Property And Casualty Insurance License Exam Cram

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Property and Casualty Insurance License Exam Cram

  
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1.  Which of these statements about the Mail coverage form are correct? Select all that apply.
A.
B.
C.
D.
2.  A breakdown of equipment covered under the Equipment Breakdown Protection coverage form results in the simultaneous breakdown of three other pieces of covered equipment. According to the form, how many "breakdowns" occurred in this loss?
A.
B.
C.
D.
3.  A device that is used to minimize small nuisance claims and that helps to keep insurance premiums down is called what?
A.
B.
C.
D.
4.  Under the Earthquake and Volcanic Eruption endorsement, all earthquake shocks or volcanic eruptions that occur within a certain number of hours constitute a single earthquake or volcanic eruption. What is that time period?
A.
B.
C.
D.
5.  Which of the following must be true in a burglary?
A.
B.
C.
D.
6.  Vanessa's Liability coverage has split limits of 100/300/50. How much coverage does Vanessa have for property damage liability?
A.
B.
C.
D.
7.  Which type of insurance professional does not actually sell insurance coverages, but sells advice about insurance coverages?
A.
B.
C.
D.
8.  Under a homeowners policy, in addition to any payments for damages awarded against an insured, the insurance company will reimburse the insured for reasonable expenses incurred at the company's request, including loss of earnings of up to how many days?
A.
B.
C.
D.
9.  The Motor Truck Cargo policy does which of the following?
A.
B.
C.
D.
10.  Various types of domestic shipments may be covered under a number of inland marine forms. Which of the following is not one of the nonfiled marine forms used to insure domestic shipments?
A.
B.
C.
D.
11.  Walt and Joanna are co-owners of a bagel shop. Both Walt and Joanna are listed in the declarations of the policy that insures the business, with Joanna's name appearing first. The declarations also list First State Bank, which has an outstanding loan on the business. Who is considered a named insured on the policy?
A.
B.
C.
D.
12.  What is the maximum amount of coverage that can be purchased for a single-family home under the emergency Flood insurance program?
A.
B.
C.
D.
13.  Which one of the following is not required in a CGL coverage part?
A.
B.
C.
D.
14.  Which of the following is not one of the duties of an agent?
A.
B.
C.
D.
15.  A typical Outboard Motor and Boat policy provides which of the following coverages?
A.
B.
C.
D.
16.  Which of the following classes of personal property are subject to special sublimits of coverage under a homeowners policy?
A.
B.
C.
D.
17.  Policies issued under the National Flood Insurance Program provide removal coverage for property removed to protect it from flood. This coverage applies at another location for up to how many days?
A.
B.
C.
D.
18.  Theresa, a spectator at a baseball game, is injured when an errant ball hits her in the head. She sues the stadium owners for negligence. Which one of the following defenses against negligence would the owners probably use?
A.
B.
C.
D.
19.  The purpose of FAIR Plans (Fair Access to Insurance Requirements) is to do what?
A.
B.
C.
D.
20.  Under which part of a Workers Compensation and Employers Liability policy would you find a description of the insured's obligations when an injury occurs?
A.
B.
C.
D.
21.  Under a National Flood Insurance policy, losses to which of the following could be paid on a replacement cost basis?
A.
B.
C.
D.
22.  Which one of the following illustrates the concept of contributory negligence?. Martin buys a tanning bed for his home. Although he follows the manufacturer's directions to the letter, he is severely burned after spending five minutes in the bed.
A.
B.
C.
D.
23.  Medical payments under a homeowners policy are available for expenses resulting from an injury to which of the following?
A.
B.
C.
D.
24.  On homeowners policies, "insured location" is a broad term describing where liability coverages apply. It includes each of the following except which one?
A.
B.
C.
D.
25.  Vehicles that might be insured by a personal auto policy are described in the eligibility rules and the policy definitions. Each of the following is true about vehicles eligible for PAP coverage except
A.
B.
C.
D.
26.  Liability that an insured incurs because of the actions of others, such as employees, is called what?
A.
B.
C.
D.
27.  If coverage for towing and labor costs is included in a personal auto policy, labor costs will be covered only if the labor is performed
A.
B.
C.
D.
28.  Mary's Liability coverage limits are 50/100/50. A driver who was injured in an accident caused by Mary obtains a $75,000 judgment against her. Postjudgment interest of $5,000 accrues between the time the judgment was entered by the court and the time the insurer pays. What is the total amount Mary's insurance company will pay for this loss?
A.
B.
C.
D.
29.  Which of the following losses would be covered under the property coverage of a BOP?
A.
B.
C.
D.
30.  When the special causes of loss form is attached to a commercial property coverage part, coverage for theft of furs and fur garments is limited to how much?
A.
B.
C.
D.
31.  An insurer's loss ratio is determined by dividing what?
A.
B.
C.
D.
32.  Which one of the following injuries qualifies as a compensable injury under workers compensation laws?
A.
B.
C.
D.
33.  Solicitors may not
A.
B.
C.
D.
34.  Under a homeowners policy, which of the following classes of personal property have special limits for theft losses, but not for other types of losses?
A.
B.
C.
D.
35.  A commercial building valued at $300,000 is insured for $200,000. If the policy is written with an 80% coinsurance percentage and a standard deductible, how much would be paid for a $60,000 loss?
A.
B.
C.
D.
36.  A heavy snowfall causes the roof over Amaya's living room to collapse. The insurance company asks her to move her belongings out of the living room to protect them from further damage and put a tarp over the roof until it can be repaired. It also asks her to complete a proof of loss form listing the items that were damaged. This is an example of the application of what policy condition?
A.
B.
C.
D.
37.  Commercial general liability coverage provides medical expense payments for accidental injuries if the expenses are incurred and reported to the insurer within what date?
A.
B.
C.
D.
38.  Which of the following losses would be excluded under Part D of a Personal Auto policy?
A.
B.
C.
D.
39.  A business that wants coverage for its liability for employment-related acts can obtain it by purchasing which of the following?
A.
B.
C.
D.
40.  Each of the following is true about the National Flood Insurance Program except which one?
A.
B.
C.
D.
41.  At DEF Insurance Company, agents are employees of the company who are paid a salary plus commissions. This is an example of what type of insurance marketing system?
A.
B.
C.
D.
42.  Which of the following would be covered under the business personal property coverage of a BOP?
A.
B.
C.
D.
43.  Agent Blondell is offering a free television to every applicant who agrees to buy insurance through his agency. In most states, this is an illegal practice known as
A.
B.
C.
D.
44.  An agreement between the insured and the insurer that certain conditions will be met is which of the following?
A.
B.
C.
D.
45.  Which of the following properties would not be excluded under the Building and Personal Property coverage form?
A.
B.
C.
D.
46.  When an insured decides to cancel an insurance policy prior to the expiration date, the unearned premium is returned on what basis?
47.  Lee sues Pat for injuries sustained in an auto accident. During the trial, it is determined that Lee's negligence contributed to the loss. Under comparative negligence laws, what can Lee recover?
A.
B.
C.
D.
48.  Insurance is a mechanism used to manage which of the following types of risk?
A.
B.
C.
D.
49.  Under most property insurance policies, the policy territory includes which of the following?
A.
B.
C.
D.
50.  The insured knows that it might take several months for his damaged turbine to be fully repaired, so he authorizes $500 for temporary repairs so that production can resume. This expenditure would be covered under which coverage in the Equipment Breakdown Protection coverage form?
A.
B.
C.
D.
51.  Under liability insurance policies, what does an "aggregate limit" mean?
A.
B.
C.
D.
52.  Which type of insurer consists of an unincorporated group of members who share losses and provide insurance to each other?
A.
B.
C.
D.
53.  Up to what percent of the amount paid for direct loss will the insurance company pay for debris removal expense under the Business and Personal Property coverage form?
A.
B.
C.
D.
54.  An Assigned Risk Plan covers which of the following?
A.
B.
C.
D.
55.  The insured's business sustains $25,000 damage in a fire. The fire department that was called to the scene billed the insured $1,000. The business is insured under the Building and Personal Property coverage form for $500,000 with a $5,000 deductible. How much will the insurance company pay for this loss?
A.
B.
C.
D.
56.  What is the per-year policy limit for coverage of electronic data under the Business and Personal Property coverage form?
A.
B.
C.
D.
57.  Which one of the following answer choices lists all of the parties to a Surety bond?
A.
B.
C.
D.
58.  Claims that are paid by general liability coverage are charged against the aggregate policy limits and reduce the amount of insurance remaining to pay future claims. However, CGL aggregate limits will be reinstated in full
A.
B.
C.
D.
59.  If an insurer decides to not renew the CGL policy, how many days notice of nonrenewal must be provided to the first named insured?
A.
B.
C.
D.
60.  Three policies, totaling $300,000 in coverage, apply to an $80,000 loss. Policy A's limit of insurance is $100,000, policy B's limit is $50,000, and policy C's limit is $150,000. Use the pro rata method to determine how much policy C would pay for this loss.
A.
B.
C.
D.
61.  Coverage for earthquake losses is which of the following?
A.
B.
C.
D.
62.  Unless an exception applies, when does coverage under an NFIP policy begin?
A.
B.
C.
D.
63.  To void a policy, misrepresentation or concealment must be which of the following?
A.
B.
C.
D.
64.  Which of the following are true about the 60-day basic extended reporting period? Select all that apply.
A.
B.
C.
D.
65.  The insured's policy is nearing the expiration date. The insurance company doesn't want to continue the insured's coverage, so it sends the insured a notice that the policy will not continue beyond the expiration date of the policy. This is considered which of the following?
A.
B.
C.
D.
66.  If coverage for personal liability and medical payments is attached to a dwelling policy, what basic limit of coverage applies to medical payments unless a higher amount is purchased?
A.
B.
C.
D.
67.  When are losses under the Building and Personal Property coverage form paid at replacement or repair cost?
A.
B.
C.
D.
68.  All of the following types of losses may be covered by the Equipment Breakdown Protection coverage form except which of the following?
A.
B.
C.
D.
69.  For how long after the date of a direct physical loss will the insurance company pay for extra expenses under the extra expense additional coverage?
A.
B.
C.
D.
70.  Who of the following would be considered an insured under Business Auto Liability coverage?
A.
B.
C.
D.
71.  Which of the following are contained in the Common Policy Declarations?
A.
B.
C.
D.
72.  Which of the following could be considered an uninsured motorist?
A.
B.
C.
D.
73.  Which of the following statements concerning binders is correct?
A.
B.
C.
D.
74.  Consuela's Homeowners policy has an 80% Coinsurance condition. Her home's value is $125,000. What is the minimum amount of coverage she must carry to avoid a coinsurance penalty for partial losses?
A.
B.
C.
D.
75.  Which of the following perils are covered in the Causes of LossBasic form?
76.  Unless a higher limit is shown in the declarations, what is the limit on coverage for business income from dependent properties?
A.
B.
C.
D.
77.  Which of the following losses could be paid under Uninsured Motorists coverage? (Assume that there are no endorsements attached to the policy.)
A.
B.
C.
D.
78.  Who of the following would be considered custodians while having care and custody of company property inside the premises?
A.
B.
C.
D.
79.  The most common definition of actual cash value (ACV) in the property insurance field is which of the following?
A.
B.
C.
D.
80.  Which Causes of Loss form provides open peril coverage?
A.
B.
C.
D.
81.  What rating method makes modifications to manual rates to reflect the unique characteristics of each risk?
A.
B.
C.
D.
82.  Which of the following may be covered under a Farm coverage part?
A.
B.
C.
D.
83.  Which portion of the Garage coverage form covers liability for damage to property of others in the insured's care, custody, or control?
A.
B.
C.
D.
84.  Highpoint Industries has an automatic sprinkler system installed in its office building. This is an example of which risk management method?
A.
B.
C.
D.
85.  Who may cancel a CPP?
A.
B.
C.
D.
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