FINAL EXAM- MO Property and Casualty Quizzes Solved and Rated 100%

FINAL EXAM- MO Property and Casualty Quizzes Solved and Rated 100% Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? -ANS- Liability coverage What are the two types of compensatory damages? -ANS- Special and general Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses? -ANS- Additional coverage Which of the following policies will help an auto dealership cover most of its liability exposures? -ANS- A garage liability coverage Under the commercial property coverage program, the basic causes of loss form insures against loss caused by... -ANS- Sprinkler leakage The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what max time period? -ANS- 1 year The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information... -ANS- Within 45 days In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for -ANS- Uninsured motorist coverage, bodily injury, and property damage A basic dwelling policy automatically provides coverage against fire, lightning, and -ANS- Internal explosion Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages? -ANS- Special What term includes damage where the insured peril was the proximate cause of loss? -ANS- Direct loss In liability insurance policies, supplementary payments are made -ANS- In addition to the limit of liability According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders? -ANS- The mortgageholder must petition the state department of insurance for named status All of the following are supplemental payments found in liability policies EXCEPT -ANS- Costs the insured incurred in hiring an attorney Which of the following would NOT qualify as a hired auto? -ANS- An auto borrowed from an employee Coverage A - Bodily Injury and Property Damage in the CGL policy will cover -ANS- Losses due to the insured's negligence Which method of loss valuation is contrary to the basic concept of indemnity? -ANS- Replacement cost Which of the following is true regarding the fire department service charge under the builders risk form? -ANS- It is an additional coverage What is the coinsurance requirement for a theatrical property floater under an Inland Marine policy? -ANS- 80% A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true? -ANS- Payment for unnamed perils is reduced by 25% A builder's risk form is most often written as which of the following? -ANS- Completed value form A tornado that destroys property would be an example of which of the following? -ANS- A peril Professional liability coverage protects the insured against legal liability resulting from -ANS- Errors and omissions Replacement cost is defined as -ANS- Full replacement of property at its current cost, new and without reduction for depreciation Duties of the insurer found in the property policy conditions include all of the following EXCEPT -ANS- Notify the insured in the event of financial difficulty What type of compensatory damages will pay for pain and suffering and disfigurement? -ANS- General Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim? -ANS- Professional liability Which of the following is true of dwelling policy coverage? -ANS- Exclusions apply to all three policy forms A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? -ANS- The coinsurance formula would apply Which of the following types of valuation works best for property whose value does not fluctuate much? -ANS- Agreed value Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? -ANS- Valuable papers and records The pro rata liability clause is designed to protect the principle of -ANS- Indemnity All of the following are true statements regarding the supplementary payments of a CGL policy EXCEPT -ANS- They pay defense costs even after the aggregate limit has been reached Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? -ANS- The insured would be responsible for the amount required as underlying limits in the event of a claim. An auto policy issued in Missouri may -ANS- Contain a named driver exclusion How can inland marine coverage be written in this state? -ANS- As a combination policy with fire casualty Which of the following can be licensed as a surplus lines broker? -ANS- A property and casualty producer In order to form a business entity providing medical malpractice insurance, how many licensed persons are required? -ANS- 3 When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered -ANS- Discrimination Which of the following authorities is required to conduct a financial examination of the state's insurers? -ANS- Director An applicant was denied coverage from the Missouri Automobile Insurance Plan. She appealed the decision to the Director, who also denied her application. How many days does the applicant have to file another petition? -ANS- 10 Which of the following is NOT true regarding a Certificate of Authority? -ANS- It is issued to group insurance participants In forming an insurance contract, when does acceptance usually occur? -ANS- When an insurer's underwriter approves coverage Who is NOT considered an employee in a CGL policy? -ANS- Temporary worker If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose? -ANS- Its common law defenses against liability suits An insured owns and operates a commercial business. He has included a business income coverage form with his commercial package policy. When the insured's business is severely damaged by fire, the business income coverage will pay for -ANS- Net income plus continuing expenses of the business How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeowners policy? -ANS- It removes the coverage What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy? -ANS- $10,000 for all expenses incurred during a 12-month period Which of the following may be covered by electronic data processing coverage form under an inland marine policy? -ANS- All of the options Which of the following coverages in dwelling and homeowners policies is for indirect losses? -ANS- Loss of use Which loss listed below would be fully covered by a homeowners policy? -ANS- $2,000 silver tea set stolen In return for premium, an insurance company must -ANS- Be fair in underwriting and pay covered losses Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur? -ANS- Aggregate limit of liability All of the following are excluded in the equipment breakdown basic policy EXCEPT -ANS- Explosion of steam boilers Supplementary payments on a CGL provide all of the following EXCEPT -ANS- Up to $500 a day for lost earnings and $2,000 for the cost of all bail bonds Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim? -ANS- Get the insured's consent Under businessowners policy Section I, if an insurer wants to nonrenew a policy for nonpayment of premium, how many days before the expiration date must the insurer notify the mortgageholder? -ANS- 10 days Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? -ANS- Mechanical breakdown Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? -ANS- $5,000 All of the following statements describe the concept of strict liability EXCEPT -ANS- It is imposed on defendants engaged in hazardous activities Coverage for all of the following is found in Section I of a homeowners policy EXCEPT -ANS- Personal liability If an individual producer's license expires and the producer doesn't want to pass a written exam, the license must be reinstated within what time period from the renewal date? -ANS- 12 months Which of the following would be required to be licensed as an insurance producer? -ANS- A salaried employee who advertises and solicits insurance All of the following are true regarding rebates EXCEPT -ANS- Rebates are allowed if it's in the best interest of the client. How often are insurance producers in this state required to fulfill continuing education credits? -ANS- Every 2 years Which of the following is NOT a punishment for violating the Director's cease and desist order? -ANS- Community service When a property policy is cancelled under the Missouri Basic Property Insurance and Placement Program, the insurer must send the insured a notice of cancellation. Which of the following is FALSE regarding the notice? -ANS- It must be sent at least 15 days prior to the date of cancellation How many hours of continuing education must be completed in ethics and Missouri law each licensing period? -ANS- 3 The owner of a standard fire insurance policy suffers a total loss due to fire. The insurer receives the insured's Proof of Loss statement along with evidence of arson. How soon may the insurer cancel the policy? -ANS- Within 10 days If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, the would be considered -ANS- An unfair trade practice An employee was injured on the job and has been out of commission for the past 3 months. If he last received workers' compensation claims check on June 5th, what is the latest day that he could receive his next check? -ANS- June 19th Which of the following actions is prohibited by the state regulations on producer commissions and compensation? -ANS- Retrospective commissions