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An exclusion that states that an insurer will not pay any claim in which an individuals property is damaged as a result of an earthquake, mudslide, landslide, or sinkhole. ✔✔an Earth movement exclusion An exclusion that states that an insurer will not pay any claim in which an individuals property is damaged as a result of the fact that the individual did not maintain the property. ✔✔Neglect exclusion Which Home Owner's form covers damage to a condo owner's PROPERTY that occurs as the result of any event that is not specifically excluded in the policy. ✔✔HO- 6 Unit Owner's Form Which Home Owner's form covers damage to a TENANT'S property that occurs as a result of an aircraft, civil commotion, explosion, fire, nail, lightning, smoke, theft, vandalism, vehicles and/or wind. ✔✔HO-4 Content's Broad Form Which HO form covers damage to the DWELLING that occurs as the result of any event that is not specifically excluded in the policy and damage to the property inside the dwelling that results of an aircraft, civil commotion, explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind. ✔✔HO-3 Special Form
PA Property & Casualty License Practice
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Which HO Form covers damage to the DWELLING & PROPERTY inside the dwelling that occurs as an result of any event that is not specifically excluded in the policy. ✔✔HO - 5 Comprehensive Form What means conducting business in accordance with current rules and laws set by government regulatory agencies and the courts. ✔✔Compliance Standards of conduct and moral judgement. ✔✔Ethics Legal term that describes the relationship between parties. ✔✔Agency What is the term to describe how an insurer appoints an individual to act on its behalf. ✔✔Agency Contract An individual whose position and responsibilities involve a high degree of trust and confidence (trustees, guardians, and executors). ✔✔Fiduciary The name for the fact a producer must sell the kind of policies that best fit the prospects needs and in amounts that the prospects can afford. ✔✔Needs Selling What is given when the applicant pays the initial premium at the time the application for a policy is signed. ✔✔Conditional Receipt
2.) Have their principal place of business in PA In what 2 situations is it not required to be a licensed as a manager or exclusive general agent? ✔✔1.) The licensee who has limited underwriting authority - or- 2.) A manager or agent who has started before Dec. 22, 1965 Which of the following can not be issued a temp license? ✔✔A person selling insurance for the estate of a deceased producer. Which is NOT a reason for a licensed to be suspended or revoked? a.) Making factual by subjective comparisons of 2 policies. b.) Intentionally violating a cease and desist order. c.) Making false statements in a license application. d.) Violating an insurance regulation. ✔✔A. Increases a chance for loss ✔✔Hazard (i.e. leaving a door unlocked) Chance of a loss ✔✔Risk A means of transferring the risk of loss ✔✔Insurance The cause of the loss ✔✔Perils (i.e. Fire, Flood, Collision, Theft)
States that there must be an adequate spread of risk for insurance to be effective. ✔✔Law of Large #s Installing an automatic sprinkler system is an example of ✔✔Reduction (can not avoid risk but can reduce it) Deciding not to produce a produce due to serious potential side effects. ✔✔Avoidance (avoid the risk of being sued) Person in good health cancels health insurance policy...What is risk management ✔✔Retention (retaining the risk) Under what regulation in PA does it state that insurers must maintain a specific minimum levels of capital stock and surplus? ✔✔Regulation of Insurer Solvency. Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory rates? ✔✔Casualty & Surety Rate Regulatory Act Who must an insurer notify when they terminate a producer's appointment? ✔✔The Commissioner and producer.
When a auto policy is cancelled for a reason other than non-payment of premium, how many days notice must be provided to the insured? ✔✔ 30 days If an insured's drivers license has been suspended, the insurer may cancel the auto insurance policy by giving how many days notice? ✔✔ 15 days What are the minimum limits of liability any individual must provide for bodily injury and property damage? ✔✔15/30/ $15,000 per person bodily injury $30,000 per accident for bodily injury $5,000 per accident for property damage Purchased in the normal of standard market. ✔✔PA Fair Plan Act After an accident, what is the waiting period before the insured can apply for income loss benefits? ✔✔ 5 working days What must occur in order to pay for funeral expenses? ✔✔Death within 24 hours of accident An insurer must notify an insured at least how many days before increasing the premium on a commercial casualty insurance policy. ✔✔ 30 days
Which agency provides motor vehicle coverage insurance to those who would be otherwise un- insurable? ✔✔PA Auto Assigned Risk Plan When an employer must provide worker's compensation insurance but is unable to do so through normal channels, which organization can provide the required coverage? ✔✔State Worker's Insurance Fund What term describes a producer who converts premiums for his own use? ✔✔Breach of Fiduciary Duty What insurance option lets the insured seek recovery for all medical and other out-of-pocket damages, pain & suffering, and other non-monetary damages as a result of injuries caused by other drivers? ✔✔Full Tort Option What percent can crops be insured of their expected value? ✔✔75% A car crashes into a storage container which holds industrial waste materials located at a factory. As a result, a large amount of industrial waste ends up being released onto the property. The cost to clean up the waste totals $23,000. If the owner of the factory has a commercial property policy with additional coverage for pollutant clean-up and removal, how much does the insurance policy pay out to insured? ✔✔$10,
The potential for an individuals house to light on fire is best classified as what type of risk? ✔✔Pure Risk The owner of courier service establishes an insurance policy for the vans used by the business. The insurer has a requirement that insurance for any vehicle used for commercial purposes should be insured for 75% of its value. The owner of the courier service decides to cut costs by purchasing a policy that only cover 60% of the van's value. The van ends up in a major traffic accident that results in $25,000 in damage and liability costs. If the policy has a $15,000 deductible and the van was worth $80,000, how mush does the owner of the van end up paying out of pocket? (Value of the Policy = .6 x $80,000) (Required Value of the Policy = .75 x $80,000) (Insurer's Reimbursement = (Value of the Policy / Required Value of the Policy) x (Total Loss - Deductible)) (Out of Pocket Payment = Total Loss - Insurer's Reimbursement) ✔✔$17, What is the primary intent of the Special Coverage Form (DP-3)? ✔✔To offer a broadened contract that will include miscellaneous and undefined incidents that cannot be anticipated In addition to the limits of bodily injury liability set forth in the policy declarations, the policy will also pay out up to for the cost of bail bonds required because of an accident. ✔✔$ Which of the following is included as part of an insured building under a commercial property policy? Select one: ✔✔Outdoor fixtures
The insurer of a homeowners policy will pay, on replacement cost basis, up to for property damage to the property of others caused by an insured. ✔✔$1,000 per occurrence Which of the following is affected by the general aggregate limit associated with commercial general liability coverage? ✔✔Medical expenses A homeowners HO- 4 form does not offer coverage for which of the following? ✔✔Structures What does commercial crime insurance primarily protect an insured from? ✔✔The dishonesty of others In regards to a commercial property policy with a mortgage holder condition, what happens if the insurer pays the whole principal on the mortgage, plus any accrued interest, to the mortgage holder? ✔✔The named insured's mortgage and note will be transferred to the insurer and the named insured will pay the remaining mortgage debt to the insurer of a homeowners policy includes other buildings that are rented to tenants as dwellings or for use by a non-tenant as a private garage. ✔✔Coverage B A dwelling policy lacks which of the following? ✔✔An occupancy requirement
Which of the following is not a type of auto covered under a trucker coverage form? ✔✔Owned private passenger autos The insurer of an equipment breakdown policy reserves the right to do which of the following if a piece of covered equipment is found to be in an unsafe condition? ✔✔Immediately suspend coverage on the unsafe piece of equipment Which of the following homeowners coverages are property coverages? Select one: a. Coverage D b. Coverage A c. Coverage B d. All of these are correct ✔✔D. An individual is injured during a white water rafting trip. The rafting company claims they are not liable for the injury because the individual signed a waiver relieving the rafting company of any responsibility for any injuries that happen while people are using their boats. This is an example of which of the following? ✔✔Expressed assumption of risk Which section of an insurance policy details the obligations of the insurer in the event of a covered loss? ✔✔The insuring agreement
While on display at an industry convention, a business's prototype of a new product is critically damaged. Which commercial property coverage extension would provide insurance protection for this situation? ✔✔Property off-premises Liability for property damage could be covered by coverage of a homeowners policy. Select one: a. G b. E c. F d. D ✔✔E What does an Individual Named Insured endorsement do to the standard policy language of a commercial auto policy? ✔✔Includes a spouse under the definition of "You" (the first named insured) and adds coverage for personal use vehicles owned by the insured and not used for business Why would a business need a business income coverage form with an extra expense section? ✔✔To minimize a suspension of business and allow operations to continue at another location after the business's primary location has been damaged or destroyed A contract must have a legal purpose in order to be enforceable. What does it mean for a contract to have legal purpose? ✔✔The performance of the contract is not in and of itself unlawful, and the performance of the contract will not result in a violation of law
d. Motor carriers coverage can apply to a commercial operation that transports passengers ✔✔Motor carriers coverage can apply to a commercial operation that transports passengers Which of the following is the formula use to determine risk? ✔✔Probability - Reduction If an individual causes property damage while working as a valet driver for a private parking garage, will her liability be covered by coverage B of her personal auto policy? ✔✔No In regards to "other insurance" situations, what is nonconcurrency? ✔✔The multiple policies covering the same risk do not match up in some way A Changes provision in a commercial package policy allows the first named insured to make alterations to the policy through which of the following? ✔✔Endorsements Which of the following types of insurance is commonly found in a commercial package policy? ✔✔Equipment breakdown insurance Which of the following is an exclusion that applies only to auto dealers? Select one: a. The insurer will not pay for loss to any covered auto displayed or stored at a location not listed in the declarations, if the loss occurs more than 45 days after the insured begins using the location Correct b. The insurer will not pay for bodily injury that results from dispersal of any pollutant c. The insurer will not pay for property damage that is expected by an insured
d. The insurer will not pay for property damage that arises out of the named insured or another insured participating in a prearranged racing contest ✔✔A. Insurers do not offer coverage for anything defined as a peril. ✔✔Special If a bar serves a person, and that person injures another patron in the bar after becoming intoxicated, does the bar's commercial general liability policy cover the their liability for the bodily injury caused by the intoxicated customer? ✔✔No Do supplementary payments reduce the limits of a commercial general liability policy? ✔✔No A personal auto policy may have coverage for which the insured may end up incurring after a loss, up to $20 a day or $600 maximum. ✔✔transportation expenses Symbol 31 of a garage coverage form provides coverage for physical damage for autos owned by who have a financial interest in those autos. Select one: a. trailer dealers b. non-dealers c. All of these are correct d. auto dealers ✔✔C
An insurer will provide Uninsured Motorists Coverage for bodily injury sustained by any person if... ✔✔a bodily injury liability bond or policy applies to the relevant motor vehicle at the time of the accident but the bonding or insuring company denies coverage. Which commercial auto symbol applies to owned autos subject to a state's compulsory uninsured motorist law? ✔✔ 6 Which of the following types of compensatory damages are designed to repay a party for intangible injuries? ✔✔General damages Which of the following would be defined as a breakdown? ✔✔A failure of vacuum equipment Coverage F of a homeowners does not cover watercraft liability if, at the time of an occurrence, the boat is... ✔✔used to carry cargo for a charge Is there a form of commercial crime coverage form which provides legal liability coverage for a loss to a customer's property that was in a safe deposit box? ✔✔es, as long as the loss was caused by a robbery The commercial property broad form adds weight of snow to the list of covered perils. Which of the following is covered by the broad form if it is damaged by the weight of snow? Select one: a. A car
b. A Smokestack Correct c. Underground pipes d. A bridge ✔✔B A contractor has ordered an air-conditioning unit. If the contractor is concerned about damage being done to the AC unit before it is fully installed, what kind of inland marine insurance would provide the right coverage for this situation? ✔✔An installation floater Which of the following is a personal injury protection benefit made available through Coverage C
- Medical Payments Coverage? Select one: a. Advertising Injury b. Rental Vehicle Expenses c. Fire and Smoke Damage d. Loss of Income ✔✔D Which of the following statements about non-admitted insurers is correct? Select one: a. Non-admitted insurers must file their rates with state governments b. Non-admitted insurers do not have flexibility with pricing c. Non-admitted insurers are licensed by the state in which they are operating d. A state government will not help pay the claims of a non-admitted insurer that becomes insolvent ✔✔D
