VA P&C Practice Exam Questions and Answers.

VA P&C Practice Exam Questions and Answers. "Which of the following would be covered by the Special Cause of Loss form and not covered by a Broad Cause of Loss form? A. Theft of inventory during a riot B. Collapse of the building cause by hidden termite damage C. An airplane accidentally drops a block of blue ice on building while flying overhead D. Damage to a computer terminal when an employee accidentally hits the computer while buffing the floor – CORRECT ANSWER D. Damage to a computer terminal when an employee accidentally hits the computer while buffing the floor" "The Nationwide Marine Definition was written by: A. NCCI B. SACCI C. CAIP D. NAIC - CORRECT ANSWER D. NAIC" "All of the following are parts of a Commercial Package Policy (CPP) EXCEPT: A. crime B. property C. inland marine D. ocean marine - CORRECT ANSWER D. ocean marine" "Supplemental payments on a CGL part include all of the following, EXCEPT: A. bodily injury damages B. $250 bail bond C. pre-judgement interest D. court fees - CORRECT ANSWER A. bodily injury damages" "All of the following are Basic Perils covered on a BOP, EXCEPT: A. Sprinkler leakage B. Transportation C. Earthquake D. Sinkhole Collapse - CORRECT ANSWER C. Earthquake" "All of the following are exceptions to the contractual liability exclusion in a CGL, except: A. Easement agreement B. Tort liability C. Liquor liability D. Elevator maintenance agreement - CORRECT ANSWER C. Liquor liability" "CGL insurance is divided into which two sublines? A. Premises/Operations and Advertising/Personal Injury B. Premises/Operations and Claims Made/Occurrence C. Premises/Operations and Products/Completed Operations D. Premises/Completed Operations and Advertising/Personal Injury - CORRECT ANSWER C. Premises/Operations and Products/Completed Operations" "A Commercial Package Policy (CPP) is best described as: A. A self-contained complete package policy B. A modular approach to insuring businesses C. A package including liability, workers compensation and vehicle D. Commercial property and commercial general liability insurance - CORRECT ANSWER B. A modular approach to insuring businesses" "A Businessowners Policy (BOP) is best described as: A. A self-contained complete package policy B. A modular approach to insuring businesses C. Combination of personal and commercial insurance coverage D. Combination of property and crime coverage - CORRECT ANSWER A. A self-contained complete package policy" "Which of the following is not considered "Mobile Equipment" on a Business Auto Policy? A. Bulldozer B. Crane C. Forklift D. Truck mounted snow plow - CORRECT ANSWER D. Truck mounted snow plow" "What is the limit for water damage under Equipment Breakdown coverage? A. $5,000 B. $10,000 C. $25,000 D. $50,000 - CORRECT ANSWER C. $25,000" "A surety bond is a financial guarantee of: A. Payment B. Performance C. Obligation D. Principal - CORRECT ANSWER B. Performance" "What is the most that will be paid for water damage losses covered under Equipment Breakdown? A. $10,000 B. $15,000 C. $20,000 D. $25,000 - CORRECT ANSWER D. $25,000" "Johnny's School Supplies has a special form BOP. Following a fire, Johnny's was closed for 4 months while repairs were made. Which of the following most accurately describes the coverage provided for Johnny's loss of income? A. Provided automatically with no limits B. Available as an endorsement C. No dollar limit for up to 12 months D. An amount not to exceed Coverage A - CORRECT ANSWER C. No dollar limit for up to 12 months" "The BOP excludes all of the following perils if the building is vacant for more than 60 days, EXCEPT: A. Vandalism B. Theft C. Sprinkler leakage D. Sinkhole damage - CORRECT ANSWER D. Sinkhole damage" "Which of the following is ineligible for a BOP? A. A small office of a local credit union B. A small restaurant with sales of $2M annually C. A clothing store with one location and $1.2M in gross sales annually D. An apartment building with 3 floors and 36 apartment units - CORRECT ANSWER A. A small office of a local credit union" "Which of the following is eligible for a BOP? A. Auto repair shop B. A small manufacturing plant C. A restaurant with $2M in gross sales annually D. An office building with 4 floors and 90,000 sq ft of space - CORRECT ANSWER C. A restaurant with $2M in gross sales annually" "Every insurer license in VA shall file an annual financial statement with the Commission each year on or before: A. January 1 B. March 1 C. June 30 D. July 1 - CORRECT ANSWER B. March 1" "Any person who unintentionally violates VA insurance law may be punished for violation by a penalty of not more than: A. $500 B. $750 C. $1,000 D. $5,000 - CORRECT ANSWER C. $1,000" "The Insurance Commission has the power and authority to perform an assortment of duties. Which of the following is not a responsibility of the Commission? A. Issuing property and casualty insurance licenses B. Prosecuting agents who break insurance laws C. Delegates examining duties to a deputy D. Regulates insurer for solvency - CORRECT ANSWER B. Prosecuting agents who break insurance laws" "Which of the following statements about consultant licensing is CORRECT? A. Consultant licenses can only be issued to individuals B. A consultant's license expires every 3 years C. A consultant is considered an independent contractor D. Attorney and CPAs acting the course of their normal employment must obtain a consultant's license - CORRECT ANSWER C. A consultant is considered an independent contractor" "A person who, for a fee, offers advice to the public regarding property and casualty insurance, best describes a/an: A. Agent B. Nonresident agent C. Consultant D. Adjuster - CORRECT ANSWER C. Consultant" "An agent who shares his commission with a prospective insured in return for the purchase of a policy has engaged in A. Twisting B. Coercion C. Defamation D. Rebating - CORRECT ANSWER D. Rebating" "An applicant for a producer license must: A. have a college degree B. be at least 21 years old C. have been a broker for 3 years D. be at least 18 years old - CORRECT ANSWER D. be at least 18 years old" "Which of the following person would need to hold a license to transact insurance in VA? A. A person who provides underwriting services to an insurance company B. A full-time employee of an insurance company who provides loss control services C. A person who job duties are limited to enrolling employees in group health insurance plans D. An employee of an insurance agency who helps customers select policy limits - CORRECT ANSWER D. An employee of an insurance agency who helps customers select policy limits" "A licensed agent must report a name change to the Commission within how many days? A. 30 B. 45 C. 60 D. 90 - CORRECT ANSWER A. 30" "All of the following must be included in a notice of cancellation due to material misrepresentation on a policy protecting an owner-occupied dwelling EXCEPT: A. 10 days' written notice B. the specific reason for the action C. the date cancellation will be effective D. information regarding the insured's possible eligibility for coverage under the VA Property Insurance Association - CORRECT ANSWER A. 10 days' written notice" "Virginia property cancellation regulations do NOT apply to policies which have been in effect for less than how many days? A. 30 B. 60 C. 90 D. 180 - CORRECT ANSWER B. 60" "Which of the following statements is NOT correct regarding the VA Property Insurance Association? A. The residual marketing facility is responsible for the equitable distribution of risks B. Inspections of property are required C. The purpose of this plan is to assure the stability of the property insurance market in this state D. This plan encourages maximum use of the voluntary insurance market - CORRECT ANSWER B. Inspections of property are required" "A policy covering owner occupied dwelling may be cancelled or terminated for all of the following reasons EXCEPT: A. submission of a claim for fire damage B. nonpayment of premium C. discovery of fraud or material misrepresentation D. physical changes to the property that cause the property to become uninsurable - CORRECT ANSWER A. submission of a claim for fire damage" "A policy covering owner-occupied dwellings may be cancelled or terminated for each of the following reasons EXCEPT: A. discovery of fraud on the part of the insured B. bodily injury to a person caused by the insured's dog C. reckless act which increases the hazard D. material misrepresentation - CORRECT ANSWER B. bodily injury to a person caused by the insured's dog" "An insured who requests cancellation of their fire insurance policy A. is entitled to a pro-rata refund B. is entitled to a short-rate refund C. is not entitled to a refund D. will have to pay a $100 fine - CORRECT ANSWER B. is entitled to a short-rate refund" "Any insurer that issues or delivers in VA a fire insurance policy that excludes coverage for damage due to flood must: A. clearly state the flood exclusion in the policy B. state that coverage is available from the NFIP C. state that the flood policy covers personal property for an additional premium D. all of the above - CORRECT ANSWER D. all of the above" "Insurers that issue fire insurance policies in VA A. must include coverage for earthquake B. must include coverage for earthquake but may not charge a higher premium C. may exclude coverage for earthquake and charge a higher premium D. shall provide written notice that states that "earthquake coverage is excluded unless purchased by endorsement" - CORRECT ANSWER D. shall provide written notice that states that "earthquake coverage is excluded unless purchased by endorsement"" "If an insurer cancels a policy covering an owner-occupied dwelling for nonpayment of premium, it must provide ______ days' written notice of cancellation. A. 5 B. 10 C. 20 D. 30 - CORRECT ANSWER B. 10" "All owners of motor vehicles in VA must have in effect at least which of the following limits? A. $10,000 for bodily injury or death to any one person in any one accident B. $25,000 for bodily injury or death to any person in any one accident C. $25,000 for bodily injury or death to all persons in any one accident D. $25,000 for property damage for any one accident - CORRECT ANSWER B. $25,000 for bodily injury or death to any person in any one accident" "As a condition of operating in VA, all auto insurance companies must participate in which of the following? A. Virginia Property Insurance Association B. Virginia Automobile Insurance Plan C. Virginia Property and Casualty Insurance Guaranty Association D. Virginia Safe Driver Insurance Plan - CORRECT ANSWER B. Virginia Automobile Insurance Plan" "Which of the following would be considered covered employees under VA workers' compensation laws? A. Casual employees B. Domestic workers C. Farm workers D. County policemen and firefighters - CORRECT ANSWER D. County policemen and firefighters" "Which of the following coverages is provided under uninsured motorist coverage in VA? A. Bodily injury to others B. Damage to the property of another person caused by the insured C. An accidental death benefit D. Damage to the insured's property up to $20,000 - CORRECT ANSWER D. Damage to the insured's property up to $20,000" "Which of the illnesses would qualify as occupational disease in VA? A. Anxiety caused by work-related stress B. Cancer cause by exposure to chemicals at the work site C. Hearing loss caused by excessive noise on a factory assembly line D. Carpal tunnel syndrome from using power tools - CORRECT ANSWER B. Cancer cause by exposure to chemicals at the work site" "An automobile insurance policy offering comprehensive or collision coverage must also offer: A. accidental death B. towing C. rental reimbursement coverage D. disability - CORRECT ANSWER C. rental reimbursement coverage" "The Commissioner must inspect the financial records of each domestic company every _____ years. A. 2 B. 5 C. 6 D. 7 - CORRECT ANSWER B. 5" "VA auto insurance law stipulates that the minimum amount of liability limits that must be carried by an insured are: A. 10/20/5 B. 25/50/20 C. 25/50/25 C. 25/60/20 - CORRECT ANSWER B. 25/50/20" "Which of the following is NOT a duty of the Commissioner? A. Examining domestic insurers B. Enforcing insurance laws C. Writing insurance laws D. Authorizing insurers to transact business in VA - CORRECT ANSWER C. Writing insurance laws" "Transacting insurance includes all of the following EXCEPT: A. soliciting B. underwriting C. negotiating D. effecting the contract - CORRECT ANSWER B. underwriting" "Individual holding more than 1 type of license must complete how many hours of continuing education credits every 2 years? A. 15 B. 24 C. 36 D. 40 - CORRECT ANSWER B. 24" "The VA P&C Guaranty Association is liable for all of the following EXCEPT: A. amounts that exceed the insolvent insurer's obligation for a covered claim B. the full amount of a covered claim for benefits under a workers' compensation policy C. up to $300,000 per claimant for all covered claims other than workers' compensation D. covered claims that existed before the insolvency but arose 91 days after the determination of insolvency - CORRECT ANSWER A. amounts that exceed the insolvent insurer's obligation for a covered claim" "A building owner purchases a fire policy providing $60,000 worth of coverage with an 80% coinsurance clause for his $100,000 building. He suffers a $10,000 loss. How much will with insurer pay? A. $1,667 B. $7,500 C. $8,000 D. $10,000 - CORRECT ANSWER B. $7,500" "Joey owns a building that is insured for $90,000. Company A insures the structure for $40,000, Company B provides coverage for $30,000 and Company C insures the building for $20,000. A fire causes a $10,000 loss. How much will Company C pay? A. $2,222 B. $3,333 C. $4,444 D. $5,555 - CORRECT ANSWER A. $2,222" "The Hitchcock Clock Co. purchases a fire policy with a 90% coinsurance clause and a coverage limit of $150,000. The replacement cost of the building is $200,000. The company suffers a $20,000 loss. What will the insurer pay? A. $12,500 B. $16,667 C. $18,750 D. $20,000 - CORRECT ANSWER B. $16,667" "A commercial general liability policy provides coverage for: A. damage to property owned by an insured B. bodily injury to an employee C. bodily injury caused by an auto accident D. liability for slander - CORRECT ANSWER D. liability for slander" "All of the following statements concerning personal liability coverage provided by a HO policy are true EXCEPT: A. it is generally a single limit liability B. it covers an insured's legal liability as a result of nonbusiness activities C. an insurer will not defend a liability suit that is obviously groundless D. the basic limit of coverage is $100,000 - CORRECT ANSWER C. an insurer will not defend a liability suit that is obviously groundless" "If Scott files bankruptcy, which of the following statements regarding their insurance is TRUE? A. Scott can abandon his property to the insurance company because they no longer have an insurable interest B. The insurer's responsibilities are not eliminated C. The mortgage company loses its interest in the property D. Scott's interest in the property is excess over any other creditors - CORRECT ANSWER B. The insurer's responsibilities are not eliminated" "Internal limitations on property covered under a HO policy include which of the following? A. antiques & fine art B. money, jewelry & furs C. furniture & clothes D. appliances & equipment - CORRECT ANSWER B. money, jewelry & furs" "An insured purchased a sofa in 1985 for $750. The depreciation is calculated at 1% per year. The sofa is destroyed in a fire in 2005. The replacement cost for a comparable sofa is $1,000. How much will the insurer pay to replace the sofa? A. $600 B. $750 C. $800 D. $1,000 - CORRECT ANSWER C. $800" "Loss of earnings up to what amount per day is covered by a CGL policy under supplementary payments? A. $25 B. $50 C. $100 D. $250 - CORRECT ANSWER D. $250" " "Which of the following is true regarding the insurer's rights to claim settlement? A. The insured must agree to all aspects of the settlement. B. The insurer may not settle a claim unless there is a court order. C. The insurer may settle a liability claim without the insured's permission. D. The insured retains complete rights of claim settlement. – CORRECT ANSWER C. The insurer may settle a liability claim without the insured's permission." "Which of the following statements concerning a proof of loss is NOT true? A. It is the duty of the insured to submit a proof of loss. B. The insurer provides the insured with the proof of loss at the appropriate time C. A proof of loss details the circumstances of the loss D. A proof of loss may be oral – CORRECT ANSWER D. A proof of loss may be oral" "A notice of claim to an insurer must include all of the following EXCEPT: A. Insured's name B. Insured's address C. Name of insured's attorney D. Description of how the loss occurred – CORRECT ANSWER C. Name of insured's attorney" "John has two homeowner's policies in force. Policy A covers the home for $200,000 and Policy B covers the home for $100,000. The total insurance in force is $300,000. John has a fire that does $45,000 damage to the home. How much will Policy A pay? A. $45,000 B. $0 C. $15,000 D. $30,000 – CORRECT ANSWER D. $30,000" "Select the item that is considered a consumer report: A. Driving record B. Application for insurance C. The agent's knowledge of the applicant D. Inspection of the property - CORRECT ANSWER A. Driving record" "If information on consumer reports differs from an applicant's statements and causes the insurer to reject the application, the insurer has made a/an: A. Adverse underwriting decision B. Unfair decision C. Unfair discriminatory decision D. Negative underwriting decision - CORRECT ANSWER A. Adverse underwriting decision" "Identify a federal law that protects the privacy of insurance applicants: A. Equal Employment Opportunity Law B. Fair Housing Act C. Financial Modernization Act of 1999 D. Equal Rights Amendment of 1964 - CORRECT ANSWER C. Financial Modernization Act of 1999" "Which of the following is NOT included on a Certificate of Insurance? A. Name of insured B. Policy number C. Effective date D. Premium - CORRECT ANSWER D. Premium" "Which HO form provides broad named perils coverage for both the dwelling and its contents? A. HO 2 B. HO 3 C. HO 4 D. HO 5 - CORRECT ANSWER A. HO 2" "The HO3 differs from the HO2 in what manner? A. Liability coverage provided B. Amount of coverage provided for personal property C. Amount of coverage provided for additional living expenses D. Perils insured against for the dwelling - CORRECT ANSWER D. Perils insured against for the dwelling" "The only difference between the HO3 and HO5 is: A. Liability coverage provided B. Amount of coverage provided for personal property C. Amount of coverage provided for additional living expenses D. Perils insured against for personal property & valuation of loss - CORRECT ANSWER D. Perils insured against for personal property & valuation of loss" "After a torrential rain, Velma discovered her basement was filling up water. If she has an HO5, the loss would be: A. Covered B. Excluded C. Considered a flood loss D. Damage to the house is covered, but the personal property is not - CORRECT ANSWER B. Excluded" "Removal is provided in the NFIP for how many days when property is moved to another location and enclosed in a building to protect it from flooding? A. 10 B. 15 C. 30 D. 45 - CORRECT ANSWER D. 45" "How is the deductible required to be paid under the NFIP? A. No deductible is required B. Only one deductible applies to both the building and contents C. A separate deductible applies to the building and contents D. Federal government is responsible for paying the deductible - CORRECT ANSWER C. A separate deductible applies to the building and contents" "All of the following are necessary components of a CPP except: A. Common Declarations Page B. Common Conditions C. 2 or more coverage parts D. Commercial General Liability insurance - CORRECT ANSWER D. Commercial General Liability insurance" "Which of the following is not a supplementary payment on a CGL? A. Bail bonds up to $250 B. Attorney fees C. Pre-judgment and post-judgement interest D. Medical expenses - CORRECT ANSWER D. Medical expenses" "Which of the following losses would be covered by the basic cause of loss form in a Building & Personal Property Coverage Form of a CPP? A. Damage to merchandise being delivered by the insured in a van B. Damage to the building by vandals C. A customer fails to stop, crashing their auto into the front of the insured's building D. Theft of merchandise by a client - CORRECT ANSWER B. Damage to the building by vandals" "The Commercial Property Building & Personal Property Special Coverage Cause of Loss form does NOT cover which of the following situations? A. ruptured water pipes B. dishonest act by an employee C. water damage caused by bursting pipes D. theft of a part of the building - CORRECT ANSWER B. dishonest act by an employee" "Personal and Advertising Injury coverage pays for claims an insurer is legally obligated to pay and includes these two expenses: A. damages and defense B. medical and bodily injury C. damages and liability D. defense and loss of income - CORRECT ANSWER A. damages and defense" "Claims made forms provide the option of an extended reporting period. Which ERP allows claims to be reported after the expiration date indefinitely? A. SERP B. Mini-tail C. Midi-tail - CORRECT ANSWER A. SERP" "Claims made forms provide the option of an extended reporting period. Which ERP allows claims to be reported up to 5 years after the expiration date? A. SERP B. Mini-tail C. Midi-tail - CORRECT ANSWER C. Midi-tail" "Claims made forms provide the option of an extended reporting period. Which ERP allows claims to be reported up to 60 days after the expiration date? A. SERP B. Mini-tail C. Midi-tail - CORRECT ANSWER B. Mini-tail" "True or False: Having a client sign a partially completed application is allowed. - CORRECT ANSWER FALSE" "True or False: Paying a friend a finder's fee only for those referrals that actually purchase insurance from you is allowed. - CORRECT ANSWER FALSE" "True or False: Splitting commissions with an agent with the same license as you is allowed. - CORRECT ANSWER TRUE" "When must an insured choose to waive subrogation? A. At application B. Before a loss occurs C. With proof of loss D. After claim is closed - CORRECT ANSWER B. Before a loss occurs" "Swimming pools are covered under what Coverage? A. Coverage A B. Coverage B C. Coverage C D. Coverage D - CORRECT ANSWER B. Coverage B" "What HO policy form is best for a farm? A. HO-2 B. HO-8 C. HO-5 D. None, farms are not eligible for any HO policies - CORRECT ANSWER D. None, farms are not eligible for any HO policies" "Automatic Increase or Inflation Guard is an automatic provision in the BOP providing a standard increase in the limit of coverage annually at what percent? A. 5 B. 8 C. 10 D. 12 - CORRECT ANSWER B. 8" "Which of the following is not a property coverage offered under the BOP? A. The Standard Form B. The Broad Form C. The Special Form - CORRECT ANSWER B. The Broad Form" "Businessowners Package Policy is very similar to which other policy? A. Business Auto Policy B. Commercial Package Policy C. Commercial General Liability D. Dwelling Policy - CORRECT ANSWER C. Commercial General Liability" "Vandalism and Malicious Mischief is an optional coverage that can be added by endorsement to which policy? A. DP-3 B. DP-4 C. DP-2 D. DP-1 - CORRECT ANSWER D. DP-1 (INCLUDED IN ALL OTHER DP POLICIES AUTOMATICALLY)" "An insured must file a proof of loss within how many days after a loss? A. 90 B. 120 C. 30 D. 60 - CORRECT ANSWER B. 120" "Which of the following is not true about Difference in Conditions (DIC) insurance? A. DIC policies provide property and liability coverages B. Basic perils are usually excluded by DIC policies C. DIC supplements other coverages and fills insurance gaps. D. DIC can provide considerable protection at a reasonable cost - CORRECT ANSWER A. DIC policies provide property and liability coverages" "Under the Equipment Breakdown Protection Coverage Form, which of the following causes of damage to covered equipment would not be covered? A. Electrical failure, including arcing B. Leakage at any valve fitting, shaft seal, gland packing, joint, or connection C. Failure of pressure or vacuum equipment D. Mechanical failures, including rupture or bursting caused by centrifugal force - CORRECT ANSWER B. Leakage at any valve fitting, shaft seal, gland packing, joint, or connection" "What part of an insurance policy describes what property and/or perils will be covered by the contract? A. Definitions B. Exclusions C. Insuring Agreement D. Conditions - CORRECT ANSWER C. Insuring Agreement" "The term "Time Element Coverage" is used when the amount of loss depends on which of the following? A. The time between the date of loss and the policy expiration date B. The time it takes to repair, rebuild, or restore damaged property C. The time between the policy effective date and date of loss D. The time of year when a seasonal business suffers a loss - CORRECT ANSWER B. The time it takes to repair, rebuild, or restore damaged property" "BOP eligibility rules limit eligible risks to what maximum? A. $5 million in annual sales B. $3 million in annual sales C. $1.5 million in annual sales D. $750,000 in annual sales - CORRECT ANSWER B. $3 million in annual sales" "Which of the following Other Coverages is not included in the Basic Dwelling Coverage form? A. Fire dept service charge B. Collapse C. Debris removal D. Reasonable repairs - CORRECT ANSWER B. Collapse" "Which of the following is NOT excluded under Business Auto Liability coverage? A. Liability assumed under a contract that is considered an insured contract B. Damage to the insured's own auto C. Injury to employees covered by workers compensation laws D. Liability for property in the insured's custody - CORRECT ANSWER A. Liability assumed under a contract that is considered an insured contract" "Under which of the following DP forms may the insured be reimbursed for the replacement cost when the dwelling is destroyed? A. All DP forms B. DP-1 Basic form only C. DP-2 Broad and DP-3 Special forms D. DP-3 Special form only - CORRECT ANSWER C. DP-2 Broad and DP-3 Special forms" "Lisa has a CGL policy for her bakery. She moves the bakery to a new location during the term of the policy. Which of the following is correct? A. Coverage is suspended until she notifies the insurance company of the move B. Coverage is automatic until the end of the policy term C. Coverage is automatic for 90 days after the move D. Coverage is determined on pro rata basis for both locations - CORRECT ANSWER B. Coverage is automatic until the end of the policy term" "All of the following supplementary payments are provided by an auto policy's bodily injury coverage EXCEPT: A. the cost of investigating an accident B. the premium for a bail bond C. all of the insured's lost earnings during attendance at a hearing or trial D. the premium for an appeal bond - CORRECT ANSWER C. all of the insured's lost earnings during attendance at a hearing or trial" "All of the following are indirect loss coverage available under equipment breakdown forms EXCEPT: A. business income B. business interruption C. consequential damage D. extra expense - CORRECT ANSWER A. business income" "Which of the following losses is covered by the inside the premises - robbery or safe burglary of other property crime coverage form? A. Theft from a messenger while at the bank B. Theft by an employee C. Merchandise stolen from a custodian D. Money stolen from an employee - CORRECT ANSWER C. Merchandise stolen from a custodian" "All of the following are covered by a PAP EXCEPT: A. glass breakage B. theft C. liability for damage to the insured's property D. damage to the property of others - CORRECT ANSWER C. liability for damage to the insured's property" "All of the following are covered by a standard fire insurance policy EXCEPT: A. fire B. explosion C. lightning D. removal - CORRECT ANSWER B. explosion" "A farmer's crops being damaged by toxic fumes that have been escaping continuously from a factory is an example of a/an: A. occurrence B. accident C. proximate cause D. insurable interest - CORRECT ANSWER A. occurrence" "uninsured motorist coverage provides payments for which of the following? A. Bodily injury to other parties B. Bodily injury to the insured C. Physical damage to the auto D. Bodily injury to the uninsured driver - CORRECT ANSWER B. Bodily injury to the insured" "Proximate cause may involve all of the following EXCEPT: A. covered peril B. break in the chain of causation C. direct loss D. indirect loss - CORRECT ANSWER C. direct loss" "When an insured decides to cancel a fire policy mid-term, the cancellation is effected on a/an: A. pro rata basis B. equitable basis C. excess basis D. short-rate basis - CORRECT ANSWER D. short-rate basis" "Each of the following is covered under a commercial property policy EXCEPT: A. merchandise B. outdoor curbside signs C. fixtures D. furniture - CORRECT ANSWER B. outdoor curbside signs" "Which of the following is protected by Coverage A in a CGL policy? A. Personal injury liability B. Medical payments C. Advertising injury liability D. Products & completed operations - CORRECT ANSWER D. Products & completed operations" "If a neighbor accidentally drove his vehicle into the insured's fence, this would: A. be covered under a basic form - dwelling policy with the extended coverage perils B. not be covered under any of the dwelling policy forms C. be covered under the broad form - dwelling policy D. be covered as part of the extension of coverage under all dwelling coverage forms - CORRECT ANSWER C. be covered under the broad form - dwelling policy" "A fire causes extensive damage to the interior of a small restaurant. The building was covered by a commercial package policy with a building and personal property form. Which of the following losses was covered by this contract? A. the loss of gross earnings of the restaurant B. tables and chairs destroyed by the fire C. loss of profits while customers are unable to make purchases D. expenses incurred to reopen the restaurant - CORRECT ANSWER B. tables and chairs destroyed by the fire" "Under the liability section of a PAP, all of the following are considered insureds EXCEPT: A. the daughter of the insured while driving her boyfriend's car B. the insured's neighbor who temporarily borrows the insured's car C. a coworker who borrowed the insured's car to run an errand for the insured's employer D. the insured's employer if the insured used the employer's vehicle to run an errand for his employer - CORRECT ANSWER D. the insured's employer if the insured used the employer's vehicle to run an errand for his employer" "If an insured purchases 2 separate fire policies for 2 separate insurers with identical limits of liability and then suffers a loss, payment will be made on which of the following bases? A. reimbursement basis B. all-risk basis C. pro rata basis D. specified basis - CORRECT ANSWER C. pro rata basis" "All of the following statements regarding the business income coverage form are true EXCEPT: A. it is coverage for business interruption losses B. it covers time element losses C. it covers suspension of operation for any reason D. its coverage applies to losses and expenses related to an interruption of normal business operations - CORRECT ANSWER C. it covers suspension of operation for any reason" "Tony has a liability policy that covers his business. Sometime during the policy period a loss occurs, but Tony does not become aware of the loss until several years after his policy expires. Which of the following types of policies would cover the loss? A. Special policy B. Occurrence policy C. Claims-made policy D. The loss would not be covered under any type of policy - CORRECT ANSWER B. Occurrence policy" "In which of the following instances would coverage be triggered under a claims made form? A. When a claim is reported and filed B. When a covered employee is injured on the job C. When bodily injury to others occurs following a retroactive date, if any D. When injury or damage occurs during the policy period - CORRECT ANSWER A. When a claim is reported and filed" "What is the name of a Commercial Auto form to cover an auto repair facility for damage to a customer's car in their care, custody or control? A. Business Auto Policy B. Commercial General Liability C. Garagekeepers Policy D. Commercial Property Policy - CORRECT ANSWER C. Garagekeepers Policy" "What is the name of the commercial floater used by a contractor to cover equipment on the construction site that has not yet been installed? A. Scheduled personal property floater B. Installation floater C. Personal effects floater D. Equipment breakdown - CORRECT ANSWER B. Installation floater" "What is the name of the coverage that protects a business who has a customer's auto in their care, custody or control? A. Garage Coverage B. Garagekeepers Liability C. General liability D. Business Auto Policy - CORRECT ANSWER B. Garagekeepers Liability "Under which part of a Workers' Compensation and Employer's Liability policy would you find a description of employer's liability coverage provided? A. PART 1 B. PART 2 C. PART 3 D. PART 4 - CORRECT ANSWER B. PART 2" "A solicitor may not: A. Issue or countersign policies B. Sell insurance C. Collect premiums D. Sign an application - CORRECT ANSWER A. Issue or countersign policies" "A typical Outboard Motor and Boat policy provides which of the following coverages? A. Liability B. Medical Payments C. Physical damage D. All of the above - CORRECT ANSWER C. Physical damage" "What is the largest offic ebuilding risk that might be eligible for a BOP? A. Three stories and 50,000 square feet B. Three stories and 75,000 square feet C. Six stories and 75,000 square feet D. Six stories and 100,000 square feet - CORRECT ANSWER D. Six stories and 100,000 square feet" "Which of the following is NOT covered under Farm Coverage? A. Farm buildings, equipment and livestock B. Liability arising out of farm operations C. Growing crops D. Farm dwelling and its personal property - CORRECT ANSWER C. Growing crops" "What is the limit on Pollutant Cleanup and Removal coverage under the Business and Personal Property form? A. $10,000 B. $20,000 C. $25,000 D. $50,000 - CORRECT ANSWER A. $10,000" "What is the limit on Debris Removal coverage under the Business and Personal Property form? A. Up to 10% of loss B. Up to 25% of loss C. Up to 30% of loss D. Up to 15% of loss - CORRECT ANSWER B. Up to 25% of loss" "What is the limit on Fire Department Service Charge coverage under the Business and Personal Property form? A. $500 B. $1,000 C. $2,000 D. $1,500 - CORRECT ANSWER B. $1,000" "What is the limit on Electronic Data coverage under the Business and Personal Property form? A. $2,500 B. $1,000 C. $2,000 D. $1,500 - CORRECT ANSWER A. $2,500" "What is the limit on Increased Cost of Construction coverage under the Business and Personal Property form? A. $10,000 or 6% of building coverage, whichever is less B. $10,000 or 5% of building coverage, whichever is less C. $20,000 or 6% of building coverage, whichever is less D. $15,000 or 5% of building coverage, whichever is less - CORRECT ANSWER B. $10,000 or 5% of building coverage, whichever is less" "Which of the following is not required in a CGL coverage part? A. CGL declarations B. One or more CGL coverage forms C. Causes of loss form D. Common policy declarations - CORRECT ANSWER C. Causes of loss form" "If the insurance company requests a proof of loss on a Commercial Inland Marine claim, the insured must submit it within how many days? A. 10 B. 30 C. 60 D. 90 - CORRECT ANSWER C. 60" "What is the limit on coverage for grave markers under the HO policy? A. $1,000 B. $2,000 C. $2,500 D. $5,000 - CORRECT ANSWER D. $5,000" " Which of the following represents pure risk? A. Purchase of stock in a new company B. An investment in real estate C. Purchase of a lottery ticket D. Chance of fire in a dwelling – CORRECT ANSWER D. Chance of fire in a dwelling" "WHICH OF THE FOLLOWING IS A PERIL? A. ATTITUDE TOWARDS SAFETY B. FIRE C. DEDUCTIBLE D. AN EXCLUSION – CORRECT ANSWER B. FIRE" "Direct loss refers to: A. Fire damage to a dwellings roof B. Cost of increased living expenses due to a fire C. Reduction in the value of in the insured's 401k D. Exclusions – CORRECT ANSWER A. Fire damage to a dwellings roof" "When property is unique in value, which of the following may be used to develop premium? A. Actual Cash Value B. Replacement Cost C. Stated Value D. Salvage Value – CORRECT ANSWER C. Stated Value" "There is a condition in most property policies that may exclude coverage for certain perils depending on the occupancy of the building at the time of loss. If the insured moved to a new dwelling 60 days before the loss, which of the following conditions might apply? A. Unoccupancy B. Vacancy C. Use limitation D. Protection warranty – CORRECT ANSWER B. Vacancy" "There is a condition in most property policies that may exclude coverage for certain perils depending on the occupancy of the building at the time of loss. If the insured has a vandalism claim while they are on vacation, which of the following conditions might apply? A. Unoccupancy B. Vacancy C. Use limitation D. Protection warranty – CORRECT ANSWER A. Unoccupancy" "When an individual or business causes harm to another, the injured party will expect their damages to be covered by the person causing the injury. If the individual or business causing harm will be held responsible for the damages regardless of negligence, we say they are: A. Negligent B. Absolutely liable C. Vicariously liable D. Not liable – CORRECT ANSWER B. Absolutely liable" "When an insured is held liable for a product they manufactured that caused injury an negligence does not need to be proven, what type of liability is this? A. Negligence B. Vicarious liability C. Not liable D. Strict liability – CORRECT ANSWER D. Strict liability" "In a commercial insurance policy, the person with the responsibility of administering the policy, making payments, etc. is the: A. Named insured B. Additional insured C. First named insured D. Lienholder – CORRECT ANSWER C. First named insured" "All of the following are duties of the insured as detailed in the Conditions of the policy EXCEPT: A. Make premium payments on time B. Notify insurer of incidents that may lead to a claim C. Cooperate with the insurer D. Assist in selecting an insurance adjuster – CORRECT ANSWER D. Assist in selecting an insurance adjuster"