition of "serious injury."
Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? ✔✔The coverage is considered good will because payments are made without regard to fault.
Homeowners policies provide coverage for ✔✔Business property while on the residence premises.
Who will transport the property of anyone who hires them? ✔✔Common carriers
Which of the following is NOT true regarding a Certificate of Authority? ✔✔It is issued to group insurance participants.
What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property? ✔✔80% (note-Coverage F - Unscheduled Farm Personal Property insures all farm personal property on a blanket basis. Coverage F is subject to an 80% coinsurance clause. )
Which of the following would be considered an unfair claims settlement practice? ✔✔A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Which of the following policies must contain, at a minimum, policy language equal to the Standard Fire Policy? ✔✔All of the above
Under the dwelling policy, Coverage C - Personal Property is ✔✔Limited to covering a servant's property while at the insured location.
Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license? ✔✔Forgery
In dwelling policies, automatic increase in insurance is ✔✔Coverage by endorsement.
What is the maximum amount of protection available to insureds under the Pennsylvania Property and Casualty Insurance Guaranty Association? ✔✔The amount of loss up to the amount of coverage in the original policy, not to exceed $300,000 (per claimant)
A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? ✔✔The loss is payable to the insured and the mortgagee.
With regards to a homeowners policy, which coverage provides for indirect or consequential losses? ✔✔Coverage D
To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than ✔✔6 stories.
How soon after the due date should the insurer pay the agent appointment fees? ✔✔Within 30 days
Which of the following is the federal body that regulates truckers who travel across state lines? ✔✔Federal Motor Carrier Safety Administration
A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n) ✔✔Valued policy.
In terms of parties to a contract, which of the following does NOT describe a competent party? ✔✔The person must have at least completed secondary education.
An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? ✔✔Contractors equipment floater
If an insured lives in a high-risk area and can't find an insurer that will cover his/her property, which of the following would most likely provide coverage? ✔✔The FAIR Plan
If an insurer changes a form that it uses to transact insurance, it must do which of the following? ✔✔File the form with the Commissioner for approval
Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? ✔✔Make voluntary payments for treatment of the worker's injury
An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement? ✔✔Nothing
Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners? ✔✔Bailee's customer policy
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT ✔✔The insured is injured while exiting a friend's mobile home.
Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries? ✔✔Injury incurred while the person was under the influence of drugs or alcohol
A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid? ✔✔Other-than-collision
If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? ✔✔ 30
The other insurances clause of an ocean marine policy allows coverage for which reasons? ✔✔To obtain coverage for war, strikes, and related risks not covered by the policy
The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true? ✔✔All volcanic eruptions within a 72-hour period will be considered one occurrence.
A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil? ✔✔$ million
Which of the following would be included in the farm liability coverage forms? ✔✔Bodily injury to a residence employee
In which of the following situations would the jewelers block extension cover a loss? ✔✔A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged.
Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT ✔✔Prepackaged software.
The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and
for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called ✔✔Exclusive remedy.
If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state? ✔✔ 90
Which of the following is the type of property NOT covered by the homeowners policy? ✔✔Land on which the property is located
When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property? ✔✔The carrier
Which of the following is defined as the cost to replace damaged property with less expensive and more modern construction or equipment? ✔✔Functional replacement cost
To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days? ✔✔10 days
Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits? ✔✔$20 per day; $600 maximum
When transacting business in this state an insurer formed under the laws of another country is known as a/an ✔✔Alien insurer.
All of the following are other coverages under the dwelling policy EXCEPT ✔✔Earth movement.
Which of the following regulatory authorities participated in creating the National Do Not Call Registry? ✔✔FTC
Installing deadbolt locks on the doors of a home is an example of which method of handling risk? ✔✔Reduction
The members of a limited liability company are insureds under a businessowners policy (BOP) if ✔✔The limited liability company is designated as the named insured.
What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence? ✔✔Proximate cause
How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? ✔✔$
When the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation? ✔✔Cease and Desist Order
In property insurance, actual cash value is defined as which of the following? ✔✔Replacement cost at the time of the loss, less depreciation
Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? ✔✔Any other state
An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy? ✔✔A friend rents their boat and runs it into a neighbor's dock.
A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the ✔✔Additional insured.
Which of the following is NOT an optional coverage available in a businessowners policy? ✔✔Workers compensation
All of the following statements describe the concept of strict liability EXCEPT ✔✔It is imposed on defendants engaged in hazardous activities.
