Fire & Casualty Exam #3

150 Questions | Total Attempts: 754

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Fire & Casualty Exam #3

Fire & Casualty Exam #3 150 questions 3 hour time limit 70% to pass


Questions and Answers
  • 1. 
    What course of action does a party to a contract have if the other party is found to be in breach of that contract?
    • A. 

      Nothing, unless the injured party can prove the damages are substantial.

    • B. 

      Reasonable attorney fees and costs only

    • C. 

      Damages for breach, reasonable attorney fees and costs

    • D. 

      Damages caused by the breach only.

  • 2. 
    A representation in an insurance contract qualifies as which of the following?
    • A. 

      An Amendment

    • B. 

      An express warranty

    • C. 

      A policy provision

    • D. 

      An implied warranty

  • 3. 
    What does if mean if an agent's license is inactive?
    • A. 

      The agent can transact insurance business if it is done with another agents approval

    • B. 

      The agent can transact any insurance business for which the agent is licensed

    • C. 

      The agent can still transact insurance business in CA, but not in any ohter state until it is reactivated

    • D. 

      The agent cannot transact any insurance business for which a valid, active license is required

  • 4. 
    The ordinance and law exclusion/limitation found in property policies such as the commercial property coverage, and in the homeowner's policy have the following effect:
    • A. 

      It warrants that an insured has not knowingly violated an ordinance or law

    • B. 

      The insured may not remove or modify the effect of the exclusion

    • C. 

      It reduces the coverage on any loss if the loss was caused by the insured violating the ordinance or law

    • D. 

      It excludes that part of the loss resulting from the enforcement of a building ordinance or law

  • 5. 
    Extra expense insurance covers:
    • A. 

      Increased expense of repairing property to appreciated assets

    • B. 

      The extra expense that a business incurs to continue a business while damage to the premises is being restored

    • C. 

      The loss of profit a business incurs while it is shut down after a loss by a covered peril

    • D. 

      Payroll and other overhead incurred when a business is shut down after a loss

  • 6. 
    A plate glass/glass coverage form is needed by some insureds. Which of the following statements about the coverage for the peril of glass breakage in commercial property for a "building and personal property" basic, broad and special causes of loss forms is true?
    • A. 

      There is limited glass breakage coverage in both of the broad and special forms

    • B. 

      There is limited glass breakage coverage in the basic form

    • C. 

      No policy limits apply to glass breakage coverage in the special form, all named perils

    • D. 

      There is no glass breakage coverage in the broad or special forms

  • 7. 
    In the state of California, no rate will remain in effect if it is considered to be any of the following, except:
    • A. 

      Impartial

    • B. 

      Unfairly discriminatory

    • C. 

      Excessive

    • D. 

      Inadequate

  • 8. 
    The amount paid for damage to property which is equal to the price for which it could have been sold is:
    • A. 

      Actual Cash Value

    • B. 

      Replacement Cost

    • C. 

      Stated amount

    • D. 

      Market Value

  • 9. 
    The limited Mexico endorsement applies to trips to Mexico with a duration of:
    • A. 

      7 days or less

    • B. 

      10 days or less

    • C. 

      2 days or less

    • D. 

      14 days or less

  • 10. 
    Which of the following types of coverage would pay for losses which occurred during the policy period and are found for up to one year after policy termination?
    • A. 

      Occurrence

    • B. 

      Loss sustained

    • C. 

      Claims made

    • D. 

      Discovery

  • 11. 
    Which coverage is needed to protect physicians, surgeons and dentists for their professional activities?
    • A. 

      Commercial general liability

    • B. 

      Malpractice coverage

    • C. 

      Employer's liability

    • D. 

      Errors and Omissions coverage

  • 12. 
    What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer, and then issues a policy from that application?
    • A. 

      The agent must become an employee of the company within 30 days of receiving the application

    • B. 

      Name the agent to the list of the company's approved agents

    • C. 

      Send the agent an appointment approval notice within 30 days of policy issuance

    • D. 

      Forward to the Commissioner a notice of appointment within 14 days of receipt of application

  • 13. 
    Under a major medical plan, coinsurance equals a percentage
    • A. 

      The employee pays after the deductible is met

    • B. 

      The plan pays after the deductible is met

    • C. 

      The employer pays after the deductible

    • D. 

      The spouses' insurance company pays after the deductible

  • 14. 
    If an insured borrows a neighbor's vehicle to run a personal errand, how do the policies respond in the event of an auto accident?
    • A. 

      Both policies respond on a pro-rate basis

    • B. 

      Only the neighbor's policy provides coverage: there is no coverage by the driver's policy

    • C. 

      The driver's policy is primary and the neighbor's policy is excess

    • D. 

      The neighbor's policy is primary and the driver's policy is excess

  • 15. 
    The equipment dealer's coverage form covers all of the following types of property, except:
    • A. 

      Dealer's used stock

    • B. 

      Motor vehicles designed for highway use

    • C. 

      Customer's equipment in for service

    • D. 

      Dealer's new stock

  • 16. 
    A self-insured group qualifies for stop-loss after claims:
    • A. 

      Equal the anticipated loss per month

    • B. 

      Meet the out-of-pocket expense during the policy period

    • C. 

      Exceed a specified limit in a set period of time

    • D. 

      Average the maximum amount stated on the master policy

  • 17. 
    A reporting form is used for property insurance
    • A. 

      To maintain the correct limits of coverage without over or under insuring when the value or volume of the property varies during the policy term

    • B. 

      To report losses and adjust insurance in force to conform

    • C. 

      When the insured's premises are subjuect to periodic safety inspections

    • D. 

      To establish a guaranteed amount of insurance based upon a report of values submitted before the beginning of the policy term

  • 18. 
    All of the following contribute to the rising cost of Worker's Compensation Insurance, except:
    • A. 

      The growing population

    • B. 

      Employers who fail to secure the payment of workers compensation as required by law

    • C. 

      Under-reported payroll of employers

    • D. 

      Fraudulent claims

  • 19. 
    Which type of exposure can be best defined as a condition or sitution where the exposure to financial loss is presented to an individual or family from causes such as injury, disability, death, sickness or unemployment?
    • A. 

      Personnel loss exposure

    • B. 

      Personal loss exposure

    • C. 

      Personal property loss exposure

    • D. 

      Liability loss exposure

  • 20. 
    All of the following would be considered benefits of insurance, except:
    • A. 

      The can be a source of investment funds

    • B. 

      Retention of the loss by the insured

    • C. 

      Redemption of the financial uncertainty of the insured

    • D. 

      Payment for the cost of covered losses

  • 21. 
    Which of the following is also known as a human loss exposure?
    • A. 

      Personnel loss exposure

    • B. 

      Personal loss exposure

    • C. 

      Indirect loss exposure

    • D. 

      Liability loss exposure

  • 22. 
    If a tenant is insured under a building personal property coverage form, when is the property considered vacant?
    • A. 

      When the structure is being renovated as the result of a fire

    • B. 

      When the insured's operation is halted dui to a strike

    • C. 

      When there is insufficient business personal property present to conduct customary operations

    • D. 

      When less than 31% of the total building space is rented to others or in use by the insured.

  • 23. 
    A commercial property policy can provide coverage for all of the following, except:
    • A. 

      Tangible losses

    • B. 

      Indirect losses

    • C. 

      Intangible losses

    • D. 

      Direct losses

  • 24. 
    Which of the following types of coverage would be needed to cover a contractor's bulldozers which are used in the contractor's business but are not held for sale?
    • A. 

      Older truck cargo floater

    • B. 

      Contractor's equipment floater

    • C. 

      Annual transit policy

    • D. 

      Installment sales floater

  • 25. 
    It is a violation of the CA Insurance Code to act as a producer for a non-admitted carrier unless:
    • A. 

      The producer is an insurance solicitor

    • B. 

      It is always a violation, no matter what type of producer

    • C. 

      The producer is dually licensed in at least two states

    • D. 

      The producer is a surplus lines broker