Property & Casualty Practice EXAM Questions

All the following are considered an insured under Part A liability coverage, of the personal auto policy EXCEPT!

Employer while insured is driving a company car.

A bank customer's identity was compromised and the thieves made numerous purchases from a retailer by signing the customer's checks. When the bank refused to make payment for the goods, the retailer brought suit against the bank. which coverage indemnified the bank for liability in the suit?

Forgery and alteration

Which of the following best describes the CGL's general aggregate annual limit as it applies to the coverage parts of the CGL?

Coverage A, B and C apply in sum and are the most that will be paid subject to the general aggregate annual limit.

Which type of crime listed below best describes someone who waits until store personnel are preoccupied and pockets merchandise while no one is looking and leaves without detection?

Theft

The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date?

retroactive date

Which of the following is how defense costs are paid in relation to the limit of insurance under the personal auto policy for bodily injury and property damage part A-liability coverage?

in excess of the limit

A cable company uses employees to install equipment in the customers homes. THe company purchases a bond from an insurance company to protect itself from potential dishonest acts of the employees. Which of the following types of bond does the cable company purchase?

fidelity bond

Exclusions common to liability coverage for both the personal auto policy and the business auto policy include all the following EXCEPT

for liability arising while the insured auto is being used in an auto business.

An extended reporting period attached to a general liability policy provides coverage in which of the following ways?

It provides coverage for claims made outside the policy term.

Which one of the following persons would be covered for accidental injury on the insured's premises under Coverage C of the CGL Medical Payments?

A volunteer worker

In which of the following situations would worker compensation benefits be covered for an injured employee?

a slip and fall while on the job at work

All of the following are common exclusions in a liability policy EXCEPT

damage caused by acts of civil disobedience and riots.

An injured employee covered under workers compensation is entitled to reasonably justifiable expenses for retraining. this benefit falls under which of the following?

vocational rehabilitation

For the CGL coverages of bodily injury, property damage and medical payments, which of the following limits of insurance apply if the aggregate limit is NOT met?

per occurence

Which of the following would be eligible to collect survivor and death benefits from workers compensation in the event of the covered injury resulting in the death of an employee?

spouse of employee

The insured carries under insured motorists coverage limits of 250/500/250 on his automobile policy and his vehicle is struck by an at fault motorist who insures with the State minimum for liability of 20/40/10. If the insured brings suit for bodily injury damages to himself of 500,000 how much will he recover from at fault driver's policy?

20,000

If the insured has a loss with a private passenger nonowned temporary substitute vehicle how will the loss be treated by the insureds own policy for physical damage?

the broadest coverage available extends from the insured's policy.

When an insured is driving his covered automobile causes an accident that results in injury, his automobile causes an accident that results in injury, his automobile medical payments will pay medical expenses for all of the following EXCEPT.

Any occupant of the other not at fault vehicle.

Worker's compensation benefits for loss of wages include which of the following?

replacement of a portion of lost wages

An insured with split liability limits of 100/300/100 is at fault in an automobile accident and the other vehicle sustains $6500 in property damages as well as two occupants have bodily injury and are claiming $150000 each. What is the most insurance will pay to each occupant?

$100,000

Which of the following business liability exposures does a slip and fall loss fall under?

premises and operations

Which of the following business liability insurance policies would provide coverage to ABC Company in a suit brought by a fired employee for wrongful discharge?

Employment Practices Liability

All of the following describe a nonowned auto under the commercial auto policy symbol 9 EXCEPT?

auto not titled to an insured but available for regular use of named insured of family member.

Which par of the CGL designates who is an insured?

Declarations

When an employer sends employees out of state on work related business, which of the following must he do to ensure the appropriate workers compensation coverage?

list the state on the information page for other states coverage

Which of the following provides insurance for employers when workers not covered by workers compensation insurance are injured on the job and sue for compensation?

employer liability

When an insured selects symbol 2 on the automobile declaration, indicating coverage for any auto titled to the insured, which of the following automobile types will be covered?

owned autos only

The insured has a commercial auto policy with a drive other car broadened coverage liability for named individuals (DOC) endorsement. In which of the following would the named individual be covered?

Driving neighbors auto

Which of the following forms trigger coverage for a loss under the commercial general liability policy if a loss happens during the policy period?

occurrence form

Which of the following causes of loss to a vehicle will trigger collision coverage on the personal auto policy Part D-coverage for damage to your auto?

Vehicle upset

Which of the following would be covered perils under the DP-1 Basic policy form?

riot or civil commotion

What is the purpose of the causes of loss form that lists specific exclusions?

to state which perils are insured against

All of the following are the most commonly used personal inland marine forms EXCEPT

builder's floater form

Which of the following would be covered by a commercial package policy?

loss due to crime

The property coverage of a BOP includes which of the following?

carpeting that is permanently installed inside the building

A single earthquake constitutes all shocks that occur within which time period?

72 hours

Which of the following types of policy BEST describes the DP-2 form policy?

named perils

Which of the following is EXCLUDED as a covered loss under the DP-3 coverage?

Damage by ice to outdoor radio and television antennas and aerials

Which exposure is unique to mobile homes?

loss from collision damage

How does the BOP differ from the CPP?

The BOP prepackages a group of coverages desirable to small businesses

According to the Nationwide Definition of marine insurance, which category is an eligible marine risk?

imported goods

Which of the following is the special limit of coverage on the homeowners policy form for property damage to personal watercraft?

$1500

Which of the following homeowners forms covers tenants?

HO-4

Which of the following limits of insurance on the dwelling are available and apply to Coverage D-Fair Rental Value?

20%

Which of the following created The National Flood Insurance Program?

the United States Congress

Which of the following is an example of a financial loss caused by a home being damaged in a windstorm?

direct loss

Mobile homes can be insured in all of the following ways EXCEPT

with a HO-8 Modified Coverage form

Which of the following is the standard amount of coverage A-dwelling provided by the HO-6 Unit-Owners Policy?

$1000

When does the coverage begin for a builders risk form?

on the date of construction starts above the lowest basement floor if there is a basement

Which coverage forms are used when the insured sustains loss of revenue due to direct physical loss from a peril insured against that forces the insured to suspend operations during the period of restoration?

Business Income Coverage forms

Which of the following conditions best describes the type of home that the HO-8 modified coverage form was designed for?

replacement value far exceeding market value

All of the following are a covered cause of loss under the Homeowners HO-2 Broad form EXCEPT

discharge or overflow of water from a sump

All of the following establish a defense against negligence EXCEPT

repudiation of the claim in a court of law

The insured purchases a car for $40000 and added $5000 in insured modifications. Four years later it was worth $24000 when it was totaled in a crash. According to the principle of indemnity, how much should the insured receive from the insurance proceeds?

$24000

Which one of the following valuations methods best describes how a loss will be settled when the policy provides for actual cash value settlement?

replacement cost less depreciation

When the policy term ends and either the insured or the insurance company wants to discontinue coverage which provision is applied?

nonrenewal

All of the following are examples of insurable interest EXCEPT

insuring your friend's automobile

Which type of hazard is an example of a person who increases the chance of loss through carelessness or by irresponsible actions?

morale hazard

Absolute liability can be imposed by law and exist in the absence of which of the following?

negligence

Purchasing boat owners insurance is an example of which of the following?

transfer

Which of the following defines the term peril?

cause of loss

Which of the following defines a loss which is consequential and comes as a result of an original loss?

indirect loss

Which policy condition encourages policy holder to insure to at least 80% of replacement value to avoid a penalty with partial losses?

coinsurance

Which of the following policy assignment rights occurs when the named insured dies?

The insured's legal representative takes

Determining adequate indemnification after a loss is a principle duty of which of the following?

insurance company

All of the following are responsibilities of the insured listed in the loss provisions for most property insurance contracts EXCEPT?

to determining adequate indemnification

All of the following would be found on a declarations page EXCEPT

policy exclusions

What does an application for insurance contractually represent for the insured?

an offer

Underwriters are permitted to use all of the following when underwriting an application for insurance EXCEPT

age, race, and religion

All of the following would be considered to be incompetent to enter into an contract EXCEPT

someone who is incarcerated

The policy conditions as well as state laws permit the insurance company to cancel or rescind a policy when any of the following exist EXCEPT

represensations

The Fair Credit Reporting Act permits consumer reporting agencies to include applicant information about bankruptcies MORE than 10 years old under which of the following circumstances?

The applicant is seeking a transaction greater than $150000

Which document would a lender ask an insured for as evidence that a policy has been written?

Certificate

Which policy condition applies when an insurer covers property losses at cash value rather than an amount that exceeds the repair or replacement value?

loss settlement condition

Punitive damages are intended to do all of the following EXCEPT

compensate for actual financial losses

Which of the following liability insurance policies would provide coverage to ABC Company in a suit brought by a fired employee for wrongful discharge?

Employment Practices Liability

Which of the following types of crime best describe the unlawful act of taking property from the care and custody of another person while threatening to cause bodily harm?

robbery

Which of the following is considered a hired auto under the commercial auto policy symbol 8?

utos the insured leases, borrows or rents

Employees are barred from suing employers in court to obtain compensation for injuries covered by workers? compensation because of which of the following doctrines?

exclusive remedy

The following are all types of disability categories under workers? compensation insurance EXCEPT

temporary permanent

Which of the following is correct for amounts paid as supplementary payments covered in the personal auto policy Part A liability?

They do not reduce the policy limit.

For the CGL coverages of bodily injury, property damage and medical payments, which of the following limits of insurance apply if the aggregate limit is NOT met?

per occurrence

All of the following are methods of limiting liability EXCEPT

collective limit.

Liability arising out of any of the following is excluded from the personal and advertising injury liability coverage EXCEPT

unknowingly inflicting injury that violates the rights of another.

The State highway department is rebuilding a roadway and the general contractor winning the bid will be required to purchase a bond guaranteeing the work will be completed according to specifications and on time. Which of the following types of bonds will the general contractor need to purchase?

surety bond

All of the following are exclusions are found under the personal auto policy Part A liability coverage, EXCEPT

bodily Injury to an insured?s nonresident family member or relative.

All of the following would be eligible expenses after a loss under Coverage E Additional Living Expense EXCEPT

mortgage expenses.

Which of the following would trigger coverage under business income form with extra expense coverage?

Carpet cleaning after a water main break

As a general rule, inland marine insurance covers all of following EXCEPT

merchandise while it is being manufactured.

Which of the following Homeowners form provides the most comprehensive coverage?

HO-5

Which of the following situations under dwelling policy conditions describe how the insurance company will settle a loss?

company has the option to repair to pre-loss condition

All of the following operations would fall under the liability rules for strict liability EXCEPT

livestock ranchers

All of the following demonstrate insurable interest EXCEPT

insuring an engagement ring given to fiancée.

Mysterious disappearance in insurance refers to which occurrence?

the disappearance of property without any explanation of what happened

Which of the following defines the term peril?

cause of loss

When an individual with a pre-existing condition is in an automobile accident and the insurance covers rehabilitation only to the level of the condition prior to the accident, this is because of which of the following principles?

indemnity

Which of the following hazards is an example of a physical hazard?

burning debris near the building on a calm sunny day

All of the following are examples of direct loss EXCEPT

after a car crash you have to rent a replacement vehicle.

Which of the following describes market value?

It is what property could be sold for

Which of the following is TRUE when the insured?s limits of insurance apply per occurrence?

Coverage is triggered for smoke damage to siding caused by repeated acts by insured's neighbor.