General Insurance Exam Questions And Answers
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These General insurance exam questions and answers cover general insurance concepts. It is designed to help you evaluate your comprehension of the general insurance concepts for which you will be tested in your insurance license qualification exam. The questions are intended to resemble the types of queries and the range of content on your insurance license qualification exam; however, because insurance license exam questions are kept strictly confidential, you should not expect these questions to be the same as those you will see on your actual exam.
- 1.Medical payments under a homeowners policy are available for expenses resulting from an injury to which of the following?
- A.
The named insured
- B.
A residence employee
- C.
A person who is on the insured location without permission
- D.
Any regular resident of the insured's household who pays rent
- 2.Some property insurance policies provide for payment of the full policy limit in the event of a total loss by a covered peril, regardless of the actual value of the property. These policies are known as which of the following?
- A.
Indemnity policies
- B.
ACV policies
- C.
Valued or agreed amount policies
- D.
Market value policies
- 3.When an uninterrupted chain of events resulting from a negligent act causes a loss, that act is considered to be which of the following?
- A.
An assumption of risk
- B.
An intervening cause
- C.
The proximate cause of loss
- D.
A matter of strict liability
- 4.Policies issued under the National Flood Insurance Program provide removal coverage for property removed to protect it from the flood. This coverage applies at another location for up to how many days?
- A.
60 days
- B.
45 days
- C.
30 days
- D.
15 days
- 5.In legal terms, the actions by one party might have the effect of giving up a known right. When this occurs, the party has created which of the following?
- A.
Unilateral contract
- B.
Representation
- C.
Warranty
- D.
Waiver
- 6.When the special causes of loss form are attached to a commercial property coverage part, coverage for theft of furs and fur garments is limited to how much?
- A.
$2,500
- B.
$2,000
- C.
$1,500
- D.
$1,000
- 7.An insurer's loss ratio is determined by dividing what?
- A.
Premiums by combined losses and expenses
- B.
Premiums by underwriting losses
- C.
Operating expenses by total premiums
- D.
Underwriting losses by total premiums
- 8.Under most property insurance policies, the policy territory includes which of the following?
- A.
Only the United States
- B.
The United States, its territories and possessions, and Canada
- C.
The United States, Canada, and Mexico
- D.
All of North America and Europe
- 9.Claims-made general liability coverage does not apply to bodily injury or property damage that occurs when?
- A.
On the policy's retroactive date.
- B.
Before the policy's retroactive date.
- C.
After the policy's retroactive date.
- D.
Before the effective date, if there is no retroactive date.
- 10.Under liability insurance policies, what does an "aggregate limit" mean?
- A.
It is the most the insurer will pay for any one accident.
- B.
It is the most the insurer will pay for all losses during any one policy period.
- C.
It is the maximum limit for each claim when multiple claimants are arising out of the same occurrence.
- D.
It is the single largest limit that applies when a loss is covered by two or more policies issued by the same insurer.
- 11.In the event of a physical damage loss that makes a covered auto unavailable for a period of time, a personal auto policy will provide coverage for transportation expenses at the rate of $20 per day up to how much?
- A.
A maximum payment of $300
- B.
A maximum payment of $460
- C.
A maximum payment of $600
- D.
A maximum payment of $740
- 12.Under the business auto coverage part, each of the following is true about the classifications of covered autos, which are designated by numerical symbols shown in the declarations, except for which of the following?
- A.
All classes of newly acquired autos are automatically covered.
- B.
An insured can select different classifications for various coverages.
- C.
"Any auto" is the broadest coverage classification.
- D.
"Hired autos" include autos the insured leases, hires, rents, or borrows.
- 13.Something that might increase the likelihood that a loss will occur is called what?
- A.
Peril
- B.
Hazard
- C.
Risk
- D.
Catastrophe
- 14.Tom Baxter has an automobile insured by a personal auto policy. He trades in his car and purchases a new private passenger auto as a replacement vehicle. If he does not notify the insurance company, the liability coverage for his replacement vehicle will apply automatically for how long?
- A.
10 days
- B.
30 days
- C.
60 days
- D.
Until the end of the policy period
- 15.A device that is used to minimize small nuisance claims and that helps to keep insurance premiums down is called what?
- A.
Arbitration
- B.
Deductible
- C.
Valued policy
- D.
Coinsurance
- 16.Which type of insurance professional does not actually sell insurance coverages but sells advice about insurance coverages?
- A.
Excess and surplus lines agent
- B.
Solicitor
- C.
Consultant
- D.
Producer
- 17.Under the NCCI workers compensation and employers liability policy form, the basic, or minimum, the limit for employers liability coverage is how much per accident?
- A.
$50,000 per accident
- B.
$100,000 per accident
- C.
$250,000 per accident
- D.
$500,000 per accident
- 18.Which dwelling policy forms are named peril forms?
- A.
All dwelling forms
- B.
The basic form only
- C.
The basic and broad forms
- D.
The special form only
- 19.If general liability "claims-made" coverage is renewed by "occurrence" coverage and the insured purchases a supplemental extended reporting period (ERP), the period for reporting claims under the policy will be extended for how long?
- A.
Indefinitely
- B.
5 years
- C.
3 years
- D.
60 days
- 20.Under liability insurance policies, what does the term "personal injury" usually mean?
- A.
Injury for such things as libel, slander, false arrest, or invasion of privacy.
- B.
Only bodily injuries that are suffered by individuals.
- C.
Any form of injury that affects a person, including bodily injury, property damage, financial injury, and damage to one's reputation.
- D.
Injuries suffered by named insureds or family members who are insured under personal lines policies.
- 21.Under a personal auto policy, if an insured already has physical damage coverage for at least one vehicle, a new vehicle will be automatically covered from the date it is acquired as long as the insured notifies the insurer and requests the coverage within how many days?
- A.
30 days
- B.
14 days
- C.
10 days
- D.
7 days
- 22.Which of the following is not true about difference in conditions (DIC) insurance?
- A.
DIC policies provide property and liability coverages.
- B.
Traditional perils (such as fire, lightning, and so on) are usually excluded by DIC policies.
- C.
DIC supplements other coverages and fills insurance gaps.
- D.
DIC can provide considerable protection at a reasonable cost.
- 23.If coverage for personal liability and medical payments is attached to a dwelling policy, what basic limit of coverage applies to medical payments unless a higher amount is purchased?
- A.
$500 per person
- B.
$1,000 per person
- C.
$2,500 per person
- D.
$5,000 per person
- 24.Under which type of marketing system do agents or agencies operate as independent businesses but agree to represent only one insurance company?
- A.
Direct writer system
- B.
Exclusive of the captive agency system
- C.
Direct response system
- D.
Independent agency system
- 25.A commercial property coverage part with the basic causes of loss form attached covers all of the following perils except which one?
- A.
Windstorm
- B.
Explosion
- C.
Volcanic eruption
- D.
Sprinkler leakage
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