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72 Cards in this Set

  • Front
  • Back
Which rating method listed below is established by the underwriter?
Judgment rating
In which of the following would you have an insurable interest?

The car on which you are still paying




The house you own, but have rented to a tenant

Under Aleatory contracts the exchange of values may be:
Unequal
In insurance, when the number of similar units increase, the predictability of the loss improves:
According to the Law of Large Numbers
When a building has physical contents but no occupants, the building is said to be:
Unoccupied
The Insuring Agreement in an insurance policy is best described as:
It determines the coverage that is provided
An insurance policy has a $25,000 per occurrence limit. If the insured has a $5,000 covered loss during the policy period, how much coverage is available for other covered losses that occur during the remainder of the policy period?

$25,000






With the Exception of an aggregate limit, most policy limits are restored after payment of a loss. The per occurrence limit applies only for each separate occurrence. Therefore, the full $25,000 is reset and available for future occurrences.

Negligence is
considered to be any Unintentional Tort or Act. Anything deliberate would be considered an intentional tort.
Under Liability Insurance, Personal Injury Liability Coverage includes
Libel, slander, false arrest, invasion of privacy, etc
When damages are reduced in proportion to the degree of negligence, this is an example of:
Comparative Negligence
In Liability Insurance, the maximum amount that the coverage will pay for loss to any one person regardless of overall policy limits, is known as:
The Per Person Limit
Which Statutory Law Defense states that damages are reduced in proportion to the degree of negligence?

Comparative Negligence





In insurance, which of the following best describes an occurrence?

An event that results in a loss.




EX.


Someone takes blood pressure medicine and over time develops a rash

An example of Vicarious Liability might be:

The indirect or imputed liability for the acts of another

Which of the following Common Law Defenses prevents recovery for injuries caused by a negligent party if the claimant was also negligent?

Contributory Negligence





covered under Personal Property Coverage C of a Homeowners policy?
Theft of personal fishing equipment on the insured's boat located on the premises
insured under an unendorsed Homeowners policy?
Private residence in which the owner-occupant also maintains an office for her accounting business
Homeowners endorsements is used to schedule separate coverage for one or more of nine categories of personal property?
Scheduled Personal Property
Robert loves his hobbies and his agent advises him that only which of the following is covered under the homeowner policy?
Model airplane
Robert's agent discusses homeowner coverage for several types of motor vehicles that Robert owns and advises Robert that which of the following is not covered?
Dune buggy used on a public beach
In general, any business property or activity
is not covered under the Homeowners Liability coverages.
Which of the following is true concerning the Home Day Care Coverage Endorsement to the Homeowners Policy?
The endorsement extends Section II coverages to the insured's home day care business
Uninsured Motorists coverage provides coverage for which of the following?

Bodily injury to an insured




Uninsured Motorist's coverage provides Bodily injury only. The policy defines an insured as the named insured, a family member, or any other person occupying the insured auto. It does not provide Property damage coverage.

In ALL states, an UNENDORSED Personal Auto policy's Uninsured Motorists coverage applies to what type of loss caused by an uninsured motorist?
Bodily injury
Which of the following IS true regarding a Value Reporting Form Endorsement?
The insured must pay an advanced premium at the beginning of the policy period
Which of the following is a coverage extension that is available in the Building and Personal Property coverage form?
Property off-premises
Under the Commercial General Liability coverage form, liability assumed under contract is:

Excluded, EXCEPT: for contracts specifically defined as insured

Under the Motor Carrier Act of 1980, what is the minimum limit of liability required when transporting non-hazardous materials?
$750,000
Which of the following coverages is not included in the Commercial Crime insuring agreements, but can be added by endorsement?
Extortion
Which one of these Commercial Inland Marine forms CANNOT be included in the Commercial Inland Marine coverage part of the Commercial Package policy?
Commercial Builders Risk coverage form
In a monopolistic state, an employer purchases Workers' Compensation insurance from:



A state fund

Part Two - Employers Liability has which of the following occupational 'Sickness Limits'?



$100,000 per person




Part Two is the Employers Liability section of the policy. Liability covers all claims the employer is obligated to pay according to common law. Liability always has established limits. The minimum limits required in Workers' Compensation are: $100,000 per accident for injuries, $100,000 per person for disease or sickness. This question is asking for sickness limits.

Which statement concerning a binder is true?

A binder is valid for a maximum of 90 days

Who is the current Commissioner of Insurance in the State of Alabama?

Jim Ridling

A home would be considered to be eligible to receive a minimum level of wind mitigation discount if it was built at least to which of the following standards?
2006 IRC or later
Which of the following would NOT be an allowable reason for cancellation of an automobile policy?

The driver of the car is 17 years old and has a speeding ticket on their driving record

A notice of cancellation of an automobile insurance policy for nonpayment of premium must be mailed or delivered to the named insured at least ______ days before the effective date of the cancellation.
10
Which of the following statements about uninsured/underinsured motorist coverage is true?

This coverage is not required, but will be automatically included unless the insured rejects it in writing

A producer is subject to maintain continuing education requirements and must complete _________ classroom hours of continuing education or its equivalent on a biennial basis, 3 of which must be on ethics or business practices.
24
Which of the following levels of mitigation discounts requires that you have a fortified licensed evaluator inspect the property to document and certify the home meets requirements?
bronze, gold and silver
Every person engaged in the business of making and charging bail bonds (other than in Cullman County) must furnish a bond in the amount of:

$25,000

If the offense charged in the indictment is a misdemeanor, the defendant must be discharged on giving sufficient bail, but the amount of bail must be at least:

$50

All of the following are Elements of Insurable Risk, except:

Loss in indeterminable

The Elements that determine if a risk is an Insurable are:
Accidental, Measureable, Calculable, Hardship (must cause financial hardship), Exclude Catastrophic Perils, Affordable (cost of insurance) and Predictable
Which rating method listed below is established by the underwriter?
Judgment rating
Which of the following is an insurable risk?



Hail damage to the roof of a car

A fire sprinkler system installed in a factory is considered which of the following methods of managing risk?

Reduction

Which of the following describes the process where disputed claims between insured's and insurer's are decided by a neutral third party without a jury trial?



Arbitration

Which of the following best defines short rate cancellation?

The insured will receive less than the full amount of the unearned premium

Property Damage in Liability Insurance includes:
Damage to tangible property, including loss of use of that property caused by the insured's negligence
When responsibility without fault or negligence applies, such as employers are completely liable for work related injuries, or owners of wild animals kept in captivity are completely liable for injuries caused by those animals, this is an example of:

Absolute Liability

Under the Dwelling policies, which is correct regarding coverage of trees, shrubs or plants?
Damage by wind, hail, weight of ice, snow or sleet is not covered
Which of the following can be insured under an unendorsed Homeowners policy?

Private residence in which the owner-occupant also maintains an office for her accounting business

If an HO-3 has a coverage limit of $100,000 on a dwelling, how much coverage would automatically apply to cover the insured's personal property in Coverage C?

$50,000




Coverage C - Personal Property of a H.O. policy provides up to 50% of the Coverage A - Dwelling Limit.

Which of the following would be covered under Personal Property Coverage C of a Homeowners policy?
Theft of personal fishing equipment on the insured's boat located on the premises
All of the following are true about the Personal Liability coverage of a Homeowners contract, except:
The insured is required to pay all defense costs
Under a Homeowners Policy, Coverage A includes:
The dwelling on the premises (shown in the Declarations), plus structures that are attached to the dwelling
Trees, shrubs and plants are included for coverage in a Homeowners Policy for all the following, except:

A loss resulting from a windstorm




Damage to plants by windstorm or the weight of ice, snow, or sleet is considered so common as to be an uninsurable hazard.

Tom is driving with auto limits of 100/300/100 when he causes an accident injuring two people in the amounts of $60,000 and $125,000. What is the maximum his policy will pay for the accident?

$160,000




This question is regarding injuries totaling $160,000. The second number in this example:100/300/100 is the maximum BI Per Accident that the policy will pay. The $125,000 claim exceeded the Per Person Limit of $100,000 and therefore only pay: $100,000. The other claim of $60,000 was under the Per Person Limit and therefore pays it all. The two combined did not exceed the total Per Accident amount permitted by this policy so the maximum it would pay is $160,000. $100,000 + $60,000 = $160,000.

Which of the following accidents would NOT be covered under the Uninsured Motorists coverage of the Personal auto policy?

An accident occurs with a motorist who has coverage that satisfies the minimum liability limits that are required by law, but not enough to cover the damages






This driver would be considered to be an underinsured motorist, not an uninsured motorist. Underinsured motorist is not automatically included in Uninsured Motorist Coverage, but can be added by endorsement. Underinsured motorists coverage pays the difference between the insured's actual damages for bodily injury and the amount of Liability insurance carried by the driver who was at fault.

Uninsured Motorists coverage provides coverage for which of the following?
Bodily injury to an insured
In ALL states, an UNENDORSED Personal Auto policy's Uninsured Motorists coverage applies to what type of loss caused by an uninsured motorist?
Bodily injury
Flood insurance
Is available from the federal government or private companies who are reimbursed for losses by the government
Which of the following IS true regarding a Value Reporting Form Endorsement?

The insured must pay an advanced premium at the beginning of the policy period




The only true statement listed is that the insured must pay an advanced premium at the beginning of the policy period. Reports may be filed daily, weekly, monthly or quarterly. However, the final report MUST be made within 30 days of the end of the policy period. Reports must indicate 100% of the value of the property. There is no 80% coinsurance allowed here.



Which of the following losses would be paid under the Business Auto coverage form's Comprehensive coverage?

A covered auto was stolen and never recovered






Comprehensive coverage provides coverage for anything other than collision, that is not excluded. Mechanical breakdown is specifically excluded, the other two choices are examples of Collision.

Under the Motor Carrier Act of 1980, what is the minimum limit of liability required when transporting non-hazardous materials?
$750,000
Which one of these Commercial Inland Marine forms CANNOT be included in the Commercial Inland Marine coverage part of the Commercial Package policy?
Commercial Builders Risk coverage form
Pete's Businessowners policy covers which of the following?

Pete is sued for injury to a competitor caused by one of Pete's advertisements






Businessowners liability coverage includes bodily injury, property damage, medical expense, and personal and advertising injury which would cover injury due to an offense arising out of the insured's business.

Part Two - Employers Liability has which of the following occupational 'Sickness Limits'?

$100,000 per person






Part Two is the Employers Liability section of the policy. Liability covers all claims the employer is obligated to pay according to common law. Liability always has established limits. The minimum limits required in Workers' Compensation are: $100,000 per accident for injuries, $100,000 per person for disease or sickness. This question is asking for sickness limits.

A driver has liability limits of 25/50/25. The most his policy will pay for property damage in any one occurrence is:
$25,000
Which of the following would NOT be an allowable reason for cancellation of an automobile policy?

The driver of the car is 17 years old and has a speeding ticket on their driving record






Primary Grounds for Cancellation are: Nonpayment of premium, lying on an application, filing false claims, epilepsy, drug or alcohol use, felony conviction, vehicle unsafe, vehicle being used for commercial use or as an unauthorized emergency vehicle, etc.

Which statement concerning a binder is true?

A binder is valid for a maximum of 90 days