4-40 License
TEST 2
Questions and
answers
Jerry is an adjuster and has signed a contract with ABC Insurance to
adjust claims in an area recently devastated by a hurricane. Jerry
receives the claims from ABC Insurance, completes the inspections,
and settles claims on behalf of ABC Insurance according to his
contract. What type of authority has ABC Insurance given Jerry? -
answer B. Express authority
Anton is purchasing homeowner's insurance for his new house. He
wants to make sure his policy offers the BEST coverage available.
Which policy should Anton choose? - answer D. HO-5
The HO-5 is the most comprehensive ISO homeowners policy
available, providing open-peril coverage for both structures and
personal property.
In the case of condominiums: - answer the unit owner and condo
association share responsibility for insuring the property.
What requirements must Wholesalers and Distributors meet in order
to be eligible for a BOP? - answer B. 25% or less of floor space is
available to the general public, and less than 25% of gross income
may come from retail sales.
,In a BOP, all of the following losses are excluded from liability
coverage, EXCEPT: - answer B. property damage to premises rented
by the insured.
The DP-3 is known as the: - answer Special Form
Lightning strikes one of Christy's trees in her backyard and starts a
fire that spreads to two other trees before firefighters are able to
put it out. The fire department charges her $600 for responding to
her call. Christy's DP-2 policy has a Coverage A limit of $95,000.
What is the maximum amount of indemnification that Christy can
expect to receive for this loss (ignoring any deductible)? - answer A.
$2,000
The DP-2 provides up to $500 per tree under Trees, Shrubs, & Other
Plants coverage, and up to $500 under Fire Department Service
Charge. So, 3 trees at $500 per tree, plus $500 for the Fire
Department, comes to $2,000 ($500 x 4 = $2,000).
Which of the following would be covered under Coverage A in a
dwelling policy? - answer D. Gas furnace in the basement
Machinery that services the dwelling (such as a furnace) is covered
under Coverage A. But, Coverage A does not pay for damage to
land, construction tools next to the dwelling, or building materials
not intended for use on the dwelling.
In a Farm Insurance policy, which of the following would cover the
main dwelling on the insured farm? - answer B. Coverage A
Alan owns a commercial landscaping business and does most of his
work during the summer months. One day, he arrives at work to find
an enormous hole in the middle of the yard where he stored his
lawn mowers. Under which Causes of Loss form(s) would the
mowers, which were consumed by the sinkhole, be covered by his
commercial property policy? - answer B. Basic, Broad, and Special
Forms
, Phil runs a locomotive repair business, which is insured under a
commercial property policy. One night, some blasting powder is
accidentally ignited and blows a crowbar through one of the
engines. No one is hurt, but the locomotive is severely damaged.
Which coverage option may help cover the cost of repairing the
engine from this unfortunate event? - answer C. Legal Liability
Coverage
The Legal Liability Coverage Form provides insurance protection
against negligent damage to the personal property of others while
in the insured's care or on the insured's premises.
Phil owns a public pool. One day, Phil has an altercation with a
woman visiting the pool. Phil doesn't like the way she looks, so he
tells her that she has to leave the premises right away. The woman
takes Phil to court for violating her civil rights. This is an example of
what type of personal injury covered under Phil's Commercial
General Liability policy? - answer B. Wrongful Eviction
ABC Roofing has two CGL policies that cover the same losses. Both
policies are occurrence forms, thus pay out on a pro rata basis. The
first policy is through KLM Insurance and has a limit of $300,000.
The second is through XYZ Mutual, with a limit of $600,000. One
day, ABC Roofing suffers an occurrence resulting in a $150,000
covered loss. How will this loss be indemnified? - answer B. KLM
Insurance will pay $50,000; XYZ Mutual will pay $100,000
KLM Insurance will pay $50,000 and XYZ Mutual will pay $100,000.
When policies pay on a pro rata basis, each insurer agrees to pay its
share of the loss according to its share of all policy limits. The KLM
policy limit makes up 1/3 of the total, so it will pay 1/3 of the loss.
The XYZ policy limit makes up the other 2/3 of the total, so it will
pay 2/3 of the loss.
Herb owns a processing plant outside of town that services all the
local farmers. He's been using over-the-road transportation but
wants to streamline his business by using the railroads. He contacts
TEST 2
Questions and
answers
Jerry is an adjuster and has signed a contract with ABC Insurance to
adjust claims in an area recently devastated by a hurricane. Jerry
receives the claims from ABC Insurance, completes the inspections,
and settles claims on behalf of ABC Insurance according to his
contract. What type of authority has ABC Insurance given Jerry? -
answer B. Express authority
Anton is purchasing homeowner's insurance for his new house. He
wants to make sure his policy offers the BEST coverage available.
Which policy should Anton choose? - answer D. HO-5
The HO-5 is the most comprehensive ISO homeowners policy
available, providing open-peril coverage for both structures and
personal property.
In the case of condominiums: - answer the unit owner and condo
association share responsibility for insuring the property.
What requirements must Wholesalers and Distributors meet in order
to be eligible for a BOP? - answer B. 25% or less of floor space is
available to the general public, and less than 25% of gross income
may come from retail sales.
,In a BOP, all of the following losses are excluded from liability
coverage, EXCEPT: - answer B. property damage to premises rented
by the insured.
The DP-3 is known as the: - answer Special Form
Lightning strikes one of Christy's trees in her backyard and starts a
fire that spreads to two other trees before firefighters are able to
put it out. The fire department charges her $600 for responding to
her call. Christy's DP-2 policy has a Coverage A limit of $95,000.
What is the maximum amount of indemnification that Christy can
expect to receive for this loss (ignoring any deductible)? - answer A.
$2,000
The DP-2 provides up to $500 per tree under Trees, Shrubs, & Other
Plants coverage, and up to $500 under Fire Department Service
Charge. So, 3 trees at $500 per tree, plus $500 for the Fire
Department, comes to $2,000 ($500 x 4 = $2,000).
Which of the following would be covered under Coverage A in a
dwelling policy? - answer D. Gas furnace in the basement
Machinery that services the dwelling (such as a furnace) is covered
under Coverage A. But, Coverage A does not pay for damage to
land, construction tools next to the dwelling, or building materials
not intended for use on the dwelling.
In a Farm Insurance policy, which of the following would cover the
main dwelling on the insured farm? - answer B. Coverage A
Alan owns a commercial landscaping business and does most of his
work during the summer months. One day, he arrives at work to find
an enormous hole in the middle of the yard where he stored his
lawn mowers. Under which Causes of Loss form(s) would the
mowers, which were consumed by the sinkhole, be covered by his
commercial property policy? - answer B. Basic, Broad, and Special
Forms
, Phil runs a locomotive repair business, which is insured under a
commercial property policy. One night, some blasting powder is
accidentally ignited and blows a crowbar through one of the
engines. No one is hurt, but the locomotive is severely damaged.
Which coverage option may help cover the cost of repairing the
engine from this unfortunate event? - answer C. Legal Liability
Coverage
The Legal Liability Coverage Form provides insurance protection
against negligent damage to the personal property of others while
in the insured's care or on the insured's premises.
Phil owns a public pool. One day, Phil has an altercation with a
woman visiting the pool. Phil doesn't like the way she looks, so he
tells her that she has to leave the premises right away. The woman
takes Phil to court for violating her civil rights. This is an example of
what type of personal injury covered under Phil's Commercial
General Liability policy? - answer B. Wrongful Eviction
ABC Roofing has two CGL policies that cover the same losses. Both
policies are occurrence forms, thus pay out on a pro rata basis. The
first policy is through KLM Insurance and has a limit of $300,000.
The second is through XYZ Mutual, with a limit of $600,000. One
day, ABC Roofing suffers an occurrence resulting in a $150,000
covered loss. How will this loss be indemnified? - answer B. KLM
Insurance will pay $50,000; XYZ Mutual will pay $100,000
KLM Insurance will pay $50,000 and XYZ Mutual will pay $100,000.
When policies pay on a pro rata basis, each insurer agrees to pay its
share of the loss according to its share of all policy limits. The KLM
policy limit makes up 1/3 of the total, so it will pay 1/3 of the loss.
The XYZ policy limit makes up the other 2/3 of the total, so it will
pay 2/3 of the loss.
Herb owns a processing plant outside of town that services all the
local farmers. He's been using over-the-road transportation but
wants to streamline his business by using the railroads. He contacts
