Prep Review Most often Property & Caustly

J has medical payments coverage as a part of her Personal Auto Policy (PAP). Under which of the following circumstances would this coverage pay?

1. J's son is drag racing in her automobile and gets injured.

2. J is riding around on a friend's motorized dirt bike and injures herself.

3. J is involved in a car accident, and the driver of the car J hit, gets injured.

4. J hits another car, and her passenger, S, gets injured.

J is involved in a car accident, and the driver of the car J hit, gets injured.

n a Personal Auto Policy (PAP), which of these policy features is NOT a Supplementary Payment?

1. accrued interest on an appeal bond

2. loss of earnings

3. bodily injuries

4. cost of a bail bond

bodily injuries

Under a personal auto policy (PAP), which of the following statements about a newly acquired additional vehicle is FALSE?

1. Pickups or vans used for business other than farming must be reported within 14 days.

2. Automatic physical damage coverage does not exceed 14 days.

3. Automatic liability coverage is provided to the end of the policy term.

4. Automatic coverage is on the same basis as that provided to a present vehicle.

Automatic liability coverage is provided to the end of the policy term.

Under a Personal Auto Policy (PAP), Transportation Expenses differs from Substitute Transportation coverage in all of the following ways, EXCEPT:

1. there is a 24 hour waiting period for any covered loss besides theft.

2. the maximum payable is $20 per day.

3. there is a 48 hour waiting period after a theft.

4. the insured must pay an extra premium for the coverage.

the insured must pay an extra premium for the coverage.

What would NOT be covered under a personal automobile policy (PAP) comprehensive coverage?

1. damage to a covered auto as a result of vandalism

2. damage to a covered auto as a result of collision with a deer

3. damage to a covered auto as a result of a flood

4. damage to a covered auto as a result of mechanical breakdown

damage to a covered auto as a result of mechanical breakdown

When a newly acquired auto purchased is purchased, the named insured must notify the insurer within what period of time in order for coverage under an existing personal automobile policy (PAP) to be provided?

14 days

Under a Personal Auto Policy (PAP), which of the following would be covered by "other than collision" coverage?

1. Damage to the covered auto when it hits a telephone pole

2. Damage to the covered auto when it hits a rock wall

3. Damage to the covered auto when it strikes a building

4. Damage to the covered auto when it strikes a dead deer

Damage to the covered auto when it strikes a dead deer

Which of the following is an example of a nonowned auto under a Personal Automobile Policy (PAP)?

1. A new auto added to the policy

2. The vehicle identified in the declarations

3. A borrowed vehicle

4. A trailer attached to the covered auto

borrowed vehicle

Under Part D - Damage to Your Auto under a Personal Auto Policy (PAP), colliding with an animal is considered to be:

1. Offensive to PETA

2. Hurtful to the animal

3. A comprehensive loss

4. A collision loss

A comprehensive loss

Under a Personal Auto Policy (PAP), a replacement vehicle on loan from a garage mechanic to be used by an insured until his vehicle is repaired and returned is considered a:

temporary substitute vehicle

All of the following are exclusions under Part D - Physical Damage of a personal auto policy (PAP), EXCEPT:

1. Mechanical breakdown.

2. Using the covered auto as a livery conveyance.

3. Flood damage to the auto.

4. Seizure by government authority.

flood damage to the auto

All of the following would be considered a type of collision loss under a Personal Auto Policy (PAP), EXCEPT:

1. covered auto striking a telephone pole

2. an insured's auto strikes a moose

3. insured's auto collides with a relative's auto on the insured's property

4. an insured hit a shopping cart while turning into a store parking lot

an insured auto strikes a moose

G is driving X's car with permission when G slams into another car, causing bodily injury to the other driver, D. Assuming all of the drivers are properly insured under a Personal Auto Policy (PAP), which of the following will occur?

1. G is fully covered under his policy

2. X's policy will cover the loss

3. D will have to collect damages in court

4. X and G's coverage will subrogate and split the cost.

X's policy will cover the loss

XYZ Corporation has a Business Auto Policy (BAP). The CEO, who is not the named insured, uses his personal car to drive to a meeting. His car would be considered:

a non-owned auto

Which of the following is a common endorsement that can be added to a Personal Auto Policy (PAP)?

1. Additional perils coverage

2. Drive other car coverage

3. Property inclusion protection

4. Spouse and children rider

Drive other car coverage

Which of the following would require the Mobile Equipment endorsement to be properly covered under Business Auto Policy (BAP)?

1. Front end loader

2. Tandem dump truck

3. Pickup truck with a boom crane attached

4. School Bus

Front end loader

All of the following are covered under Garagekeepers form Physical Damage Coverage EXCEPT:

1. Hail

2. Fire

3. Explosion

4. Theft

Hail

All of the following perils are excluded under the Garage coverage form, EXCEPT:

1. damage to stored vehicles done by an earthquake

2. auto dealer loss of market value

3. loss of stored autos at an unnamed location

4. Collison of unsold autos during transport of a dealer that is 75 miles away from the insured

damage to stored vehicles done by an earthquake

Each of the following companies could be covered by a Garage Coverage Form, EXCEPT:

1. a motorcycle repair service.

2. a used automobile dealership.

3. a construction company that builds garages.

4. a valet parking service.

a construction company that build garages

M is a mechanic who works for Broken Axle auto repair shop. One Tuesday, M is driving around a customer's repaired car and accidentally smashes it against the wall of the garage door on the way out. The section of Garagekeepers coverage that will cover M's accident is:

1. Section II

2. Section I

3. Section III

4. Section IV

Section III

What loss is NOT covered under the Garagekeeper's Coverage in the Garage Coverage Form? ?

1. damages to a customer's auto by an employee

2. bodily injury loss stemming from an automobile servicing hoist

3. claim resulting from a mistake in judgment by the insured while repairing a customer's auto

4. loss due to employee negligence

bodily injury loss stemming from an automoblie servicing hoist

A comprehensive Garagekeepers form will cover all of the following perils, EXCEPT:

1. Vandalism

2. Earthquake and flooding

3. Windstorm and Hail

4. Burning of the auto during transport

earthquake and flooding

H's used car business is about to open and H must place a policy on his business to protect against his commercial losses. H should purchase:

Garage Coverage Form

Which is correct regarding an unendorsed Garage Liability coverage form?

1. It excludes damage to the customers vehicles caused by the insured’s defective product or work

2. It covers claims for loss of use of property, if not physically damaged

3. It covers damages to the insured’s own product

4. It covers damage to the customers vehicles caused by the insured’s defective product or work

It covers damage to the customers vehicles caused by the insured’s defective product or work

Which of the following is excluded on the Garage coverage form?

1. injury to customers on the premises

2. damage to the customer car left for repair

3. customers test driving lot cars

4. mechanics test driving customers cars

damage to the customer car left for repair

In which part of a Business Auto Policy (BAP) are the appropriate auto codes and premiums listed?

declarations

Under a Business Auto Policy (BAP), the endorsement that covers a person named in the policy for use of automobiles that are not covered autos under the Business Auto Coverage form, and that they do not own is known as:

Drive Other Car Coverage

Under the Individual Named Insured endorsement under a Business Auto Policy (BAP):

coverage is added at no extra premium

Which of the following machines is not covered under the definition of mobile equipment?

1. a tractor planting seeds

2. a yacht cruising the Atlantic

3. a bulldozer that is being used to build a private office building

4. a power crane building a sky scraper

A yacht crusing the Atlantic

Specified causes of loss coverage under a Business Auto Policy (BAP) will cover which perils?

1. windstorm, fire, lightning, explosion, theft, vandalism

2. Hail, fire, lightning, explosion, theft, vandalism

3. fire, lightning, explosion, theft, vandalism

4. Flood, fire, lightning, explosion, theft, vandalism

fire lighting explosion theft vandalism

All of the following are subject to special sublimits under a Business Auto policy (BAP), EXCEPT:

1. Uninsured/underinsured motorist coverage

2. Towing and labor costs

3. Liability coverage for bodily injury to others

4. Rental reimbursement coverage

liability coverage for bodily injury to others

Liability coverage under Section II of a Business Auto Policy (BAP)will provide coverage for:

1. A service station employee taking an insured’s vehicle for a test drive

2. The leasing company for an auto leased by an insured without an endorsement

3. Clean up costs resulting from an oil spill after an accident with an insured auto

4. Clean up costs from oil leaking after a covered auto broke down and was being towed

1. Clean up costs resulting from an oil spill after an accident with an insured auto

What type of coverage may be endorsed to a Garage Coverage form to protect the repair shop owner if a customer’s auto is damaged while in his custody?

1. Hangarkeepers liability

2. Garagekeepers liability

3. General liability coverage

4. Auto Dealers coverage

Garagekeepers liability

The trailer interchange portion of the truckers and motor carriers coverage form does what?

1. It says borrowed trucks are covered equally between the policies of the borrower and the owner.

2. It says borrowed trucks are covered under the policy of the borrower, not the owner.

3. It says borrowed trucks are covered under the policy of the owner, not the borrower.

4. It covers borrowed trucks in lieu of the policies of the borrower and the owner.

it says borroewed trucks are covered under the borrower not the owner

A Commercial General Liability (CGL) policy defines bodily injury liability as all of the following EXCEPT:

1. Nonphysical Injuries

2. Death resulting from physical harm

3. Sickness or disease resulting from physical harm

4. Physical harm

nonphysical injuries

A Commercial General Liability (CGL) policy defines property damage liability as all of the following EXCEPT:

1. Damage to intangible property

2. Physical damage to tangible property

3. Loss of use of tangible property

4. Loss of use of tangible property even if not damaged

damage to intangilbe property

A Commercial General Liability (CGL) Policy provides coverage for exposures to loss arising out of what operation?

1. on or away from the insured's premises

2. away from the insured's premises only

3. business and personal

4. on the insured's premises only

on or away from the insured’s premises

The aggregate limit on the Commercial General Liability (CGL) policy is the:

maximum payout for the entire policy period

What types of losses incurred would be covered under the commercial general liability (CGL) claims made form?

1. bodily injury to an employee injured in the course of employment

2. bodily injury for which an insured may be held liable by reason of an automobile accident

3. property damage for which an architect preparing drawings is obligated to pay damages by reason of the assumption of liability in an agreement

4. bodily injury resulting from the intentional use of reasonable force by the insured while protecting his property

bodily injury resulting from the intentional use of reasonable force by the insured while protecting his property

Which is NOT an example of a commercial general liability (CGL) personal injury?

1. False imprisonment

2. Damage to someone’s character and reputation

3. Wrongful entry or eviction

4. Bodily injuries

Bodily injuries

Which of the following limits on a commercial general liability (CGL) coverage policy is considered one of the two overall policy limits?

1. Personal and advertising injury limit

2. Products-completed operations aggregate limit

3. Damage to premises rented to the insured limit

4. Per occurrence limit

Products-completed operations aggregate limit

All of the following statements pertaining to Medical Payment Part C of the Commercial General Liability (CGL) policy are correct, EXCEPT:

1. It has a modest coverage limit, often of $5,000 or less.

2. A person has to establish the liability of the insured before medical benefits will be paid under the contract.

3. It is goodwill coverage.

4. A claim must be filed within 1 year of an accident which caused bodily injury.

a person has to establish the liabilty of the insured before medical benefits will be paid under the contract

Products and Completed Operations liability under a Commercial General Liability (CGL) policy excludes coverage for which of the following?

1. recall of products

2. damage caused by a defective product

3. a vendor's liability for the products of others

4. damage occurring after possession of the product has been relinquished

recall of products

What is true with regard to Products and Completed Operations coverage under a claims made Commercial General Liability (CGL) form?

1. Products coverage protects against any advertising losses incurred if connected with a faulty product.

2. A separate aggregate limit applies to this coverage under a CGL policy.

3. A loss will be paid as long as the injured party never had possession of the product.

4. Injuries sustained must occur on the insured's premises.

a separate aggregate limit applies to this coverage under a CGL policy

Acme Fence and Railing installs a railing next to the front steps of an elderly client's house. When the client walks down the steps, the railing fails. As a result, the elderly client breaks an ankle. Which type of loss is this?

1. A completed operations liability

2. An operations liability

3. A premises liability

4. A product liability

A completed operations liability

J purchases groceries at a local supermarket, including a new brand of vegetable soup. J's family becomes violently ill after consuming the soup. What type of coverage will protect the soup manufacturer because of any bodily injury suffered by J's family?

1. completed operations liability

2. manufacturers' liability

3. premises and operations liability

4. products liability

products liability

H owns a small retail store which sells handbags. Which type of exposure would be most threatening to H's business?

Premises and operations

Infringement ,of a copyright, title or slogan, business style misappropriation and slander would be considered:

advertising injury

What situation would be covered by products and completed operations liability under a Commercial General Liability (CGL) policy?

1. contractual liability assumed by the insured

2. bodily injury caused by a defect in a product

3. replacement of a defective product

4. property damage to the named insured's products

bodily injury caused by a defect in a product

The ABC Contracting Company built a porch on a building for an insured. One year after the porch was completed it collapsed, causing injury to the homeowner. This type of accident would be considered a:

products and completed operations liabilty loss

Which is the most correct statement about Commercial General Liability (CGL) aggregate limits?

1. One aggregate applies to Product and Completed Operations and a second aggregate for all other policy coverages

2. The Commercial General Liablity (CGL) policy does not use aggregate limits

3. One aggregate applies to Premises Operations & Completed Operations and a second aggregate to all other coverages

4. One aggregate applies to all claims for all policy coverages

One aggregate applies to Product and Completed Operations and a second aggregate for all other policy coverages

The stealing of property while leaving visible signs of forced entry best describes:

burglary

All of the following statements are true regarding Employee Dishonesty, EXCEPT:

1. when written on a schedule basis, the limit of insurance applies "per employee"

2. it may be written on a blanket basis or a schedule basis

3. when written on a blanket basis, the limit of insurance applies "per loss," regardless of how many employees were involved

4. loss discovered upon taking inventory is not covered but can be added by endorsement

loss discovered upon taking inventory is not covered but can be added by endorsement

What is the primary difference between robbery and theft?

Theft is the taking of property and robbery involves a threat or harm to another person.

Forgery or Alteration provides coverage for loss by Forgery or Alteration of all of the following, EXCEPT:

1. insured’s checks

2. insured’s drafts or promissory notes

3. insured’s negotiable instruments

4. insured's inventory log

insured inventory log

Which of the following statements BEST describes the difference between bonding and insurance?

1. Insurance only has two parties, bonds have three and once loss occurs in insurance there is no expectation of repayment in most cases whereas in bonding, the guarantor has right to recover loss payment from the obligor.

2. There is no difference

3. Insurance pays on the expectation of loss whereas bonding guarantees loss will occur

4. Insurers have no right to recover loss payment from an insured or a principal

1. Insurance only has two parties, bonds have three and once loss occurs in insurance there is no expectation of repayment in most cases whereas in bonding, the guarantor has right to recover loss payment from the obligor.

Which of the parties to a surety bond guarantees the obligation?

surety

The party that is paid money if the Principal fails to perform is the

obligee

Which of the parties to a surety bond is required to perform an obligation?

principal

Which of the parties to a surety bond requires a fulfilling of an obligation?

obligee

A fidelity bond protects which of the following?

1. A customer

2. An insurer

3. An employer

4. An employee

an employer

In a Fidelity Bond, the period of discovery:

1. is allowed in the case of inventory shortage

2. is the time the employer has to realize they have suffered a loss

3. is a three year period under a blanket position bond

4. is a two year period on a Commercial blanket bond

is the time the employer has to realize they have suffered a loss

An insured purchases a Personal Umbrella policy with a limit of 1 million. The underlying limit requirement is $300,000 for personal or auto liability. If his auto policy is cancelled and he later causes bodily injury to another in an auto accident, how will his Umbrella policy respond?

1. It will pay the first $300,000 of damages only

2. It will pay 70% of the claim

3. It will provide no coverage since his underlying policy was cancelled

4. It will pay as if the underlying policy was in force.

It will pay as if the underlying policy was in force

If the underlying policy is cancelled, an umbrella policy would:

Pay as if the cancelled policy was still in effect

Why is a Self-Insured Retention (SIR) included in a Personal Umbrella Policy (PUP), and how does it contribute to the overall coverage structure?

1. The SIR ensures the policy remains affordable for high-risk individuals; it reduces the need for underlying insurance coverage.

2. The SIR shifts a portion of the risk to the insured; it provides an extra layer of protection above the primary insurance policies.

3. The SIR acts as a deductible for bodily injury claims only; it lowers the premium cost of the umbrella policy.

4. The SIR eliminates the need for liability coverage on the underlying policies; it guarantees complete coverage under the umbrella policy.

The SIR shifts a portion of the risk to the insured; it provides an extra layer of protection above the primary insurance policies.

What is the primary purpose of a Self-Insured Retention (SIR) in a Personal Umbrella Policy (PUP)?

1. To provide a layer of self-insurance before the umbrella coverage applies

2. To waive the requirement of other underlying insurance policies

3. To reduce the overall premium cost of the policy

4. To determine the maximum liability limit for the insured

to provide a layer of self-insurance before the umbrella coverage applies

An insurance policy that provides excess liability coverage over another policy's underlying limits is known as an:

umbrella

A businessowners policy (BOP) is a commercial package policy for small businesses. All of the following are optional coverages available in a Businessowners Policy, EXCEPT:

1. Mechanical breakdown of objects

2. Outdoor signs

3. Employee dishonesty

4. Business personal property

mechanical breakdown of objects

A Businessowners Policy (BOP) declaration page shows three separate limits of liability, which are:

1. Professional Service, Property Damage, and Fire Legal Liability.

2. Supplementary Payments, Medical Payment to Others, and Fire Legal Liability.

3. Combined Single Limit, Medical Payments to Others, and Fire Legal Liability.

4. Advertising Injury, Personal Injury, and Fire Legal Liability.

Combined Single Limit, Medical Payments to Others, and Fire Legal Liability.

A Businessowners Policy (BOP) provides coverage for each of the following, EXCEPT?

1. Damage to premises rented to you

2. Supplementary payments

3. Damage to lawns

4. Premises and operations liability

damange to lawns

An employer that may be sued as a result of wrongful termination may be protected by:

1. Professional liability insurance

2. Employment practices liability insurance

3. Employee benefits liability insurance

4. Fiduciary liability insurance

emplyoment practices liability insurance

What commercial policy protects an insured from both the risks of: intentional and unintentional liability; the repairing or replacing of computer systems; the cost of notifying clients; and lawsuits?

1. Cyber Liability Insurance

2. Commercial General Liability

3. Terrorism Risk Insurance Act

4. Data Processing Liability

Cyber Liability Insurance

Each of the following elements must be included in a contract in order for it to be legal, EXCEPT:

1. Legal capacity

2. Consideration

3. An exclusion section

4. Offer

an exclusion section

In the formation of a legal contract, each party must give something of value. Under contract law, this is referred to as:

consideration

What are the four elements required for a contract to be legal?

Competent parties, offer and acceptance, consideration, legal purpose

The "conditions" section of an insurance contract sets forth the:

1. limits of liability under the contract.

2. exclusions of coverage under the contract.

3. rules of conduct for the insured and insurance company.

4. coverage provided by the contract

rules of conduct for the insured and insurance company.

The declarations page of an insurance policy contains which of the following?

1. conditions and exclusions

2. specifications for the payment of loss

3. insured's statement about the condition of the property

4. insured's name and address and the time duration of the policy

insured’s name and address and the time duration of the policy

All of the following are typically written in as an exclusion on a policy, EXCEPT:

1. predictable losses.

2. items with a high monetary value.

3. items covered under other types of insurance.

4. catastrophic losses.

items with a high monetary value.

B has a property policy and would like to know perils are covered. B should read the:

1. Exclusions

2. Declarations

3. Conditions

4. Insuring Clause

insuring clause

Which of the following policy sections identifies and describes a policy's insurance terms?

1. Coverage divisions

2. Declarations

3. Definitions

4. Declaratory statements

definitions

Which of the following is a major section of the liability insurance policy?

1. Loss payment

2. Perils

3. Property covered

4. Conditions

conditions

Which of the following policy components identifies the rights and duties of an insured and insurer?

1. Conditions

2. Definitions

3. Declarations

4. Exclusions

conditions

The legal process by which an insurance company, once it reimburses someone for a loss caused by someone else, assumes the legal right to sue the "guilty" third party, is called:

1. split limit liability.

2. strict liability.

3. subrogation.

4. surety.

subrogation

The responsibility for the insured to prevent further loss of property from damage under reasonable conditions is listed under:

1. Duties of the Insurer

2. Duties of the Insured

3. Definitions

4. Obligations of the Insurer

Duties of the Insured

Under the policy, who has the obligation to notify the mortgagee of a policy cancellation?

1. insurer

2. agent

3. lending institution

4. insured

insurer

Under which of the following provisions would separate property policies cover a loss equally?

1. Other Insurance clause

2. Pro Rata Liability

3. Contribution by equal shares

4. Primary and Excess clause

contribution by equal share

When a kitchen fire resulted in a loss covered by R's homeowners policy, the terms of the policy required R to submit a written proof of loss to the insurer within 60 days of its request. Each of the following items would be necessary information to include in this proof of loss, EXCEPT:

1. Other insurance that may be in force

2. The applicable police report

3. An inventory of the damaged property

4. The time and cause of the loss

the applicable police report

How do policy exclusions related to wear and tear or gradual deterioration help insurers control costs?

1. Insurers can avoid paying for damages caused by natural wear and tear, reducing claim frequency.

2. Exclusions for wear and tear shift the responsibility for maintenance and repairs to the policyholder.

3. Insurers can charge higher premiums for policies that cover wear and tear or gradual deterioration.

4. Exclusions for wear and tear encourage policyholders to properly maintain their property.

Insurers can avoid paying for damages caused by natural wear and tear, reducing claim frequency

The perils covered in an insurance policy would be found in the:

1. Declarations

2. Insuring agreement

3. Conditions

4. Exclusions

insuring agreement

The perils covered in a property and liability insurance contract are found in the:

1. Exclusions

2. Declarations

3. Conditions

4. Insuring agreement

insuring agreement

What part of an insurance policy states that the insurer promises to pay claims?

1. Insuring provision

2. Exclusions

3. Conditions

4. Declarations

insuring provision

If the first named insured dies who is responsible for the duties under the policy?

1. Partner of the business

2. Director of the business

3. Temporary custodian

4. Spouse of the deceased

temporary custodian

Written proof of loss must be provided to the insurer:

1. Within 60 days of the loss

2. Within 60 days of the insurer’s request

3. Within 30 days of the loss

4. Within 30 days of the request

Within 60 days of the insurer’s request

Transferring the rights of a policy to another party is known as:

assignment

The deductible found in an insurance contract is a means of doing which of the following with risk when the insurer requires it?

1. Retaining

2. Avoiding

3. Transferring

4. Reducing

retaining

Which of the following lowers premiums in an insurance policy?

1. Adding an additional insured

2. Insuring more than one auto under one policy

3. Endorsements

4. Deductibles

deductibles

The responsibility for the insured to prevent further loss under reasonable conditions is listed under the:

1. Exclusions

2. Insuring Clause

3. Duties of the Insured

4. Declarations

duties of the insured

Which of the following policy components provides coverage in addition to the perils insured against?

1. Supplementary payements

2. Policy conditions

3. Additional coverages

4. Definitions and declarations

additional coverage

The fact that an insured may recover more than what was paid in premiums is known as:

1. Conditional

2. Adhesion

3. Unilateral

4. Aleatory

ALEATORY

For a misrepresentation to result in the voiding of an insurance contract it would have to be:

1. Absolutely true

2. Material

3. Conditional

4. Personal

material