IDAHO PROPERTY INSURANCE EXAM Q&A VERIFIED

IDAHO PROPERTY INSURANCE EXAM Q&A VERIFIED The term flood refers to all of the following EXCEPT A. an overflow of inland tidal waters B. collapse of land as a result of excessive erosion due to flood C. mudslides D. sewer backup - Sewer backup Insurers may be classified according to their financial strength. This includes all of the following factors EXCEPT... A. Number of clients B. Loss experience C. Investment performance D. Operating expenses - Number of clients An individual applied for auto insurance and obtained coverage from ABC IC. Who is the 1st party in the contract? A. The insured (customer) B. The insurer (IC) C. The agent D. The insured and agent - A. The insured (customer) If a fire causes damage to a building, the fire is... A. A Hazard B. A Peril C. A Risk D. An Exposure - B. A Peril Wearing a seatbelt in a car is an ex of which method of managing risk? A. Retain B. Avoid C. Reduce D. Transfer - C. Reduce Tiffany leaves her car unlocked when she goes shopping. She figures her car and its contents are insured, so there is no reason to worry. Which type of hazard is this an example of? A. Physical B. Morale C. Careless D. Moral - Morale A flood is an example of.... A. A peril B. A moral hazard C. A speculative risk D. a physical hazard - A peril An insurance company incorporated in Wisconsin and conducting business in Wisconsin is known as a domestic company. What kind of company are they considered if they do business in Minnesota? A. Alien B. Domestic C. Foreign D. Nonadmitted - Foreign All of the following statements about a stock insurance company are true EXCEPT A. A stock co pays dividends to stockholders B. A stock co is a participating co C. A Stock co is a nonparticipating co D. a stock co has shareholders - A stock company is a participating company What do IC's use to help predict how many losses will occur in a group or class of individuals? A. The law of Large Numbers B. Standard and Poor's Insurance Rating Service C. Risk retention groups D. Adverse Selection - The law of Large Numbers State require companies to have a license to sell insurance in the state. The license is called... A. A certificate of authority B. A reinsurance license C. A producer's license D. An admittance license - A certificate of authority All of the following are requirements of an insurance pure risk EXCEPT... A. premiums must be calculable B. premium must be affordable C. the risk must be catastrophic for the insurance company D. The loss must have been accidental - the risk must be catastrophic for the insurance company Carl hands out a business card with his company's logo to all new prospects that he meets at a golf outing. This is an example of... A. express authority B. implied authority C. Apparent authority D. Agent Authority - implied authority Agency is a relationship in which one person is authorized to represent and act for another person or a corporation. In insurance, the insurance agent acts on behalf of... A. The principal B. The insured C. The claimant D. The adjuster - The principal Which of the following types of advertising does not involves an agent and is conducted through the mail, by advertisements in newspapers and magazines, on television and radio or through the internet? A. Direct writing B. Captive agency system C. Direct response D. Cold calling - Direct writing Which of the following individuals represent only on insurance company? A. An Independent Agent B. A general Agent C. A Captive Agent D. A Managing General Agent - A Captive Agent Which of the following terms describes a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration? A. An offer B. an acceptance C. a contact D. A consideration - A contact Which of the following is NOT an element of a legal contract? A. Offer B. Acceptance C. Legal purpose D. Unilateral - Unilateral Jill is filling out an insurance application with information that she believes to be true. The information that she is providing is considered: A. a representation B. a misrepresentation C. a material misrepresentation D. a warranty - a representation A guarantee that something is true is... A. a representation B. a misrepresentation C. a material misrepresentation D. a warranty - a warranty The heart of the insurance policy that states what will be covered is called... A. The insuring agreement B. The conditions C. The declarations D. The definitions - The insuring agreement Which of the following would NOT be included on the declarations page of the policy? A. The name of the insured B. The amount of coverage provided C. The description of the policy D. The exclusions of the policy - The exclusions of the policy The duties of a loss condition lists the insured's responsibilities after a loss. One of these duties requires that the insured completes an official inventory of the damages. This is also known as... A. a detailed proof of loss B. a notice of claim C. Valuation D. Subrogation - a detailed proof of loss All of the following statements regarding the rights and responsibilities of an insurer or insured when an insurance contract is cancelled or non-renewed are true EXCEPT... A. both the insurance company and insured can cancel a contract at any time B. when a policy is cancelled on the effective date, by either the insurer or insured, it's called a flat cancellation C. it is common that a policy is extended at the end of its term or policy period D. if the insured had paid premiums in advance for future months, any unused premium - A. both the insurance company and insured can cancel a contract at any time Which of the following is NOT a ratio that the insurer uses to evaluate performance? A. Loss ratio B. Expense Ratio C. Combined ratio D. Cost ratio - Cost ratio Which of the following is an oral or written statements made by the agent that gives the insured immediate coverage for a specified time? A. A binder B. An application C. An insurable interest D. A contract - A binder