insurance review

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?

12:01 am the day after the application and premium payment are mailed

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions.

In an auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault.

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

30 days

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

The Commissioner has the power to conduct _____________ in order to enforce the Insurance Code.

Investigations

All of the following causes of loss forms are “named peril�� forms EXCEPT

special form

Who would participate in a WYO program

Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is

50% of the amount provided as Coverage A

Sunny received a notice from her insurance company that it was not going to renew her personal risk insurance policy. She mailed a written request for an explanation for the nonrenewal within the specified amount of time. How many days does the insurance

20 days

Negligence may be defined as

The failure to use reasonable and prudent care

Wilber's house is located 1 mile from the county's new landfill and across the road from the entrance of a rock quarry. To rebuild the house if something happened to it would cost $150,000. But when Wilber tried to sell it, the best offer he received was

Market value

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid?

Other-than-collision (comprehensive)

As a condition for renewal of their licenses, how many hours of continuing education are required for all resident and nonresident insurance producers?

24

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions.

In return for premium, an insurance company must

Be fair in underwriting and pay covered losses.

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500-pound capacity

All of the following statements concerning coinsurance are true, EXCEPT

The coinsurance formula also will be applied to total losses

The part of the insurance contract that describes the covered perils, and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement

Which of the following does the term “proximate cause�� refer to?

Negligence that leads to an injury

Insurable interest in the property covered in a policy must be proven

At time of loss

Any named insured may reject uninsured motorist coverage by doing which of the following?

Rejecting the coverage in writing

What is the purpose of the NFIP?

To fill the gap left by the private insurers in flood coverage

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?

Other insurance

What information must be stated clearly on the front page of an insurance contract for a rental car?

A statement that the purchaser's personal motor vehicle insurance may cover collision damage to the rental car

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT

Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.

Sara owns a fire insurance policy on her house. If her home is totally destroyed in a fire, how much will the insurer be liable for?

The actual cash value of the property at the time of loss

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy

All of the above are true

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for

Uninsured motorists coverage

Transportation expenses are covered under a Personal Auto Policy for

$20 per day, for a maximum of $600

Which of the following perils is covered by flood insurance?

Mudslide caused by accumulations of water under the ground

Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as

Representations.

In commercial policies, who has control of the policy?

First named insured

Which of the following could be covered by a HO policy?

An oriental rug in an on-premises apartment

Adam is injured in a car accident caused by John. What kind of insurance would cover John's obligation to pay for Adam's injuries?

Liability insurance

An insurance producer may not act as an agent for an insurer unless he/she has become a(n) __________ agent of the insurer.

Appointed

The causes of loss insured against in an insurance policy are known as

Perils

In property insurance, actual cash value is defined as which of the following?

Replacement cost at the time of the loss, less depreciation

Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

A person who is not named as an insured on the declaration page of a policy but is protected by the policy, usually in regard to a specific interest is known as a

Additional insured

The crime of forced entry into the premises of another by a person or persons with felonious intent, is defined as a

Burglary

How long does a producer have after writing a Fire insurance contract to have the building inspected

90 days

In insurance, an offer is usually made when

The application is submitted

Which of the following describes the transfer of a legal right or interest in an insurance policy

Assignment

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered

Vacant.

Under Tennessee law, the limits for uninsured motorist coverage must be equal to which of the following?

The bodily injury liability limits stated in the insured's policy

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written

Stated amount

What do individuals use to transfer their risk of loss to a larger group?

Insurance

Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value

They are automatically provided with replacement cost coverage

For a producer to share his commission with another producer, which of the following must be true?

Both producers must be currently licensed for the same line of authority as the transaction

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty.

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation

Negligence is defined as

The failure to do what a reasonable prudent person would do under given circumstances.

Jenne is involved in an auto accident, and the driver of the other car flees the scene of the accident. Jenne is injured in the accident and is taken to the emergency room. Jenne DOES NOT have the right to recover damages under the uninsured motorist prov

All of above would give Jenne the right to recover damages under the uninsured motorist provision.

In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention.

Replacement cost is defined as

Full replacement of property at its current cost, new and without reduction for depreciation.

Insurance is a contract by which one seeks to protect another from

Loss

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

When a producer was reviewing a potential customer’s insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

Three years ago, an insured moved to an unfurnished apartment. She bought new furniture that cost $9,000. Last week, there was a fire in the apartment that destroyed the furniture. Replacement cost is $10,500. The adjuster told the insured her furniture d

$8,000

Who is personally liable for all contracts of insurance unlawfully made within Tennessee on behalf of an unauthorized insurer?

The individual making the contract on behalf of the unauthorized insurer is liable.

Sally wants to buy a fire insurance policy on her house. The building is worth $80,000. What is the maximum amount of fire insurance that Sally can buy in her policy?

$80,000

What is the minimum required age for an insurance producer in this state?

18 years old

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss

Nothing

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is

Considered underinsured.

Which method of loss valuation is contrary to the basic concept of indemnity?

Replacement cost

Which of the following is NOT included in the definition of personal risk insurance?

Insurance on an auto used for the a small business

A policy that insures all property at multiple locations for a single amount is referred to as

Blanket

What type of coverage do umbrella policies provide?

Excess coverage over an underlying or primary policy

What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?

Open peril policy

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called

Pro rata liability.

Sally has a property insurance policy that is not subject to any coinsurance requirements. Her policy has a set amount of insurance scheduled for her property. What loss valuation method does her policy use?

Stated amount

All of the following are true regarding deposit premium EXCEPT

It is 50% of the actual premium.

With respect to the business of insurance, a hazard is

Any condition or exposure that increases the possibility of loss.

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation.

Any licensed person in this state may be assessed a civil penalty for an unintentional violation of a state insurance statute up to

$1,000.

What type of compensatory damages will pay for pain and suffering and disfigurement?

General

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

insurable interest in the property covered in a policy must be proven..

at time of loss

liability imposes on one party as a result of the actions of another person ( parent/child, employer/employee) is know as

vicarious liability

An insured owns a buliding tjat is valued at $400.00. to comply with the 80% coinsurance provision

80% of the property's ACV or more

An insured is applying for a casualty insurance policy. one of the condition of the policy allows the insurance company to inspect the insured's books. at the end of the policy term to make suire sufficent premium has been collected for the exposure she p

Deposit preminum audit

events in which the principal has both the chance of winning or losing are classified as?

specultive risk

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage niether expected nor intended.

ACCIDENT