Fire & Casualty Exam 1b

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Fire & Casualty Exam 1b - Quiz

California Fire & Casualty Practice Exam 1B
150 questions, 3 hours.
70% to pass


Questions and Answers
  • 1. 

    The one basic characteristic of any type of insurance is that the insured is returned to the same (or close to the same) status that existed prior to the loss, but without a chance for gain or profit.

    • A.

      This is true

    • B.

      This is false

    Correct Answer
    A. This is true
    Explanation
    Statement of fact. Insurance is not intended to create a profit for the insured.

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  • 2. 

    Which of the following coverages does an open peril policy provide?

    • A.

      Ocean and sea perils

    • B.

      Perils that would affect business continuance

    • C.

      Perils other than those specifically named as being excluded

    • D.

      Perils stated in the policy

    Correct Answer
    C. Perils other than those specifically named as being excluded
    Explanation
    This is the definition of an open-peril or all-risk policy, and applies to both personal and commercial lines.

    Rate this question:

  • 3. 

    Determine the actual cash value in the following situation:Original price of office equipment when purchased (8 years ago)--$9,000Depreciated amount at time of fire--$5,000Current replacement cost--$12,000

    • A.

      $4,000

    • B.

      $5,000

    • C.

      $6,000

    • D.

      $7,000

    Correct Answer
    D. $7,000
    Explanation
    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.

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  • 4. 

    The continuing education requirements that a fire-casualty broker/agent must fulfill as required by the DOI are which of the following?

    • A.

      10 hours during each year of the first four years that the licensee is licensed

    • B.

      20 hours during each year of the first four years that the licensee is licensed

    • C.

      25 hours during each year of the first four years that the licensee is licensed

    • D.

      36 hours during each year of the first four years that the licensee is licensed

    Correct Answer(s)
    A. 10 hours during each year of the first four years that the licensee is licensed
    C. 25 hours during each year of the first four years that the licensee is licensed
    Explanation
    Statement of fact regarding Continuing Education Requirements. After license year four, the hourly CE requirement is 15 hours per license year.

    Rate this question:

  • 5. 

    An individual who lives nest to a Nuclear Power Plant is exposed to which of the following types of hazards?

    • A.

      Physical

    • B.

      Moral

    • C.

      Morale

    • D.

      Legal

    Correct Answer
    A. pHysical
    Explanation
    A physical hazard has tangible characteristics that can be quantified such as location of the insured premises of the distance from a high-risk structure.

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  • 6. 

    Of the following, which is the true characteristic about insurance?

    • A.

      It is considered a type of gambling

    • B.

      It is considered a way of retaining risk

    • C.

      It is considered a method of transferring risk

    • D.

      It is incorprated under the laws of any other jurisdication other that the state of california

    Correct Answer
    C. It is considered a method of transferring risk
    Explanation
    insurance always transfers possible financial risk/loss form an individual to a group of similar risk exposures that are accepted and categorized by an insurance company

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  • 7. 

    How is an admitted insured defined according to the California DOI?

    • A.

      It transacts insurance business in all states

    • B.

      It is organized and chartered according to the laws of the state of California

    • C.

      It transacts insurance according to the laws of the state of California

    • D.

      It is incorporated under the laws of any other jurisdiction other than the state of California

    Correct Answer
    C. It transacts insurance according to the laws of the state of California
    Explanation
    An admitted insurance company is approved to transact insurance business in the State of California, but may have been organized, incorporated, or chartered according to the laws of another state. The other state would be the insurer's state of domicile.

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  • 8. 

    Which of these is defined as "exclusive agent"?

    • A.

      Sells health insurance only

    • B.

      Sells one line of insurance only

    • C.

      Sells one insurance company's products only

    • D.

      Sells all policies by telephone only

    Correct Answer
    C. Sells one insurance company's products only
    Explanation
    statement of fact regarding exclusive agent

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  • 9. 

    The method that the California DOI uses to approve or disapprove rate filings for various types of insurance such as homeowners and automobile is know as?

    • A.

      File and use method

    • B.

      Open competition method

    • C.

      Mandated rates method

    • D.

      Prior approval method

    Correct Answer
    D. Prior approval method
    Explanation
    Statement of fact regarding the rate approval method that is most commonly used in the state of california

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  • 10. 

    "Risk" is one of the most important terms in the insurance industry. How is it defined?

    • A.

      The certainty of financial loss

    • B.

      The uncertainty of financial loss

    • C.

      The basis of a financial loss

    • D.

      The predictability of a financial loss

    Correct Answer
    B. The uncertainty of financial loss
    Explanation
    The uncertainty is whether an insured peril will occur, and the acutal dollar amount of the damage.

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  • 11. 

    An employee is operating their own car for their employer. The individual injures a person in an area as a result of negligent driving. The reason why the employer would be held liable is because of which of the following?

    • A.

      Contributory negligence

    • B.

      Comparative liability

    • C.

      Gross negligence

    • D.

      Vicarious liability

    Correct Answer
    D. Vicarious liability
    Explanation
    Vicarious, as it is used here means that the responsibility for one person's actions is substitued by another person. Therefore, the employer becomes responsible for the injuries caused by their own employees.

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  • 12. 

    Which of the following is a reason why someone would not purchase a dwelling policy insteat of an HO-3?

    • A.

      Personal liability is not desired

    • B.

      The home is being leased to a tenant

    • C.

      Broader coverage is desired

    • D.

      The dwelling does not meet all the standards for a homeowners policy, but meets dwelling requirements

    Correct Answer
    C. Broader coverage is desired
    Explanation
    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.

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  • 13. 

    The concept of "pure risk" involves the possibility or chance of which of the following?

    • A.

      A loss only

    • B.

      Either a loss or a gain

    • C.

      A profitable distribution of risks

    • D.

      None of the above

    Correct Answer
    A. A loss only
    Explanation
    Insurance is only not intended to create any type of gain.

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  • 14. 

    What type of insurance company has owners who are stockholders in the company who share in the profits of the company?

    • A.

      Assessment insurance companies

    • B.

      Reciprocal insurance companies

    • C.

      Mutual insurance companies

    • D.

      Stock insurance companies

    Correct Answer
    D. Stock insurance companies
    Explanation
    Statement of fact regarding owners/shareholders of stock insurance companies.

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  • 15. 

    An insured has a personal auto policy with liability coverage only, and an undendorsed HO-3 homeowners policy. The insured's auto is parked in the garage when an earthquake strikes. The car and garage are not damaged, but as a result of a broken gas line in the house which has been totally destroyed, a fire results which destroys the car and the garage. The policies would pay for damage to what?

    • A.

      Auto only

    • B.

      House and Garage only

    • C.

      All three insured items

    • D.

      Garage only

    Correct Answer
    D. Garage only
    Explanation
    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.

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  • 16. 

    What would be the result of a lower ($250) deductible vs the selection of a higher deductible ($1,000)?

    • A.

      Reduction in the premiums paid for the policy

    • B.

      Greater number of smaller claims sent to the insurer

    • C.

      Increase in the accuracy of risk distribution

    • D.

      Any or all of these could resuld

    Correct Answer
    B. Greater number of smaller claims sent to the insurer
    Explanation
    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.

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  • 17. 

    For any type of risk exposure to be considered an 'ideally insurable risk', which of the following characteristics does not have to exist?

    • A.

      The risk has to be part of a group of risks that have the same or very similar characteristics

    • B.

      The value of a loss must be able to be measured financially

    • C.

      The event that causes the loss has to be accidental

    • D.

      There is very little, if any chance a loss happening during the policy period

    Correct Answer
    D. There is very little, if any chance a loss happening during the policy period
    Explanation
    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.

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  • 18. 

    Which of the following is the best definition of an insurer's loss reserve?

    • A.

      The dollar amount an insurance company must pay to close-out a claim

    • B.

      The dollar amount of claims paid divided by earned premiums, exluding loss adjustment expenses

    • C.

      The approximate dollar amount of an insurer's liability for a least one (or more) open claims

    • D.

      The dollar amount received by an insurer for coverage provided

    Correct Answer
    C. The approximate dollar amount of an insurer's liability for a least one (or more) open claims
    Explanation
    Statement of fact regarding insurer loss reserves

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  • 19. 

    Which party is allowed to cancel a commercial policy (assuming all legal requirements are met)?

    • A.

      Insurance company only

    • B.

      Insurance company and/or any insured named in the policy

    • C.

      Insurance company and/or the first named insured in the policy

    • D.

      Insurance company and/or the first named insured, only concurrently

    Correct Answer
    C. Insurance company and/or the first named insured in the policy
    Explanation
    Statment of fact. These cancellation requirements apply to both personal and commercial lines.

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  • 20. 

    Which of the following types of crime coverage is the broadest in terms of coverage?

    • A.

      Robbery

    • B.

      Safe burglary

    • C.

      Theft

    • D.

      Burglary

    Correct Answer
    C. Theft
    Explanation
    Theft is any act of stealing which would include robbery, burglary and safe burglary.

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  • 21. 

    Under the terms and conditions of a commercial package policy, who is responsible to make all premium payments, if there are four individuals named as insureds. who are all operating a business under a "DBA" and are unincorporated?

    • A.

      Any of the four named individuals

    • B.

      All four of the named individuals insureds have an equal responsibility

    • C.

      The business itself, because it is unincorporated

    • D.

      The first named insured.

    Correct Answer
    D. The first named insured.
    Explanation
    The first named insured is responsible for all premium payments under all types of personal and commercial lines insurance contracts.

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  • 22. 

    Which of the following coverage parts is not found in a standard commercial package policy?

    • A.

      Commercial crive coverage part

    • B.

      Commercial property coverage part

    • C.

      Boiler and machinery part

    • D.

      Dwelling property coverage part

    Correct Answer
    D. Dwelling property coverage part
    Explanation
    Choice D is a personal lines coverage not found in commercial contracts.

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  • 23. 

    Identify which of the following is always included in a commercial package policy?

    • A.

      Common policy declarations and conditions

    • B.

      Personal auto coverage (for non-owned commercial vehicle)

    • C.

      Commercial auto coverage part

    • D.

      There are no coverage parts of components that are required in commercial package policies

    Correct Answer
    A. Common policy declarations and conditions
    Explanation
    Statement of fact. These two elements are found in all commercial package policies.

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  • 24. 

    In a commercial property policy, which cause of loss form includes coverage for the peril of glass breakage?

    • A.

      Basic and broad

    • B.

      Broad and special

    • C.

      Basic and special

    • D.

      Special only

    Correct Answer
    B. Broad and special
    Explanation
    Statement of fact regarding the commercial property policy forms that include coverage for glass breakage.

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  • 25. 

    A commercial package policy contains a coinsurance clause which is a method used by insurance companies to encourage their insureds to purchase amounts of insurance coveage that are close to the dollar value of the insured property

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Statement of fact regarding the purpose of coinsurance in both personal and commercial lines insurance contracts

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  • 26. 

    Under the business income coverage form, the loss of income to an insured's business must be covered by an insured peril or there will be no payment for a loss

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Statement of fact regarding loss of income requirements under the business income coverage from

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  • 27. 

    The type of coverage which can be utilized by an insured to alter the insurance amounts of coverage provided by the building and personal property coverage form in known as the "value reporting form"

    • A.

      True

    • B.

      False

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

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  • 28. 

     Which of the following types of business could utilize a businessowners policy?

    • A.

      Banks

    • B.

      Service station and auto repair station

    • C.

      Restaurants

    • D.

      Office buildings 2-stories high and containing about 5,000 sq ft

    Correct Answer
    D. Office buildings 2-stories high and containing about 5,000 sq ft
    Explanation
    Choices A, B & C are specifically excluded from eligibility for a businessowners policy. Choice C is correct because the maximum size for an office building to be covered under a businessowners policy is 6 stories and 100,000 sq ft.

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  • 29. 

    Liability exposures that result from the location of a business in addition to the activites of that business, is known as which of the following?

    • A.

      The completed operations exposure

    • B.

      The premises and operations exposure

    • C.

      The products and premises exposure

    • D.

      The general liability exposure

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

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  • 30. 

    An insurer has the right to audit books and records of an insured while the policy is in force and for a period of up to three month after expiration of the policy.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false as it is three years

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  • 31. 

    The medical payments coverage found in a commercial general liability policy applies to which of the following categories of individuals?

    • A.

      The insured's employees while participating in any activities that are employer sponsored

    • B.

      The insured's employees while engaged only in a sports event that is employer sponsored

    • C.

      The insured's customers who are in the process of transacting business on the insured's premises

    • D.

      The insured's hired repair-person who is fixing windows damaged by a peril insured by the policy

    Correct Answer
    C. The insured's customers who are in the process of transacting business on the insured's premises
    Explanation
    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.

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  • 32. 

    Boiler and Machinery exposures are excluded from coverage under commercial property policies because this type of risk is very unique and unusual. This is the reason that a separate boiler and machiner policy is needed by many business owners.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Statement of fact regarding the need to purchase a separate policy to cover the exposures associated with boiler and machinery risks.

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  • 33. 

    A practicing physician would need the type of professional liability coverage that is contained in a medical malpractice policy because ...

    • A.

      Commercial general liability policies are not issued or written by insurers on a claims-made bases

    • B.

      Professional liability and malpractice losses are excluded in commercial general liability policies

    • C.

      The liability limits provided in a commercial liability policy are insufficient for most physicians to be adequately covered

    • D.

      These are all reasons why professional liability coverage is needed

    Correct Answer
    B. Professional liability and malpractice losses are excluded in commercial general liability policies
    Explanation
    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.

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  • 34. 

    Which of these are covered by an employee dishonesty coverage form?

    • A.

      Cash that is lost by an employee who is driving to the bank

    • B.

      Merchandise shortages that are discovered only after an inventory of the store

    • C.

      Robbery of an employee

    • D.

      Theft of stock from the business, owned by the policyholder, by an employee

    Correct Answer
    D. Theft of stock from the business, owned by the policyholder, by an employee
    Explanation
    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).

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  • 35. 

    The type of coverage the owner of a public parking garage should purchase in order to have liability coverage in case of accidental damage to vehicles that are owned by the public, but are left in the care, custody and control of the garage is known as garagekeepers coverage.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    statement of fact regarding the type of coverage needed by the owner of a public parking garage, as well as owners of other types of businesses who have the vehicles of others in their care, custody and control.

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  • 36. 

    The limit of liability in a personal automobile policy providing coverage for 'damage to your automobile' is stated as 'the leaser of the amount necessary to replace or repair the damaged property (vehicle), or the ______________________________' (fill in the blank from the choices below).

    • A.

      Guaranteed replacement cost

    • B.

      Guaranteed replacement cost of the damaged or stolen property

    • C.

      Actual cash value of the damaged or stolen property

    • D.

      Replacement cost of the damaged or stolen property but only if the insured carries at least 80% of the actual replacement cost to value

    Correct Answer
    C. Actual cash value of the damaged or stolen property
    Explanation
    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.

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  • 37. 

    Of the following choices, which one would define the 'retroactive date' which is contained in the structure of a claims-made professional liability policy contract?

    • A.

      The policy expiration date

    • B.

      A loss or event can occur and still be eligible for recovery of payment under the terms of the policy. if it occurs after this date

    • C.

      No further claims can be made or submitted under the policy after this date

    • D.

      The same as the inception date of the policy

    Correct Answer
    B. A loss or event can occur and still be eligible for recovery of payment under the terms of the policy. if it occurs after this date
    Explanation
    Statement of fact regarding the definition of the retroactive date in a professional liability policy.

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  • 38. 

    What does ocean marine insurance cover?

    • A.

      Cargo

    • B.

      Frieght

    • C.

      The vessel itself

    • D.

      There are all covered

    Correct Answer
    C. The vessel itself
    Explanation
    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.

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  • 39. 

    There is an exclusion in automobile insurance issued by admitted insurers in California regarding coverage in Mexico, which can only be provided through an endorsement to a PAP. Which is true regarding this endorsement?

    • A.

      It is liability coverage, on an excess bases, provided for losses that occur in Mexico, within 25 miles of the Californa/Mexico Interntational border

    • B.

      It is a required endorsement for all personal auto policies issued in California to Mexican citizens

    • C.

      There is no coverage unless the loss is reported within 48-hours of the occurrence

    • D.

      It is liability coverage, on a primary basis, for insureds driving anywhere in the country of Mexico

    Correct Answer
    A. It is liability coverage, on an excess bases, provided for losses that occur in Mexico, within 25 miles of the Californa/Mexico Interntational border
    Explanation
    Statement of fact regarding the limitations of the Mexico coverage endorsement of a personal auto policy.

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  • 40. 

    The symbol "4" on a business auto policy indicates coverage for which of the following categories of vehicles?

    • A.

      Owned autos other than private passenger autos

    • B.

      Described autos exclusively

    • C.

      All drivers and autos are covered, except for those driven by drivers under age 25

    • D.

      Vehicles of 2-ton or less, that are used for business purposes

    Correct Answer
    A. Owned autos other than private passenger autos
    Explanation
    statement of fact regarding the classification of covered vehicles under Symbol 4 of a personal auto policy

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  • 41. 

    A business owner, who is insured with a commercial auto policy, is interested in purchasing the necessary liability coverage for any losses and subsequent claims that result from an employee's use of their own vehicles. What would be the best way to do this?

    • A.

      Buy employer's non-ownership liability in the commercial auto policy

    • B.

      Require all employees to include the employer as a listed additional insured in their personal auto policies

    • C.

      Include uninsured motorist coverage in the commercial auto policy contract

    • D.

      This type of exposure cannot be covered

    Correct Answer
    A. Buy employer's non-ownership liability in the commercial auto policy
    Explanation
    this is an example of the purpose of the non-ownership liability endorsement found in a business auto policy.

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  • 42. 

    Of the following, which are included under the coverage provided by a Workers Compensation policy?

    • A.

      Coverage for sickness or injuries that are job-related without regard to who is at fault or negligent

    • B.

      Compensation benefits at retirement to provide monthly income

    • C.

      Medical benefits with a coinsurance percentage of 80%/20%, a $1,000 stop-loss limit, but with an unlimited dollar amount of coverage

    • D.

      24-hours a day coverage, whether on or off the job for all workers who are eligible

    Correct Answer
    A. Coverage for sickness or injuries that are job-related without regard to who is at fault or negligent
    Explanation
    The correct answer is A because there is no limit for coverage as long as the injury or illness is job related; there are no retirement benefits under a workers compensation policy, nor is there any coinsurance or stop-loss limits. 24-hour coverage is not provided under a standard policy, it must be purchased specifically as a 24-hour workers compensation policy.

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  • 43. 

    Where is ocean marine liability insurance found?

    • A.

      Protection and indemnity coverage

    • B.

      Ocean marine cargo coverage insurance

    • C.

      Ocean marine freight liability coverage

    • D.

      Comprehensive personal liability policies

    Correct Answer
    A. Protection and indemnity coverage
    Explanation
    statement of fact regarding Protection & Indemnity (P&I) coverage. Cargo covers the goods being shipped, freight refers to the shipping charges of the cargo, there is no comprehensive personal liability coverage in an ocean marine liability policy.

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  • 44. 

    The statement is true regarding medical expense coverage in a workers' compensation policy is ...

    • A.

      It contains an unlimited amount of coverage for both time and dollar amounts

    • B.

      It has a limit, but no dollar limit

    • C.

      It has a dollar limit, but no time limet

    • D.

      None of these are true statements

    Correct Answer
    A. It contains an unlimited amount of coverage for both time and dollar amounts
    Explanation
    statement of fact regarding medical expense coverage limits found in a workers compensation policy

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  • 45. 

    Which of the following parts of a Medicare requires a premium payment by those eligible for coverage?

    • A.

      Hospital coverage under Part A

    • B.

      Physicians expense coverage under Part B

    • C.

      Long-term care coverage under Part C

    • D.

      Parts A & B both require copayments

    Correct Answer
    B. pHysicians expense coverage under Part B
    Explanation
    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.

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  • 46. 

    A disability income insurance policy provided coverage for which of the following?

    • A.

      Medical and hospital expenses

    • B.

      Room and board charges in the hospital

    • C.

      The income that is lost after a business closes as the result of an earthquake related injury

    • D.

      The income that is lost or reduced, in some cases, resulting from the insured experiencing a physical injury or any time of sickness

    Correct Answer
    D. The income that is lost or reduced, in some cases, resulting from the insured experiencing a pHysical injury or any time of sickness
    Explanation
    disability income contracts pay personal income that is lost as the result of personal injury of illness, but do not pay any type of medical expenses, hospital or room and board costs, or damages resulting from an earthquake.

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  • 47. 

    The Federal law known as COBRA does which of the following?

    • A.

      Allowing insurers to require evidence of insurability for insureds who wish to join a group health insurance plan once the period of enrollment has passed

    • B.

      Allowing employers to terminate a group health insurance coverage when an employees terminates employment

    • C.

      Requiring employers to pay the same percentage of the premium for terminated employees for up to 18 months after termination as they would have paid prior to termination

    • D.

      Allowing for, and providing protection of ex-employees, as well as their dependents by providing them the same conversion and extension benefits for group health insurance benefits as those given to existing employees

    Correct Answer
    D. Allowing for, and providing protection of ex-employees, as well as their dependents by providing them the same conversion and extension benefits for group health insurance benefits as those given to existing employees
    Explanation
    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.

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  • 48. 

    A single person does not own or least an automobile, she occasionally drives her housemate's vehicle on an emergency basis, she is going on vacation and will have to rent a car. To obtain full automobile insurance coverage when this occurs, what should she purchase?

    • A.

      The transportation extenstion endorsement

    • B.

      The miscellaneous vehicle endorsement

    • C.

      The non-owner extension coverage endorsement

    • D.

      The named non-owner coverage endorsement

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

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  • 49. 

    When an automobile insurance policy is cancelled at the request of the insured, and the insurance company keeps all earned premiums in additional to an amount to pay for overhead expenses incurred by the insurer, it is referred to as what type of cancellation?

    • A.

      Short rate type of cancellation

    • B.

      Pro-rate type of cancellation

    • C.

      Flat rate type of cancellation

    • D.

      It is none of these

    Correct Answer
    A. Short rate type of cancellation
    Explanation
    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.

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  • 50. 

    A dwelling that is occupied by, and only houses one-family, can be insured by using an HO-3 policy.

    • A.

      False

    • B.

      True

    Correct Answer
    B. True
    Explanation
    statement of fact regarding the use of an HO-3 policy.

    Rate this question:

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 10, 2010
    Quiz Created by
    Petsya
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