Shared Flashcard Set

Details

Property & Casualty
Study Guide
159
Insurance
Not Applicable
09/30/2011

Additional Insurance Flashcards

 


 

Cards

Term
The definition of controlled business is business written solely on...
Definition
Family and Business Associates
Term
All state require those who represent insurance companies in sales with consumers to be licensed. Insurance departments help assure that persons who are licensed......
Definition
are of good character and possess a minimum level of competence.
Term

One of the criteria to determine an insurable risk is

 

a. Limited Exposure

b. Calculable Loss

c. Infedility

Definition
B.  Calculable
Term
An insured in involved in an automobile accident.  The adjuster declares the insured's car to be a total loss and authorizes payment to the insured for the actual cash value of the car.  The salvage belongs to.........
Definition
The Insurer
Term
A morale hazard in considered....
Definition
Indifference to loss
Term
Policy A is written covering a building with a $50,000 limit. Policy B is written covering the same building with a $100,000 limit.  A $9000 covered loss occurs. Company A will pay $3000 of the loss; company B will pay $6000 of the loss.  This is an example of which principle of indemnity?
Definition
Pro Rata
Term

Which of the following would be eligible for a dwelling policy?

 

A. A small five-unit apartment building used strictly as a residence.

B. A mountain vacation house used mostly in the summer and some weekends.

C.  A two story home where the down stairs is used for  a small candy store

Definition
B.  A mountain vacation house used mostly in the summer and some weekends.
Term
The automatic increase in insurance endorsement in the dwelling property program provides annual increases to the limits of which coverages by a percentage shown in the declarations?
Definition
Coverage A - Dwelling and Coverage C- Personal property
Term

A personal injury endorsement added to a homeowners policy would provide coverage for liability caused by the insured.....

A. Intentionally using a racial slur while campaigning for election

B. Your neighbor suing you for medical payments because you back out of your driveway and accident hit their daugther.

C. A landlord intermittently entering his tenants apartment to see if the tenant is harboring a cat, which violates the tenants lease.

Definition
C.  A landlord intermittently entering his tenants apartment to see if the tenant is harboring acat, which violates the tenants lease.
Term
Coverage F - Medical payments to others, includes payments for?
Definition
Reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices, and funeral services.
Term
Coverage B - Other structures applies to....
Definition
Structures located on the insured's property separated from the dwelling by clear space.
Term
The purpose of the homeowners program is to provide...
Definition
a single package policy that reduces the need for multiple policies.
Term

Jane takes her vehicleto the local garage to have new brakes installed.  After completing the job the mechanic takes the car out for a test drive.  The mechanic runs a red light and hits another vehicle. The damage to Janes car would be covered primarily on..... 

  

Definition
The repair shops garagekeepers liablity policy.
Term
An insured is involved in a serious head on collision with another vehicle.  Injuries have been sustained and there is damage to the vehicle.  Under a personal automobile policy, and insured is obligated to....
Definition
promptly notify the insurance company of the loss.
Term
For an applicant to be eligible fo coverage in the automobile insurance plan the applicant must....
Definition
be unable to purchase insurance in the voluntary market
Term
Is theft covered under a commercial articles floater?
Definition
YES
Term
Who would be covered for medical reimbursement for injuries sustained under the medical payments section of the commercial general liability policy?
Definition
Customers of the insured.
Term
What is the waiting period included in the definition of period of restoration in the business income coverage form?
Definition
72 hours
Term

Which of the following would be eligible for an ISO business owners policy?

 

A. An owner occupied four family dwelling with three residential rental units.

B. A convienience store with a gasoline pump

Definition
B. A convenience store with a gasoline pump.
Term
To be eligible to receive workers' compensation benefits, an employee must......
Definition
be injured in a work related incident.
Term

Which of the following would be covered under a personal umbrella policy?

 

A. Property damage to the insured's home

 

B. Liability assessed against an insured as a result from his dog biting a neighbor's child

Definition
B.  Liaibility assessed against an insured as a result from his dog biting a neighbor's child
Term
In ocean marine insurance, the act of throwing cargo overboard in order to save the ship and crew is known as....
Definition
Jettison
Term
With regard to property insurance, consideration is.....
Definition
payment of premium by the insured in return for the promise to pay covered claims.
Term
Compensatory damages are awarded for......
Definition
Actual loss suffered
Term
covered under the Building and Personal Property Coverage Form
Definition
Accounts, bills, currency, deeds, evidence of debt, money or securities Correct
Term
Which of the following is considered covered property under the BOP?
Choose one answer.
a. Completed additions, permanently installed machinery and equipment.
b. Motor trucks that deliver the insured's goods.
c. Automobiles used in the business.
Definition
Completed additions, permanently installed machinery and equipment. Correct
Term
Which is true of Coverage C of the Dwelling Policy?
Choose one answer.
a. Coverage C provides coverage for coins and currency.
b. Coverage C provides coverage for passports, tickets, and deeds.
c. Coverage C excludes coverage for animals, birds, fish, motor vehicles not used to service the premises or assist the handicapped, and property of boarders, roomers or tenants.
d. Coverage C provides coverage for grave markers.
Definition
Coverage C excludes coverage for animals, birds, fish, motor vehicles not used to service the premises or assist the handicapped, and property of boarders, roomers or tenants.
Term
The Personal Articles Floater Policy is written:
Definition
To provide coverage worldwide with some exceptions. Correct
Term
After an accident under the Personal Auto Policy the insured is required to do all of the following
Definition
Submit a proof-of-loss when required by the insurer.
Cooperate with the investigation and settlement of any claim.
Promptly send the insurer copies of notices or legal papers received.
Term
Which of the following is not considered a covered breakdown under Equipment Breakdown Protection Coverage Form?
Choose one answer.
a. Mechanical failure caused by centrifugal forces.
b. Electrical failure including arcing.
c. The functioning of any safety device.
d. Failure of pressure or vacuum equipment.
Definition
The functioning of any safety device
Term
Producers/agents act as representatives of ______________ when transacting the business of insurance.
Definition
The insurer
Term
When a mortgage company requires an applicant to buy insurance from them as a condition for a loan, this known as:
Definition
Coercion
Term
When a producer, agent, or broker makes a false statement about the benefits or the nature of an insurance policy it is called:
Definition
The person is guilty of Misrepresentation
Term
Insurance is designed to provide protection against....
Definition
Pure Risk
Term
A good example of Risk Reduction is....
Definition
When one takes action to minimize the severity of a potential loss
Term
Bodily Injury in Liability Insurance is best described as:
Definition
It includes physical injury to a person or death arising from the negligent or purposeful acts or omissions by an insured, including sickness or disease.
Term
What is true regarding every insurance license applicant?
Definition
The applicant must be competent, trustworthy and financially responsible.
Term
What defines a Surplus Lines Broker?
Definition
They place risks with non-admitted insurers when coverage cannot be placed with admitted insurer carriers.
Term
All of the following are true regarding Medical Payments coverage under the BOP, except:
Choose one answer.
a. Payment of medical expenses is made regardless of who is at fault. b. It pays medical expenses incurred within one year of the date of the accident.
c. The policy excludes funeral expense.
d. It covers accidents on premises the insured owns or rents, or due to the insured's operations.
Definition
The policy excludes funeral expense.
Term
Under the Dwelling Broad Form, losses to a building are paid on a/an ____ basis
Definition
Replacement Cost
Term
______ ________ Insurance covers employee's injuries arising out of and in the course of employment, and these benefits are the exclusive remedy for the employee injured under these circumstances.
Definition
Workers' Compensation
Term
Insurers may take which of the following actions in the process of handling and settling policy claims?
Choose one answer.
a. Require the claimant to submit a proof of loss before claim payment.
b. Require an insured to take a lie detector test.
c. Refuse to negotiate a claim settlement because the policy application was changed.
d. Not pay a claim because of the reputation of the insured.
Definition
Require the claimant to submit a proof of loss before claim payment.
Term
The best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance...
Definition
It provides coverage to employees that are not otherwise covered
Term
All of the following are true regarding the use of insurance, except:
Choose one answer.
a. It protects against uncertainty and reduces anxiety.
b. It transfer risk from the insured to the insurer.
c. It is designed to be used to protect the insured from dishonest acts.
d. It is the substitution of a small certain expense for a large uncertain loss.
Definition
It is designed to be used to protect the insured from dishonest acts
Term
In insurance, to determine acceptable risks is the primary responsibility of:
Definition
The Underwriter
Term
An insurer that is authorized to do business in a particular state is said to be:
Definition
Admitted
Term
What describes the term General Average under Ocean Marine Insurance?
Definition
A partial loss where the loss is shared, where jettison of cargo is necessary to save the ship
Term
Which of the following is not true, regarding the Value Reporting Form?
Choose one answer.
a. The insured is only required to report up to 80% of value of the property.
b. Late reporting or under-reporting will result in a penalty in the event of a loss.
c. The insured pays an advance premium at the beginning of the policy period.
d. The insured is required to report 100% of values with each report.
Definition
The insured is only required to report up to 80% of value of the property.
Term
The Commissioner (Director) of Insurance has some general duties, which include all of the following, except?
Choose one answer.
a. Examination of the financial status of each insured.
b. Regulation of the internal affairs of the Department or Division of Insurance.
c. Prescribing procedures to be followed in hearings before the Department or Division of Insurance.
d. Interpreting and enforcing state laws relating to insurance.
Definition
Examination of the financial status of each insured.
Term
All of the following are allowed or true regarding a producer or agent, except:
Choose one answer.
a. As an incentive to close a sale, they may select the lowest priced policy from the companies they represent to offer to a prospective client.
b. As an incentive to close a sale, they may offer discounts of premium to a prospective client.
c. As an incentive to close a sale, they may place coverage on a brokerage basis with a company the agent does not represent, to serve a prospective client.
d. As an incentive to close a sale, they may commit themselves to professional insurance counseling at no charge to the prospective client.
Definition
As an incentive to close a sale, they may offer discounts of premium to a prospective client
Term
Which of the following types of insurers can charge a policyholder more for a pro rata share of losses?
Choose one answer.
a. A Stock Insurance Company
b. A Lloyds Insurer
c. A Fraternal Insurer
d. An Assessment Insurer
Definition
An Assessment Insurer
Term
Under the Livestock Coverage Form, to avoid penalty, all property must be written:
Definition
At Actual Cash Value
Term
A Directors and Officers Liability Insurance would cover....
Definition
Errors in the preparing of financial statements
Term
Business Liability Coverage under the BOP includes coverage for:
Definition
Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period.
Term
A Certificate of Insurance includes...
Definition
The effective date, name of the insurer, the named insured and limits of liability.
Term
Which of the following is not eligible to be written on a Business-owners Policy?
Choose one answer.
a. Building owners personal property in apartment buildings
b. Laundries and Dry Cleaners
c. Credit Unions
d. Office buildings
Definition
Credit Unions
Term
Which of the following might be considered a physical hazard?
Choose one answer.
a. The storage of flammables near a furnace.
b. The insured's attitude that good housekeeping is not important.
c. Dishonesty on the part of an insured.
d. The storage of all flammables in a fireproof container.
Definition
a. The storage of flammables near a furnace.
Term
When a proper entry is made on the Declarations Page of a BOP, outdoor signs would be:
Definition
Covered on an open perils basis
Term
A person can purchase an insurance policy to cover losses from all the following, except:
Choose one answer.
a. An operation of drug smuggling.
b. Loss of property through burglary or theft.
c. Loss of assets through tort actions brought against the person.
d. Sudden and direct damage to property by natural causes
Definition
a. An operation of drug smuggling.
Term
Which of the following is not considered an insured under Section II of the Homeowners Policy?
Choose one answer.
a. Persons who are not named as insureds in the Declarations of the policy.
b. A person who is no relation and pays the insured rent.
c. Persons other than immediate family members of the insured.
d. Members of the family under the age of 24 enrolled in school and living at school away from the home.
Definition
A person who is no relation and pays the insured rent. Roomers or boarders are not considered insureds
Term
n property insurance, the practice that damaged property, which has been paid for by the insurance company, belongs to the insurer is known as:
Definition
Salvage
Term
The Basic Cause of Loss Form under the Commercial Property Coverage Part will cover losses caused by:
Choose one answer.
a. Sprinkler leakage
b. Falling Objects
c. Water Damage Caused by Accidental Discharge of Water
d. Weight of Ice, Snow or Sleet
Definition
a. Sprinkler leakage
Term
The main purpose of licensing insurance producers is to protect:
Definition
The general public
Term
The powers of a producer that are stated in his/her agency contract, are said to be:
Definition
Express Powers
Term
Medical Payments under Section II of the Homeowners Policy would cover all of the following, except:
Choose one answer.
a. Medical and surgical expenses
b. Prosthetic devices
c. Dental expenses
d. Loss of Income of an injured person
Definition
d. Loss of Income of an injured person.

Coverage F (Medical Payments to Others), pays necessary medical expenses incurred within three years from the date of an accident. This may include surgical, dental, hospital, ambulance, professional nursing and similar expenses.
Term
laims charging misappropriation of advertising ideas or style of doing business, infringement of copyright, title or slogan and written material that violates a persons right to privacy, may be insured under which coverages?
Definition
Advertising Injury Liability
Term
Under the General Exclusions of the Commercial Crime Coverage Part to the Commercial Package Policy, which of the following is true?
Choose one answer.
a. The exclusion of legal expenses does not apply if the expenses arise from a legal action.
b. There is a government action exclusion.
c. The exclusion of indirect losses does not apply to loss of business income.
d. There is an exclusion of loss to any property not owned by the insured
Definition
b. There is a government action exclusion.

Losses resulting from property seizure or destruction by a governmental authority are not covered.
Term
Under classifications of construction, material having a fire-resistance rating between one and two hours for walls, floors and roofs, is classified as:
Definition
Modified fire-resistive
Term
The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is:
Definition
50% of Coverage A
Term
What is rebating?
Definition
It is the offering any rebate, discount of premium, or advantage not specified in the policy.
Term
The Homeowners Policy is a multi-line policy. What is the most accurate concerning multi-line policies?
Definition
They offer fewer gaps in coverage, a savings in premium, and fewer policies are required.
he multi-line policy combines Property Coverage and Liability Coverage, which previously required separate policies, into one policy. This prevents overlaps and gaps in coverage, and the simplified processing results in lower premiums.
Term
In insurance, when the number of similar units increase, the predictability of the loss improves:
Definition
According to the Law of Large Numbers
Term
Which statement is accurate concerning Coverage D-Additional Living Expense of the Homeowners Policy?
Definition
The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living.
Term
What may be the result of any producer, agent, or broker who knowingly violates an unfair trade practice?
Definition
Generally, the States provide that a producer's, agent's, or broker's license may be revoked if the licensee knowingly violated any state law or insurance department regulation.
Term
The stipulation that coverage will not benefit a person or organization that is holding, storing, or moving insured property for a fee, is found in which of the following Conditions of a property insurance policy?
Definition
No Benefit to Bailee
Term
Under the Homeowners Policy, Medical Payments coverage will apply to expenses that are incurred within what length of time?
Definition
Three years
Term
Under a Homeowners Policy, how much coverage is provided for theft or unauthorized use of a credit card?
Definition
$500

The Credit Card, Fund Transfer Card, Forgery and Counterfeit Money Additional Coverage provide $500 coverage for unauthorized use of Credit and Fund Transfer Cards.
Term
The definition of Business Personal Property under the Building and Personal Property Coverage Form includes:
Definition
Furniture, fixtures, machinery and equipment, stock held for sale (including raw material) and other personal property owned by the insured.
Term
Which Property Condition provides that the insurer may broaden coverage during the policy period without an increase in premium?
Definition
Liberalization
Term
Fine Arts Floater
Definition
It covers such items as paintings, rare manuscripts and antiques.
Term
A retail store has a Businessowners Policy with a $250 deductible and no optional coverages. In the event an employee unlawfully takes $10,000, how much will the policy pay?
Definition
The policy would not pay, as employee dishonesty must be purchased as an Optional Coverage for the loss to be covered.
Term
Since persons contracting with contractors or subcontractors to make repairs, construction, or alterations have possible contingent exposure because of negligent acts of the contractor or subcontractor, they should purchase:
Definition
Contingent Liability Insurance
Term
Under the Common Policy Conditions, the part on Examinations of Your Books and Records, states that the:
Definition
Insurer may examine the books at any time during the policy period and up to three years afterward.
Term
An event that results in an insured loss because of a continued and repeated exposure, in insurance is said to be:
Definition
An occurrence
Term
n an insurance contract the value that each party gives the other is said to be:
Definition
The consideration
Term
Under the Equipment Breakdown Protection Coverage Form, what describes expediting expenses?
Definition
It is coverage that is available to make temporary repairs, or to expedite permanent repairs or replacement of damaged property.
Term
The primary purpose is to protect insureds from insurers that become insolvent.....
Definition
Property and Casualty Insurance Guaranty Association
Term
In the insurance world, a potential for a loss is said to be:
Definition
A risk
Term
All of the following are defined as a Named Insured under the Business Auto Coverage Form, except:
a.An Individual
b. A neighbor using a covered auto with permission
c. A Corporation
d. A Partnership
Definition
A neighbor using a covered auto with permission
Term
In the Personal Auto Policy, the definition of Family Member includes...
Definition
A person related by blood, marriage or adoption who is a resident of a household (including a foster child).
Term
Employee Dishonesty Optional Coverage under the BOP, when activated with an entry on the Declarations Page, will cover
Definition
Damage or loss to business or personal property, including money and securities, resulting from dishonest acts of employees.
Employee Dishonesty Optional Coverage protects the insured from dishonest acts of employees acting alone, or in collusion with other employees.
Term
Under Section II of the Homeowners Policy, an employee whose duties are related to the maintenance or use of the residence premises, is defined as:
Definition
A Residence Employee
Term
The Homeowners Policy would cover personal property, such as:
Definition
A camera that is stolen while the insured is on vacation
Term
Whatis a property insurance provision that serves to prevent the insured from collecting twice for the same loss?
Definition
Subrogation
Term
The Common Policy Conditions are found or contained where?
Definition
As Section III of the Businessowners Coverage Form.
Term
n states where insurance rates cannot be used until the Department or Division of Insurance approves them, the rates are referred to as:
Definition
Prior approval rates
Term
Under a Homeowners Policy, structures on the premises that are separated by a clear space from the dwelling, are covered under:
Definition
Coverage B
Term
The Insurance Commissioner is required to:
Definition
Enforce laws relating to insurance.
Term
Under Personal Marine Insurance, the Personal Articles Floater (Scheduled Articles Floater) is:
Definition
Used to insure individual personal property on an itemized or scheduled basis.
Term
Under Motor Truck Cargo Forms, the form that insures public truckers against their legal liability for loss or damage to cargo belonging to others in their possession, is called
Definition
Trucker's Form
Term
What describes Fiduciary Responsibilities?
Definition
Anyone acting as an insurance producer or agent for an insurer shall be held responsible in a trust or fiduciary capacity for any money collected or received for the insurer
Term
If the Insurance Commissioner has reason to believe that a producer has engaged in unfair competition, he/she is required to:
Definition
Advise the producer that he/she is entitled to a public hearing
Term
Under Workers' Compensation, the main purpose of the classification system is...
Definition
It is to categorize employees according to their common exposure.
Term
In the Dwelling Policy, the fact that earth movement, landslide, mine substance, or mudflow are not covered unless direct loss by fire or explosion ensues and then it will only pay the ensuing loss, is stated where?
Definition
General Exclusions
Term
The Business Auto Coverage Form is used...
Definition
For owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers that are used by businesses
Term
When an insurance policy is not clear, the court will usually interpret in favor of the insured because:
Definition
A Contract of Adhesion is a contract between two parties that does not allow for negotiation, i.e. take it or leave it. An insurance policy, drawn up by the insurer, is such a contract. Any ambiguity in the contract is construed against the party who drew it up.
Term
The taking of property from inside the premises by a person unlawfully entering or leaving the premises as evidenced by visible signs of forcible entry or exit, is covered under which of the following Crime Coverages?
Definition
Burglary
Term
The Part of the Workers' Compensation Policy that includes States that are listed in the Information Page, is called:
Definition
Part Three - Other States Insurance
Term
Under Liability Insurance, Personal Injury Liability Coverage includes...
Definition
Libel, slander, false arrest, invasion of privacy, etc.

Bodily Injury and Property Damage insurance provides coverage for physical injury to persons or their property. Personal Injury insurance supplements this coverage by providing coverage for mental, rather than physical, harm to other persons.
Term
A breach under the Doctrine of Warranty may result in:
Definition
Voidance of the contract
Term
Under Definitions of the Farm Property Coverage Form, the term Vacancy or Vacant means:
Definition
A building not containing sufficient furnishings or other property customary to its intended use.
Term
When insurance can not be placed with a licensed insurer, it may be placed with an authorized/non-admitted insurer by a:
Definition
Surplus Lines broker
Term
Under the Dwelling Policy coverage extension of Debris Removal....
Definition
Does not increase the amount of insurance under the policy.
The Debris Removal expense is included in the limit of liability that applies to the damaged property; therefore, is not Additional Insurance.
Term
Under Uninsured Motorist Coverage of the Personal Auto Policy, What defines insured?
Definition
The named insured, a family member, or any other person occupying the insured auto.
Term
When a homeowner allows wet leaves to remain on his/her sidewalk, this might be considered...
Definition
A physical hazard
Term
Under the Electronic Data Processing Floater....
Definition
Hardware and software must be described in the Declarations.
Term
The Reasonable Expectations Doctrine states that:
Definition
An insured is entitled to coverage that a reasonable and prudent buyer can expect.
Term
The Owner's Form is different from the Shipper's Form and the Trucker's Form because:
Definition
It is designed to provide coverage for a business firm that transports its own goods
Term
It is usually funded by assessments of insurers and self insurers...
Definition
Second Injury Fund under Workers' Compensation Insurance

The Second Injury Fund pays compensation when an employee, who has already suffered a prior disabling injury, now sustains a subsequent injury and the combination of the two injuries creates a greater disability than the second injury would have created by itself.
Term
Coverage under this form does not extend to the insured's property worn by salespersons for display purposes. The policy also excludes misdelivery or unaccountable losses.
Definition
A Jeweler's Block Coverage Form
Term
In insurance, the insurer's promise to pay a covered loss and defend the insured in a lawsuit and the insured's payment of the first premium, are all examples of...
Definition
Consideration
Term
A contract whereby only one party is bound to future performance, is said to be:
Definition
A unilateral contract
Term
What are the territorial limits of the Commercial General Liability Coverage Part of the Commercial Package Policy?
Definition
United States, its territories and possessions, Puerto Rico and Canada
Term
Part A Limit of Liability under the Personal Auto Policy...
Definition
The Part A Limit of Liability under the Personal Auto Policy makes clear the maximum amount of insurance that is available in various circumstances.
Term
Which grouping of perils is included under the dwelling and other structures (Coverages A & B) of the HO-2?
Definition
Broad Form Perils
Term
When the decision regarding placement of insurance lies exclusively with the licensee, that insurance is considered....
Definition
Controlled Business. A licensee may not use their license principally for the purpose of procuring insurance for themself, their spouse or for a business they control.
Term
Under Boiler and Machinery Insurance...
Definition
The insurer will pay the amount of a covered loss in excess of the deductible, and if more than one covered equipment is involved in one breakdown only the highest deductible applies.
Term
The main reason federal and state authorities are concerned about establishing an individual's right to privacy is:
Definition
To protect individuals from overly intrusive information collection practices.
Term
Misrepresentation with the purpose of encouraging a person to lapse, cease, or cancel a policy issued by another insurer, and purchase a new one.
Definition
Twisting
Term
The Businessowners Liability Coverage Form includes coverage for bodily injury, property damage, personal injury and advertising injury to which coverage applies, plus...
Definition
Liability assumed under an insured contract
Term
The Commissioner of Insurance has the power to take what action?
Definition
Revoke a producer's license.
Term
The Businessowners Coverage Form Section II - Liability, provides coverage for:
Definition
Personal injury or advertising injury that is caused by an offense arising out of the insured's business, but only if the offense takes place in the coverage territory during the policy period
Term
What are bonds that are used in court proceedings called
Definition
Judicial Bonds
Term
The primary purpose of requiring licensing in insurance is:
Definition
To protect the General Public.
Term
Under the Limits of Insurance of the Building and Personal Property Coverage Form.....
Definition
The most the policy will pay for any one occurrence is the limit shown in the Declarations.
Term
The Limit of Liability of Coverage D, Damage to Your Auto, under the Personal Auto Policy states that:
Definition
The limit of liability is the lesser of the actual cash value (ACV) of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality.
Term
Under Medical Expenses of the Businessowners Coverage Form Section II - Liability, how long is allowed for expenses to incur?
Definition
One Year
Term
Coverage Other Than Collision would include all of the following losses to the insured vehicle, except:
Choose one answer.
a. Explosion or Earthquake
b. Theft or Larceny
c. Damage to the insured auto from running into a tree
d. Fire
Definition
Damage to the insured auto from running into a tree.
Collision means the upset of the covered auto or its impact with another vehicle or object; therefore, the damaged caused by the auto running into a tree is considered Collision damage.
Term
Which of the following is true regarding the Personal Liability Supplement?
Choose one answer.
a. It provides coverage for claim expenses, first aid expenses and damage to property of others.
b. It covers Professional Services rendered by the insured.
c. It covers the insured's personal autos.
d. The limit of liability is the same as the Coverage A amount.
Definition
It provides coverage for claim expenses, first aid expenses and damage to property of others.
Term
It is designed to cover an individual's or family's personal use of an auto...
Definition
Personal Auto Policy
Term
A lending institution may not.....
Definition
Require that a borrower purchase insurance through a certain producer
Term
In Liability Insurance, the restriction that the policy places on the dollar amount of coverage, is called:
Definition
The Limit of Liability
Term
Fire, wind and hail are all types of:
Definition
Pure Risks
Term
Nonowned Autos under the Business Auto Coverage Form includes:
Definition
Auto's owned by the insured's employees or members of their households, but only while being used in the insured's business or personal affairs.
Term
Which of the following is true, regarding Section II of Homeowners Policy Forms?
Choose one answer.
a. Coverage is intended to protect against non-business and non-automobile exposures of the individual or family unit.
b. Coverage is intended to protect against the liability exposures of the individual or family unit, except for the business exposures.
c. Coverage is intended to protect against the liability exposures of the individual or family unit, including the professional exposures of the named insured and spouse.
Definition
Coverage is intended to protect against non-business and non-automobile exposures of the individual or family unit.
Term
Under Coverage C of a Homeowners Policy, all of the following losses are included, except:
Choose one answer.
a. Windstorm damage to a riding lawnmower sitting outside the garage.
b. Damage to lawn furniture caused by vandals.
c. Lightning damage to the living room television set.
d. Windstorm damage to personal property contained in the building, unless the opening is caused by a covered peril.
Definition
Windstorm damage to personal property contained in the building, unless the opening is caused by a covered peril.
Term
Damage to outdoor plants by forces of nature other than lightning are so common that such damage is considered uninsurable. Coverage for certain other perils is provided, with a limit of $500 for any one tree, shrub, or plant.

True or False
Definition
True
Term
Under the Broad Form Dwelling Policy (DP-2), which peril is not included for coverage without an endorsement?
Definition
Theft
Term
Private Insurers are not allowed to write Workers' Compensation Insurance in....
Definition
Monopolistic States
Term
Under the Dwelling Policy Forms, which losses would be covered?
Definition
Fire damage to building materials and supplies that are located on the insured premises.
Term
The Condition that the insured's interest in a property insurance policy may not be transferred to another person without the consent of the insurance company, is called:
Definition
Assignment
Term
When the Limit of Liability of the policy may be applied to either bodily injury (BI) or property damage (PD), wherever it is needed or in any combination, it is known as:
Definition
Combined Single Limits
Term
A property owner of an office building has a Commercial Property Policy written for $300,000. Upon selling the building, can the owner transfer the policy to the new owner?
Definition
The insurer must give written consent before the policy can be transferred. Correct
Term
The Business Auto Coverage Form would not cover...
Definition
An employee using the employee's personal auto in insured's business.
Term
Which of the following best describes the use of deductibles under Part D of the Personal Auto Policy?
Definition
They tend to discourage petty claims and lower premiums
Term
When someone owns and operates a business, who has a Business Income Coverage Form along with his Commercial Property Coverage Form, experiences a large fire, which requires several weeks of down time due to rebuilding, The Business Income Coverage Form will pay for:
Definition
Net income plus continuing expenses of the business
Term
Who is not considered an insured under a BOP?
Definition
Anyone driving the named insured's mobile equipment on public roads, without the named insured's permission
Term
The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss...
Definition
Completed Operations Coverage
Term
In surety bonding, what is the party called whose obligation is guaranteed?
Definition
The Principal
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