Which of the following statements about a mortgagee's rights under the Dwelling Property Basic Form (DP-1) is INCORRECT?
The mortgagee may abandon the insured property to the insurer
Which of the following businesses would be eligible for a Businessowners policy?
Barber Shop
S is purchasing a Commercial Property policy to cover a commercial building with a replacement cost of $100,000. The policy includes an 80 percent Coinsurance clause. To avoid a coinsurance penalty in the event of a partial loss, S should purchase a polic
$8,000
Actual cash value is most often defined as which of the following options?
Replacement cost minus depreciation
The Personal Liability section of a Homeowners policy covers which of the following options?
Bodily Injury caused by the personal activities of an insured
X insures a home for $100,000 under a Dwelling Property Broad Form (DP-2). If a flood causes $1,000 in damage to the home's contents, which of the following MAXIMUM amounts will X's insurer pay?
$0
Which of the following coverages may be added by endorsement to a Boiler and Machinery policy?
Extra Expense
Pro-rata cancellation occurs when:
An insurer cancels a policy at any time
Which of the following terms can be defined as a policy provision that omits certain risks from coverage?
Exclusions
A Commercial Property policy specifies which of the following responsibilities as a duty of the insured?
To provide a sworn Proof of Loss statement if requested by the company
N's next door neighbor, S, dumps hot ashes in N's trash dumpster, starting a fire and causing severe damage to N's home. N's company pays the loss and then goes after S for payment. This is an example of:
Subrogation
G insures G's television repair shop under a Building and Personal Property Coverage Form with limits of $100,000 on the building and $50,000 on business personal property. A fire causes $10,000 in damage to the building and $20,000 in losses to the conte
$30,750
Which of the following Homeowners coverages does NOT generally contain a deductible?
Liability
The owner-operator of a computer store often leaves expensive computers balanced negligently on the edges of tables, believing that any damage to the computers will be paid by the insurance policy. This situation is BEST described as a:
Morale Hazard
In order to issue a written binder for a commercial property policy, what is the MINIMUM consideration a producer must secure from an applicant?
A promise to pay the premium
In order to issue a written binder for a commercial property policy, what is the MINIMUM consideration a producer must secure from an applicant?
A promise to pay the premium
Which of the following policy forms would BEST protect a business that must keep operating after a loss?
Extra Expense
A Commercial Building and Personal Property form provides coverage for:
Business personal property
An insured has an HO-3 Form. When using a snowblower borrowed from a neighbor, the insured strikes a large rock and causes $2,000 worth of damage to the snowblower. Under which section of the policy could payment be made on the insured's behalf?
Personal Liability
In a Commercial Property form, if a building is left vacant, coverage for vandalism will continue for up to how many days?
60 days
All of the following items are included in the Nationwide Marine definition EXCEPT:
Real Property
A fire in an insured's restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fire causes extensive damage to floors and furnishings. The water damage is best described as:
A direct loss
A building adjacent to an insured's business is severely damaged by fire. Because of the nature of the damage to the adjoining property, the insured is denied access to the business by the fire department. If the insured's property is covered under a Busi
3 weeks
The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences EXCEPT:
Water-main breakage
An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of t
$1,250
The MAXIMUM amount a policy will pay in the event of a loss is called the:
Limit of Liability
Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured?
Occurrence
A deer jumps through the window of an insured's home, damaging the interior and exterior walls. Which of the following Homeowners Forms listed below is the LEAST comprehensive form that will still provide coverage for this loss?
HO-3 Form
Inland Marine insurance is commonly used to insure all of the following items EXCEPT:
Automobiles
Which of the following statements is CORRECT about the Fair Credit Reporting Act?
it provides a method for an applicant to correct any incorrect information in the credit report.
Under a Personal Property Floater, a loss is covered when it occurs:
Anywhere in the world
Which of the following perils is covered by Broad Form perils but is not covered by the Basic Form?
Weight of ice and snow
An insured owns an antique marble statue valued at $3,000, which is covered under a Personal Articles Floater. Damage to the statue would be covered in all of the following situations EXCEPT:
The insured threw it
Which of the following sources may be used to provide property insurability information?
Physical Inspections
A Commercial Package policy must include at least how many coverage parts?
2
The principle of indemnity is designed to avoid:
Overpayment of a claim
An applicant's statement included in the insurance contract that the property to be insured has an operable sprinkler system is:
A warranty
Under a Homeowners policy, an insured is required to take all of the following actions when a covered loss occurs EXCEPT:
hire an appraiser to determine the amount of loss
Information provided by the insured in a Proof of Loss is considered:
a representation
Which of the following phrases BEST defines a hazard?
A condition that increases the chance of a loss
All of the following options are examples of insurable interest EXCEPT:
an individual's interest in property her parents will someday leave to her
An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which
$12,000
A family takes their 50 horsepower outboard motor boat to the lake on a trailer towed behind their personal auto. The pleasure boat is appropriately covered for physical damage under which of the following policies?
Boatowners
The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance po
Conditions
Which of the following terms is defined as the uncertainty of future outcome?
Risk
All of the following perils are covered under a Building and Business Personal Property Coverage Form with a Causes of Loss-Basic Form attached EXCEPT:
Earth Movement
Special Form or Open Perils coverage:
Is limited by the named exclusions
A company's promise to pay for damage caused by or resulting from any covered Cause of Loss would be found in which of the following sections of a Commercial Property policy?
Insuring Agreement
Which of the following perils is covered under the Commercial Property Basic Cause of Loss form?
Sinkhole Collapse
A primary obligation of an insurer is to:
Pay the claims covered under the policy
During a tornado, a barn is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the:
Tornado