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34 Cards in this Set
- Front
- Back
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Your Liability policy has limits of $200,000 per occurrence, $1,000,000 aggregate limit. At different times during the Policy Period, four persons are injured to the extent of $250,000 each. What would each person recover?
A. $1,000,000 B. $200,000 C. $800,000 D. $100,000 |
B. $200,000
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What part of an insurance contract describes the perils that are not covered in an all-risk policy?
A. Conditions B. Exclusions C. Declarations D. Insuring Agreement |
B. Exclusions
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Most Property and Casualty policies are written for what period of time?
A. Three years B. Five years C. One year D. Six months |
C. One year
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When a policy will pay the full cost of replacement at today's prices without any deduction for depreciation, coverage has been written on what basis?
A. Actual Cash Value B. Replacement Cost C. Valued D. Stated amount |
B. Replacement
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A doctrine of law that states that you cannot recover damages from the other party if you are found to be partly at fault is called:
A. Comparative Negligence B. Contributory negligence C. Absolute liability D. Strict liability |
B. Contributory negligence
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If a home is valued at $100,000, but only insured for $40,000 on a policy with an 80% co-insurance clause, how much will the policy pay in the event of a $20,000 claim disregarding the deductible?
A. $10,000 B. $20,000 C. $15,000 D. $5,000 |
A. $10,000
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Which part of an insurance contract sets forth the rules of conduct, duties and obligations of the insured and the insurer?
A. Declarations B. Insuring Agreement C. Exclusions D. Conditions |
D. Conditions
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In Fire insurance, Actual Cash Value means:
A. Replacement Cost B. Replacement Cost less Depreciation C. Original Cost D. none of the above |
B. Replacement Cost less Depreciation
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On an HO policy, where would you look to see who is covered as an insured?
A. Conditions B. Definitions C. Insuring Agreement D. Declarations Page |
B. Definitions
The declarations lists the named insured, which is defined as the party listed, including their spouse, if they reside together. However, the definitions sections of a policy states who is insured in addition to the named insured. |
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A policy that only pays after another policy has paid is called:
A. Excess B. Primary C. Surplus D. non-existing |
A. Excess
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What part of an insurance contract specifies the perils insured against:
A. Declarations B. Insuring Agreement C. Exclusions D. Conditions |
B. Insuring Agreement
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Furniture that is destroyed when a building burns down is an example of what kind of loss?
A. Proximate B. Consequential C. Indirect D. Direct |
D. Direct
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When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be:
A. An intervening cause B. The direct cause C. Strict liability D. The proximate cause |
D. The proximate cause
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Many CGL policies are written with an Aggregate policy limit, which is:
A. The most the insurer will pay to any one person B. The most the insurer will pay for any one occurrence C. The most the insurer will pay on behalf of any one insured D. The most the insurer will pay for all claims during the Policy Period |
D. The most the insurer will pay for all claims during the Policy Period
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When you are found to be responsible for the negligent acts of others, it is known as:
A. General liability B. Absolute liability C. Strict liability D. Vicarious liability |
D. Vicarious liability
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What is the name of the area of tort law that provides remedies for wrongful acts other than crimes and breach of contract?
A. Assumed liability B. Negligence C. Waiver and Estoppel D. No fault |
B. Negligence
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Policies that agree to pay a stated amount to the insured in the event of a claim, regardless of the actual cash value of the property are known as:
A. Contracts of Indemnity B. Blanket policies C. Replacement Cost policies D. Valued policies |
D. Valued policies
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Something insurers use to eliminate coverage for small claims and to control the cost of insurance is:
A. A deductible B. Co-insurance C. Pro-rata liability D. An aggregate limit |
A. A deductible
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The percentage of claims paid out during a particular period of time in comparison to the amount of premiums written during that same period is known as the:
A. Loss ratio B. Profitable ratio C. Combined ratio D. Expense ratio |
A. Loss ratio
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Your Liability policy has limits of $200,000 per occurrence, $1,000,000 aggregate limit. At different times during the Policy Period, four persons are injured to the extent of $250,000 each. What would each person recover?
A. $800,000 B. $1,000,000 C. $200,000 D. $100,000 |
C. $200,000
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All of the following must be present in order to prove negligence, EXCEPT:
A. Intervening cause B. Actual injury or damage C. A legal duty D. Proximate cause |
A. Intervening cause
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All of the following are true regarding property recovered after a claim has been paid, EXCEPT:
A. The insured must notify the insurer if she recovers the property B. At the insurer's option, the property will be returned to the insured C. The insurer must notify the insured if it recovers the property D. At the insured's option, the property will be returned to the insured |
B. At the insurer's option, the property will be returned to the insured
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A policy modification that may be added to an insurance policy for an extra premium charge to the insured is called a(n):
A. Additional Coverage B. Rider C. Extended Coverage D. Endorsement |
D. Endorsement
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States that have adopted limited forms of no fault auto insurance coverage are relying on what concept?
A. Contributory negligence B. Proximate cause C. Intervening cause D. Assumption of the risk |
D. Assumption of the risk
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All of the following are examples of Strict (or Absolute) Liability, EXCEPT:
A. Storing explosives B. Driving your car C. An unfenced swimming pool D. Keeping wild animals as pets |
B. Driving your car
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The penalty for failure to satisfy the 80% Coinsurance requirement on a Property policy is:
A. Only a portion of the policy limit will be paid in the event of total loss B. There will be no coverage for a total loss C. There will be no coverage for a partial loss D. Only a portion of a partial loss will be paid |
D. Only a portion of a partial loss will be paid
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A policy that combines the maximum limit available for BI and/or PD for any one occurrence is a:
A. Aggregate limit B. Occurrence limit C. Per person limit D. Single limit |
D. Single limit
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Melissa Jones has two Property policies covering the same house. Company A's policy is written for $75,000. Company B's policy is written for $25,000. In the event of a $10,000 loss, how much will Company B pay?
A. $10,000 B. $75,000 C. $25,000 D. $ 2,500 |
D. $ 2,500
This is an example of the pro-rata liability clause or often called the other insurance clause, which is designed to reinforce the Principle of Indemnity. Simply add up the total amount of coverage in force, then pro-rate the amount each policy bears to the total. |
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Generally, the coverage "territory" on a CGL includes all of these, EXCEPT:
A. U.S. territories and possessions B. Mexico C. Canada D. Puerto Rico |
B. Mexico
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Data regarding the premium, limits, name and address of the insured and the policy period are found in what part of the contract:
A. Conditions B. Insuring Agreement C. Declarations D. Exclusions |
C. Declarations
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What is the penalty for under-insuring on a contract that has a co-insurance clause?
A. There is no coverage for partial losses B. None C. Only a portion of a partial loss will be paid D. There is no coverage for total losses |
C. Only a portion of a partial loss will be paid
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Which of the following is NOT considered a Consequential Loss?
A. Loss of rental value B. Extra expenses incurred while rebuilding damaged property C. Loss of business income while a building is closed for repairs D. Damage to personal property |
D. Damage to personal property
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All of the following are permitted defenses in a negligence lawsuit, EXCEPT:
A. Strict Liability B. Comparative Negligence C. Assumption of the Risk D. Contributory Negligence |
A. Strict Liability
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The purpose of Coinsurance on Fire insurance is:
A. To reinforce the Principle of Indemnity B. To require the client to pay part of every claim C. To require the client to carry proper coverage D. To eliminate coverage for small claims |
C. To require the client to carry proper coverage
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