Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
100 Cards in this Set
- Front
- Back
Two Dwelling fire polices are written on the same house. Company A had a limit of 300,000 and Company N had a limit of 100,000. If the insured suffers a 100,000 loss, how much will Company A pay? |
75,000 |
|
An HO-6 provides which type of coverage for contents? All-risk Named peril Valued Replacement cost |
Name peril |
|
An HO-3 policy covers: Damage done by burglars Animal, birds, or fish Vandalism occurring after 60 days vacancy Water damage caused by sewer backup |
Damage done by burglars |
|
On an HO-3 policy, freezing of plumbing is covered: Regardless If the heat was left on Only if the home is unoccupied Never |
If heat was left on |
|
A "covered auto" on a Personal Auto Policy includes: Snowmobiles Motorcycle Small pick up trucks Motor homes |
Small pickup trucks |
|
You hit a bird, cracking your windshield. Which auto coverage applies: |
Other than collision |
|
Your parked auto pops out of gear and rolls into a tree. Which auto coverage applies: |
Collision |
|
The name of the insured would be found in which part of the policy: |
Declarations |
|
The covered perils would be found in which part of the policy: |
Insuring agreement |
|
The requirement to submit proof of loss is contained in which part of the policy: |
Conditions |
|
On an all-risk policy, where would you look to see what is not covered: |
Exclusions |
|
At the expiration of a leasehold, any improvements and betterments made by the tenant belong to the: |
The property owner |
|
On a property policy, a mortgage holder must be given notice upon: |
Non-renewal or cancellation |
|
All of the following are true about producers, EXCEPT they: Must be at least 18 to obtain a license Represent an insurer Must take an examination Represent the policy holder |
Represent the policyholder |
|
Two liability policies are written to cover the same insured. Company A writes an HO policy with liability limits of 500,000 and Company B writes a Personal Umbrella policy with liability limits of 1,000,000. If a judgement I'd rendered against the insured in the amount of 100,000, how much will Company B pay? |
Zero On liability insurance, claims are not paid pro rata. Primary insurance covers claims until max limit is met. |
|
An HO-3 policy is written with a policy limit of 300,000 on a house that has a replacement cost of 500,000. If the insured suffers a 60,000 loss, how much will the insurer pay? |
45,000 The insured needed to have at least 80% of the replacement cost ; 80% of 500,000. 80% of 500,000 is 400,000. 300,000 is 75% of 400,000. 45,000 =75% of 60,000. |
|
On property claims, proof of loss must be submitted within: |
60 days |
|
An insurance contract sold without any negotiations is considered to be: |
Unilateral |
|
A client's reasonable expectation of coverage is most closely associated with the: |
What a prudent person would expect |
|
The principle of indemnity is designed to: |
Restore the insured to the same position he had prior to the loss |
|
A Personal Articles Floater (PAF) provides coverage on what basis: |
Actual Cash Value |
|
If an adjuster settles a claim based upon false information provided by the client the court may void the contract. This is known as a(n): |
Rescission |
|
Wet leaves on the sidewalk are considered to be a: |
Hazard |
|
On an HO policy written for 100,000, a client had a 95,000 loss plus incurs an additional 15,000 in debris removal expenses. How much of this debris removal expense is covered? |
10,000 On an HO policy debris removal covers 5% of the policy limit |
|
On a DP-1 Basic Dwelling Fire form, water damage is covered of due to: |
Fire |
|
On a property policy, notice of claims must be given: |
Immediately |
|
An uninsured motorist includes all the following EXCEPT: A car insured by an insolvent insurer A hit-and-run auto A car driven with the required surety bond posted A car driven in violation of the financial responsibility law |
A car driven with the required surety bond posted |
|
Which of the following is not an Unfair Claims Settlement Practices: Failing to act promptly on claims communications Refusing to pay a claim without a reasonable investigation Requiring Proof of Loss to be submitted Failing to affirm or deny coverage within a reasonable time |
Requiring Proof of Loss to be submitted |
|
All of the following are true regarding strict liability EXCEPT: Negligence is required It is also known as absolute liability It is the direct responsibility for damages resulting from a deliberate action It is also known as liability without fault |
Negligence is required |
|
When there is a break in the chain of events leading from a negligent act to an injury, the defendant may utilize the defence of: |
Intervening cause |
|
Which of the following is true regarding the doctrine of comparative negligence: It varies by state It bars recovery if the injured party is partly to blame It is the same everywhere It is the same add contributory negligence |
It varies by state by state |
|
The "special provisions" environment added to some policies contains: |
The provisions required to be added by state law |
|
Conditions contained in an HO-3 policy require the insured, after a loss, to do all of the following EXCEPT: Give prompt notice of the claim to the insurer or producer Notify the police in case of Loss by theft Protect the property from further damage Abandon the property to the insurer |
Abandon the property to the insurer |
|
On a property insurance policy, the name of the clause the allows the insurer to broaden coverage during they policy period without an additional premium charge is the: |
Liberalization clause |
|
On a property policy, if the parties fail to agree on the amount of the loss, either may demand an appraisal. All of the following are true about this policy conditions EXCEPT: Each party must pay its own appraiser The other expenses of the appraisal and the cost of the umpire are shared equally A decision agreed to by any two of these three parties will set the amount of Loss The party requesting the appraisal must pay the entire cost |
The party requesting the appraisal must pay the entire cost |
|
On an HO policy, all are true about subrogation EXCEPT: It applies to all parts of the policy It helps hold rates down It applies when a 3rd party negligently causes property damage The insured waives their rights of recovery against another party to the extent that payment is made by the insurer |
It applies to all parts of the policy |
|
On which type of policy is appraisal of the property not relevant: |
A Fine Arts Floater insuring a painting |
|
On an HO-3, the coinsurance percentage requirements are based upon the: |
The replacement cost of the property at the time of loss |
|
On an HO-3, which of the following is covered without special endorsements: |
Jewelry, furs and firearms up to certain limits |
|
On a DP-1 dwelling from basic form, the "other coverage" provided for removed property applies: |
To removed property, for direct loss from any cause |
|
A Personal Auto Policy (PAP) does not provide coverage in: |
Mexico |
|
Which parts of a legal contract constitute the mutual agreement of the parties? |
Offer and acceptance |
|
When a claimant states the truth to the best of their knowledge, it is called a: |
Representation |
|
On a valued policy, when a total loss occurs it is important to determine the: |
Policy limit |
|
The policy period is defined as: |
The time the policy is in effect |
|
"Specific" property insurance provides: |
A specific amount of insurance for specific property at a specific location |
|
The amount of property damage resulting from a fire is determined by: |
Negotiation between the insured and the insurer |
|
Property policy A is written for 10,000 and policy B is written for 30,000. If a 20,000 claim occurs, to whom will this loss be allocated: |
Policy A will pay 5,000 and Policy N will pay 15,000 |
|
All the following are true about an excess limits policy EXCEPT: They are written on to top of another policy, without broadening coverage They pay after the primary policy is exhausted They pay claims pro rata with the other policy They are also called umbrella policies |
They pay claims pro rata with the other policy |
|
Exclusions in a policy do all of the following EXCEPT: Eliminate uninsurable perils Clarify coverage Provide coverage that was intended, but not clearly expressed Prevent adverse selection |
Provide coverage the was intended, but not clearly expressed |
|
On an HO policy to find out who is insured other than the named insured, you should look in the: |
Definitions |
|
Conditions in a policy apply to: |
Both the insured and the insurer |
|
The main difference between the various Dwelling Property forms is the: |
Covered property perils |
|
Which policy provisions is word as follows: "In consideration of the provisions herein and of the premium specified, the company..." |
Insuring agreement |
|
On an HO policy, all are true about subrogation EXCEPT: It prevents double coverage It applies to both sections of the policy It reinforces the Principle of Indemnity The insured assigns their right of recovery to the insurer |
It applies to both sections of the policy |
|
All are true about consideration on an insurance contract EXCEPT: It is an exchange of values It must be equal It is usually monetary It is requirement to make the contract enforceable in court |
It must be equal |
|
All are true about the cost of defence on a liability policy EXCEPT: They are in addition to limits The insurer has the option to select the lawyer The will no longer be paid once the policy limits have been paid out They are covered, even if the claim is groundless or excluded |
They are covered, even if the claim is groundless or excluded |
|
All are true about medical payments on a Homeowners policy (HO) policy EXCEPT: They will not be paid unless the insured is negligent They are to others They are no-fault They are designed to prevent lawsuit |
They will not be paid unless the insured is negligent |
|
On an HO-3, all of the following are true regarding the coverage provided for loss to trees, shrubs and plants EXCEPT: It is in addition to limits It is provided on an open-peril basis It is limited to $500 for any ones tree, shrub or plant It is subject to an aggregate limit of 5% of Coverage A |
It is provided on an open-peril basis |
|
Under the National Flood Insurance Regular Program, personal property located in a single-family home may be covered up to a maximum of: |
100,000 |
|
To help customers purchase auto insurance, even if the have bad driving records, most states offer: |
An Automobile Insurance Plan |
|
The following sentence defines what: "This Company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment had been made by this Company": |
Subrogation |
|
Regarding the policy provision of appraisal, who appoints the umpire of the two appraisers cannot agree? |
The Court |
|
Regarding the policy provisions of appraisal, who pays for the cost of the appraisers? |
Each party |
|
All of the following are true about a total property loss EXCEPT: Abandonment is not permitted without the consent of the insurer The insurer may sell the salvage to offset their expenses The value of the land is covered The insurer will pay the value of the property or the policy limit, whichever is less |
The value of the land is covered |
|
Conditions in a policy allow the insurer to ask the insured to do all EXCEPT: Protect the property from further loss Submit proof of loss in the event of a total loss Abandon the property in the event of a total loss Produce books and records at any time |
Abandon the property in the event of a total loss |
|
All the following are excluded on a Personal Automobile Policy (PAP) EXCEPT: Driving a non-owned auto without the owner's permission Using your car as a taxi or limousine Driving a temporary substitute for regular use Using your car in connection with the auto business |
Driving a temporary substitute for regular use |
|
All the following are true about Proof of Loss EXCEPT: It must contain the names of everyone in the insured's household It must be submitted within the time specified in the policy It is a condition in the policy Failure to submit it may result in claim denial |
It must contain the names of everyone in the insured's household |
|
A client insured a rental home he owns for 60,000 on a Basic Form dwelling policy. What is the most the policy will pay under Rental Value if the house becomes uninhabitable due to a covered loss fit one month? |
1,000 Basic Form dwelling policy covers 20% of the policy limit which is 12,000. It covers lost income monthly which is 1,000 a month |
|
Which of the following expenses would be covered under Loss of Use on an HO-4? |
Additional fuel costs due to the insured having to drive farther to work |
|
If an insured's PAP liability limits are 100,000/300,000/300,000, what is the most their insurer will pay if he negligently injures one person in an auto accident? |
100,000 |
|
An insured takes out an HO-3 with Coverage A limits of 200,000. If he has a fire loss of 190,000 and incurs 30,000 in debris removal expenses, how much coverage is available for debris removal? |
20,000 |
|
Which of the following are true about flood insurance? Dwelling Fire and HO policies cover flood Flood Insurance is only written by the federal government Flood Insurance covers landslide and mudslide Participating insurers may offer flood insurance under a Write Your Own program |
Participating insurers may offer flood insurance under a Write Your Own program |
|
When an insurer's losses fin their Write Your Own flood insurance program exceeds premiums and investments income, how are losses paid? |
By the federal government |
|
Reinsurance allows insurers to do all of the following EXCEPT: Stabilize profits Increase unearned premiums reserves Avoid catastrophic risk Increase underwriting capacity |
Stabilize profits |
|
All are true about a Personal Umbrella liability policy EXCEPT: It may provided coverage that is excluded by the underlying primary policies It provides coverage that is excess over and above the primary policies It covers an insureds liability related to unpaid services performed on behalf of a non-profit charitable organization It covers work related liability |
It covers work related liability |
|
A Boatowners policy will cover an insured's liability in relation to all of the following EXCEPT: Operating in Canadian waters Participating in a fishing derby Operating as a charter fishing boat Water skiing |
Operating as a charter fishing boat |
|
On an unendorsed Personal Auto Policy, theft of which if the following permanently installed electronics equipment would NOT be covered under Other Than Collision coverage? |
Radar detectors |
|
All of the following are provisions in Section 1 of an HO policy EXCEPT: Mortgagee clause Serverability clause Appraisal clause Assignment clause |
Severability clause |
|
A Personal Articles Floater may be written to cover all of the following EXCEPT: A postage stamp A show Dog furs Jewelry |
A show dog |
|
Property of all of the following are covered by an HO policy EXCEPT: Guests Children away at college Boarders Relatives residing with the insured |
Boarders |
|
On a DP-2 , damage to which of the following caused by the weight of the ice, snow or sleet is covered: |
Garages |
|
For non-payment of premium, insurers must give at least___ days' advance written notice when canceling a DP or HO policy. |
10 |
|
You have a PAP with full coverage on your covered auto. If you borrow your friend's uninsured car and hit a tree, severely damaging the car: |
Your policy will provide coverage for collision damage to your friend's car |
|
To eliminate the exclusion regarding regular use of a non-owned auto, your should add an endorsement entitled: |
Extended Non-Owned Auto Coverage for a Named Individual |
|
If you add a 'business pursuit' endorsement to your HO, you are adding liability coverage for: |
The business pursuit named in the endorsement |
|
An HO-3 policy provides which coverage for contents: All-Risk Basic Form Broad Form Special form |
Broad form |
|
A party who has temporary control of your property in storage or for repair is known as a: |
Bailee |
|
When a policy is written fire the named insured, the rates for a dwelling under construction are based upon: |
Average value |
|
Insurance may be purchased for all of the following EXCEPT: Commercial risks Flood Drug smuggling Auto race |
Drug smuggling operations |
|
On an HO policy, an endorsement may be added to cover personal injury liability, which covers all of the following EXCEPT: Defamation Bodily injury Libel Slander |
Bodily injury |
|
All of the following are covered as supplementary payments under the Part A Liability coverage on a Personal Automobile Policy (PAP) EXCEPT: Cost of defense Bail bonds Post judgement interest Loss of earnings |
Cost of defense |
|
Residual markets are designed to provide coverage for which type of risk exposure: |
High |
|
Federal flood insurance will cover which of the following: Mudslide Storm sewer backup Landslide Mudflow |
Mudflow |
|
Shareholders might receive dividends from a policy issued by which type of insurance company) |
Stock |
|
An insurer domiciled in Canada that is authorized to do business in this state is considered to be a(n) _________ insurer. |
Alien |
|
An insurer is responsible for the acts of its producers under the Doctrine of ___________ liability. |
Vicarious |
|
All of the following are considered to be hazards the property insurance underwriters are concerned about EXCEPT: Oily rags Dead tree Fire Gasoline |
Fire |
|
Section II of an HO policy covers all of the following EXCEPT: Personal injury Bodily injury Medical Property damage |
Personal injury |
|
Which of the following is NOT an Additional Coverage under Section I of an HO policy: Grave makers Ordinance or law Debris removal Loss assessments |
Loss assessments |