P&c

Front 1

The inception and expiration dates of an insured’s underlying commercial liability polices and commercial umbrella liability policy should be the same in order to:

Back 1

Avoid gaps in coverage.
Explanation:

It is better to have the policies issued with the same inception and expiration dates to avoid gaps in coverage.

Front 2

The minimum capital required to form and organize a new domestic stock life insurance company in Alabama is:

Back 2

$1,000,000

Front 3

Under a Personal Articles Floater, a pair of antique salt and pepper shakers is insured for $1,000. When one of the shakers is broken, the remaining shaker is worth only $200. How much will the insured receive for the loss before the deductible is applied?

Back 3

$800.

Explanation:

In this case the loss would be determined by taking the value of the item that is remaining and deduct that from the limit of insurance.

Front 4

A theft that occurs with visible signs of forcible entry is known as:

Back 4

Burglary

Front 5

Under the farm forms, "half a head" of livestock is an animal:

Back 5

$1,000.

Explanation:

An animal under one year of age, known as a "half a head." Coverage F covers farm personal property on a blanket basis both on and off the insured premises. A blanket limit for livestock can be added, however, the most that will be paid for "half a head" of livestock (an animal under one year of age) is $1,000.

Front 6

What is the limit of coverage provided under a mobile home policy for detached structures?

Back 6

10% of the Coverage A limit or $2,000 whichever is greater

Explanation:

The limit is $2,000 or 10% of the Coverage A (dwelling limit), whichever is greater.

Front 7

Injuries in which of the following would NOT be covered for medical payments under the general liability policy?

A parking lot immediately adjoining the named insured’s place of business but not owned or rented by the named insured

An office the named insured rents to others in his office building, if the injured person is not an occupant of that office

An office of the named insured in Acapulco, Mexico

A public park during the named insured’s company picnic

Back 7

Mexico is not insured

Front 8

What does the term "unvalued basis" mean as it relates to ocean marine hull insurance?

Back 8

A policy where the value is not declared until after the loss

Front 9

Implied authority

Back 9

an element of the law of agency that is not formally express or communicated. This allows the agent to perform all the usual tasks required to sell and service the insurance policies.

Front 10

Gramm-Leach-Bliley Act (GLB Act), also known as the Financial Modernization Act of 1999

Back 10

requires insurers to give customers written privacy notices that explain information-sharing practices and requires insurers to safeguard sensitive data.

Front 11

With surety bonds, who is to be protected under a performance bond?

Back 11

The Obligee.Explanation:

The obligee is protected by the bond in case the contractor defaults under the contract for the work to be performed. The surety issuing the bond is the guarantor under the bond.

Front 12

The supplemental payments portion of the CGL will cover defense costs of an "indemnitee" but only if:

Back 12

The indemnitee agrees to pay for an arbitrator if needed. is correct.Explanation:

If the indemnitee, which may be someone the insured has agreed to protect, such as in an insured contract, agrees to cooperate fully with the insurer.

Front 13

Under Coverage F - ___________________________ the most that will be paid for a "head" of livestock (an adult animal, one year of age or older) is:

Back 13

$2,000

Coverage F covers farm personal property on a blanket basis both on and off the insured premises

Front 14

Personal property normally at other residences owned or rented to the insured is covered for:

Back 14

10% of the Coverage C limit or $1,000 whichever is greater

Front 15

A surety which provides a Performance Bond to a contractor might also provide another performance bond which guarantees the materials will be provided at the price quoted and the quality and quantity specified. This bond is referred to as a:

Back 15

Supply Bond

Front 16

Accounts Receivable.

Back 16

protects the insured when their records have been destroyed or damaged by a peril insured against. It pays to reconstruct the records and it also pays for the losses sustained by the insured due to the destruction of the accounts receivable records.

Front 17

A furrier customers policy does not cover:

Back 17

Loss in excess of the value of the property as declared by the owner..

EXPLANATION:The furrier is not responsible for a value beyond what is declared by the owner of the property.

Front 18

An insured wishing to cover the employee while driving their own car on company time would need the following endorsement?

Back 18

Employees as insureds.

EXPLANATION:The "employee as insured" endorsement (CA 99 33) would cover the employee when also sued in an accident while driving their car on company time.

Front 19

***Coinsurance clause in commercial property insurance

Back 19

Coinsurance has a negative effect on partial losses if the policy limit does not meet or exceed the “limit required”. For example, with an 80% coinsurance clause, a limit set at 40% of building’s value is only half of the limit required, and the insured would be a co-insurer on any covered loss. When the limit is at or above the amount required, the insured will collect fully on partial losses, without any penalty. Rates are adjusted downward slightly, when higher coinsurance percentages are chosen. Coinsurance does not affect total losses, since the policy limit would be paid in any case. But coinsurance does NOT state that an insured can collect up to 80% on a covered loss; this is a misunderstanding of the “coinsurance percentage.

Front 20

When an insurance company is called upon to defend an insured who has been named in a lawsuit, the amount it will spend in defense costs is:

Back 20

Not limited..

EXPLANATION:There is no policy limit for defense costs. The amount spent in defense costs is at the discretion of the insurance company.

Front 21

The insured owns a two-family dwelling and rents out one of the dwelling units. If a fire occurs what coverage could the insured look to for his loss of rental income under the DP-3?

Back 21

Fair Rental Value.

EXPLANATION:The dwelling policy provides coverage for loss of rental income. The policy will pay 20% of coverage A for this coverage.

Front 22

The federal crop program that covers the revenue of the entire farm as opposed to a specific crop is called:

Back 22

Adjusted Gross Revenue .

EXPLANATION:Group Risk involves the average county revenue. Crop revenue compares the early market price of the crop to the harvest price and Income protection involves a combination of both low harvest prices and low yield. All of those can be tied to a specific crop depending on the farm. Adjusted Gross revenue insures the revenue of the entire farm as opposed to a specific crop.

Front 23

Virtually all inland marine named perils forms include coverage for:

Back 23

Fire and lightening

Front 24

An interline endorsement used in a Commercial Package Policy (CPP):

Back 24

I. May be mandatory or optional.

II. Is an endorsement that applies to more than 1 line of insurance.

Front 25

Inland marine policies most closely resembles the scheduled personal property endorsement?

Back 25

Personal articles floater

Front 26

Under the homeowner forms, "loss of use" would apply to

Back 26

"Loss of use" is Coverage D would apply to

Additional living expenses of the insured after a covered fire

Front 27

Personal property is automatically covered for______ of the amount of the dwelling limit. If replacement cost coverage is purchased on the personal property, the limit of insurance will be increased. The insured can always increase the contents limit for an additional premium.

Back 27

50%

Front 28

Under the livestock coverage form, how must livestock be covered?

Back 28

The livestock form requires that the livestock must be insured at least 80% to value.

Front 29

Which of the following is subsidized by the federal government?

Crop and Hail Cov

Multi Peril crop Cov

Back 29

Crop hail insurance is not subsidized by the federal government. Multi Peril crop coverage is

Front 30

The Forgery and Alteration Coverage Form protects the insured from losses resulting from forgery or alteration of:I. Outgoing checks.II. Drafts.III. Promissory notes.IV. Instruments drawn against the insured.

Back 30

ALL

Front 31

Under the property coverage offered by the HO-3 form

Back 31

The policy excludes animals as covered property.

Front 32

Under the "regular program" a flood insurance policy will insure a single family residence for up to:

Back 32

$250,000

Front 33

Under the emergency flood program the dwelling is covered for only :

Back 33

$35,000.

Front 34

under Section II–Liability of the BOP

Back 34

Coverage is included for valet parking bodily injury claims. However, the coverage only applies to the ways and means of the insured's premises that are owned or rented. The vehicle must be one that is not owned, rented or loaned to the insured. Coverage is the same in the general liability form.

Front 35

Vicarious liability

Back 35

is when the employer is held legally liable for the acts of their employee

Front 36

How is a combined deductible applied in an Equipment Breakdown policy?

Back 36

It is first deducted from the aggregate amount of any loss to which it applies.

EXPLANATION:If a combined deductible applies to two or more coverages provided, it is first deducted from the aggregate amount of any loss to which it applies.

Front 37

Insurance fraud in the first degree is a prohibited act in cases where the loss or potential loss exceeds:

Back 37

nsurance fraud in the first degree is a prohibited act in cases where the loss or potential loss exceeds $1,000. Insurance fraud in the first degree is a Class B felony.

Front 38

All of the following are considered to be family members on the PAP EXCEPT:

Back 38

Insured’s mother who doesn’t live in the household.

EXPLANATION:The insured’s mother although a relative by blood is not living in the household so therefore is not considered to be a family member. A family member is related to the insured by blood, marriage or adoption and resides in the household.

Front 39

Some items covered under the Businessowners Policy have a theft limit. Which of the following does not have a specific theft limitation?

Back 39

Tobacco products.

Front 40

Cause of loss forms refer to what type of coverage under a farm policy?

Back 40

Property.

EXPLANATION:There are three causes of loss provisions in the property coverage under a farm policy - basic, broad and special. The insured chooses which provision is to apply and pays the premium accordingly. Obviously, the special is the broadest coverage.

Front 41

What is the limit under the Businessowners Policy for pollution clean up?

Back 41

A maximum of $10,000.

Front 42

In a Physicians Professional liability policy two separate errors cause several claims. How is the deductible determined?

Back 42

Per Claim

Front 43

When would the Personal Auto Policy respond to a loss with a three wheeler?

Back 43

When used in an emergency situation. .

EXPLANATION:The PAP policy makes an exception to the less than four wheel rule. In cases of an emergency this type of a vehicle would be covered for liability coverage.

Front 44

What is found in the "conditions section" of a workers compensation policy?

Back 44

Cancellation clause.

Front 45

Jim Johnson has an automobile policy with a combined single limit of $50,000. He has an at-fault accident and incurs the following expenses: $30,000 bodily injury judgment; $30,000 property damage judgment; $5,000 damage to traffic light; $6,000 attorney's fees for his defense; $300 in premiums for appeal bond; and $75 in bail bond premiums for related traffic violations. What is the maximum amount his insurance company will pay?

Back 45

$56,375.

EXPLANATION:The policy cannot pay more than its limit of liability. Under supplemental coverages in the policy, the policy will pay the defense costs plus the cost of the premiums on appeal bonds and bail bonds.