Maryland State Law - Property & Casualty Quiz

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A person with insurable interest in real property at a fixed location may apply to the Joint Insurance Association if they have been unable to obtain homeowner's insurance. This suggests that the Joint Insurance Association provides an alternative option for individuals who have been denied coverage by other insurance providers.

An insurance adviser license authorizes individuals to provide advice on the terms, coverages, or benefits of insurance contracts and charge a fee for their advice. This means that they are legally permitted to offer guidance and recommendations to clients regarding various aspects of insurance policies, such as the terms and conditions, the types of coverage available, and the benefits that can be obtained. They are also allowed to charge a fee for their expertise and services in providing this advice. This license does not authorize them to qualify as a bail bondsman, re-write insurance policies, or issue licenses to other potential insurance advisers.

According to the given answer, if a carrier proposes to non-renew a commercial policy, the insurer is required to provide a response within 15 days of the insured's request for additional information. This means that if the insured requests more information regarding the non-renewal, the insurer must respond within the specified time frame.

An employer must have at least one employee to be subject to Maryland's worker's compensation laws. This means that even if there is only one employee working for the employer, they are still required to provide worker's compensation coverage.

All licensed insurance producers who are acting on behalf of an insurance company must obtain an appointment from an insurer in order to sell, solicit, or negotiate property and casualty. This is because insurance producers are individuals who are authorized to sell insurance policies and represent insurance companies. By obtaining an appointment from an insurer, they are officially recognized and authorized to act on behalf of the insurance company in selling and negotiating insurance policies in the property and casualty sector.

If a property is vacant for more than 60 days, the perils that would be excluded are damage by burglars and accidental discharge of steam or water. This means that if the property is left unoccupied for an extended period of time, any damage caused by burglars or any accidental discharge of steam or water would not be covered by the insurance policy.

The Maryland Auto Insurance Fund defines a covered vehicle as Auto, Truck, Van, Mopeds, Motor Scooters, and Trailer. This means that if you have insurance through the Maryland Auto Insurance Fund, your trailer will be covered under the policy.

Sabotage would not be considered a non-accidental loss under the Equipment Breakdown Policy. Non-accidental losses refer to damages or breakdowns that occur due to natural wear and tear, rust, or deterioration over time. Sabotage, on the other hand, is an intentional act of causing damage or disruption, which would typically be covered under a different type of insurance policy, such as property or liability insurance.

Membership in The Property and Casualty Insurance Guarantee Corporation among authorized P&C insurers is mandatory. This means that all authorized P&C insurers are required to be members of the corporation. This ensures that policyholders are protected in the event of an insurer's insolvency. By making membership mandatory, the corporation can effectively fulfill its role in providing a safety net for policyholders and maintaining the stability of the insurance industry.

Worker's Compensation is an exclusion under Employment Practices Liability coverage because it is a separate type of insurance that covers workplace injuries or illnesses. Employment Practices Liability coverage specifically protects against claims related to wrongful termination, sexual harassment, and alleged discrimination. Worker's Compensation, on the other hand, provides benefits to employees who are injured or become ill as a result of their job. Therefore, it is not included in Employment Practices Liability coverage.

Workers Compensation accidental injury is compensable if it occurs during the period of time when an employee was at work, at the employer's place of business or a designated location, and while the employee was performing their job duties or something related to them. However, it is not compensable if it was a result of the employee's negligence. This means that if the injury occurred due to the employee's own fault or carelessness, they would not be eligible for workers' compensation benefits.

A cemetery plot of any insured would be considered an insured location under the HO3 policy. This means that if the insured person owns a cemetery plot, it would be covered by the insurance policy.

An Insurance Producer is required to inform the Insurance Commission of any changes to their name or address within 30 days of the change. This allows the Commission to update their records and ensure that any communication or documentation is sent to the correct location. It is important for the Producer to promptly notify the Commission to maintain accurate and up-to-date information.

When terminating a policy or insurance contract, an insurer's termination notice must state the specific reason for termination. This requirement ensures transparency and accountability in the termination process, allowing the insured to understand the grounds on which their policy is being terminated. By providing a specific reason, the insurer is able to communicate any violations or breaches of the policy terms that have led to the termination. This helps to protect the rights and interests of both the insurer and the insured.

When an insured increases the limits on their Personal Auto Policy (PAP) to 100/300/50 and signs an Uninsured Motorist Waiver, the Uninsured Motorist coverage remains the same at 30/60/15. The Uninsured Motorist coverage is not affected by the increase in limits or the signing of the waiver.

According to Maryland insurance law, an insurer must provide an insured with claim forms within 15 calendar days of receiving a notice of claim. This requirement ensures that the insured can promptly file a claim and begin the process of recovering from a loss.

The National Flood Insurance Program provides coverage for various types of floods, including flash floods, tidal bores, and tsunamis. However, it does not provide coverage for mudslides. A mudslide is a type of landslide where a mass of mud, rocks, and debris moves rapidly down a slope. While it is related to heavy rainfall and can cause significant damage, it is not included in the coverage provided by the National Flood Insurance Program.

A Maryland Auto Insurance Fund (MAIF) producer is required to have a bond for the fund of $10,000. This bond serves as a financial guarantee to protect the MAIF and its policyholders in case the producer fails to fulfill their obligations or engages in fraudulent activities. By having a bond in place, the MAIF can ensure that there are sufficient funds available to cover any potential losses or damages caused by the producer's actions.

The premium receipt tax charged for surplus lines insurance on all gross premiums is 3%. This means that for every dollar of gross premiums paid for surplus lines insurance, an additional 3 cents is charged as a tax.

A licensed insurance producer is not required to provide a statement that indicates a claim filed under the homeowner's policy will cover any loss when offering flood insurance. This is because flood insurance is a separate policy from homeowner's insurance and has its own terms and conditions for coverage. Therefore, it is important for the applicant to understand that flood insurance is necessary to cover losses specifically caused by floods, and it cannot be assumed that a homeowner's policy will provide the same coverage.

An overturn of a vehicle is not considered a comprehensive loss because it falls under the category of collision loss. Comprehensive coverage typically includes damages caused by incidents other than collisions, such as hitting a deer, damage from falling rocks, and vandalism. However, an overturn of a vehicle is specifically related to a collision between the vehicle and another object, making it a collision loss.

The notice of intent to cancel a Worker's Compensation Policy is not required to include information about alternate insurance. This means that when an insurance company intends to cancel the policy, they do not have to provide information about any other insurance options that the policyholder can consider. The other options listed in the question, such as the effective date of the cancellation, information on policy limits, and the insurer's name and address, are all required components of the notice.

If an employer becomes bankrupt or insolvent during the policy term, the insurer is obligated to continue providing payment of compensation for injury. This means that despite the financial difficulties faced by the employer, the insurer will still fulfill its responsibility to compensate employees for any injuries suffered during the policy term. This ensures that the employees are not left without the necessary financial support in case of an unfortunate event.

Persons entitled to seek a hearing as a result of an action by the insurance commissioner have 30 days. This means that individuals who wish to contest or challenge a decision made by the insurance commissioner must submit their request for a hearing within 30 days from the date of the action. This timeframe allows for a reasonable opportunity for affected parties to present their case and seek a resolution.

Insurance companies typically review policies when the insured reaches a certain age or has a physical condition that may affect their ability to drive safely. In this case, John is 66 years old and has a physical handicap, which indicates that he may be at a higher risk of being involved in an accident. Therefore, his policy will automatically have to be reviewed to assess the potential impact of his age and physical condition on his ability to drive and determine if any adjustments need to be made to his policy.

In order for an insurance producer to act on behalf of an insurer, the insurer must appoint the producer and enter into an appointment agreement. This agreement establishes the producer as an authorized representative of the insurer and grants them the authority to act on their behalf. Without this appointment, the producer does not have the legal authority to represent the insurer.

A company must provide a 10-day notice to cancel a Homeowner's policy for non-payment which has been in effect for more than 60 days. This means that if the policyholder fails to make the required payment within the given 10-day notice period, the company has the right to cancel the policy. This notice period allows the policyholder a final opportunity to make the payment and avoid cancellation.

A premium finance company may charge an initial non-refundable service fee of $20. This fee is likely charged to cover administrative costs and ensure that the company is compensated for their services. It is important for customers to be aware of this fee when considering financing options for their premiums.

An insurer must give a policyholder 10 days' notice in advance before proposing to cancel a policy for nonpayment of premium. This allows the policyholder some time to rectify the situation and make the necessary payment to avoid policy cancellation.

The given question asks the test-taker to select the options they like. The correct answer is Option1, which implies that the test-taker likes Option1 out of all the given options.

A National Flood Insurance Program policyholder that has purchased personal property coverage may recover rare books or autographed items. This means that if these valuable items are damaged or destroyed due to a flood, the policyholder can file a claim and receive compensation to replace or repair them. This coverage is specifically designed to protect high-value personal belongings that may be difficult or expensive to replace.

The correct answer is Insurer. When an employee is injured on the job and receives worker's compensation benefits, it is the responsibility of the insurer to pay for those benefits. The insurer is the entity that provides the insurance coverage for the employer, and they are the ones who handle the financial aspect of the worker's compensation claim.

Under Maryland Insurance Laws, PIP benefits for lost wages are paid at 85%. This means that if an individual is injured in an accident and is unable to work, they can receive compensation for 85% of their lost wages through their personal injury protection (PIP) insurance coverage. This is a higher percentage compared to the other options provided, indicating that Maryland law prioritizes providing adequate financial support for individuals who are unable to work due to injuries sustained in an accident.

When flood maps change and a property has higher rates as a result, the rates will be gradually phased in over a 5-year period at a rate of 20% per year. This means that the property owner will experience a gradual increase in their rates over the course of 5 years, with a 20% increase each year. This phased approach allows the property owner to adjust to the higher rates gradually rather than facing a sudden and significant increase all at once.

The Property and casualty guaranty corporation is required to pay the full amount of any claim 30 days after an insurer. This means that if an insurer fails to fulfill their obligation to pay a claim, the guaranty corporation will step in and pay the claim within 30 days. This ensures that policyholders are still protected even if their insurer becomes insolvent or is unable to pay the claim.

The correct answer is "Collects premium owed before handling claim" because the insurer failed to provide notice of renewal premium due for the policy. As a result, the insured has not paid the premium, and the insurer has the right to collect the outstanding premium before handling any claims. This ensures that the insured fulfills their financial obligation before receiving any benefits from the policy.

The property covered under a binder of insurance remains insured for a period of 45 days.

PIP coverage, also known as Personal Injury Protection coverage, is a type of insurance that pays for medical expenses and other related costs resulting from an auto accident. Loss of services refers to the compensation for the loss of the injured person's ability to perform household tasks or provide care to their family members. This can include activities such as cooking, cleaning, and childcare. Therefore, PIP coverage would provide financial assistance for the loss of services due to the accident.

The correct answer is "An objective basis and is not arbitrary." This means that the insurer may refuse to issue property insurance on a risk location based on specific and measurable factors, such as the condition of the property or its proximity to potential hazards. The decision is not arbitrary, meaning it is not made randomly or without reason.

This question is asking for the option that does not apply to coverage prohibited under the National Flood Insurance Program (NFIP). The correct answer is "Subject to a deductible." This means that coverage under the NFIP is not subject to a deductible. Deductibles are typically applied to insurance policies to determine the amount that the insured individual must pay out of pocket before the insurance coverage kicks in. However, under the NFIP, coverage is not subject to this deductible requirement.

The reason "Payment of claim to an insured" may not be used to withdraw funds from a premium account because premium accounts are typically used for depositing and accumulating funds, not for making payments or withdrawals. The purpose of a premium account is to hold the premiums paid by policyholders and to generate interest or investment income for the insurer. The payment of claims to insured individuals is typically done from the insurer's general funds or from a separate claims reserve.