Smith Motors has garage keepers coverage with a $500 per auto deductible and a
$2,500 maximum deductible per loss. Vandals break in and damage ten vehicles,
causing $400 in damage to each vehicle for a total loss of $4,000. How much of that
total loss will Smith pay as the deductible?
a. $0
b. $1,500
c. $2,500
d. $4,000
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$2,500
Explanation:
The deductible applies for losses from collision, theft, mischief, and
vandalism. A maximum deductible amount applies when a loss is caused by
theft, mischief, or vandalism. In this case, the maximum deductible, which
Smith must cover, is $2,500. The insurer will pay $1,500.
,Jack and Jill are vacationing at a golf resort when a thief enters their room and steals a
laptop computer, golf clubs, cash, and clothing. Jack and Jill contact their
homeowners insurer and ask the claim representative whether they are covered for
this loss. What does the representative tell them?
a. Coverage does not apply to a theft away from the residence premises.
b. Coverage applies but is limited to $1,000.
c. Coverage applies but the claim will be adjusted on a pro rata basis with the resort.
d. Coverage applies just as it would if were stored at the insured's home.
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Coverage applies just as it would if were stored at the insured's home.
Explanation:
Coverage for an insured's personal property applies anywhere in the world,
subject to a restriction that limits coverage to property usually located at
another residence to $1,000. The limitation on property usually located at
other residences does not apply to temporary locations like hotel rooms.
All of the following statements regarding accident coverage under the Limited
Mexico Coverage endorsement are correct EXCEPT:
a. To be covered, an accident must occur more than 25 miles from the U.S. border.
b. The trip into Mexico must not exceed ten days.
c. The insurer's duty to defend arises only if the original suit for damages is brought in
the United States and does not involve a Mexican citizen or resident.
d. No physical damage coverage is provided for repairs made in Mexico unless the
covered auto cannot be driven in its damaged condition.
Give this one a try later!
, To be covered, an accident must occur more than 25 miles from the U.S.
border.
Explanation:
The Limited Mexico Coverage Endorsement contains several major
limitations. Coverage only applies within 25 miles of the U.S. border for trips
that do not exceed ten days at a time.
Sandra has a client that manufactures a product that is difficult to insure. The exposure
is on the state's exportable list. Consequently, Sandra can
a. place the client's coverage in the surplus lines market after getting declinations
from three admitted insurers.
b. place the client's coverage in the surplus lines market without three declinations
from admitted insurers.
c. seek coverage for the client from an alien insurer.
d. seek coverage for the client from a foreign insurer.
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place the client's coverage in the surplus lines market without three
declinations from admitted insurers.
Explanation:
Risks on an exportable list are inherently so hard to place that the state
regulator has waived the diligent search requirement. Therefore, three
declinations are not needed to access the surplus lines market.
The DP 2 form, unendorsed, covers losses to trees and shrubs.
True or False
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, True
Joyce notices that her insurance policy contains a disclosure stating it is written by a
nonadmitted insurance company. She doesn't understand what this means. Her
insurance agent tells her it means all of the following EXCEPT:
a. Her policy was written by an Excess & Surplus (E&S) lines insurance carrier.
b. The E&S carrier is required by law to disclose certain facts to her.
c. If the E&S carrier were to become insolvent, she would not be eligible for
compensation from the state's guarantee association.
d. Her policy was written by a standard insurer that is licensed to do transact
insurance in the state.
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Her policy was written by a standard insurer that is licensed to do transact
insurance in the state.
Explanation:
Nonadmitted insurers are insurers that are neither licensed nor registered
to do business in a given state.
Which form of the commercial general liability (CGL) policy covers the insured for
injuries or damages that occur during the policy period even if that policy is no longer
in force when the claim arises?
a. special form
b. broad form
c. claims-made form
d. occurrence form
Give this one a try later!
$2,500 maximum deductible per loss. Vandals break in and damage ten vehicles,
causing $400 in damage to each vehicle for a total loss of $4,000. How much of that
total loss will Smith pay as the deductible?
a. $0
b. $1,500
c. $2,500
d. $4,000
Give this one a try later!
$2,500
Explanation:
The deductible applies for losses from collision, theft, mischief, and
vandalism. A maximum deductible amount applies when a loss is caused by
theft, mischief, or vandalism. In this case, the maximum deductible, which
Smith must cover, is $2,500. The insurer will pay $1,500.
,Jack and Jill are vacationing at a golf resort when a thief enters their room and steals a
laptop computer, golf clubs, cash, and clothing. Jack and Jill contact their
homeowners insurer and ask the claim representative whether they are covered for
this loss. What does the representative tell them?
a. Coverage does not apply to a theft away from the residence premises.
b. Coverage applies but is limited to $1,000.
c. Coverage applies but the claim will be adjusted on a pro rata basis with the resort.
d. Coverage applies just as it would if were stored at the insured's home.
Give this one a try later!
Coverage applies just as it would if were stored at the insured's home.
Explanation:
Coverage for an insured's personal property applies anywhere in the world,
subject to a restriction that limits coverage to property usually located at
another residence to $1,000. The limitation on property usually located at
other residences does not apply to temporary locations like hotel rooms.
All of the following statements regarding accident coverage under the Limited
Mexico Coverage endorsement are correct EXCEPT:
a. To be covered, an accident must occur more than 25 miles from the U.S. border.
b. The trip into Mexico must not exceed ten days.
c. The insurer's duty to defend arises only if the original suit for damages is brought in
the United States and does not involve a Mexican citizen or resident.
d. No physical damage coverage is provided for repairs made in Mexico unless the
covered auto cannot be driven in its damaged condition.
Give this one a try later!
, To be covered, an accident must occur more than 25 miles from the U.S.
border.
Explanation:
The Limited Mexico Coverage Endorsement contains several major
limitations. Coverage only applies within 25 miles of the U.S. border for trips
that do not exceed ten days at a time.
Sandra has a client that manufactures a product that is difficult to insure. The exposure
is on the state's exportable list. Consequently, Sandra can
a. place the client's coverage in the surplus lines market after getting declinations
from three admitted insurers.
b. place the client's coverage in the surplus lines market without three declinations
from admitted insurers.
c. seek coverage for the client from an alien insurer.
d. seek coverage for the client from a foreign insurer.
Give this one a try later!
place the client's coverage in the surplus lines market without three
declinations from admitted insurers.
Explanation:
Risks on an exportable list are inherently so hard to place that the state
regulator has waived the diligent search requirement. Therefore, three
declinations are not needed to access the surplus lines market.
The DP 2 form, unendorsed, covers losses to trees and shrubs.
True or False
Give this one a try later!
, True
Joyce notices that her insurance policy contains a disclosure stating it is written by a
nonadmitted insurance company. She doesn't understand what this means. Her
insurance agent tells her it means all of the following EXCEPT:
a. Her policy was written by an Excess & Surplus (E&S) lines insurance carrier.
b. The E&S carrier is required by law to disclose certain facts to her.
c. If the E&S carrier were to become insolvent, she would not be eligible for
compensation from the state's guarantee association.
d. Her policy was written by a standard insurer that is licensed to do transact
insurance in the state.
Give this one a try later!
Her policy was written by a standard insurer that is licensed to do transact
insurance in the state.
Explanation:
Nonadmitted insurers are insurers that are neither licensed nor registered
to do business in a given state.
Which form of the commercial general liability (CGL) policy covers the insured for
injuries or damages that occur during the policy period even if that policy is no longer
in force when the claim arises?
a. special form
b. broad form
c. claims-made form
d. occurrence form
Give this one a try later!
