STUDY THIS: Property Insurance Test
PearsonVue (LAW) Q&A/ A+ Score Solutions.
All of the following items contained in a basement are covered under the standard flood
insurance policy EXCEPT:
A. drywall for walls and ceilings and the cost of labor to nail it, unfinished and unfloated and not
taped to the framing
B. functioning electrical outlets and switches
C. carpet permanently installed over unfinished flooring
D. fuel tanks, if installed in their functioning locations and connected to a power sources -
Answer: C. carpet permanently installed over unfinished flooring
If a commercial insurer fails to meet the requirements of the forty-five days Notice of
Nonrenewal Rule prior to the expiration date of the existing policy, the company MUST
A. extend the current policy for one year and waive the premium
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,B. reduce coverage to develop a new premium that does not exceed the expiring policy's
premium
C. provide a renewal policy that matches the expiring policy's coverages and premium
D. pay a $3,000 fine per violation to the Division of Insurance - Answer: C. provide a renewal
policy that matches the expiring policy's coverages and premium
Which of the following persons may assign a Standard Fire policy?
A. A claims adjuster
B. The Superintendent of Insurance
C. The insured with the permission of the insurance company
D. The insured only - Answer: C. The insured with the permission of the insurance company
In this state, a domestic insurer is defined as a company that:
A. Operates in this state but is incorporated in another state
B. operates in this state but is domiciled in another state
C. is headquartered in this state
D. is incorporated in this state - Answer: D. is incorporated in this state
The Insurance Commissioner may issue a limited insurance representative license to an
individual who wants to sell which of the following types of policies?
A. Fire
B. Automobile
C. Mortgage Guaranty
D. Health - Answer: C. Mortgage Guaranty
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, Upon determining that a producer has violated the insurance law, the Insurance Commissioner
is required to take which of the following actions?
A. Place the licensee on probation immediately
B. Publish notice of the violation
C. Hold a hearing on the infraction
D. Submit the infraction to the Department of Insurance for review - Answer: C. Hold a hearing
on the infraction
An insurer that intends to nonrenew a Homeowners policy MUST take which of the following
actions?
A. Obtain coverage for the policyholder from another insurer
B. Obtain coverage for the policyholder under the FAIR Plan
C. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy
expiration date
D. Send a notice stating the reason for nonrenewal to the insured - Answer: D. Send a notice
stating the reason for nonrenewal to the insured
The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the
following reasons EXCEPT:
A. Untrue statements on the license application
B. Conviction of a misdemeanor
C. Incompetency
D. Coverting funds - Answer: B. Conviction of a misdemeanor
An insurer that generally fails to affirm or deny coverage of claims within a reasonable period of
time after receiving Proof of Loss may be found guilty of:
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PearsonVue (LAW) Q&A/ A+ Score Solutions.
All of the following items contained in a basement are covered under the standard flood
insurance policy EXCEPT:
A. drywall for walls and ceilings and the cost of labor to nail it, unfinished and unfloated and not
taped to the framing
B. functioning electrical outlets and switches
C. carpet permanently installed over unfinished flooring
D. fuel tanks, if installed in their functioning locations and connected to a power sources -
Answer: C. carpet permanently installed over unfinished flooring
If a commercial insurer fails to meet the requirements of the forty-five days Notice of
Nonrenewal Rule prior to the expiration date of the existing policy, the company MUST
A. extend the current policy for one year and waive the premium
Page 1 of 21
,B. reduce coverage to develop a new premium that does not exceed the expiring policy's
premium
C. provide a renewal policy that matches the expiring policy's coverages and premium
D. pay a $3,000 fine per violation to the Division of Insurance - Answer: C. provide a renewal
policy that matches the expiring policy's coverages and premium
Which of the following persons may assign a Standard Fire policy?
A. A claims adjuster
B. The Superintendent of Insurance
C. The insured with the permission of the insurance company
D. The insured only - Answer: C. The insured with the permission of the insurance company
In this state, a domestic insurer is defined as a company that:
A. Operates in this state but is incorporated in another state
B. operates in this state but is domiciled in another state
C. is headquartered in this state
D. is incorporated in this state - Answer: D. is incorporated in this state
The Insurance Commissioner may issue a limited insurance representative license to an
individual who wants to sell which of the following types of policies?
A. Fire
B. Automobile
C. Mortgage Guaranty
D. Health - Answer: C. Mortgage Guaranty
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, Upon determining that a producer has violated the insurance law, the Insurance Commissioner
is required to take which of the following actions?
A. Place the licensee on probation immediately
B. Publish notice of the violation
C. Hold a hearing on the infraction
D. Submit the infraction to the Department of Insurance for review - Answer: C. Hold a hearing
on the infraction
An insurer that intends to nonrenew a Homeowners policy MUST take which of the following
actions?
A. Obtain coverage for the policyholder from another insurer
B. Obtain coverage for the policyholder under the FAIR Plan
C. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy
expiration date
D. Send a notice stating the reason for nonrenewal to the insured - Answer: D. Send a notice
stating the reason for nonrenewal to the insured
The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the
following reasons EXCEPT:
A. Untrue statements on the license application
B. Conviction of a misdemeanor
C. Incompetency
D. Coverting funds - Answer: B. Conviction of a misdemeanor
An insurer that generally fails to affirm or deny coverage of claims within a reasonable period of
time after receiving Proof of Loss may be found guilty of:
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