Fire & Casualty Exam 1b

Total Loss: $40,000 less $8,000 (20% depreciation) = $32,000.

statement of fact.

payment for this loss would be calculated as follows: $1,050 (collision damage) minus $500 (deductible) equals payment of $550.

statement of fact regarding the definition of "personal injury"

statement of fact regading the definition of "collision" in a personal auto policy.

Actual cash value is calculated by subtracting depreciation from the replacement cost. In this question the replacement cost is $12,000 minus depreciation of $5,000 giving an actual cash value of $7,000.

this is an example of the purpose of the non-ownership liability endorsement found in a business auto policy.

statement of fact.

statement of fact regarding other-than-collision coverage.

Statement of fact regarding the commercial property policy forms that include coverage for glass breakage.

This statement is false as it is three years

statement of fact.

the is the purpose of products and completed operations coverage. it covers exposures and losses that are the result of products, manufactured, sold or distributed by the insured as well as operational exposures.

an extension of group health insurance benefits under COBRA does not require evidence of insurability, does not terminate coverage, but rather extends it for terminated employees and dependents; former employers are not requred to pay any portion of premiums for an extension of benefits for terminated employees under COBRA, and former employees must have the same conversion and extension benefits that are given to currently employed individuals. Therefore choice D is the correct answer.

the owner's policy would be primary on the vehicle, but since it is only liability, your insured's collision coverage would be primary.

although an endorsement may increase the transportation coverage, limited coverage is included automatically.

statement of fact. this is the formula for determining business income under the business income form.

Employees and others who are hired by the insured would be covered under workers compensation, not a commercial general liability policy. Customers are covered under the medical payments of a CGL contact.

Statement of fact regarding the definition of the retroactive date in a professional liability policy.

statement of fact regarding the ways that an insurer may settle a covered loss under a PAP.

statement of fact.

statement of fact regarding the classification of covered vehicles under Symbol 4 of a personal auto policy

statement of fact regarding liability coverage in a Homeowners policy and Comprehensive Personal Liability policy.

statement of fact regarding the 'scheduled personal property endorsement.' other categories of property that may be covered under this endorsement include silverware, fine arts, golfer's equipement and stamp or coin collections.

Theft of an insured vehicle, as well as permanently installed electronic equipment, and components of the vehicle (tires and wheels), are covered under other-than-collision coverage. Choice A would be covered under collision coverage, choice D would be covered under the insured's homeowners policy, choice C would not be covered.

statement of fact regarding the liability coverages found in a homeowners policy.

in order for the rental car expense to be covered (choice A), the policy must be endorsed accordingly, intentional damages (choice B) are never covered, a brick hitting the vehicle (choice C) would be covered under collision (which is not part of liability coverage), hitting a neighbor's wall (choice D) would be covered under the liability portion of the policy.

This statement is false because the Fair plan is used as a means to insure high-risk residential properties located in hazardous brush fire areas or high-risk urban areas. Insurance for high-risk drivers may be obtained through the CAARP (California Automobile Assigned Risk Plan).

careful with the wording on this one, it states "...all are excluded, except..." meaing which is covered. CGL policies exclude coverage for employees of the insured (choice A), as well the insured him/herself (Choices B & C). Injuries to a customer for which the insured is liable are covered, making choice D the correct answer.

statement of fact regarding the use and purpose of the 'named non-owner coverage endorsement' found in a personal auto policy.

statement of fact regarding a commercial package policy

Statement of fact regarding the rate approval method that is most commonly used in the state of california

choices A & C are false statements, therefor making D a false statement. Choice B is the reason that a physician wound need medical malpractice insurance.

employee dishonesty covers intentional dishonest acts of employees (theft), making Choice D the correct answer. It does not cover accidental occurrences (loss of cash), losses that can only be proven by inventory, or activities of others toward employees (robbery of employees).

this is the definition of short rate cancellation, a flate rate type of cancellation requires a refund of 100% of the premiums paid back to the inception date of the policy.

this statement is false because reinsurance does not involve selling contracts by an insurer. Rather, it is the transference and acceptance of risk by several insurers with an equal or unequal liability.

A lower deductible means that the insurer has accepted a higher proportion of both the insured risks and subsequently potential losses. Therefore, the insurer will pay a larger number of smaller claims. However, premiums will be higher for the insured.

coinsurance requirements must always be met for replacement coverages to apply. This applies to personal lines and commercial lines.

statement of fact.

State of fact regarding the reasons to use HO-3 instead of a dwelling policy, Be careful with the wording on ths one, it's asking why someone would NOT purchase a dwelling policy instead of an HO-3.

Statement of fact. Actual cash value (ACV) is the way that physical damage to loss claims are paid and limited by insurers under a PAP.

In the question the word location refers to the premises, and activity refers to operations of the business making choice B the correct answer.

this statement is false because the only difference with a mobile homeowners policy is that the structure/dwelling that is covered by the policy is a mobile home. All other coverages are the same.

Choice A, damage from a flood would ve covered under loss-other-than-a-collison, choice B, injuring a neighbor's dog would be considered liability coverage, this eleminates choice D, choice C states that the insured "collided with the tree limbs," therefore it is covered under the collision portion of the policy.

statement of fact. losses that occur after a 60-day vacancy will be treated in this manner.

Statement of fact.

this type of loss would fall under 'removal coverages.' Choice A & C would be covered under the insured's personal auto policy, thus eliminating choice D.

statement of fact regarding the purpose of the extended non-owner liability endorsement of a PAP.

statement of fact.

Choices A, B and C are statements of fact. The question is asking which does NOT have to be present for a risk to be considered 'ideally insurable.' One of the requirements is that there must be a chance of a loss occurring, therefore this is not a correct statement about the elements os insurable risks, making D the correct answer.

Only the garage would be covered under the insured's homeowners policy. The vehicle would not be covered as the insured's personal auto policy contains only liability coverage, not physical damage (specifically for this situration, comprehensive) coverage.

Statement of fact regarding insurer loss reserves

statement of fact.

statement of fact, each policy defines and treats "mobile equipment" and "autos" the same. Therefore, there are no gaps or overlaps.

under prop 103, insurers may use years of driving experience, but not age.

the structural part of a ship or ocean going vessel that contains the crew, passengers and cargo is referred to as the 'hull.' Therefore, hull insurance covers physical damage to the hull itself, as well as limited liability for damages caused to other vessels by the insured vessel.

perils and conditions are not the same. perils are the events or circumstances that result in a loss occurring. conditions are the duties, rules of conduct, provisions and obligations of both parties to the insurance contract.

the statement is false because the Commissioner cannot deny the use of an individual's true name, (that is an individual's legally given name). However, the commissioner can deny the use of a corporate name if it is too similar to an name already in use, or it may mislead the public in any way.

The limit of the policy is $50,000 per accident.

coverage provided by endorsement only.

Choice D is a personal lines coverage not found in commercial contracts.

statement of fact. Part A Medicare is paid through payroll taxes, Part B requres a payment by participants, There is no such things as Part C of Medicare.

statement of fact regarding the types of physical damage coverages found in a Business Auto Policy (BAP)

state of fact. products and completed operations exposures have their own limitations under a separate category of coverage of a CGL

Statement of fact regarding the value reporting form. Under this form, coverage amounts will fluctuate typically as inventory amounts vary.

this statement is false because the sublimits of $1,000 on these three categories of property only apply if the loss is due to left.

statement of fact

Statement of fact regarding Continuing Education Requirements. After license year four, the hourly CE requirement is 15 hours per license year.