Exam Fx Study Guide| 167 Questions| With Complete Solutions

A state-established program that requires insurers who write property insurance to accept risks in economically depressed areas in the same proportion as their other business bears to the total property insurance market is called the correct answer: Fair Trades Practice plan. A farmer is remodeling his 100-year-old farmhouse. He is in the process of painting the porch and hanging shutters. He keeps his ladder, paint, and other materials used to remodel his home under the porch. Which of the following provides coverage for his remodeling materials? correct answer: Coverage C All of the following are TRUE statements regarding the requirements of an insurer to offer earth movement coverage in California EXCEPT correct answer: Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement. In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? correct answer: Unilateral Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy? correct answer: The period of time to repair or replace is not limited by the expiration date of the policy. An optional coverage endorsement to the homeowners policy that covers scheduled residential structures on the insured's premises that are rented to others is called correct answer: Additional residence rental provision. All of the following are eligibility criteria for applicants in the CAARP EXCEPT correct answer: Anyone who does not owe money on any automobile insurance policy within the last 18 months. All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT correct answer: $500 for business personal property on the insured premises. An independent agent may have contracts with which of the following? correct answer: More than one insurer Under the claims-made CGL the supplemental extended reporting period correct answer: Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium. Which of the following is the correct formula for computing a loss ratio? correct answer: (Incurred losses + loss adjusting expense)/earned premium Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT correct answer: Damage to a third-party property for which the insured is legally liable. Under farm liability, Coverage H includes correct answer: Bodily injury. Cargo has been insured warehouse to warehouse. Which of the following is true? correct answer: The cargo is covered from origin to destination or 60 days after discharge, whichever is first. Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something? correct answer: Injunction bonds The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to correct answer