Terms in this set (87)
Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?
12:01 am the day after the application and premium payment are mailed
The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the
In an auto policy, the medical payments coverage is similar to
Accident insurance, because it pays medical expenses regardless of fault.
How long is the waiting period after the application has been accepted before flood coverage goes into effect?
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
The Commissioner has the power to conduct _____________ in order to enforce the Insurance Code.
All of the following causes of loss forms are â€œnamed perilâ€ forms EXCEPT
Who would participate in a WYO program
Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is
50% of the amount provided as Coverage A
Sunny received a notice from her insurance company that it was not going to renew her personal risk insurance policy. She mailed a written request for an explanation for the nonrenewal within the specified amount of time. How many days does the insurance company have to mail to Sunny a written statement specifying a reason for the nonrenewal of her policy?
Negligence may be defined as
The failure to use reasonable and prudent care
Wilber's house is located 1 mile from the county's new landfill and across the road from the entrance of a rock quarry. To rebuild the house if something happened to it would cost $150,000. But when Wilber tried to sell it, the best offer he received was $80,000. His insurance company will insure the house for only $80,000. How is Wilber's house insured?
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?
As a condition for renewal of their licenses, how many hours of continuing education are required for all resident and nonresident insurance producers?
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
In return for premium, an insurance company must
Be fair in underwriting and pay covered losses.
An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?
A two-ton grain truck with a 6,500-pound capacity
All of the following statements concerning coinsurance are true, EXCEPT
The coinsurance formula also will be applied to total losses
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
Which of the following does the term â€œproximate causeâ€ refer to?
Negligence that leads to an injury
Insurable interest in the property covered in a policy must be proven
At time of loss
Any named insured may reject uninsured motorist coverage by doing which of the following?
Rejecting the coverage in writing
What is the purpose of the NFIP?
To fill the gap left by the private insurers in flood coverage
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?
What information must be stated clearly on the front page of an insurance contract for a rental car?
A statement that the purchaser's personal motor vehicle insurance may cover collision damage to the rental car
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
Sara owns a fire insurance policy on her house. If her home is totally destroyed in a fire, how much will the insurer be liable for?
The actual cash value of the property at the time of loss
When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy
All of the above are true
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for
Uninsured motorists coverage
Transportation expenses are covered under a Personal Auto Policy for
$20 per day, for a maximum of $600
Which of the following perils is covered by flood insurance?
Mudslide caused by accumulations of water under the ground
Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as
In commercial policies, who has control of the policy?
First named insured
Which of the following could be covered by a HO policy?
An oriental rug in an on-premises apartment
Adam is injured in a car accident caused by John. What kind of insurance would cover John's obligation to pay for Adam's injuries?
An insurance producer may not act as an agent for an insurer unless he/she has become a(n) __________ agent of the insurer.
The causes of loss insured against in an insurance policy are known as
In property insurance, actual cash value is defined as which of the following?
Replacement cost at the time of the loss, less depreciation
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 person who is not named as an insured on the declaration page of a policy but is protected by the policy, usually in regard to a specific interest is known as a
The crime of forced entry into the premises of another by a person or persons with felonious intent, is defined as a
How long does a producer have after writing a Fire insurance contract to have the building inspected
In insurance, an offer is usually made when
The application is submitted
Which of the following describes the transfer of a legal right or interest in an insurance policy
A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered
Under Tennessee law, the limits for uninsured motorist coverage must be equal to which of the following?
The bodily injury liability limits stated in the insured's policy
When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written
What do individuals use to transfer their risk of loss to a larger group?
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value
They are automatically provided with replacement cost coverage
For a producer to share his commission with another producer, which of the following must be true?
Both producers must be currently licensed for the same line of authority as the transaction
Duties of the insurer found in property policy conditions include all of the following EXCEPT
Notify the insured in the event of financial difficulty.
With respect to auto insurance, the term owned autos includes all of the following EXCEPT
A pickup or van titled to and used in the named insured's business
Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as
Negligence is defined as
The failure to do what a reasonable prudent person would do under given circumstances.
Jenne is involved in an auto accident, and the driver of the other car flees the scene of the accident. Jenne is injured in the accident and is taken to the emergency room. Jenne DOES NOT have the right to recover damages under the uninsured motorist provision UNLESS which of following happens?
All of above would give Jenne the right to recover damages under the uninsured motorist provision.
In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called
Replacement cost is defined as
Full replacement of property at its current cost, new and without reduction for depreciation.
Insurance is a contract by which one seeks to protect another from
Which of the following persons is required to hold a producer license?
A person who negotiates insurance contracts
When a producer was reviewing a potential customerâ€™s insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of
Three years ago, an insured moved to an unfurnished apartment. She bought new furniture that cost $9,000. Last week, there was a fire in the apartment that destroyed the furniture. Replacement cost is $10,500. The adjuster told the insured her furniture depreciated $2,500. If insurance is written on an actual cash value basis, how much will it pay for the loss?
Who is personally liable for all contracts of insurance unlawfully made within Tennessee on behalf of an unauthorized insurer?
The individual making the contract on behalf of the unauthorized insurer is liable.
Sally wants to buy a fire insurance policy on her house. The building is worth $80,000. What is the maximum amount of fire insurance that Sally can buy in her policy?
What is the minimum required age for an insurance producer in this state?
18 years old
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive
The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is
Which method of loss valuation is contrary to the basic concept of indemnity?
Which of the following is NOT included in the definition of personal risk insurance?
Insurance on an auto used for the a small business
A policy that insures all property at multiple locations for a single amount is referred to as
What type of coverage do umbrella policies provide?
Excess coverage over an underlying or primary policy
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?
Open peril policy
The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called
Pro rata liability.
Sally has a property insurance policy that is not subject to any coinsurance requirements. Her policy has a set amount of insurance scheduled for her property. What loss valuation method does her policy use?
All of the following are true regarding deposit premium EXCEPT
It is 50% of the actual premium.
With respect to the business of insurance, a hazard is
Any condition or exposure that increases the possibility of loss.
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
Any licensed person in this state may be assessed a civil penalty for an unintentional violation of a state insurance statute up to
What type of compensatory damages will pay for pain and suffering and disfigurement?
Which of the following persons is required to hold a producer license?
A person who negotiates insurance contracts
insurable interest in the property covered in a policy must be proven..
at time of loss
liability imposes on one party as a result of the actions of another person ( parent/child, employer/employee) is know as
An insured owns a buliding tjat is valued at $400.00. to comply with the 80% coinsurance provision
80% of the property's ACV or more
An insured is applying for a casualty insurance policy. one of the condition of the policy allows the insurance company to inspect the insured's books. at the end of the policy term to make suire sufficent premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy?
Deposit preminum audit
events in which the principal has both the chance of winning or losing are classified as?
A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage niether expected nor intended.
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