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Personal Lines Latest Correctly Answered Questions
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Which of the following is true about cancellations of an insurance policy A- By the insurance company at any time B- By the insurance company after it gives the insured 5 days notice C- By the insured at any time after giving advance written notice to the company D- By the insured after they give the insurance company at least 10 days written notice - Answer C- By the insured at any time after giving advance written notice to the company
Which of the following individuals represents the insurance company when selling an insurance policy? A- Adjuster B- Broker C- Producer D- Insurer - Answer C- Producer
A temporary insurance contract pending the issuance of a policy is called: A- Endorsement B- Certificate of Insurance C- Binder D- None of the Above - Answer C- Binder
The public assumes an agent has what type of authority when quoting insurance? A- Implied B- Authorized
C- Express D- Apparent - Answer D- Apparent - quoting would be an action in this circumstance
Which of the following types of risk management would sprinklers in a building be? A- Avoidance B- Reduction C- Transfer D- Retention - Answer B- Reduction
Which of the following is NOT one of the responsibilities of a producer to the insurer? A- A fiduciary duty (trust) B- To forward premiums to the insured in a timely manner C- To report material facts that may affect underwriting D- To recommend only high rate policies - Answer D- To recommend only high rate policies
Indemnity insurance requires that the insured has insurable interest to collect. When does the insured need to have this interest? A- When applying for the insurance B- When the loss occurs C- At policy issuance D- During the policy duration -Answer B- At the time of the loss Federal law known as the _____________________ safeguards consumer privacy. A- Fraudulent Insurance Act B- Privacy Protection Act C- Fair Credit Reporting Act D- None of the above - Answer C- Fair Credit Reporting Act
position that existed prior to the loss? A- Adhesion B- Underwriting C- Indemnity D- Insurability - Answer C- Indemnity
The conditions section of an insurance contract identifies which of the following: A- The insured's duties B- The location of the property C- The amount of coverage D- The policy period - Answer A- The insured's duties
Which of the following is NOT a characteristic of a legal contract: A- Consideration B- Indemnity C- Legal Purpose D- Agreement - Answer B- Indemnity
A producer who can represent one, or more than one insurance company, and who also represents members of the insurance buying public is classified as: A- Broker B- Independent Agent C- Solicitor D- Both A and B - Answer D- Both A and B
A warranty is defined as which of the following? A- What a reasonable and prudent buyer can expect
B- Intentional misrepresentation on the application C- Statement in the application that is guaranteed to be true D- A false statement in the application - Answer C- Statement in the application that is guaranteed to be true
That part of the insurance contract that describes who is insured, besides the named insured is the: A- Conditions B- Declarations C- Insurance Contract D- Definitions - Answer D- Definitions
The insurance company is inspecting an insured's home and finds that the chimney is not properly attached to the house. This would be known as a: A- Morale Hazard B- Proximate Hazard C- Physical Hazard D- Moral Hazard - Answer C- Physical Hazard
The court would consider which of the following in determining if a person was negligent? A- How serious the injury B- How a prudent person would have acted in the same situation C- How much insurance the person carries D- Amount of prior suits filed against them - Correct answer B- What a reasonable man would have done in the same situation
What is the purpose of the Fair Credit Reporting Act? A- To Protect the consumer's right to privacy
A- Excess B- Domestic C- Foreign D- Alien - Answer C- Foreign
An insurer with a certificate of authority doing business in the state of New York is considered: A- Permitted B- Excess C- Foreign D- Admitted - Answer D- Admitted
______________________ equals that portion of the damages awarded specifically for tangible (out of pocket) losses or damages. A- Special damages B- Specific damages C- Compensatory damages D- General damages - Answer A- Special damages
When filling out an application for insurance the applicant has to answer based on the legal principle of: A- Utmost good faith B- Waiver C- Estoppel D- Reasonable expectations - Answer A- Utmost good faith
The Fair Credit Reporting Act does which of the following: A- It makes the disclosure of the information illegal
B- It prevents the insurance companies from using information that is disputed by the applicant C- It requires the insurance company to notify an applicant, in advance, that an inspection report may be obtained. D- It requires the insurance companies to send all applicants copies of any reports obtained form an inspection company. - Answer C- It requires the insurance company to notify an applicant, in advance, that an inspection report may be obtained.
A warranty can best be described as which of the following? A- A statement of fact that a condition does exist, and will continue to exist into the future B- A statement made by the agent to the insured C- Promising to protect the property from further damage D- The failure to disclose a material fact - Answer A- A statement of fact that a condition does exist, and will continue to exist into the future
To be licensed as an insurance broker in New York, an applicant must be at least: A- 21 years of age B- 19 years of age C- 20 years of age D- 18 years of age - Answer D- 18 years of age
Which of the following describes a peril? A- The result of loss B- The cause of loss C- A condition that can increase the extent of loss D- Stored materials that ignite easily - Answer B- The cause of loss
A deductible is an example of which type of risk management?
D- Conditions - Answer B- Insuring Agreement
After the storm, wet leaves are blown onto the local highway. This would be an example of a: A- Morale hazard B- Natural hazard C- Moral hazard D- Physical hazard - Answer D- Physical hazard
Herman is a captive agent for the ABC Insurance Company. Which one of the following would describe his duties and responsibilities with them as their agent? A- Implied Authority B- Apparent authority C- Expressed authority D- Captive authority - Answer C- Expressed authority
The statements made by the insured in the application for insurance are considered true to the best of their knowledge and not absolute fact. These statements are: A- Representations B- Insuring Agreements C- Warranties D- Expressions - Answer A- Representations
A contract whereby only one party makes legally enforceable promises is called a: A- Personal B- Unilateral C- Adhesion D- Aleatory - Answer B- Unilateral
Risk that involves a chance of loss or gain is called: A- Pure B- Profitable C- Substantial D- Speculative - Answer D- Speculative
A group of accountants form a reciprocal insurer for their professional liability exposure. What type of risk management is in use in this situation? A- Sharing B- Reduction C- Avoidance D- transfer - Answer A- Sharing
Which of the following below are NOT duties of a broker to the insured? A- Explain the coverage's under the policy B- Serve the insured in the event of loss C- Cannot disclose derogatory information to the insurance company without the insured's permission D- Adapt policies to the client's special needs with endorsements - Answer C- Cannot disclose derogatory information to the insurance company without the insured's permission
Which of the following best describes the term "indemnity" A- Current reproduction cost B- Payment limited to the extent of the financial loss C- Payment limited to face value D- Replacement cost new - Answer B- Payment limited to the extent of the financial loss
B- Adjust premium refunds C- Extend liability coverages D- Exclude fire losses - Answer A- Control the company's liability on covered losses by placing obligations on themselves and the insured.
Which of the following is a section of an insurance policy that identifies who may be insured in addition to the named insured? A- Agent B- Premium C- Negligence D- Definitions - Answer D- Definitions
Exclusions are an essential part of an insurance contract for all of the following reasons, except: A- Eliminate coverages in undesirable geographic areas B- Control moral hazards C- Eliminate uninsurable perils D- Control physical hazards - Answer A- Eliminate coverages in undesirable geographic areas
A person may be held responsible for negligence even if they have nothing to do with the negligent act, and are said to be: A- Absolutely liable B- Vicariously liable C- Proximately liable D- Indirectly liable - Answer B- Vicariously liable
The court orders that a defendant pays damages to the plaintiff for doctor's fees and other expenses the plaintiff suffered. All these damages fall under:
A- Compensatory damages B- Property damage C- Punitive damages D- None of the above - Answer A- Compensatory damages
Which of the following types of cancellation would an insured receive when they cancel a policy? A- Pro rate B- Flat C- Short rate D- No refund - Answer C- Short rate
Which of the following perils is covered under the extended coverage portion of a Broad Form Dwelling Fire policy? A- war and related losses B- damage by aircraft C- nuclear hazard D- water damage (flood) - Answer B- damage by aircraft
Under the DP-2, all of the following damages to a plumbing system are covered, except: A- wear and tear B- freezing C- tearing apart D- accidental discharge - Answer A- wear and tear
DP-1 dwelling losses are settled on a _______________ basis. A- ACV at the time of loss B- replacement cost
D- One family dwellings, only - Answer C- One to four family private dwellings
A civil authority denies access to the insured location because of a fire at a neighboring building. Under a DP-3, is this loss covered, and if so, for how long? A- 72 hours B- 3 weeks C-24 hours D-2 weeks-Answer D-2 weeks
A DP-2 Form covers all of the following perils, except: A- Explosion B- Earthquake C- Falling objects D- Tearing asunder - Answer B- Earthquake
In the Dwelling Property Program, replacement cost coverage is provided under which of the following? A- All dwelling property forms B- The Special Form only C- The Special and Broad forms only D- The Broad and Comprehensive forms, only - Answer C- The Special and Broad forms only
Under DP-2 & 3, what is the limit for lawns under the Trees, Shrubs, and Other Plants other coverage? A- 10% of the Coverage A limit B- There is no coverage for lawns C- $500. D- 5% of the Coverage A limit - Answer D- 5% of the Coverage A limit
Coverage C- Personal Property of the Dwelling Property Program excludes all of the following, except: A- bullion B- dog C- canoe D- car - Answer C- canoe
Which of the following would be eligible for the Dwelling Program? A- A private dwelling with 5 roomers B- A private dwelling with 5 tenants C- A private dwelling with 6 tenants D- A private dwelling with 8 boarders - Answer A- A private dwelling with 5 roomers
Under a DP-2, Broad Form with $75,000 of personal property coverage included, in the event of a covered cause of loss occurring anywhere in the world, what percentage would be covered? A- 0% B- 10% C- 60% D- 100% - Answer B- 10%
The insured has a tenant occupied rental dwelling. The tenant is away on business and a burglar breaks into the dwelling and steals the plumbing from the basement heating system. Which of the dwelling policies, if any, would cover the loss? A- DP- B- DP- C- DP- D- None - Answer C- DP-
All of the following would be covered under Coverage A of the D.P. Program, except: A- Debris removal expense B- An attached deck C- Material and supplies on or next to the premises used for construction of a detached garage on the premises D- The Dwelling - Answer C- Material and supplies on or next to the premises used for construction of a detached garage on the premises
An insured has a Dp-3 covering her dwelling for $400,000. The dwelling was destroyed by a hostile fire, Her detached garage was damaged as well, in the amount of $55,000. The fire also destroyed 10 shrubs on the side of the dwelling, worth $10,000. Ignoring any deductible, how much will the policy pay? A- $320, B- $465, C- $445, D- $400,000 - Answer C- $445,
*400,000+40,000(10%)+5,000(10x500) = $445,
Under Coverage A of the Dwelling Property Program, all of the following pieces of property are covered, except: A- The dwelling B- An attached garage C- A detached garage D- An attached deck - Answer C- A detached garage
Vandalism and malicious mischief is automatically covered under which of the following Dwelling Property form(s): A- DP-
B- DP-1 and DP- C- DP-2 and DP- D- DP-1, 2, and 3 - Answer C- DP-2 and DP-
Mobile homes may be covered under which of the following Dwelling Property forms? A- DP- B- DP- C- DP- D- DP-4 - Answer A- DP-
Under a Dwelling Property Basic form personal property losses would be paid based upon? A- Market value at the time of loss. B- Replacement cost at the time of loss. C- Actual Cash Value at time of loss. D- Purchase price new at time of loss. - Answer C- Actual Cash Value at time of loss.
The insured has a DP-1, Basic Form. There is an explosion in the kitchen. The insured removes undamaged property to protect it. Is the property covered and if so, for how long? A- Yes, for 30 days after removal B- No, property is only covered on premises C- No, only the Broad and Special Forms would cover the loss D- Yes, for 5 days after removal. - Answer D- Yes, for 5 days after removal. (30 days under DP-2 and 3)
All of the following are extended coverage perils, except: A- Smoke B- Explosion
