South Carolina Property and Casualty Insurance Exam

The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rate is known as? - Underwriting The Director is conducting an examination of a foreign company transacting business in South Carolina. Who is responsible for the cost of the examination? - Foreign company Driver A has a personal auto policy with Part C: UM/UIM limits of 100/300. He is injured by Driver B who has Part A: Bodily Injury Liability Limits of 50/100. It is determined that Driver B is at fault for the accident . Driver A has $125,000 in medical expenses. How much will Part C: UM/UIM coverage will pay? - 50,000 A premium discount is the term that describes when an insured owes a total standard premium greater than? - 5,000 According to SC law, comprehensive deductibles do not apply to - safety glass Who is an insurance producer? - Any person licensed to sell, solicit or negotiate insurance Employee fidelity may be written in all the following ways EXCEPT - Location schedule Section 1 of boatowners policy covers - Physical Damage Which type of losses are covered by the South Carolina Wind and Hail Underwriting Association? - Both Direct and Indirect losses Before granting a Certificate of Authority to a company, the Director must be satisfied by proper evidence that all of the following are true EXCEPT - The insurer does not have a Certificate of Authority in any other state Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim? - No, because the claim results from copyright infringement and is not in an advertisement When the insured's car was totaled in a recent accident, the ownership of the car was transferred to the insurer. The insurer then sold off the wrecked car to recover some of the loss it paid to the insured. What is the term for this action? - Salvage The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as - loss A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly? - Completed operations Which employee fidelity bond pays no more than its limit of liability for each separate occurrence no matter that several separately identifiable employees were involved in a single loss? - commercial blanket position If an employee consumes alcohol, becomes intoxicated, and is injured at work, he/she is __________. - Not covered if the consumption of alcohol is proven to have caused the injury Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises? - $500 Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? - 5 days What is the purpose of the government crime coverage form? - To provide crime coverage to those who do not qualify in the normal market Which of the following insurance options would be considered a risk-sharing arrangement? - Reciprocal According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? - 60 days Which of the following is true of dwelling policy coverage? - Exclusion apply to all three policy forms The individual named insured endorsement under a commercial auto policy provides coverage for which of the following? - The sole proprietor of the business and his or hers family members The type of crime policy under which coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period is the _____________. - Loss sustained form What type of coverage protects the insured in an accident caused by a driver with insufficient coverage? - Underinsured Motorist In which of the following sections of a commercial auto policy will you find specific information about the policy period? - Conditions Faulty wiring in a home is an example of a _______. - Hazard Which of the following list all the required elements for establishing a charge of negligence? - legal duty owed, standard of care, proximate cause, damages Which of the following is true regarding the premium computation for workers compensation insurance? - a premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis Which of the following is NOT the consideration in a policy? - The application given to a prospective insured All are true about the South Carolina Property and Casualty Insurance Guaranty Association EXCEPT: - It does not cover workers compensation claims Which of the following statements is INCORRECT with regard to surplus lines insurance? - Policies written by a surplus lines insurer typically contain standard coverages and forms The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called? - Avoidance In dwelling policies, automatic increase in insurance is ___________. - Coverage by endorsement The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true? - All volcanic eruptions within a 72 hour period will be considered one occurrence Dwelling coverage includes all of the following EXCEPT: - Land on which the dwelling is located Which of the following is a formal program developed by an employer to fund its losses as an alternative to the purchase of insurance? - Self Insurance In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? - The customer's associates, friends, and neighbors provide the reports data Which of the following losses would most likely NOT be covered under coverage A in the dwelling policy? - Theft of a renter's lawn mower used to service the premises An insurer CANNOT non renew a homeowners policy because of a _________. - A loss caused by an Act of God Which of the following endorsement is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? - Individual Named Insured Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? - The Fair Credit Reporting Act An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? - The Fair Credit Reporting Act The personal injury liability endorsement to an HO policy applies to all the following EXCEPT _______. - A third party breaks a leg when the insured knocks him down An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase __________. - HO-6 HMS Toys carries more inventory from October 1st to December 31st. Which of these would provide higher coverage limits during those months and lower limits the rest of the year? - Peak Season Uninsured motorist bodily injury coverage pays for all of the following EXCEPT: - Down payment on a new vehicle Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? - Vacant farmland owned by the insured An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile? - Collision Who are required to be members of the SC Property and Casualty Insurance Guaranty Association? - All Admitted P&C insurers The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the ___________. - Conditions Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to _________. - Property and Liability losses Conducting insurance in this state without a license would be considered a ____________. - Misdemeanor The declarations page of the homeowners policy provides all of the following information EXCEPT: - A statement that earthquake damage is not covered Who might receive dividends from a mutual insurer? - Policyholders Employee theft coverage may be written as _________. - blanket coverage, name schedule coverage, position schedule coverage All of the following are classes of inland marine risks EXCEPT: - Common carrier cargo liability An insured unintentionally accepted forged currency during the course of regular business. Which of the following crime coverages protects against such a loss? - Money orders and counterfeit paper currency Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment? - HO-4 An insured purchased an insurance policy 5 years ago. Last year she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? - mutual CGL Coverage B (Personal and Advertising Injury) will cover __________. - Inadvertent injury to others caused in the course of advertising the insured's product Under the provisions of the business income coverage form, all of the following are true EXCEPT: - The insured is reimbursed for the loss from the date of loss to the date of the restoration or policy expiration date, which ever comes first All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT: - They pay defense costs even after the aggregate limit has been reached The inspections and surveys condition in a business owners policy _________. - Allows the insurer the right to inspect the insured's premises What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? - $2,500 What will happen if a house covered by a standard mortgage clause is a total loss? - the insurer pays the mortgage according to the mortgagee's interest in the property Which of the following would be covered under the Garage Liability Coverage Form? - Insured's business premises The part of a policy that clarifies terms in the policy is the _______. - Definitions Which of the following produces evaluations of insurers' financial status often used by state departments of the insurance? - AM Best Under a business owners policy, a loss of earnings is subject to ________. - 12 month time limit for business income Which of the following is NOT true regarding mobile agricultural machinery and equipment coverage? - This coverage must be written as part of farm coverage The party to a surety or fidelity bond who promises to fulfill the obligation is the ______. - Principal If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered _________. - An unfair trade practice In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss? - Coverage E If an insured owns a watch valued at $10,000 full coverage can be provided on a home owners policy by purchasing the ____________. - Scheduled personal property endorsement Employee fidelity may be written in all of the following ways EXCEPT: - Location Schedule Under which of the following conditions can broad theft coverage be added to a dwelling policy? - If the insured is owner-occupant of the dwelling