PROPERTY AND CASUALTY INSURANCE LICENSING EXAM PREP QUESTIONS AND ANSWERS 2023

To prevent recovery beyond the amount of the insured's actual loss, the policy will contain: An Other Insurance Clause Collision coverage of an auto policy covers: a) road damage to the tires b) upset of the vehicle c) frozen engine block d) falling objects B) upset of the vehicle The maximum amount of payable for all losses resulting from one event is known as the: a) occurrence limit b) aggregate limit a) occurrence limit Which of the following is a cause of loss form? a) declarations form b) proof of loss form c) garage keepers' form d) basic form d) Basic form The minimum flood deductible is: a) $100 b) $250 c) $500 d) $1000 c) $500 The insured intentionally did not inform the insurer that the insured owned only 35% of the property. The insurer can void the policy for: a) conditional coverage b) misrepresentation c) error d) concealment d) concealment Which of the following is NOT a defense against negligence? a) contributory negligence b) statues of limitations c) presumption of negligence d) assumption of risk c) presumption of negligence The presumed authority necessary to carry out the producer's routine tasks is known as: a) expressed authority b) implied authority b) implied authority Which of the following statements regarding the Towing and Labor endorsement is false? a) it will pay to the limit stated in the endorsement each time a covered vehicle is disabled b) there is no coverage for roadside labor costs c) there is no deductible d) none of the above b) there is no coverage for roadside labor costs A licensee may violate federal law and be subject to a fine and prison for doing which of the following? a) selling insurance w/ a nonresident license b) sending threatening letters to the state insurance regulator c) fraudulently telling an insured a claim isn't covered on the policy d) murdering an applicant b) sending threatening letters to the state insurance regulator Which of the following is not an insured location for liability coverage under the homeowners policy? a) a restaurant party room the insured has rented for a business meeting b) the insured's cemetery plot c) a restaurant party room the insured has rented for a birthday party d) vacant land owned by the insured a) a restaurant party room the insured has rented for a business meeting Special covers each of the following EXCEPT: a) theft b) mysterious disappearance c) Acts of God d) floods and earthquakes d) floods and earthquakes Sam has underinsured motorist coverage with limits of $100/$300. Sam is injured by Quincy who has limits of $50/$100. Sam's injuries are valued at $125,000. Sam's underinsured motorist coverage will pay; a) $25,000 b) $50,000 c) $75,000 d) $125,000 b) $50,000 The contract agreement may be referred as the: a) legal interest test b) good faith c) meeting of the minds d) promise of indemnification c) meeting of the minds Which of the following boats owned by the insured would require the HO watercraft endorsement for liability coverage? a) a boat with 25 horsepower outboard engine b) a sailboat with 25 ft. in length c) a boat with a 15 horsepower inboard motor d) none of the above c) a boat with a 15 horsepower inboard motor Authority expressed orally by the insurer to the agent is: a)apparent authority b) no authority c) implied authority d) express authority d) express authority Contracts require each of the following except: a) consideration b) notarization c) implied authority d) express authority b) notarization Contracts require each of the following except: a) consideration b) notarization c) legal purpose d) competent parties b) notarization A broad form policy covers: a) sewer backup b) inherent vice c) earthquake d) volcano d) volcano Which section of the policy specifies which stores are owned by an insured are covered a) insuring agreements b) conditions c) exclusions d)declaration d) declaration Mike gets a grizzly bear to keep as a pet at his home. This results in a type of liability known as: a) strict liability b) professional liability c) absolute liability d) vicarious liability c) absolute liability Insurable losses will be listed in what section? a) declarations b) exclusions c) conditions d) insuring agreements d) insuring agreements Which is true regarding insurance companies? a) stock companies are managed by the policy owners b) mutual are owned by the policy holders, have the management members chosen by the policy holders, and pay dividends to the policy holders c) stock companies and mutual both pay dividends to the policy holders d) stock companies are owned by the policy holders but mutual are owned by the stock holders b) mutuals are owned by the policy holders, have the management members chosen by the policy holders, and pay dividends to the policy holders The "other than collision" section of a personal auto policy will cover which of the following? a) the car is destroyed in a flood b) a new tire is damaged by a pothole c) the cars diesel engine is damaged when the owner fills it with gas d) a purse is stolen from the car a) the car is destroyed in a flood Flood insurance covers each of these except: a) beach erosion b) sewer back up c) overflow of tidal waters d) mudslides b) sewer back up Which of the following statements regarding a contract of good faith is false? a) all parties must rely on each other to be honest b) the insured relies on the insurer's promise to pay claims c) all parties rely on the contract to provide for an equal transfer of value between the parties d) the insurer relies on the applicant to be truthful c) all parties rely on the contract to provide for an equal transfer of value between the parties Which of the following will cover personal injury? a) umbrella b) homeowners c) both A and B d) none of above a) umbrella Auto med pay: a) pays regardless of coverages in other policies b) pays medical and funeral expenses for the insured and any passengers in the insured's auto c) is required by both federal and state law d) covers any pedestrians hit by the insured's auto b) pays medical and funeral expenses for the insured and any passengers in the insured's auto Concealment involves: a) intentionally failing to disclose an immaterial fact b) unintentionally failing to disclose a material fact c) unintentionally failing to disclose an immaterial fact d) intentionally failing to disclose a material fact d) intentionally failing to disclose a material fact Which of the following is not one of the components used to develop rates? a) loss reserves b) loss costs c) business expenses d) profits a) loss reserves The joint ownership endorsement would be appropriate for insuring an auto a) owned by the 2 unmarried people living in the same household b) owned by 2 unmarried people in different households c) owned by 2 friends living in different households d) owned by 2 married people in the same household a) owned by the 2 unmarried people living in the same household The comprehensive section of an auto policy covers which of the following? a) earthquake damage b) furniture stolen from auto c) road damage to tires d) a mechanic installs a wrong part in the motor a) earthquake damage Personal injury liability covers each of the following except: a) slander b) discrimination c) malicious prosecution d) wrongful eviction b) discrimination General damages are: a) intangible b) specific c) exemplary d) economic a) intangible Participation in the NFIP is: a) usually required by the government but sometimes voluntary b) always required by the government c) always voluntary d) usually voluntary but sometimes required by the government d) usually voluntary but sometimes required b