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Personal Lines Exam Questions And 100%
Correct Answers
Foreign - Answer If an insurer is incorporated in Rhode Island, but its principal place of business is New York, what kind of insurer would it be, with respect to New York?
A contract between the insurer and the reinsurer - Answer Policyholder A's insurer is writing too many homes that are subject to wind losses. Because of this, the company wishes to reinsure those policies in order to spread the high risk of wind loss. The reinsurance contract can best be described as which of the following?
Stockholders - Answer Dividends issued by Stock insurers are paid to:
The policy is an adhesion contract - Answer When an insurance policy is ambiguous, the court will generally find in favor of the insured due to which of the following characteristic?
Retention of risk - Answer Self-insurance is an example of which of the following type of risk management?
Peril - Answer A potential cause of a loss, such as fire, explosion, flood, or theft is considered to be a(n):
A contract of indemnity - Answer An insurance contract is considered which type of contract because it restores the insured to the same financial condition as before the loss?
Admitted - Answer An insurer that is authorized to do business in a particular state is said to be:
Enhancement - Answer Is not a risk management technique
Warranty - Answer A statement indicating the liability of the manufacturer for product deficiencies.
Pure risk - Answer The uncertainty of loss from fire, wind or hail is a type of:
Aleatory - Answer Is a type of contract that is defined as an unequal exchange in value.
Misrepresentation - Answer When applying for car insurance, Producer M asked B if he had been convicted of a DWI within the previous 10 years. B answered "no" when, in fact he was convicted of a DWI last year. What is B's mistake?
Foreign Company - Answer Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty would be considered a(an):
If an individual is denied coverage, they can request a copy of the report. - Answer Under the Fair Credit Reporting Act, what is true?
Additional Coverages part of an insurance policy-provides protection in addition to the basic coverages in the insuring agreement automatically included without an additional premium.
60 days and 30 days respectively for Personal lines and Commercial lines - Answer What is the 'Loss Payment' condition in respect of the period an insurer has to pay for a loss once the proof of loss has been received and the loss has been agreed with the insured?
What would be deemed as a hostile fire? - Answer An uncontrolled campfire in the woods
of events.
Nonrenewed - Answer When an insurer decides that it does not want to continue to provide coverage for an insured it may decide not to renew the policy at the end of the policy period.
Pro Rata Liability - Answer This is a policy condition that is part of the policy under the Other Insurance provision, and which states that settlement of the claim shall be proportionate to the amount of other insurance.
Proof of Loss - Answer A proof of loss setting forth the date and circumstances of the loss (including the amount of the loss) is generally required by the insurer before the insurer will settle the claim.
Truth of Liability policy - Answer A liability policy does not cover damage to the insured's property, it covers damage to property of a third party.
Doctrine of Subrogation - Answer Contributory negligence, comparative negligence, assumption of risk, intervening cause and statute of limitations are defenses against negligence. Each State Legislature will determine what defenses they will permit to operate within the state. Subrogation is not a defense, it is an insurers right to subrogate and seek reimbursement for damages from the at fault party.
General Damages - Answer Damages that are likely to continue into the future, and where it is difficult to put a final figure on the losses.
A deliberate act - Answer is not negiligence
Liability Policy written on a primary basis - Answer A policy that pays first with respect to other policies
Contributory Negligence - A defense that denies payment to an injured party if they were partially at fault.
Bodily Injury - A) BI covers the insured for legal liability arising from physical injury to a person including sickness, disease or death caused by the negligent or purposeful acts of an insured.
Breach of Contract - A) Bodily Injury does not include breach of contract.
Absolute Liability - Answer A legal liability imposed without shown negligence.
Assumption of Risk - Answer When a person engages in an activity where a specific kind of injury can take place, the person accepts that risk
Each policy pays its pro rata share of the loss - Solution The other insurance provision stipulates the procedure to be applied when a loss is covered by more than one policy. On property, losses are pro rata settled and each policy pays no more than its pro rata share of the loss.
DP2 and DP3 - Solution Covers the same perils regarding personal property
Basic Form - Written on a named peril basis and does not cover theft, or loss to trees, shrubs, and plants.
Dwellings used for business - Not eligible for coverage under the Dwelling Program.
Coverage A - Applies to the Dwelling at the described location
Injury caused to a regular resident of the dwelling - Not covered under the Personal Liability endorsement.
Debris removal - The insured may be reimbursed, under a Dwelling policy, 'Other coverage' section, for reasonable expenses incurred in the removal of debris of covered
Section II of a HO policy covers what - Answer A guest would be eligible for medical payments. The residence employee would not be covered unless working in the course of employment by the insured.
Defense costs - Answer The policy covers defense costs as part of the policy's 'Additional Coverages' Claim Expenses (Supplementary Payments). In addition to the policy limits, and the insurer pays without regard to fault.
Neglect Exclusion - Answer Bars coverage because insured failed to use all reasonable means to save covered property.
Policy Limit - Answer The house is insured to the policy limit in the event of a total loss.
Uninsured Motorist Coverage - Answer UIM covers bodily injury only. Property damage would fall under Part D of an owner's policy, or under Uninsured Motorist Property Damage, which is optionally available.
Recovery Rights -Answer In the event of a claim being paid under the insurance, the Insured to whom such payment shall have been made shall forthwith assign all rights of recovery from any other party against whom he has a right of action in respect thereof to the Insurance Company.
Underinsured Motorist Coverage - Answer When the at-fault driver of the other vehicle has insurance but the limits are not sufficient to cover the damages of the insured, then the latter can make a claim under Underinsured Motorists Coverage.
Other than Collision Coverage - Answer Coverage for collision with a bird or animal is provided under Other than Collision Coverage.
Out of State Coverage - Question Out of State Coverage automatically extends coverage that is required by the financial responsibility laws of another state to the insured's car.
The Named Non-Owned Endsorsement - Question Provides liability, medical payments, and UM coverage for a person who does not own but frequently borrows or rents a car.
Personal Effects Floater Discussion and Solution The personal articles floater is covered worldwide in particular because it is written on the moveable type of property insureds carry with them when traveling both in their home country and overseas.
Boatowners or Watercraft package policy -Answer A boatowners or watercraft policy is a package similar to a homeowners policy. A home owners policy with watercraft endorsement will not cover boats with more than a specified length. Boatowners/Watercraft package policies provide Property, Liability and Medical Payments coverage on an open peril basis. A dwelling policy does not provide any boatowners coverage at all.
Boatowners Policy - Answer The Boatowners policy is a package that provides property and liability both in one contract and, in design is similar to the homeowners policy. It provides coverage similar in form to that provided by the personal auto policy. Generally, the policy is used to insure boats able to be towed by a car.
Personal Articles Floater Discussion The Personal Articles Floater provides coverage for personal property on a scheduled basis. Property that is covered under this type of floater is no longer covered under Coverage C of the HO policy.
