Utah Property and casualty insurance Exam Questions and Answers Part one Solved 100%

Which of the following are the authorities that an agent can hold? - Answer Express and implied Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight? - Answer Permanent partial disability Who is NOT considered an employee in an commercial general liability (CGL) policy? - Answer Temporary worker The major portion of the premium of an equipment breakdown policy pays? - Answer For inspections and examinations An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much should he insure the property for? - Answer 80% of the property's replacement cost or more Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must - Answer Respond to the consumer's complaint. All of the following are found in the declarations section of a policy EXCEPT the - Answer Exclusions. The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? - Answer Up to $2,000 All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT - Answer Dividends from a mutual insurer. Which of the following may be covered by electronic data processing coverage form under an inland marine policy? - Answer a) Computer hardware that is specifically scheduled. b) Extra expense the insured incurs to continue the business following a loss. c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs The party to a surety or fidelity bond who promises to fulfill the obligation is the - Answer Principal The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? - Answer Computer fraud Which of the following would NOT be covered under the liability section of a personal auto policy? - Answer Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within - Answer 30 days. What will happen if a house covered by a standard mortgage clause is a total loss? - Answer The insurer pays the mortgagee according to the mortgagee's interest in the property. What is the civil penalty for violating a cease and desist order of the Commissioner? - Answer $10,000 The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT - Answer Business liability. If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss? - Answer $8,000 The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called - Answer Avoidance. In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by - Answer The insurer. Which of the following entities must approve all continuing education courses in this state? - Answer The Commissioner An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of - Answer Concealment A common exclusion found under physical damage to your auto includes - Answer Mechanical breakdown. Which of the following is true regarding a risk retention group? - Answer It is a liability insurance company owned by its members. Which of the following best describes a misrepresentation? - Answer Issuing sales material with exaggerated statements about policy benefits A builder's risk form is most often written as which of the following? - Answer Completed value form An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? - Answer Per occurrence Which of the following is an example of a protective safeguard in a businessowners policy? - Answer Automatic sprinkler system If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? - Answer The change must be reported to the Commissioner. If more than one person has an insurable interest in the property covered under a dwelling policy, - Answer The insurer will be liable for only the insured's interest in the damaged property. Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay - Answer $100,000. An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if - Answer A joint ownership coverage endorsement is added. Which of the following is defined as a covered cause of loss in businessowners property coverage? - Answer Leakage from fire-extinguishing equipment The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will - Answer Apply to injuries of any guests or visitors. All of the following are exclusions under farm property coverage EXCEPT - Answer Loss of use. Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? - Answer 3 years Which of the following is an example of an unfair claims settlement practice? - Answer Failure to promptly settle a claim when liability has been clearly established Which of the following definitions best defines the term "accident"? - Answer A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended An insured's accounts receivable records have been damaged. The loss may be covered with - Answer The accounts receivable coverage form. Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases? - Answer The employer, regardless of whether it was at fault for the injury or disease A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT - Answer Be responsible for at least 25% of total commissions collected by the office that he or she manages. When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? - Answer They do not change. In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called - Answer Self-insured retention. Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? - Answer The insured is injured while driving his motorcycle on his resident premises. Which of the following is NOT an essential element of an insurance contract? - Answer Counteroffer Which of the following persons is required to hold a producer license? - Answer A person who negotiates insurance contracts If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's - Answer Ancestry Which of the following would NOT be classified as personal property for insurance purposes? - Answer A house Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS - Answer The injuries fall within the definition of "serious injury." Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? - Answer The coverage is considered good will because payments are made without regard to fault. Homeowners policies provide coverage for - Answer Business property while on the residence premises. Who will transport the property of anyone who hires them? - Answer Common carriers In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? - Answer Deductible A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy? - Answer Lost revenues from the restaurant How much is the premium for the dwelling under construction endorsement under the dwelling policy? - Answer The average amount of insurance during construction With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT - Answer Immediately report to an emergency room for medical examination. Which insurers are required to participate in the Pennsylvania Automobile Insurance Plan (Assigned Risk Plan)? - Answer All insurers authorized to write auto liability insurance in the state A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license? - Answer The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible. Which of the following is NOT true regarding a Certificate of Authority? - Answer It is issued to group insurance participants. What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property? - Answer 80% (note-Coverage F - Unscheduled Farm Personal Property insures all farm personal property on a blanket basis. Coverage F is subject to an 80% coinsurance clause. ) Which of the following would be considered an unfair claims settlement practice? - Answer A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered Which of the following policies must contain, at a minimum, policy language equal to the Standard Fire Policy? - Answer All of the above Under the dwelling policy, Coverage C - Personal Property is - Answer Limited to covering a servant's property while at the insured location. Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license? - Answer Forgery In dwelling policies, automatic increase in insurance is - Answer Coverage by endorsement. What is the maximum amount of protection available to insureds under the Pennsylvania Property and Casualty Insurance Guaranty Association? - Answer The amount of loss up to the amount of coverage in the original policy, not to exceed $300,000 (per claimant) A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? - Answer The loss is payable to the insured and the mortgagee. With regards to a homeowners policy, which coverage provides for indirect or consequential losses? - Answer Coverage D To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than - Answer 6 stories. How soon after the due date should the insurer pay the agent appointment fees? - Answer Within 30 days Which of the following is the federal body that regulates truckers who travel across state lines? - Answer Federal Motor Carrier Safety Administration What is not a consideration when paying an inland marine claim? - Answer Market value when the property was first purchased A commercial property special form covers property in transit up to - Answer $5,000. Bulk carriers are used to transport - Answer Loose cargo. According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? - Answer 60 days In which of the following situations would punishment include imprisonment? - Answer Omission of a material fact with intent to embezzle funds A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days? - Answer 30 The legal liability coverage form provides coverage for damages for which the insured is legally liable arising from - Answer Direct physical damage to property of others in the insured's care. Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? - Answer Symbol 5