The Newly Acquired or Constructed Property coverage extension in a Commercial Property policy
A. covers the newly purchased or constructed building for a limit of $100,000 and the business personal property (contents) for a limit of $100,000.
B. covers th
B
Which of the following perils are NOT covered by the Equipment Breakdown Coverage policy?
A. Malfunction of pressure or vacuum equipment
B. Mechanical malfunction, including rupture or bursting
C. Electrical malfunction, including arcing
D. Valve or fitti
D
Under the standard Homeowner's policy, Coverage F - Medical Payments to Others, the policy will cover the necessary expenses medical expenses incurred for up to ________ from the date of the accident.
A. six months
B. twelve months
C. three years
D. five
C
Which of the following is INCORRECT concerning premiums collected by an insurance producer in Alabama?
A. Premiums are considered to be trust funds received by the producer in a fiduciary capacity.
B. The producer must account for and pay those funds to t
D
Which of the following statements is NOT true?
A. A sealed roof deck can be achieved in both new and existing homes
B. A homeowner must be reroofing in order to achieve a sealed roof deck on an existing home
C. Sealing the roof deck is a critical part of
B
The type of hazard represented by slick floors is called a
A. speculative hazard.
B. moral hazard.
C. morale hazard.
D. physical hazard.
D
Which of the following lines of insurance CANNOT be included in the Commercial Package policy?
A. Aviation
B. Casualty
C. Crime
D. Property
A
Which one of the following coverages is NOT included in the Commercial Crime insuring agreements but can be added by endorsement?
A. Money & securities
B. Employee dishonesty
C. Extortion
D. Forgery or alteration
C
Coverage D under a standard Homeowner's policy contains coverage for
A. the dwelling and all permanent attachments.
B. other structures on the insured premises.
C. personal property.
D. loss of use
D
Under the Personal Auto policy, Liability coverage EXCLUDES
A. breakage of glass to the insured's vehicle.
B. damage or injury done intentionally by the insured.
C. property damage caused by the insured to another person's auto.
D. expenses for emergency
B
Xavier's car is insured by ABC Insurance Company. Xavier took out a loan with First City Bank to purchase the car, and is still making payments on the car loan. Who has an insurable interest in the car?
A. Xavier only
B. Xavier and First City Bank
C. ABC
B
In Alabama, uninsured motorist coverage is always included in an automobile liability policy unless
A. the insured rejects it orally.
B. it is specifically rejected by the insured in writing.
C. the insured has multiple policies.
D. all of the above
B
When your employee negligently injures a third party while conducting some job operation away from your business premises, which section of your Commercial General Liability policy will respond?
A. Operations Liability
B. Personal Injury
C. Premises Liabi
A
Which of the following statements about surplus line brokers is CORRECT?
A. An Alabama resident must be licensed as a property and casualty insurance producer to hold a surplus line broker license.
B. An Alabama resident must post a bond of at least $50,0
B
Which of the following is NOT a Supplementary Payment under the Personal Auto policy?
A. Reasonable expenses incurred by the insured at the company's request
B. Premiums on any bonds required
C. up to $200 per day for the insured's loss of wages while att
D
In an Umbrella Liability policy, the amount the insured must satisfy before payment may be made under the Umbrella for a loss NOT covered by an underlying policy is called the
A. excess liability.
B. reinsurance level.
C. self-insured retention.
D. disapp
C
Which of the following property is covered under the Building and Business Personal Property coverage form?
A. Property being illegally traded
B. Paper stock on a loading dock at the insured's premises awaiting pickup
C. Cash contained in a cash register
B
What is subrogation?
A. A device to pro rate an insurance company's liability when other insurance covers the same property.
B. A means of settling loss disputes.
C. Transferring to the insurance company the insured's right to collect from a negligent thi
C
Coverage B under a standard Homeowner's policy contains coverage for
A. the dwelling and all permanent attachments.
B. other structures on the insured premises.
C. personal property.
D. loss of use.
B
Which of the following is NOT one of the categories most states typically use to determine the level of disability under Workers Compensation laws?
A. Temporary partial
B. Temporary permanent
C. Permanent partial
D. Permanent total
B
Frank owns a power boat with a 100 horsepower motor. Which is true of Frank's coverage for the boat under his Homeowner's policy?
A. Frank would have no property or liability coverage for the boat
B. Frank would have $1000 property coverage and limited li
C
In the Commercial Crime forms, an insured can obtain coverage for the theft of money and securities while the property is
A. inside the premises.
B. outside the premises.
C. Both A and B
D. Neither A nor B
C
The insured under a property insurance policy must carry insurance equal to a specified percentage of the property's value to qualify for replacement cost coverage. This is an example of the
A. Coinsurance clause.
B. Liberalization clause.
C. Other Insura
A
Coverage C under a Dwelling policy contains coverage for
A. the dwelling and all permanent attachments.
B. other detached structures on the insured premises.
C. personal property.
D. additional living expenses.
C
What type of Ocean Marine insurance covers goods while they are in transit over water?
A. Cargo
B. Freight
C. Hull
D. Protection and Indemnity
A
The Broad Cause of Loss form for Homeowner's policies includes the Additional Coverage of
A. collapse.
B. fire.
C. earthquake.
D. volcanic action.
A
The Declarations Page in a Homeowner's Policy contains all of the following EXCEPT
A. name and address of the insured.
B. the make and model year of your automobile.
C. selected deductible amount.
D. selected liability limit.
B
Common elements, such as playground equipment, which condominium unit owners own jointly are covered by the:
A. Condominium Association coverage form.
B. Condominium Unit Owners coverage form.
C. Both of the above
D. None of the above
A
The authority given by the company to the agent that is NOT formally written or communicated is called
A. ambiguous authority.
B. express authority.
C. implied authority.
D. reasonable authority.
C
If an insurance company intentionally prolongs the claims process, forcing the policyowner to sue for damages, the company has violated the principle of
A. Utmost Good Faith.
B. Insurable Interest.
C. Warranties.
D. Representations.
A
Under the Personal Auto policy, Uninsured Motorists coverage provides coverage for bodily injury for which the insured is legally entitled to recover that results from an accident with
A. an uninsured driver.
B. a hit and run driver.
C. a driver whose ins
D
An insurer compares what it paid in claims against the amount received in premium to determine its
A. expense ratio.
B. loss ratio.
C. underwriting profit.
D. manual rates
B
The insured purchased her television set three years ago for $500. At the time of a fire loss it had depreciated by $200. It would cost $600 today to buy a replacement. What is the actual cash value of the destroyed television?
A. $200 [amount of deprecia
C
A thief hides in a store until it closes. He then takes insured property and breaks out of the store. In the Commercial Crime policy this would be called
A. Breaking and Entering.
B. Burglary.
C. Robbery.
D. Vandalism.
B
To extend coverage under the Personal Auto policy for a motorcycle, the insured must purchase the
A. Miscellaneous Type Vehicles endorsement.
B. Named Non-Owner endorsement.
C. Extended Nonowned Coverage endorsement.
D. Uninsured Motorists endorsement.
A
An insured who needs coverage for her home and its contents against loss caused by earthquake can obtain it with
A. a Commercial Property coverage form.
B. an unendorsed Dwelling policy.
C. an unendorsed Homeowner's policy.
D. either a separate Earthquake
D
In calculating the premium for a Workers Compensation policy, an experience modification factor over 1.0 will result in what?
A. A premium increase
B. A premium reduction
C. No change in the premium
D. Any of the above.
A
A surety bond is a (an)
A. two-party contract.
B. four-party contract.
C. three-party contract.
D. insurance contract.
C
Which of the following provides temporary coverage for the insured between the time the application is made and the policy is issued?
A. Binder
B. Certificate of insurance
C. Endorsement
D. Insuring Agreement
A
Providing misleading comparisons of the terms and benefits of an insurance policy for the purpose of inducing the policyholder to change to another policy is known as
A. rebating.
B. twisting.
C. embezzlement.
D. coercion.
B
The minimum limits in Alabama for automobile liability are
A. 20/40/20.
B. 20/50/20.
C. 25/50/25.
D. 30/60/30.
C
Which one of the following covers a trucker while pulling an empty trailer or operating the tractor with no trailer?
A. Business Auto coverage form
B. Motor Truck Cargo policy
C. Trip Transit policy
D. Truckers coverage form
D
Under the Dwelling policy, personal property away from the premises anywhere in the world
A. has full coverage.
B. is covered for up to 10% of the amount of coverage for personal property.
C. is not covered.
D. is covered only while at a secondary residen
B
Which of the following statements about notice of cancellation of an Alabama automobile policy is CORRECT?
A. For reasons other than non-payment of premium, the insurer must provide at least 20 days' notice of cancellation of an automobile policy.
B. The
A