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Insurance Practice Exam
Terms in this set (75)
An insured operates a auto repair shop and has a garage coverage form with garagekeepers insurance when an employee on a test drive with a customer?s car is involved in a crash. How will the customer?s car be covered by the insured?s policy?
The customer?s car is covered for any physical damage while in the custody of the insured.
Which of the following causes of loss to a vehicle will trigger collision coverage on the personal auto policy Part D- coverage for damage to your auto?
The insured has a commercial auto policy with a drive other car broadened coverage liability for named individuals (DOC) endorsement. In which of the following would the named individual be covered?
driving neighbor?s auto
When an employer sends employees out of state on work related business, which of the following must he do to ensure the appropriate workers? compensation coverage?
list the state on the information page for other states' coverage
Which of the following does HO-6 provide?
coverage for personal property of a condominium owner
All of the following are considered an insured under the liability part of a personal auto insurance policy EXCEPT
a stranger who takes the car without permission.
All of the following demonstrate insurable interest EXCEPT
insuring an engagement ring given to fiancée.
Punitive damages are intended to do all of the following EXCEPT
compensate for actual financial losses.
Which of the following homeowners forms is most appropriate for older homes with replacement values that may far exceed their market values?
Which of the following terms refers to the transfer of the insured?s right of recovery against others to his insurance company?
Employees are barred from suing employers in court to obtain compensation for injuries covered by workers? compensation because of which of the following doctrines?
Which type of coverage would be appropriate for a detached garage in a DP-1 policy?
Mobile homes can be insured in all of the following ways EXCEPT
with a HO-8 Modified Coverage form.
The property coverage of a BOP includes which of the following?
carpeting that is permanently installed inside the building
Which of the following does Homeowners Special form (HO-3) cover that Homeowners Broad form (HO-2) does not?
structures other than the dwelling
With which of the following methods are losses settled on an actual cash value (ACV) basis?
Which of the following forms trigger coverage for a loss under the commercial general liability policy if a loss happens during the policy period?
Determining adequate indemnification after a loss is a principle duty of which of the following
All of the following are Unfair Claims Settlement Practices EXCEPT
failure to respond to a first notice of loss within 24 hours.
Which policy condition applies when an insurer covers property losses at cash value rather than an amount that exceeds the repair or replacement value?
loss settlement condition
All of the following operations would fall under the liability rules for strict liability EXCEPT
The Fair Credit Reporting Act permits consumer reporting agencies to include applicant information about bankruptcies MORE than 10 years old under which of the following circumstances?
The applicant is seeking a transaction greater than $150,000.
According to the Nationwide Definition of marine insurance, which category is an eligible marine risk?
An injured employee covered under workers? compensation is entitled to reasonably justifiable expenses for retraining. This benefit falls under which of the following?
Which one of the following persons would be covered for accidental injury on the insured?s premises under Coverage C of the CGL Medical Payments?
a volunteer worker
A DP-2 policy covers all of the following EXCEPT
damage to awnings from weight of snow.
A single earthquake constitutes all shocks that occur within which time period?
All of the following are exclusions are found under the personal auto policy Part A liability coverage, EXCEPT
bodily Injury to an insured?s nonresident family member or relative.
Which of the following created The National Flood Insurance Program?
the United States Congress
Which of the following business liability exposures does a slip and fall loss fall under?
premises and operations
All of the following specify limits of insurance for the CGL EXCEPT
Which of the following are defined as a part of the policy and can void the policy if they are breached, whether the breach was intentional or unintentional?
The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date?
Which part of the CGL designates who is an insured?
How does the BOP differ from the CPP?
The BOP prepackages a group of coverages desirable to small businesses.
When does the coverage begin for a builders risk form?
On the date construction starts above the lowest basement floor if there is a basement
If the insured has a loss with a private passenger nonowned temporary substitute vehicle how will the loss be treated by the insured?s own policy for physical damage?
The broadest coverage available extends from the insured?s policy.
An extended reporting period attached to a general liability policy provides coverage in which of the following ways?
It provides coverage for claims made outside the policy term.
When an insured is driving his covered automobile causes an accident that results in injury, his automobile medical payments will pay medical expenses for all of the following EXCEPT
any occupant of the other not at fault vehicle.
Which one of the following is an example of pure risk?
storing your new motorcycle outside
The insured carries underinsured motorists coverage limits of 250/500/250 on his automobile policy and his vehicle is struck by an at fault motorist who insures with the State minimum for liability of 20/40/10. If the insured brings suit for bodily injury damages to himself of $500,000, how much will he recover from at fault driver?s policy?
Which of the following limits of insurance on the dwelling are available and apply to Coverage D-Fair Rental Value?
Which of the following is an example of a financial loss caused by a home being damaged in a windstorm?
Underwriters are permitted to use all of the following when underwriting an application for insurance EXCEPT
age, race, and religion.
Which of the following represents the primary amount of insurance for the HO-4?
The insured causes an accident in which three persons are injured. One person claims $50,000, the second claims $100,000, and the third claims $250,000. The insured has a combined single limit of $250,000 liability on his automobile policy. What is the sum total the policy will pay?
A bank customer?s identity was compromised and the thieves made numerous purchases from a retailer by signing the customer?s checks. When the bank refused to make payment for the goods, the retailer brought suit against the bank. Which coverage indemnified the bank for liability in the suit?
forgery and alteration
A contract that is against public policy is not enforceable according to which contract characteristic?
An insurance company?s right to cancel a policy is often limited by state laws but is generally permitted under which of the following conditions?
non-payment of premium
All of the following establish a defense against negligence EXCEPT
repudiation of the claim in a court of law.
What does an application for insurance contractually represent for the insured?
The following are all types of disability categories under workers? compensation insurance EXCEPT
Workers? compensation benefits for loss of wages include which of the following?
replacement of a portion of lost wages
In which of the following DP forms is the dwelling covered under open perils and the personal property on a named peril basis?
A person who intentionally defrauds and insurance company to gain from a claim is an example of which type of hazard?
Bodily injury means injury arising out of all the following EXCEPT
Workers? compensation coverage is rated on the basis of which of the following?
When an insured selects symbol 2 on the automobile declarations, indicating coverage for any auto titled to the insured, which of the following automobile types will be covered?
owned autos only
All of the following describe a nonowned auto under the commercial auto policy symbol 9 EXCEPT
auto not titled to an insured but available for regular use of named insured or family member.
The Causes of Loss form for farm property lists which of the following?
perils property is insured against
Which of the following types of crime best describe the unlawful act of taking property from the care and custody of another person while threatening to cause bodily harm?
Federal Crop Insurance is a type of insurance sometimes called which one of the following?
residual market insurance
The insured purchased a car for $40,000 and added $5,000 in insured modifications. Four years later it was worth $24,000 when it was totaled in a crash. According to the principle of indemnity, how much should the insured receive from the insurance proceeds?
What is the purpose of the causes of loss form that lists specific exclusions?
to state which perils are insured against
All of the following are the most commonly used personal inland marine forms EXCEPT
builder's floater form.
Which of the following professionals would purchase Errors And Omissions insurance to manage the liability risk associated with their business endeavors?
All of the following would be found on a declarations page EXCEPT
A woman slips on icy steps and breaks her leg. Which of the following is the peril in this situation?
All of the following are responsibilities of the insured listed in the loss provisions for most property insurance contracts EXCEPT
to determining adequate indemnification.
All of the following are examples of direct loss EXCEPT
after a car crash you have to rent a replacement vehicle.
Which of the following would be covered by a commercial package policy?
loss due to crime
Which policy provision provides that an insurance company can take possession of damaged property?
A cable company uses employees to install equipment in customers? homes. The company purchases a bond from an insurance company to protect itself from potential dishonest acts of the employees. Which of the following types of bond does the cable company purchase?
Under the CGL which one of the following is covered under supplementary payments?
cost of bail bonds
Which coverage forms are used when the insured sustains loss of revenue due to direct physical loss from a peril insured against that forces the insured to suspend operations during the period of restoration?
Business Income Coverage forms
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Imagine that you are in charge of Customer Service for a large e-marketing firm such as Amazon.com. Investigate the process for returning defective merchandise by logging on to a large online store. List the steps a consumer must take in order to return merchandise and get a refund. What problems does returning defective merchandise present for customers who purchase products online? What are some ways you could make returning defective merchandise easy for online customers? Create a step-by-step guide for customers to use when they are returning defective merchandise. Be sure to consider factors such as shipping costs, packaging materials, insurance issues, and other issues that may arise. Share your guide with the class.
Suppose the exchange rate between the U.S. dollar and the Swedish krona was 8 52 krona=$1, and the exchange rate between the dollar and the British pound was$£ 1=\$1.53$. What would be the exchange rate between Swedish kronas and pounds?
You visit a new Mom & Pop café that holds weekly drawings for free treats and prizes. It requires signing up with your email address. The café promises not to share your information with any outside parties, but you start receiving a lot of spam after signing up. Even if a company promises not to sell your email address, it is possible for spammers to access the company's computers if they are not secure. Discuss with your class whether it is ethical for the restaurant to keep running this promotion.
A life insurance policy is a financial asset, with the premiums paid representing the investment’s cost. a. How would you calculate the expected return on a 1-year life insurance policy? b. Suppose the owner of a life insurance policy has no other financial assets—the person’s only other asset is “human capital,” or earnings capacity.What is the correlation coefficient between the return on the insurance policy and the return on the human capital? c. Life insurance companies must pay administrative costs and sales representatives’ commissions; hence, the expected rate of return on insurance premiums is generally low or even negative. Use portfolio concepts to explain why people buy life insurance in spite of low expected returns.
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