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 the following represents a pure risk?
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2.  The law of large numbers
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3.  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.
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4.  Highpoint Industries has an automatic sprinkler system installed in its office building. This is an example of which risk management method?
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5.  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?
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6.  The tread on Alan's automobile tires is very thin. This is an example of what type of hazard?
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7.  Which of the following is a hazard as opposed to a peril?
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8.  What is meant by a contract of adhesion?
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9.  Which of the following describes the principle of indemnity?
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10.  Which part of an insurance policy describes what property and/or perils will be covered by the contract?
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11.  What is the consideration that an insurer gives to the insured under an insurance contract?
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12.  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?
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13.  The "ground rules" are described in which part of an insurance policy?
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14.  A mutual insurance company
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15.  A nonexclusive agent
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16.  Solicitors may not
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17.  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?
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18.  Which insurance company department is responsible for accepting and rejecting applications based on company standards?
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19.  Which insurance company department is responsible for paying insureds' covered losses?
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20.  Who is responsible for licensing insurance agents?
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21.  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
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22.  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
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23.  Which of the following statements concerning regulation of the insurance industry is correct?
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24.  Which of the following is not one of the duties of an agent?
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25.  The written agency contract between an insurer and an agent constitutes the agent's
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26.  The Excel Insurance Company is incorporated in the state of Tennessee. It is also authorized to do business in Georgia. In Georgia, Excel is known as what type of company?
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D.
27.  Can states require insurance companies to use certain forms or rates in connection with certain types of insurance?
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28.  Which of the following statements concerning binders is correct?
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29.  Judgment rating is based on which of the following?
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30.  What rating method makes modifications to manual rates to reflect the unique characteristics of each risk?
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31.  To void a policy, misrepresentation or concealment must be which of the following?
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32.  An agreement between the insured and the insurer that certain conditions will be met is which of the following?
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33.  Which one of these statements about the Fair Credit Reporting Act is not correct?
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34.  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?
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35.  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?
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36.  Renata's home is demolished in a fire that started when a neighbor misdirected the fireworks he set off to celebrate the Fourth of July. Renata's insurance company pays her for the damage, and then files suit against the neighbor to recover the amount it paid for the loss. This is an example of the application of what policy condition?
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37.  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?
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38.  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?
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39.  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.
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40.  Which of the following would not normally be excluded under a property insurance contract?
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41.  An indirect loss is which of the following?
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42.  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?
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D.
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43.  According to the terms of the Mortgage condition, which of the following does not apply to the rights and duties of the mortgagee?
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44.  Jake has two insurance policies on his house. They are issued by different companies, but they are otherwise identical. The term for this is
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45.  Under the Appraisal condition, the insured and the insurance company each chooses an appraiser. If the appraisers do not agree, the dispute is submitted to a third individual agreed upon jointly by the insured and the insurance company. That third party is called the
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46.  Failure to use the care that is required to protect others from the unreasonable chance of harm is called what?
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47.  All of the following must be present to establish negligence except which one?
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48.  An action that, in a natural and continuous sequence, produces a loss is the
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49.  Liability that is imposed as a matter of law without regard to negligence is called what?
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50.  Liability that an insured incurs because of the actions of others, such as employees, is called what?
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51.  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?
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52.  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.
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53.  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?
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54.  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?
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55.  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?
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56.  Which of the following could not be covered under a Dwelling policy?
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57.  Which of the following coverage provisions would not be found in an unendorsed Dwelling policy form?
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58.  Which of these items of personal property would be covered under a Dwelling policy when Coverage C is written?
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59.  The Special Dwelling policy form provides which of the following?
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60.  Which of the following Other Coverages is not included in the Basic Dwelling coverage form?
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61.  Under which of the Dwelling policy forms may the insured be reimbursed for the replacement cost when the dwelling is destroyed?
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62.  An insured has a DP-3 covering a home that has a replacement value of $100,000. The insured carries $60,000 of insurance. Following a loss, the determined is made that it would cost $12,000 to replace the damaged portion of the home. How much could the insured collect, assuming the ACV of the loss is $6,000?
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D.
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63.  Which of the following would not be covered under Coverage A or Coverage B of a Dwelling policy?
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64.  Which of the following losses would not be excluded under a Basic Dwelling policy form?
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D.
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65.  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?
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66.  Myrtle has a Dwelling policy with Broad Theft coverage applicable both on and off her premises. Which of the following theft losses would be covered?
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67.  A homeowner who wants the maximum protection for her home and personal property should purchase the
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D.
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68.  An individual lives in an apartment. Which homeowners form should he purchase to cover his personal property?
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69.  Which homeowners form provides broad coverage for both the dwelling and its contents?
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70.  Which of the following could be covered by an unendorsed homeowners policy?
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D.
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71.  In the homeowners forms,
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D.
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72.  The Additional Coverage for collapse is included in which homeowners form(s)?
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D.
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73.  Which of the following classes of personal property are subject to special sublimits of coverage under a homeowners policy?
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74.  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?
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D.
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75.  Which of these statements concerning Medical Payments to Others coverage are correct?
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D.
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76.  Which of these statements concerning personal liability coverage are correct?
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77.  Which of these statements about Coverage C of a homeowners policy are correct?
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D.
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78.  A homeowners policy has been in force 30 days, and the company discovers that the insured has misrepresented certain material facts. The insurer wants to cancel the policy. Under what circumstances may it do so?
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79.  What is the limit on coverage for grave markers under the homeowners policy?
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D.
80.  Which of the following cannot be covered by a homeowners Watercraft Liability endorsement?
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D.
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81.  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?
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D.
82.  Which of the following would be eligible for a Personal Auto policy?
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83.  Which of the following autos owned by the named insured could be covered under a Personal Auto policy?
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B.
C.
D.
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