GA State PC and Misc Possible Test Questions

Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority Prohibits Use" for what duration?

2 weeks

The Guaranty Fund provides coverage for the cash value under a life insurance policy up to:

a. $100,000
b. $200,000
c. $300,000
d. $400,000

$100,000

Under Georgia law, an Insurer must provide how many days’ notice prior to nonrenewal or cancellation of a property or casualty policy covering an industrial manufacturing plant?

a. 30 days
b. 60 days
c. 90 days
d. at least 1 year

See Page GA-4A, Paragraph 2.  Under Georgia law, 30 days’ notice is required to cancel or nonrenew any property or casualty policy – it doesn’t matter whether the policy covers a dwelling or an industrial property.

The correct answer is: 30 days

If a Georgia property insurer is imposing a rate of 15% or more, or new policy terms that will, in effect, nonrenew the old policy, the property insurer must give how many days notice of nonrenewal?

a. 10
b. 20
c. 30
d. 45

45

If an agent is subject to criminal arrest, the Commissioner must be notified within:

a. 5 days.
b. 10 days.
c. 20 days.
d. 30 days.

30 days

Acme Insurance has received one or more claims for a particular residential client. The claims have involved Acts of God (such as wind damage or fire damage) which didn't involve negligence or intentional acts by the client. Acme may nonrenew the policy if it has received how many of these claims?

a. 2 in the last year
b. 3 in the last 3 years
c. 2 in the last 3 years
d. 2 in the last 2 years

Georgia law requires at least 3 “no fault” claims over the last 3 years to nonrenew a residential policy.

The correct answer is: 3 in the last 3 years

Georgia insurance rates are regulated by?

a. NAIC
b. Insurance Commissioner
c. Division of Consumer Protection
d. FAIR Plan

The correct answer is: Insurance Commissioner

The Georgia Insurance Commissioner can do each of the following EXCEPT:

a. modify state statutes
b. create regulations
c. organize the Department of Insurance
d. examine the records of an Insurer

See Page GA-1B.  The Georgia legislature creates statutes – statutes may only be changed by the legislature.  The Commissioner may create regulations to implement the legislature’s statutes, but the Commissioner cannot change the legislature’s statutes.

The correct answer is: modify state statutes

Under Georgia’s Guaranty Fund system, if a work comp Insurer is insolvent, claims will be covered up to a maximum of:

a. $100,000
b. $250,000

c. $300,000
d. No Limit

No limit

An auto policy may be cancelled due to each of the following involving an Insured within the prior 36 months EXCEPT:

a. ordinary negligence resulting in an accident that kills someone
b. drunk driving
c. drug addiction
d. criminal negligence resulting in an accident that kills someone

See Page GA-4D, Paragraph 2.  Ordinary negligence cannot be a reason for cancelling an auto policy, even if the negligence results in death.  However, criminal negligence (extreme negligence) that results in death, homicide, or assault involving the use of a motor vehicle may be grounds for cancelling an auto policy.

The correct answer is: ordinary negligence resulting in an accident that kills someone

The mortgagee should receive how much notice of cancellation?

a. 10 days
b. 30 days
c. 60 days
d. 90 days

Chapter 4: Typical Property Policy

The correct answer is: 10 days

An assignment must be:

a. agreed to prior to a property loss.
b. approved by the state insurance commissioner.
c. notarized.
d. agreed to in writing by the insurer.

An assignment is an agreement to transfer coverage or benefits under a policy. The assignment must be written and agreed to by all parties.

Chapter 2: Property and Casualty Key Terms

The correct answer is: agreed to in writing by the insurer.

Which of these involves negligence?

a. A driver goes too fast and hits another vehicle.

b. A driver runs a stop light.

Without injury or damage, there is no negligence.

Chapter 5: Liability Insurance Basics

The correct answer is: A driver goes too fast and hits another vehicle.

While playing with fireworks, Smith's 16-year-old child negligently destroyed the neighbor’s $250,000 home. Smith’s homeowner’s policy will cover the liability up to:

a. $0
b. $1,000
c. $100,000
d. $250,000

The HO covers negligence of the Insured's children up to the standard $100,000 limit of liability. If this had been an intentional act, however, it would have not been covered at all because the child was 13 or older.

Chapter 13: Dwelling and Homeowner Policies

The correct answer is: $100,000

Three trees valued at $1,900, $600, and $200 were destroyed by fire. The businessowner policy will cover this loss to a total of:

a. $0
b. $1,500
c. $1,800
d. $2,500

The maximum coverage per tree under the BOP has recently been changed from $500 to $1,000, but the $2,500 total limit is unchanged. So, the policy will pay:

$1,000 (for the $1,900 tree), + $600 + $200 = a total payment of $1,800

Chapter 14: Business Owner Policy

The correct answer is: $1,800

Which is a coverage extension?

a. vans
b. fire extinguishers
c. lawns and crops
d. newly acquired property

Chapter 7: BPP

The correct answer is: newly acquired property

Earth movement insurance is available:

a. only as an endorsement

b. only as a stand-alone policy

Earthquake insurance is designed as a rider - we have to add it to another property policy. It is not a "stand alone" policy.

Chapter 11: Earthquake Insurance

The correct answer is: only as an endorsement

A store's business owner's policy covers the store's portable shelving. The shelving, which was destroyed by fire, had the following valuations: replacement cost - $7,000; actual cash value - $3,000; original purchase price - $5,000; fair market value - $280. The policy will pay how much on this claim?

a. $280
b. $3,000
c. $5,000
d. $7,000

Assume that a BOP will provide Replacement Cost coverage.

Chapter 14: Business Owner Policy

The correct answer is: $7,000

The Building and Personal Property policy covers each of the following EXCEPT:

a. fire extinguishers
b. appliances furnished by the land lord in a tenant’s unit
c. building materials used to make repairs
d. a tenant’s furnishings

Chapter 7: BPP

The correct answer is: a tenant’s furnishings

The earthquake deductible is applied:
a. once each 7 days (168 hours)
b. with each aftershock

This prevents a quick series of quakes from wiping out all of the policy's coverage.

Chapter 11: Earthquake Insurance

The correct answer is: once each 7 days (168 hours)

The Business Income form covers each of these EXCEPT:

a. lost profits
b. payroll
c. necessary continuing operating expenses
d. property replacement

The replacement of the property will be covered by the BPP.

Chapter 8: Business Interruption Policies

The correct answer is: property replacement

The owner of a business carelessly left the rear door unlocked over the weekend, resulting in merchandise being stolen. Under a Building and Personal Property policy – Special, this loss:

a. will not be covered

b. will be covered as a theft loss

My personal inclination is to somehow punish this store owner by denying coverage for the store owner's negligence. But, wait a minute! That is exactly why the store owner wants a property policy - to cover the owner's mistakes. A perfect store owner wouldn't need insurance. So, the negligence of the store owner is irrelevant - we will pay the claim.

Chapter 7: BPP

The correct answer is: will be covered as a theft loss

A business is insured by a $400,000 BOP. If three trees valued at $600, $700, and $400 are destroyed by fire, the policy will pay how much?

a. $500

b. $1,000
c. $1,400

d. $1,700

The limit per tree under the BOP is $1,000, with a maximum payment of $2,500 for all trees. So, these trees are fully covered for a total of $1,700.

Chapter 14: Business Owner Policy

The correct answer is: $1,700

The indemnity agreement is designed to protect the:

a. obligee

b. surety

Chapter 22: Surety Bonds

The correct answer is: surety

State law requires that commercial autos be covered for each of the following EXCEPT:

a. physical damage
b. property damage liability
c. bodily injury liability
d. supplementary

Chapter 23: Commercial Auto

The correct answer is: physical damage

A CGL covers each of the following EXCEPT:

a. bodily injury
b. property damage
c. personal injury
d. employers liability

Chapter 15: Commercial General Liability

The correct answer is: employers liability