Fire & Casualty Practice Exam #1

148 Questions  I  By Petsya
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Practice exam for fire & casualty. 150 questions3 hour time limit.

  
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1.  In an insurance policy, which page contains the rights and duties of both parties involved in the contract?
A.
B.
C.
D.
2.  Which of the following terms refers to how much the property (usually a home) would be bought for on the market?
A.
B.
C.
D.
3.  The modular concept refers to:
A.
B.
C.
D.
4.  Which of the following is not associated with the word insurance?
A.
B.
C.
D.
5.  Which of the following is a basis provision of all property policies for property that can't be moved, such as ahouse and sends payment to the insured as well as the lien holder in the event of a loss?
A.
B.
C.
D.
6.  A policy of liability insurance issued to a local public entity or state agency as a named insured shall not be cancelled or have renewal declined for reasons other than nonpayment of premium unless notice is mailed to the named insured at least _____ days prior to the effective date or nonrenewal of at least _____ days prior to the effective date of cancellation.
A.
B.
C.
D.
7.  The insurer may examine books and records of an insured:
A.
B.
C.
D.
8.  Which is not a reason for a company to obtain reinsurance?
A.
B.
C.
D.
9.  Under the standard fire policy, a fire that was intentionally started in an area such as a fireplace is known as:
A.
B.
C.
D.
10.  Which of the following Homeowners policies covers a home that was built 75 years ago?
A.
B.
C.
D.
11.  The declarations page of a commercial policy will state which of the following:
A.
B.
C.
D.
12.  Johnny told the insurace agent he thing he drives about 10,000 miles a year, but in fact it's more like 15,000 miles. What term would best describe this situation?
A.
B.
C.
D.
13.  What does an HO 6 cover?
A.
B.
C.
D.
14.  Which of the following Homeowner's policies have both dwelling and person property on a broad peril form?
A.
B.
C.
D.
15.  On a Commerical package policy, "you" and "your" refer to:
A.
B.
C.
D.
16.  All the following are part of the six specs of an insurance policy except:
A.
B.
C.
D.
17.  When can insurers include an expense factor added to the premium charged for a class of policies?
A.
B.
C.
D.
18.  At the time of all appointments being terminated (after all fees paid and education requirements have been fulfilled) the agent's license:
A.
B.
C.
D.
19.  Which of the following is not covered property under a Builders Risk form?
A.
B.
C.
D.
20.  Who has the ability to legally bind insurance for the insurer?
A.
B.
C.
D.
21.  All of the following are examples of being a good agent for your client except:
A.
B.
C.
D.
22.  An insurance company that has met all the qualifications designed by the Department of Insurance and has received a Certificate of Authority from the DOI to trasact insurance in this state is known as:
A.
B.
C.
D.
23.  Coverage A of the Commercial Building and Personal Property coverage form covers which of the following:
A.
B.
C.
D.
24.  Which is not a power of a Managing General Agent?
A.
B.
C.
D.
25.  Which of the following describes an Alien Insurer?
A.
B.
C.
D.
26.  A standard market insurer is an insurer who:
A.
B.
C.
D.
27.  A Builder's Risk Policy:
A.
B.
C.
D.
28.  Which of the following is a Personal Lines Licensee not allowed to transact?
A.
B.
C.
D.
29.  The claims department is responsible for:
A.
B.
C.
D.
30.  The California Code simply states that to be an insurer:
A.
B.
C.
D.
31.  Under the Building and Personal Property coverage form, vacancy means:
A.
B.
C.
D.
32.  Which of the following are not actions of transacting insurance?
A.
B.
C.
D.
33.  Which of the following terms refers to a company that fails to meet is financial obligations when they are due?
A.
B.
C.
D.
34.  Which of the following is not a type of insurer?
A.
B.
C.
D.
35.  Tenant Improvements and Betterment losses are valued at:
A.
B.
C.
D.
36.  Which of the following would not be considered a binder?
A.
B.
C.
D.
37.  Which of the following is true when two or more policies are covering an auto?
A.
B.
C.
D.
38.  Which of the following does not define an uninsured motorist?
A.
B.
C.
D.
39.  Which Commercial Property Causes of Loss form has the broadest coverage?
A.
B.
C.
D.
40.  The only exceptions to the free insurance prohibition are as follows, except:
A.
B.
C.
D.
41.  If the insurer has Physical Damage Settlement Option to repair, replace, or pay for damage, what will the company use in determining how much to pay out for a claim?
A.
B.
C.
D.
42.  What is the purpose of Miscellaneous Type Vehicle Endorsement?
A.
B.
C.
D.
43.  Business Income and Extra Expense coverage would be necessary in which of the following cases?
A.
B.
C.
D.
44.  You must notify the Commissioner in writing immediately if the following occur except:
A.
B.
C.
D.
45.  Which type of coverage is needed to cover how much you owe on a vehicle and how much the actual cash value is worth?
A.
B.
C.
D.
46.  A policy that typically insures drivers who have less than favorable driving record or less driving experience than is desired is known as which of the following coverages?
A.
B.
C.
D.
47.  Aggregate limit refers to:
A.
B.
C.
D.
48.  An Application may be denied a license without the right to a hearing if any of the following conditions apply except:
A.
B.
C.
D.
49.  What type of endorsement waives the standard requirement of a "4-wheel vehicle and/or a vehicle weight of less than 10,000 pounds" limitation?
A.
B.
C.
D.
50.  Who is eligible for Low Cost Auto Insurance Program?
A.
B.
C.
D.
51.  Coverage C of the CGL policy would cover all of the following except:
A.
B.
C.
D.
52.  If you are acting in the best interest of the insured and handling their funds and affairs then you are acting as a:
A.
B.
C.
D.
53.  Which of the following is not true of the Market Conduct Bureau?
A.
B.
C.
D.
54.  Which of the following is not true of the Good Driver Discount according to Proposition 103?
A.
B.
C.
D.
55.  All the following are exclusions under CGL policy except:
A.
B.
C.
D.
56.  Who writes standard coverages in California but the insurer is unlicensed?
A.
B.
C.
D.
57.  According to the California Code of Insurance, insurance is a contract whereby one undertakes to indemnify another against loss, damage or liability arising from a(n):
A.
B.
C.
D.
58.  Which of the following are ways of managing risks?
A.
B.
C.
D.
59.  Professional Liability coverage is designed to cover:
A.
B.
C.
D.
60.  The following are responsibilities of the Commissioner of Insurance except:
A.
B.
C.
D.
61.  What are the four types of hazards?
A.
B.
C.
D.
62.  According to the definition of an ideally insurable risk, all the following are required except:
A.
B.
C.
D.
63.  Errors & Ommissions insurance would be needed for which of the following:
A.
B.
C.
D.
64.  Incurred loss + loss adjusting expense/earned premium =
A.
B.
C.
D.
65.  When a company works to pay claims and other expenses and still makes a profit, the degree or range of risk is known as:
A.
B.
C.
D.
66.  The process whereby an insurer has an agreement with other insurers to share amounts of insurance over established limits is known as:
A.
B.
C.
D.
67.  A church has a boilerin the basement of the church that explodes one day, but no one was hurt. Which class of insurance covers this boiler?
A.
B.
C.
D.
68.  A Claims Made reporting form states that:
A.
B.
C.
D.
69.  Which of the following is not an element of a contract to be enforced by the law?
A.
B.
C.
D.
70.  To have a contract, there must be an offer made by the insurer and then an acceptance made by the insured. This is known as the:
A.
B.
C.
D.
71.  Commercial Excess Liability policies are unlike Personal Umbrella in that:
A.
B.
C.
D.
72.  Which of the following terms is mandatory as used in the Code?
A.
B.
C.
D.
73.  According to the Code, the word 'person' means:
A.
B.
C.
D.
74.  Under the Commercial Crime insurance policy, 'occurrence' is defined as:
A.
B.
C.
D.
75.  A person within California shall not conduct any insurance on property located or operations conducted within, or on the lives or persons of residents of California with nonadmitted insurers except by:
A.
B.
C.
D.
76.  General damages are:
A.
B.
C.
D.
77.  Which of the following is not a common exclusion on the Boiler & Machinery policy?
A.
B.
C.
D.
78.  The client was found to be 20% at fault in a $10,000 claim and would pay out $2,000. This is an example of:
A.
B.
C.
D.
79.  Which of the following terms is a legal defense used when a person has placed him/herself in a dangerous situation?
A.
B.
C.
D.
80.  Which of the following would be used to cover property of others left in a camera shop for repairs?
A.
B.
C.
D.
81.  A person not wanting to be killed from a plane crash would choose to never fly in an airplane. This method of managing a risk is know as:
A.
B.
C.
D.
82.  Which of the following refers to any reduction of quatity, quality or value of the insured property?
A.
B.
C.
D.
83.  A 'bailee' is defined in the insurance industry as:
A.
B.
C.
D.
84.  Indirect loss refers to:
A.
B.
C.
D.
85.  Expense is defined as:
A.
B.
C.
D.
86.  Mayberry Construction has a Business Auto Policy covering a 1995 pickup truck for liability and physical damage coverage. At the time of an accident, the driver of the pickup truck was pulling a trailer carrying a bulldozer. If the bulldozer slips off and causes bodily injury to another party, this is coverage under which of the following policies?
A.
B.
C.
D.
87.  All the following are ways insurance agencies market their business except:
A.
B.
C.
D.
88.  In a legal relationship, what authority does a pricipal (company) give the agent in writing?
A.
B.
C.
D.
89.  Which of the following is not a Specified Cause of Loss?
A.
B.
C.
D.
90.  Which of the following is not an action a person performs when transacting insurance?
A.
B.
C.
D.
91.  The system that monitors and tracks clients transactions and communiccation for an agent is know as:
A.
B.
C.
D.
92.  One of the major differences between a Business Auto Policy and a Personal Auto Policy are the endorsments. Which coverage listed below is considered an endorsement on the Business Auto Policy?
A.
B.
C.
D.
93.  The following acts are unlawful and are misdemeanors in California except when perfomed by a surplus line broker except?
A.
B.
C.
D.
94.  In dealing with insurance in connection with sales or loans, the lender does have the right to provide the insurance or to renew the insurance, and to charge a transaction fee, if:
A.
B.
C.
D.
95.  An owner of an auto repair business would be best covered under which of the following?
A.
B.
C.
D.
96.  It is against the law for an insurance licensee to offer free insurance to:
A.
B.
C.
D.
97.  Which of the following is not an exception to the free insurance prohibition?
A.
B.
C.
D.
98.  What unique exposure is present in a farming business?
A.
B.
C.
D.
99.  Good records must be kept by the agent and be made available to the DOI for a period of:
A.
B.
C.
D.
100.  Every resident insurance fire and casualty broker/agent shall maintain:
A.
B.
C.
D.
101.  All of the following are covered perils on a Crop Insurance policy, except:
A.
B.
C.
D.
102.  The Homeowners Watercraft Endorsement under Section II includes all the following except:
A.
B.
C.
D.
103.  Which of the following is true of Worker's Compensation?
A.
B.
C.
D.
104.  The FCIC is an agency that sells Flood insurance policies:
A.
B.
C.
D.
105.  Which HO endorsement covers breakage of glassware caused by an earthquake?
A.
B.
C.
D.
106.  Under the Ordinance of Law Coverage endorsement; which of the following is not provided?
A.
B.
C.
D.
107.  The Business owners Policy (BOP) is a package policy combining what types of coverages?
A.
B.
C.
D.
108.  In a Boat owner's policy, liability coverage includes all the following except:
A.
B.
C.
D.
109.  According to Personal Lines - Earthquake Coverage, which of the following is not true?
A.
B.
C.
D.
110.  Which of the following is false about the characteristics of a BOP policy?
A.
B.
C.
D.
111.  All of the following are advantages of using the Earthquake endorsement except:
A.
B.
C.
D.
112.  What is the purpose of the Fair plan?
A.
B.
C.
D.
113.  Transportation coverage on the BOP would apply to which of the following?
A.
B.
C.
D.
114.  How does the association provide assistance for people who wish to apply for insurance through the FAIR plan?
A.
B.
C.
D.
115.  Which of the following would not be covered by flood insurance through the National Flood Insurance Program (NFIP)?
A.
B.
C.
D.
116.  The four (4) components of the Section II Business Liability coverage are:
A.
B.
C.
D.
117.  What is the significance of the SEUA case of 1944?
A.
B.
C.
D.
118.  If an insurer's legal reserve funds are less than the minimum required by law, the company is impaired in its ability to pay claims and it technically:
A.
B.
C.
D.
119.  The oldest type of insurance in the world is:
A.
B.
C.
D.
120.  Which of the following describes Fair Discrimination?
A.
B.
C.
D.
121.  Which of the following statements about the requirements for rates in not true?
A.
B.
C.
D.
122.  If a ship owner who purchases an Ocean Marine policy on an All Risk form runs into a dock whole transporting cargo for a customer, the policy would pay for:
A.
B.
C.
D.
123.  Barratry is defined as:
A.
B.
C.
D.
124.  Which of the following terms is mandatory as used in the code?
A.
B.
C.
D.
125.  According to the Code, the word 'person' means:
A.
B.
C.
D.
126.  The three (3) parties to a Surety Bond contract are:
A.
B.
C.
D.
127.  A special surplus line broker may trasact 'special surplus lines.' All of the following are special surplus lines except
A.
B.
C.
D.
128.  A person within California shall not conduct any insurance on property located or operations conducted within, or on the lives or persons of residents of California, with nonadmitted insurers except by:
A.
B.
C.
D.
129.  Which of the following was not a responsibility of an employer under common law obligation for workers compensation in the early 1900's?
A.
B.
C.
D.
130.  For Coverage A, how is property valued in the event of a loss under the HO 3?
A.
B.
C.
D.
131.  Which of the following is not excluded property under the HO 3?
A.
B.
C.
D.
132.  Which of the following is not an exempt category under Workers Compensation insurance?
A.
B.
C.
D.
133.  Under coverage D, loss of use, if the home owner occupied the home, this coverage pays for:
A.
B.
C.
D.
134.  Under HO policy coverage, earth movement is a general exclusion, which homeowner's policy has done away with the exclusion for concurrent caustion regarding this peril?
A.
B.
C.
D.
135.  The percentage of a deceased worker's weekly wages payable to the spouse and dependent children is:
A.
B.
C.
D.
136.  In the event of a loss, the insured has the responsibility to do all the following except:
A.
B.
C.
D.
137.  What is the purpose of the California Residential Property Insurance Disclosure Statement?
A.
B.
C.
D.
138.  Which of the following is not true regarding the Voluntary Workers Compensation endorsement?
A.
B.
C.
D.
139.  What are the two types of major coverages in Section II of the Homeowners forms?
A.
B.
C.
D.
140.  Under Section II of the Homeowners form, what does coverage E (personal liability) cover?
A.
B.
C.
D.
141.  An insured who takes necessary precautions to reduce Workers Compensation claims or severity of losses, could receive a discount throught a(an):
A.
B.
C.
D.
142.  Which of the following properties are not included in insured locations and residence premises under Section II of the Homeowner's Policy?
A.
B.
C.
D.
143.  Which of the following is not covered in the homeowners watercraft endorsement under section II?
A.
B.
C.
D.
144.  According the a new legal development, AB996 Chapter 647, regarding Hate Crimes against Reproductive Health Facilities, all of the following are true except:
A.
B.
C.
D.
145.  The probability of accident or sickness within a given group of people is known as:
A.
B.
C.
D.
146.  When coverage is terminated under a group plan, the coverage for a totally disables employee who submits a claim prior to the termination of the policy will:
A.
B.
C.
D.
147.  A policy is known as 'non-cancelable' when:
A.
B.
C.
D.
148.  All of the following are true about COBRA except:
A.
B.
C.
D.
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