An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it?
Contractors equipment floater.
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied.
All of the following actions by a person could be described as risk avoidance EXCEPT:
Investing in the stock market.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the
Mutual.
What authorities can an agent hold?
Express and Implied.
In insurance, an offer is usually made when:
The completed application is submitted.
All of the following are examples of risk retention EXCEPT:
Premiums.
What documentation grants express authority to an agent?
Agents contract with the Principal.
Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance?
Exposure.
What is the major difference between a stock company and a mutual company?
Ownership.
A participating insurance policy may:
Pay dividends to the policy owner.
The authority granted to an agent through the agent's contract is referred to as:
Express Authority.
In insurance transactions, fiduciary responsibility means:
Handling insurer funds in a trust capacity.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated?
Consideration.
What is the term for the causes of loss insured against in a insurance policy?
Perils.
Perils is most easily defined as:
The cause of loss insured against.
The part of a policy that that clarifies terms in the policy is the:
Definitions.
What are the two types of compensatory damages?
Special and general.
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?
Specific.
What provision in a property policy applies when the insurer broadens coverage but does not increase the premium?
Liberalization.
Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay
$100,000.
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred to protect damaged property from further loss, or defense expenses?
Additional coverage.
All of the following are conditions commonly found in the insurance policy EXCEPT:
Insuring agreement.
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?
Open peril policy.
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.
The declarations page of the homeowners policy provides all of the following information EXCEPT:
A statement that earthquake damage is not covered.
Which of the following best expresses the purpose of a stated value contract?
To pre-establish the amount of coverage available for property items that are difficult to value.
After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured'
Intervening cause.
According to the doctrine of contributory negligence, when an individual is found to have contributed to his or her own loss in any way, another party?
May not be held liable.
Which of the following policies does NOT contain an automatic reinstatement provision?
General liability written with an aggregate limit.
Which of the following is NOT covered by the condominium unit owners endorsement?
Furniture in the building.
Which of the following is NOT true concerning the
fair rental value coverage provided in a dwelling
policy?
Loss or expense caused by the cancellation of
a lease is covered.
.Which of the following property coverages
would provide protection to contents damaged
by fire?
Coverage C.
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?
Loss by vandalism and malicious mischief is excluded.
In a dwelling policy, which of the following other structures would be covered?
A structure rented to a neighbor for use as a private garage.
In dwelling policies, automatic increase in insurance is:
Coverage by endorsement.
The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?
30 days.
All of the following would be eligible for
coverage under the dwelling policy EXCEPT:
A house with 5 residential units.
All of the following are characteristics of the
dwelling policy, EXCEPT:
The dwelling must be owner occupied.
On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is:
The same as provided on the DP-2 Broad Form.
Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT
Animals and birds.
Replacement cost coverage is provided in both the broad and special form dwelling policies when the amount of insurance in the dwelling is:
At least 80% of the replacement cost at the time of loss.
All of the following are perils covered under the broad form dwelling policy EXCEPT:
Theft.
The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT:
$1,000 on silverware.
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy?
Theft of a renter's lawnmower used to service the premises.
Within how many years of a loss may an
insured bring a lawsuit against an insurer,
according to dwelling policy?
2 years.
Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment?
HO-4.
The difference in the contents coverage on an HO-3 and HO-5 is which of the following?
Contents are covered open peril on HO-5 and named peril on HO-3.
Which of the following losses would NOT be covered by a homeowners policy?
A coin collection valued at $500 lost in a fire.
All of the following are true of Coverage B - Other Structures EXCEPT:
It must be added by endorsement to a homeowners policy.
Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correc
Coverage C limits will no longer apply to the jewelry insured by the endorsement.
Which of the following types of property would be covered in homeowners coverage forms?
Landlord furnishing in an on-premises apartment.
Additional coverages in the liability section of a homeowners policy cover all the following EXCEPT:
Damage to a third party property for which the insured is legally liable.
The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?
All volcanic eruptions within a 72-hour period will be considered one occurrence.
Which of the following homeowners policies covers those who rent their dwelling?
HO-4.
An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover?
A child trips over a toy in the driveway, cuts her knee, and requires stitches.
Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy?
Scheduled personal property endorsement.
What type of coverage is Coverage E in homeowners policies?
Personal liability.
Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will:
Either pay or defends as it decides.
Which of the following homeowners forms is designed for individuals that own and reside in a condominium?
HO-6.
Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?
Damage to the dwelling caused by lava or dust from a volcanic eruption.
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?
$6,000 would be paid under other-than-collision coverage.
Driver A has a personal auto policy with Part C - UM/UIM limits of 100/300. He is injured by Driver B who has Part A - Bodily Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125,000 in medical
$50,000.
When would uninsured motorist coverage apply?
Only when the other party is legally liable but has no insurance.
In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?
1st limit.
Which of the following would NOT qualify as a hired auto?
An auto borrowed from an employee.
A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the f
The damage occurred when the concrete fell.
When would uninsured motorist coverage apply?
Only when the other party is legally liable but has no insurance.
An owner of a parking lot wants liability coverage for damage to vehicles while in her custody. She needs:
Garagekeepers coverage.
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.
An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?
Collision.
Of the following, which is NOT defined in the personal auto policy as an "uninsured motor vehicle"?
A vehicle owned by a government entity.
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?
Individual named insured.
When are the limits for uninsured motorist coverage set?
When the coverage is purchased.
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for:
Uninsured motorists coverage.
Under the business auto coverage form, mobile equipment is covered for liability insurance
When being carried or towed by a covered auto.
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage.
Which of the following is NOT found in a commercial package policy?
Certificate of authority.
Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT:
Prepackaged software.
The extra expense coverage form provides:
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year?
Peak season.
A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to:
$1,000.
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?
Up to $2,000.
All of the following property is insured under Coverage A of a Farm Policy EXCEPT:
Personal lawnmower of a tenant used to service the described location.
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect unde
$175,000.
An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it?
Contractors equipment floater.
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied.
All of the following actions by a person could be described as risk avoidance EXCEPT:
Investing in the stock market.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the
Mutual.
What authorities can an agent hold?
Express and Implied.
In insurance, an offer is usually made when:
The completed application is submitted.
All of the following are examples of risk retention EXCEPT:
Premiums.
What documentation grants express authority to an agent?
Agents contract with the Principal.
Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance?
Exposure.
What is the major difference between a stock company and a mutual company?
Ownership.
A participating insurance policy may:
Pay dividends to the policy owner.
The authority granted to an agent through the agent's contract is referred to as:
Express Authority.
In insurance transactions, fiduciary responsibility means:
Handling insurer funds in a trust capacity.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated?
Consideration.
What is the term for the causes of loss insured against in a insurance policy?
Perils.
Perils is most easily defined as:
The cause of loss insured against.
The part of a policy that that clarifies terms in the policy is the:
Definitions.
What are the two types of compensatory damages?
Special and general.
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?
Specific.
What provision in a property policy applies when the insurer broadens coverage but does not increase the premium?
Liberalization.
Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay
$100,000.
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred to protect damaged property from further loss, or defense expenses?
Additional coverage.
All of the following are conditions commonly found in the insurance policy EXCEPT:
Insuring agreement.
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?
Open peril policy.
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.
The declarations page of the homeowners policy provides all of the following information EXCEPT:
A statement that earthquake damage is not covered.
Which of the following best expresses the purpose of a stated value contract?
To pre-establish the amount of coverage available for property items that are difficult to value.
After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured'
Intervening cause.
According to the doctrine of contributory negligence, when an individual is found to have contributed to his or her own loss in any way, another party?
May not be held liable.
Which of the following policies does NOT contain an automatic reinstatement provision?
General liability written with an aggregate limit.
Which of the following is NOT covered by the condominium unit owners endorsement?
Furniture in the building.
Which of the following is NOT true concerning the
fair rental value coverage provided in a dwelling
policy?
Loss or expense caused by the cancellation of
a lease is covered.
.Which of the following property coverages
would provide protection to contents damaged
by fire?
Coverage C.
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?
Loss by vandalism and malicious mischief is excluded.
In a dwelling policy, which of the following other structures would be covered?
A structure rented to a neighbor for use as a private garage.
In dwelling policies, automatic increase in insurance is:
Coverage by endorsement.
The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?
30 days.
All of the following would be eligible for
coverage under the dwelling policy EXCEPT:
A house with 5 residential units.
All of the following are characteristics of the
dwelling policy, EXCEPT:
The dwelling must be owner occupied.
On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is:
The same as provided on the DP-2 Broad Form.
Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT
Animals and birds.
Replacement cost coverage is provided in both the broad and special form dwelling policies when the amount of insurance in the dwelling is:
At least 80% of the replacement cost at the time of loss.
All of the following are perils covered under the broad form dwelling policy EXCEPT:
Theft.
The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT:
$1,000 on silverware.
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy?
Theft of a renter's lawnmower used to service the premises.
Within how many years of a loss may an
insured bring a lawsuit against an insurer,
according to dwelling policy?
2 years.
Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment?
HO-4.
The difference in the contents coverage on an HO-3 and HO-5 is which of the following?
Contents are covered open peril on HO-5 and named peril on HO-3.
Which of the following losses would NOT be covered by a homeowners policy?
A coin collection valued at $500 lost in a fire.
All of the following are true of Coverage B - Other Structures EXCEPT:
It must be added by endorsement to a homeowners policy.
Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correc
Coverage C limits will no longer apply to the jewelry insured by the endorsement.
Which of the following types of property would be covered in homeowners coverage forms?
Landlord furnishing in an on-premises apartment.
Additional coverages in the liability section of a homeowners policy cover all the following EXCEPT:
Damage to a third party property for which the insured is legally liable.
The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?
All volcanic eruptions within a 72-hour period will be considered one occurrence.
Which of the following homeowners policies covers those who rent their dwelling?
HO-4.
An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover?
A child trips over a toy in the driveway, cuts her knee, and requires stitches.
Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy?
Scheduled personal property endorsement.
What type of coverage is Coverage E in homeowners policies?
Personal liability.
Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will:
Either pay or defends as it decides.
Which of the following homeowners forms is designed for individuals that own and reside in a condominium?
HO-6.
Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?
Damage to the dwelling caused by lava or dust from a volcanic eruption.
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?
$6,000 would be paid under other-than-collision coverage.
Driver A has a personal auto policy with Part C - UM/UIM limits of 100/300. He is injured by Driver B who has Part A - Bodily Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125,000 in medical
$50,000.
When would uninsured motorist coverage apply?
Only when the other party is legally liable but has no insurance.
In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?
1st limit.
Which of the following would NOT qualify as a hired auto?
An auto borrowed from an employee.
A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the f
The damage occurred when the concrete fell.
When would uninsured motorist coverage apply?
Only when the other party is legally liable but has no insurance.
An owner of a parking lot wants liability coverage for damage to vehicles while in her custody. She needs:
Garagekeepers coverage.
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.
An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?
Collision.
Of the following, which is NOT defined in the personal auto policy as an "uninsured motor vehicle"?
A vehicle owned by a government entity.
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?
Individual named insured.
When are the limits for uninsured motorist coverage set?
When the coverage is purchased.
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for:
Uninsured motorists coverage.
Under the business auto coverage form, mobile equipment is covered for liability insurance
When being carried or towed by a covered auto.
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage.
Which of the following is NOT found in a commercial package policy?
Certificate of authority.
Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT:
Prepackaged software.
The extra expense coverage form provides:
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year?
Peak season.
A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to:
$1,000.
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?
Up to $2,000.
All of the following property is insured under Coverage A of a Farm Policy EXCEPT:
Personal lawnmower of a tenant used to service the described location.
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect unde
$175,000.