Property And Casualty Insurance License Exam Cram

85 Questions  I  By Fsspc on February 24, 2009
Property and Casualty Insurance License Exam Cram

  
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1.  Byron sells his car to his friend Annette, but does not notify his insurance company. Assuming that Byron's policy will transfer to her automatically, Annette doesn't buy insurance for the car. When the car is stolen, Annette files a claim with Byron's former insurer. The insurer denies the claim. This is an example of the application of what policy condition?
A.
B.
C.
D.
2.  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.
3.  Which Causes of Loss form provides open peril coverage?
A.
B.
C.
D.
4.  The term "time element coverage" is used when the amount of loss depends on which of the following?
A.
B.
C.
D.
5.  Insurance is a mechanism used to manage which of the following types of risk?
A.
B.
C.
D.
6.  Ann's auto was damaged when it was struck by another car whose driver ran a stop sign. Which part of Ann's Personal Auto policy will cover the damage to her car?
A.
B.
C.
D.
7.  Something that might increase the likelihood that a loss will occur, is called what?
A.
B.
C.
D.
8.  Which of the following is not excluded under commercial general liability coverage for bodily injury and property damage liability?
A.
B.
C.
D.
9.  Which of the following is not true about homeowners personal property coverage?
A.
B.
C.
D.
10.  As a result of a successful lawsuit, Agnes receives $10,000 to cover her specific losses, an additional $40,000 for pain and suffering, and because the defendant was considered to have acted with willful disregard for others' safety, Agnes was awarded an additional $75,000. This additional $75,000 award can best be described as what type of damages?
A.
B.
C.
D.
11.  A homeowner who wants the maximum protection for her home and personal property should purchase the
A.
B.
C.
D.
12.  Under a personal auto policy, if an insured already has physical damage coverage for at least one vehicle, a new vehicle will be automatically covered from the date it is acquired as long as the insured notifies the insurer and requests the coverage within how many days?
A.
B.
C.
D.
13.  Which of the following Other Coverages is not included in the Basic Dwelling coverage form?
A.
B.
C.
D.
14.  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.
15.  Some property insurance policies provide for payment of the full policy limit in the event of a total loss by a covered peril, regardless of the actual value of the property. These policies are known as which of the following?
A.
B.
C.
D.
16.  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.
17.  Who administers the NFIP?
A.
B.
C.
D.
18.  Under the business auto coverage part, each of the following is true about the classifications of covered autos, which are designated by numerical symbols shown in the declarations, except for which of the following?
A.
B.
C.
D.
19.  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.
20.  The name of the coverage that provides legal liability insurance for damage to customers' autos that are left with the insured for service, repair, or storage is which of the following?
A.
B.
C.
D.
21.  Which of the following must be true in a burglary?
A.
B.
C.
D.
22.  Which of the following losses would be excluded under Part D of a Personal Auto policy?
A.
B.
C.
D.
23.  An insured must file a proof of loss within how many days after a loss?
A.
B.
C.
D.
24.  In legal terms, the actions by one party might have the effect of giving up a known right. When this occurs, the party has created which of the following?
A.
B.
C.
D.
25.  Which of the following is not a requirement for forming a valid contract?
A.
B.
C.
D.
26.  Which of the following losses would be paid under the Other Than Collision coverage of the Personal Auto policy?
A.
B.
C.
D.
27.  If general liability "claims-made" coverage is renewed by "occurrence" coverage and the insured purchases a supplemental extended reporting period (ERP), the period for reporting claims under the policy will be extended for how long?
A.
B.
C.
D.
1 comment
28.  Which of the following individuals have Liability coverage under Mr. Stump's Personal Auto policy?
A.
B.
C.
D.
29.  Adequate coverage for large, powerful boats is provided by which of the following?
A.
B.
C.
D.
30.  What is the discovery period for coverage of losses under the employee dishonesty optional coverage?
A.
B.
C.
D.
31.  George accidentally hits Elaine's car with his car. The accident causes $3,000 of damage to Elaine's car, plus Elaine is injured and her medical bills come to $1,000. George's car also sustains $500 damage in the accident, but George isn't hurt. What will George's auto liability coverage pay for?
A.
B.
C.
D.
32.  What is the standard deductible under the regular program of the National Flood Insurance Program?
A.
B.
C.
D.
33.  A typical Outboard Motor and Boat policy provides which of the following coverages?
A.
B.
C.
D.
34.  Which insurance company department is responsible for paying insureds' covered losses?
A.
B.
C.
D.
35.  The Johnsons' home is covered by a Special Dwelling policy. When a fire damages the home, the family is forced to stay at a motel for a month while repairs are made. What coverage might reimburse them for these expenses?
A.
B.
C.
D.
36.  Which of these losses is covered under the Jewelers Block coverage form, assuming that the insured has purchased all available optional coverages? Select all that apply.
A.
B.
C.
D.
37.  A woman is injured when she breaks a tooth on a rock that mysteriously found its way into a box of cereal. This is an example of which of the following?
A.
B.
C.
D.
38.  Coverage for defense costs is included in which of the following?
A.
B.
C.
D.
39.  A Basic Dwelling policy form automatically provides coverage for losses caused by each of the following perils except which one?
A.
B.
C.
D.
40.  Jake has two insurance policies on his house. They are issued by different companies, but they are otherwise identical. The term for this is
A.
B.
C.
D.
41.  Which of the following losses would be paid under the Business Auto coverage form's Comprehensive coverage?
A.
B.
C.
D.
42.  The Electronic Data Processing Equipment floater covers what? Select all that apply.
A.
B.
C.
D.
43.  Most liability claims are based on negligence that results in injury or damage. An act of negligence is considered to be a tort. What does the term "tort" mean?
A.
B.
C.
D.
44.  What is the limit on Pollutant Cleanup and Removal coverage under the Business and Personal Property coverage form?
A.
B.
C.
D.
45.  LaTonya purchases a house from John. She borrows $75,000 from First City Bank that, along with her $25,000 down payment, equals the $100,000 purchase price of the home. Who has an insurable interest in this home? Choose all that apply.
A.
B.
C.
D.
46.  Who of the following would be considered custodians while having care and custody of company property inside the premises?
A.
B.
C.
D.
47.  Which of the following statements apply to Professional Liability policies?
A.
B.
C.
D.
48.  An action that, in a natural and continuous sequence, produces a loss is the
A.
B.
C.
D.
49.  Under which part of a Workers Compensation and Employers Liability policy would you find a description of employers liability coverage provided?
A.
B.
C.
D.
50.  Which of the following coverages may be attached to a homeowners policy only by endorsement?
A.
B.
C.
D.
51.  Which of the following is a personal and advertising injury?
A.
B.
C.
D.
52.  Benson Pharmaceutical Company decides not to manufacture a new drug after determining that it has serious potential side effects. This is an example of which risk management method?
A.
B.
C.
D.
53.  The Additional Coverage for collapse is included in which homeowners form(s)?
A.
B.
C.
D.
54.  J&M Industries does not have a group health insurance plan for its employees. Instead, it pays employees' medical expenses out of a fund specifically created for this purpose. This is an example of
A.
B.
C.
D.
55.  What is meant by the term "adverse selection"?
A.
B.
C.
D.
56.  The purpose of FAIR Plans (Fair Access to Insurance Requirements) is to do what?
A.
B.
C.
D.
57.  Which of the following classes of personal property are subject to special sublimits of coverage under a homeowners policy?
A.
B.
C.
D.
58.  Failure to use the care that is required to protect others from the unreasonable chance of harm is called what?
A.
B.
C.
D.
59.  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.
60.  Under the supplementary payments provided by general liability coverage, when a vehicle to which the bodily injury insurance applies is involved in an accident and bail bonds are required, the insurer will pay up to what amount?
A.
B.
C.
D.
61.  Coverage for earthquake losses is which of the following?
A.
B.
C.
D.
62.  Which of the following autos owned by the named insured could be covered under a Personal Auto policy?
A.
B.
C.
D.
63.  George is a trash collector earning $35,000 a year who hurts his back on the job, so he can no longer go out with the collection trucks. However, he can still be a route coordinator in the office at a salary of $25,000 per year. To what extent is George industrially disabled?
A.
B.
C.
D.
64.  A mutual insurance company
A.
B.
C.
D.
65.  Which of these statements about Coverage C of a homeowners policy are correct?
A.
B.
C.
D.
66.  Which of the following statements concerning Business Auto Liability coverage are correct?
A.
B.
C.
D.
1 comment
67.  What is required for an insured's rights and duties under a CPP to be transferred while the insured is alive?
A.
B.
C.
D.
68.  Medical payments under a homeowners policy are available for expenses resulting from an injury to which of the following?
A.
B.
C.
D.
69.  Which of the following businesses might be covered under a Garage coverage form?
A.
B.
C.
D.
70.  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.
71.  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.
72.  Which of the following losses would be excluded under the Building and Personal Property coverage form if the insured building had been vacant for more than 60 days before the loss occurred?
A.
B.
C.
D.
73.  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.
74.  Which of these statements concerning Medical Payments to Others coverage are correct?
A.
B.
C.
D.
75.  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.
76.  Which of the following coverages are provided by Business Auto Physical Damage coverage?
A.
B.
C.
D.
1 comment
77.  Homeowners coverage for loss of personal property because of "mysterious disappearance" is provided by what?
A.
B.
C.
D.
78.  Which of the following have special loss valuation requirements under the Building and Personal Property coverage form?
A.
B.
C.
D.
79.  Which of the following could be covered under the Liability section of a named insured's Personal Auto policy?
A.
B.
C.
D.
80.  Under an insurance contract, the uncertainty of events can lead to unequal financial results for the two parties. This means that insurance is what kind of contract?
A.
B.
C.
D.
81.  What is meant by a contract of adhesion?
A.
B.
C.
D.
82.  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.
83.  How do deductibles apply in the Equipment Breakdown Protection coverage form?
A.
B.
C.
D.
84.  Which of these statements about the Mail coverage form are correct? Select all that apply.
A.
B.
C.
D.
85.  Which of the following is not true about insurance binders?
A.
B.
C.
D.
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