To be considered an insurable risk, a loss may NOT be
catastrophic
Which of the following persons would be required to hold a producer license?
a nonresident agent who negotiates insurance contracts
Which of the following is the oldest known type of insurance?
ocean marine
The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks?
the difference in the actual cash value as a pair and as a single
Which of the following additional perils is covered under both of the Basic and Broad forms in dwelling policies?
internal explosion
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
A bond is written for a set limit, and the surety will be liable only for this amount. This limit is known as the
penalty
In insurance, an offer is usually made when
the application is submitted
All of the following actions by a producer may be grounds for license revocation or non-renewal EXCEPT
participating in controlled business
In personal auto policies, the term "you" refers to
the named insured
Business personal property coverage form covers all of the following except:
automobiles held for sale
in dwelling policies, automatic increase in insurance is
coverage by endorsement
To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than
6 stories
Elaborate homes with replacement costs greater than ACV or market value are insured on the
HO-8 Form
Which of the following dwelling coverage forms would pay replacement cost for the dwelling?
DP-2 and DP-3
Business personal property coverage insures property out in the open if it is
Within 100 feet of the described premises
A runaway shopping cart injures a customer in a supermarket's parking lot. Coverage for this claim would be provided under
premises and operations
Which of the following businesses would be eligible for a businessowners policy?
Hill & Morton Funeral Home
The designation symbols used in commercial auto policies can be found in which policy section?
covered auto
Which of the following is used in the formula for calculating the actual cash value (ACV) of a property?
replacement cost
What type of bond guarantees that the principal will complete the contract as agreed upon?
performance bond
Peril is most easily defined as
The cause of loss insured against
An insured building has had no residents for 10 years and it is empty of personal belongings. From an insurance standpoint, the building is
vacant
Under a workers compensation policy, premiums will be determined when
the policy period ends
Which commercial property form is used to insure buildings while under construction?
Builders risk
Which of the following information will be found in the Declarations page of the commercial property policy?
description of the policy insured
An insured is injured while driving his own car. Which personal auto coverage will pay for the loss?
Part B-Medical Payments
According to the BOP definitions, which of the following does NOT mean valuable papers and records?
Securities
Supplementary payments under the personal auto policy include all of the following EXCEPT?
unlimited cost of bail bonds
Items of property that would be difficult to appraise after a loss are best insured with
stated-amount insurance
Which of the following is NOT consideration in an insurance policy?
the application given to a perspective insured
Who is considered a nonresident agent?
an agent who is licensed in another state, but is allowed to transact insurance in this state
Events or conditions that increase the chances of an insured loss occurring are called?
hazards
An insured has purchased a used car. When does collision coverage for this car begin?
immediately
An insurance agent sold an insurance policy to his spouse. What type of transaction is this?
controlled business
In the split limit coverage in personal auto policies, which limit indicated the maximum amount the policy will pay for bodily injury per person?
1st limit
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy?
They do not change
Which of the following coverages is NOT included in the DP-1 form?
additional living expense
Which of the following perils would not be covered by the dwelling policy if the dwelling has been vacant for over 60 days?
vandalism
When doing business in this state an insurance company that is formed under the laws of another state is classified as what type of insurer?
foreign
What is the main purpose of insurance regulation?
to protect the general public
Representations are statements made by the applicant for insurance that are
considered true to the best of the applicant's knowledge
Fair Rental Value coverage in the dwelling policy is similar to which homeowners policy form?
Loss of use
All of the following coverages are included in the businessowners form without requesting coverage extensions except
newly acquired property
Section I of a Businessowners policy pertains to what type of coverage?
property
Coverage A- Bodily Injury and Property Damage in the commercial general liability policy will cover
Losses due to the insured's negligence
Within the first 60 days of coverage under the dwelling policy form, how much notice is required for policy cancellation?
10 days
What is the maximum number of boarders per unit that would be allowed the homeowners policy?
2
In a personal auto policy, which of the following describes coverage for uninsured motorist?
Part C
In property insurance, insurable interest in the property covered in a policy must be proven
at time of loss
Who is covered by an HO-4 policy?
tenants
What is the maximum number of roomers or boarders for properties insured under the dwelling policy?
5
The transfer of a legal right or interest in an insurance policy is called
an assignment
Dwelling policy Coverage C- Personal Property will cover all of the following EXCEPT
animals and birds
A policy that provides coverage for an injury or damage only if it is first reported during the policy period is called
claims-made form
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?
6o days
What type of coverage is Coverage E in homeowners policies?
Personal Liability
What is the main distinction between a hired auto and a nonowned auto?
Who owns the auto
How is the premium paid for the businessowners policy?
one indivisible premium
Which of the following is NOT a primary property coverage in homeowners policy?
collapse
The occurrence form trigger is based on which of the following?
the date when the lose occurs
All else being equal, which of the following will NOT be considered unfair discrimination by insurers?
discriminating in policy benefits based on the insurer's habits and lifestyle
What type of license represents the insurance company?
agent
In which of the following sections of a commercial auto policy will the insured find specific information about the policy period?
conditions
A liability policy has spilt limits of 25/50/30. Which of the following indicates the maximum amount payable for damage to a person's property?
$30,000
A businessowners policy is
a self-contained prepackaged policy
What is the deductible of a personal liability umbrella policy called?
SIR
An insurance policy that covers all risks of loss that are not specifically excluded is an
open peril policy
Which commercial property form is used to insure buildings while under construction?
builders risk
Which of the following is NOT one of the Other Coverages available with the personal liability supplement?
bankruptcy
Negligence may be defined as
failure to use reasonable and prudent care
Professional liability coverage protects the insured against legal liability resulting from
errors and omissions
The businessowners liability coverage form will cover medical expenses incurred and reported within how many years of the accident date?
1 year
Which of the following is NOT a duty of the Department of Insurance?
Setting premium rates
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
rebating
Which of the following information will NOT be found in the common policy declarations of a commercial package policy?
insuring agreement
Which policy in HO policies states that insurance applies seperately to each insured?
sever-ability of insurance
What is the purpose of NFIP?
The fill the coverage gap in flood coverage
When agents are acting within the scope of their contract, their actions will be assumed to be those of the
insurer
All of the following are major coverages included in the homeowners policy except
loss of income
The businessowners policy (BOP) extension coverage for personal property off premises is limited to
$10,000
An additional loss that results from a direct loss of property is called an
indirect loss
Which of the following is the Fair Rental Value coverage in the dwelling policy?
Coverage D
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
What are the 2 types of compensatory damages?
special and general
For the purposes of insurance, risk is defined as
the chance of loss
An insurer deliberately makes a maliciously critical statement about another insurer is guilty of an unfair trade practice called
defamation
If an insurer has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?
auto policy
For which of the following will a BOP property coverage form pay?
outdoor signs attached to the building
Which of the following would NOT be considered a flood?
Sewer backup