Exam FX part 3
Terms in this set (80)
An endorsement is available for hired and nonowned auto on BOP liability...
A. Only if the insured does not have commercial auto coverage
B. In addition to commercial auto coverage
C. Only if the insured has 4 or more employees
The Mail Coverage Form is always written on a reporting form basis; after the end of each reporting period shown in the declarations, reports are due within...
A. 45 days
B. 15 days
C. 30 days
D. 31 days
The inland marine coverage form for outdoor signs provides "open peril" coverage and excludes coverage for breakage only during...
C. Installation or dismantling
D. All of the above
Which of the following is covered under the Mail floater of a Commercial Inland Marine policy ONLY if is sent by registered mail?
A. Currency and unsold travelers checks
B. Postage and revenue stamps
C. Money orders, checks, drafts, notes
D. Bonds, stocks, stock certificates, coupon attached bonds
Which of the following other coverages is NOT included in the basic form dwelling policy?
A. Breakage of glass
B. Removal coverage
C. Personal property temporarily away from the insured premises
D. Tenant's improvements, alterations, and additions
Under the conditions of a Film Coverage Form, how long must the insured maintain records of each production?
A. 3 years after the policy expires
B. 5 years after the policy expires
C. 7 years after production completion
D. 1 year after production completion
Which of the following is true regarding single dwellings that are insured at least 80% of the replacement value?
A. They are subject to a $1000 deductible
B. They are automatically provided with replacement cost coverage
C. They qualify for maximum compensation under the flood insurance program
D. They are excluded from the flood insurance policy
A BOP (business owners policy) is most similar to...
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?
A. 10 days
B. 30 days
C. 45 days
D. 60 days
An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase...
The extension of coverage under the Commercial Fine Arts Floater includes coverage for newly acquired property for a maximum of...
The common policy condition is a modular part combined with other parts to create the contract. The "common policy condition" section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy?
A. The first named insured may cancel the policy at any time by giving written notice to the insurer
B. Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained
C. Requests for any change in the policy requested by the insured may be made by the second name insured
D. The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy
Which of the following statements regarding coverage for the flood and earthquake perils is true?
A. Flood and earthquake coverage us available only through the government
B. Flood insurance usually is provided in property policies. However, earthquake insurance is available by endorsement only
C. Both are excluded perils in all property policies
D. Flood and earthquake coverage is available in all policies
Professional photographers and musicians may insure their equipment with...
A. A PAF
B. A commercial articles form
C. A theatrical property coverage form
D. A block policy
Which of the following statements concerning the builders risk coverage form is correct?
A. It may be written on a reporting form or the completed value of the structure
B. It usually continues in effect for 1 year after completion of the structure
C. It covers the interest of the builder only, and cannot include coverage for the owner
D. It may not be written for perils other than fire and extended coerage
Which of the following dwelling coverage forms would pay replacement cost for the dwelling?
A. DP2 and DP3
B. DP3 only
C. All dwelling property coverage forms
The type of insurance used to cover goods for one specific trip is called...
A. Commercial property
B. Bailee policy
C. Motor truck cargo policy
D. Trip transit
Which of the following may be covered by Electronic Data Processing coverage from under and Inland Marine policy?
A. Computer hardware that is specifically scheduled
B. Extra expense the insured incurs to continue the business following a loss
C. Data processing media, including magnetic tapes or paper tapes, punch cards, and discs
D. All of these are covered
What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?
A. $15,000 all expenses incurred during a 12-month period
B. $20,000 all expenses incurred during a 12-month period
C. $5,000 for all expenses during a 12-month period
D. $10,000 for all expenses incurred during a 12-month period
An insured owns a large dog. The first day he has to leave the dog home alone to go to work, the insured comes back to find his $400 couch torn apart, his $100 coffee table chewed up, his $50 window curtain shredded, and a $200 window pane shattered where his dog jumped through. The insured has personal property coverage under a special form of dwelling policy. How much of this loss will the policy cover?
Which of the following would NOT be considered an insured under a homeowners policy?
A. Residents of the household that are blood relatives of the insured
B. An individual, under 21, in the care of but not related to the insured
C. Individuals named in the policy declarations
D. A divorced spouse living in another state
Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for those reports?
A. By the 15th of each month
B. 20 days after the report is due
C. Within 30 days after the end of each month
D. Within the first 10 days of each month
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?
B. Reassignment and modification
D. Transfer of rights and duties under the policy
Which of the following would NOT be considered a flood?
A. Overflow of tidal waves
C. Runoff of surface waters
D. Sewer backup
Builder's risk is most often written on which form?
A. Scheduled form
B. Reporting form
C. Specific value form
D. Completed value form
Which of the following is NOT found in a commercial package policy?
A. Certificate of authority
B. Common policy conditions
C. Common policy declarations
D. Interline endorsements
The Physicians and Surgeons Equipment Floater is NOT intended for which of the following?
A. Waiting room furniture in a doctor's office
B. Office equipment located in a dentist's office
C. Medical supplies located in a hospital
D. Surgeon's supplies located in the surgeon's office
Which of the following is true regarding the fire department service charge under the Builders Risk form?
A. It is a high-deductible endorsement
B. It is an additional coverage
C. It is an automatic coverage for $500
D. It is not available in this form
Business personal property coverage form covers all of the following EXCEPT...
A. Machinery that is not permanently installed
C. Automobiles held for sale
D. Furniture and fixtures
A business using its own trucks to move its own cargo would insure the cargo using...
A. Motor carrier form
B. Trip transit coverage
C. Motor truck cargo - owners form
D. Motor truck cargo - truckers form
The extra expense coverage form provides...
A. Extra money for an insured whose accounts receivable records have been damaged
B. Additional money to pay for property damage losses at a covered location
C. Payment for unforeseen expenses an insured may incur while the business is shut down following a property damage loss
D. Coverage that will permit the insured to continue in business without interruption following a property damage loss
Under the HO4 and HO6 homeowners policy forms, property is insured against...
A. Special form perils
B. Comprehensive form perils
C. Broad form perils
D. Basic form perils
Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT
A. Computer software
C. Animals and birds
D. Hobby aircrafts
The most the insurer will pay for a loss under a business owners policy is...
A. 80% of the loss
B. 20% of the loss
C. The limit of insurance after the deductible is paid
D. The amount of the loss minus the deductible
Under the provisions of the business income coverage form, all of the following are true EXCEPT...
A. The insured is reimbursed for payroll that continues after the loss begins
B. The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first
C. If the insured and insurer are unable to come to agreements as to the value of the loss, either party may make a written demand for an appraisal
D. The insured agrees to resume all of part of operations as quickly as possible
A grave marker was damaged by vandals. It would cost $3000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?
Under the Commercial Property Coverage program, the Basic Causes of Loss form insures against loss caused by...
A. Power failure off the premises
B. Sprinkler leakage
C. Earth movement
D. Nuclear hazard
In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
C. First named insured
D. Last named insured
Uncle Billy's Burger Bar was forced to close for 10 days in August when the power company's transformer was destroyed by lightning, and Uncle Billy was without electricity. Which of the following endorsements could be added to Billy's business owners policy that would provide protection against loss of income from such events?
A. Utility services - time element endorsement
B. Utility services - direct damage endorsement
C. Personal injury endorsement
D. Protective safeguard endorsement
Individuals in the business of selling construction equipment and mobile equipment should insure with...
A. A contractor's equipment floater
B. An installation floater
C. A PFF
D. Equipment dealers coverage form
How long is the waiting period after the application has been accepted before flood coverage goes into effect?
A. 30 days
B. 6 months
C. 12:01 am on the next day
D. 5 days
An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What would cover this individual to insure it?
A. Contractors equipment floater
B. Bailee customers form
C. Builders risk form
D. General property form
Which policy condition in homeowners policies state that insurance applies separately to each insured?
A. Payment of claim
B. Severability of insurance
D. Limit of liability
All of the following types of property are covered by a standard builders risk form EXCEPT...
A. Temporary structures
B. Machinery that with be permanently attached to the building
C. Tools 50 feet away from the building
D. The building itself
Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?
A. Up to $10,000 aggregate for the policy period
B. Up to $5,000 aggregate for the policy period
C. Up to $1,000 per occurrence
D. Up to $2,500 per occurrence
When does the coverage begin under the builders risk form?
A. On the date the policy is issued
B. On the date the policy is delivered
C. On the date the premium is paid
D. On the date construction starts
To be eligible for business owners policy (BOP) coverage, an office building CANNOT be higher than...
A. 2 stories
B. 3 stories
C. 6 stories
D. 10 stories
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?
A. 5 days
B. 15 days
C. 30 days
D. 60 days
Under the provisions of the business income coverage form, all of the following are true EXCEPT...
A. The insured agrees to resume all or part of operations as quickly as possible
B. The insured I s reimbursed for payroll that continues after the loss begins
C. The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first
D. If the insured and insurer are unable to come to agreement as to the value of the loss, either part may make a written demand for an appraisal
Which of the following is covered under the Camera and Musical Instruments Dealers floater?
A. A musical instrument sold and delivered to a customer
B. Furniture, fixtures, and office supplies in a music store
C. Money kept on premises of a camera shop
D. A customer's camera left at a camera shop
Which of the following kind of property would be covered under a dwelling policy?
A. Motor vehicles
C. Pontoon boats
An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under the homeowners policy?
A. One of the insureds is taking the boat out and injures her grandson
B. A friend rents their boat and runs it into a neighbor's dock
C. The insured's granddaughter slips on the boar and needs stitches
D. A friend borrows the boat and has an accident with another boat
A home is insured under an HO2 policy. The homeowner decides to replace the roof on the house. He wasn't able to complete the roof in one day and left a portion unfinished overnight. A heavy rainstorm causes $20,000 of damage to the interior of the house and some furniture. In this situation, the policy will pay...
A. Replacement cost of the damage
B. 80% of replacement cost
D. The ACV of the damage
An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home was severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays in a motel while the repairs are made. How much will the HO3 pay for their additional living expenses?
B. All of the expense up to the Coverage D limit
C. The cost of renting and apartment, but not the cost of the motel room
D. The cost of renting the apartment, and 50% of the cost of the motel
How much is the premium for the dwelling under construction endorsement under the dwelling policy?
A. 75% of the gross premium
B. The full value of the house
C. 50% of the actual value premium
D. The average amount of insurance during construction
Vandals do damage to glass that is part of a covered building. Under the broad form of a building and personal property policy, each glass plate will be covered for up to...
All of the following are essential elements of a commercial package policy (CPP) EXCEPT...
A. Interline endorsements
B. Declarations page
C. Policy conditions
D. Valuations and/or settlement provisions
The main difference between an HO4 and an HO6 is...
A. HO6 provides limited dwelling coverage as well as contents coverage
B. HO4 does not cover additional living expenses
C. HO6 does not cover additional living expenses
D. HO4 provides limited dwelling coverage as well as contents coverage
Which of the following is NOT true about earthquake coverage?
A. Coverage may be added to property policies by endorsement
B. Coverage may be written in a Difference of Conditions policy
C. Coverage is commonly provided through a federally-funded program
D. Coverage is excluded by most property forms
An insured's home is mortgaged by the local bank. The insured us required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true?
A. Losses will be paid to the mortgagee and the mortgagor as their interest appears
B. Coverage is suspended if the building is mortgaged and the insurer is not told of his indebtedness
C. The mortgagee must settle with the mortgagor in the even of a loss
D. The additional premium required for the mortgage endorsement must be paid by the mortgage
In a dwelling policy, which of the following other structures would be covered?
A. A structure used as a part of a farming operation
B. A structure used by the insured in which to operate a retail business
C. A structure used by the insured to house a manufacturing operation
D. A structure rented to a neighbor for use as a private garage
Your accounts receivable records have been destroyed or damaged. Your loss may be covered with...
A. The valuable papers coverage form
B. The accounts receivable coverage form
C. Commercial property insurance
D. The commercial articles coverage form
An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?
A. Coverage E - Additional Living Expense
B. Coverage A - Dwelling
C. Coverage B - Other Structures
D. Coverage D - Fair Rental Value
What is the minimum amount of coverage that should be carried on an HO2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000?
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
A. Coverage is automatic
B. There is no coverage
C. Coverage applies without premium
D. There must be a misprint on the form
A business income coverage form would cover all of the following situations EXCEPT...
A. A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time
B. A hurricane damages the insured's building; a temporary relocation to another building is necessary
C. A replacement part for necessary equipment is ordered with overnight delivery charges
D. The building next door is damaged during a drug bust, and the area is barred from the public
In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event of a covered peril makes the premises u uninhabitable due to a covered loss?
A. Coverage B
B. Coverage C
C. Coverage E
D. Coverage A
Jean owns a craft store. The protective safeguards endorsement of her BOP requires the store to have a functional automatic sprinkler system. A winter storm freezes the pipes to the sprinkler system, causing the system to shut down. How many hours does Jean have to restore the system before she must notify her insurer?
A. 12 hours
B. 24 hours
C. 36 hours
D. 48 hours
Who is covered by an HO4 policy?
A. Owners of a home
C. Owners of a vehicle
D. Owners of a condominium
Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy?
A. Personal property injury endorsement
B. Scheduled personal property endorsement
C. Personal property replacement cost endorsement
D. Blue skies endorsement
Which of the following is an example of a protective safeguard in a business owner police?
B. Professional liability endorsement
C. Automatic sprinkler system
D. Errors and omissions insurance
Which of the following IS covered under the theatrical floater of an Inland Marine policy?
A. Vehicles used on stage
B. Admission tickets
D. Jewelry made with precious stones
Which of the following would be covered under the Film Coverage Form?
A. Deterioration of a film
B. Exposure of a negative film to light
C. Electrical erasure of a tape
D. None of these are covered
Which coverage form would provide coverage for all incoming and outgoing shipments?
A. Trip transit
B. Motor truck cargo
C. Mail coverage
D. Annual transit
Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will...
A. Proceed according to your request
B. Defend with the hopes of not paying damage
C. Either pay or defend as he decides
D. Pay the alleged damages
A contract for the transport of goods between the shipper and the carrier is called...
A. A bailment
B. A binder
C. A bill of sale
D. A bill of lading
In which of the following situations would the jewelers block extension cover a loss?
A. Maurice's Jewelers fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged
B. Jeana's Jewelry Concepts is robbed while displaying bracelets and necklaces at a public exhibition
C. Diamond Fire Jewelry store agreed to exhibit a necklace and earring set in a showcase away from the premises. The case is broken into, and the set is stolen
D. Julie, an employee of Antique Jewelers, is wearing a cameo brooch and ring to display to customers. During the day, she discovered the brooch has fallen off, and she can't find it
All of the following statements are true regarding employee dishonest optional coverage under the business owners police (BOP) EXCEPT
A. Coverage includes all property, including money and securities owned or held by the insured
B. It provides coverage for all employees, even those who were terminated in the past 90 days
C. It provides coverage for direct loss or damage to business personal property
D. Losses result from dishonest acts of any of the insured's employees
If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rate basis at both locations for...
A. 30 days
B. 60 days
C. 90 days
D. 5 days
Under business owners policy Section I, if an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgage holder?
A. 10 days
B. 15 days
C. 20 days
D. 30 days
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