Alabama Property and Casualty Sample Quiz 1-100 correctly answered

Alabama Property and Casualty Sample Quiz 1-100 correctly answeredWhat is a hazard? an increase in the possibility that a loss might occur transfer risk from a person or business to an insurance company that agrees to to pay for losses in exchange for a premium. insurance The type of insurance company in which the policyholder is considered an owner, with the right to vote and share in the profits is a mutual company Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the final mortgage payment to FBN Mortgage Company. Jewel is considering selling her home to her niece, Cynthia. Who has an insurable interest in the home? Jewel Canford Risk of loss is a speculative risk Which one of the following is NOT an element of insurability? a. Loss must be calculable b. Risk of loss must represent a financial harship c. Cost of insurance must be affordable d. Risk of loss is a speculative risk The principle that states that an insured should be restored to approximately the same financial position after a loss as before is known as... indemnity Declarations What part of an insurance policy personalizes the policy as to who and what are insured? An insurance policy is prepared by the insurance company, with little or no input from the insured. This means that an insurance policy is a/an... adhesion contract An individual who owns and lives in a condominium can obtain broad coverage for personal property in the condo under which Homeowners form? HO-6 What is the purpose of the Fair Credit Reporting Act? to give the consumer recourse if insurance is denied on the basis of a credit report. a fire that was caused by the insureds negligence burns a neighbors building, the owner of the building sues the insured. Which of the following is a liability loss? What rating method involves modifying the premium based on the insured's loss experience over a specified period of time? Experience rating Most Flood insurance coverage is provided by a federal government program Which of the following businesses could be eligible for a Business owners policy? a. Hometown Bank & Trust b. Rest Easy Motel c. Family Fun Time Amusement Park d. Joe's Bar and Grill Rest Easy Motel Pain and Suffering Which one of the following types of benefits is generally not provided by a state's workers compensation law? foreign Which of the following describes an insurance company doing business in a state other than the one where it is incorporated? provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires The purpose of a binder is to Agent Michelle is under contract with the XYZ Insurance Company to represent and sell insurance only for XYZ. This is an example of what type of agency system? Exclusive/captive What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy? Open peril policy prior approval state In a particular state, an insurance company must file policy forms and rates with the state insurance department and wait for official approval before using the new forms and rates. This is an example of a/an According to the Nationwide Definition, imports and exports are eligible for Ocean Marine insurance Which Surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? Payment bond What describes actual cash value? Replacement cost-depreciation appraisal condition The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is the An insured purchased new furniture for $6000. At the time of a fire los, it had depreciated $2000. The same furniture will cost $7000 to replace. What is the actual cash value of the destroyed furniture? 5000 Which of the following can be insured under an unendorsed Homeowners policy? a. Farm b. Mobile Home c. Dwelling that the owner rents to his cousin d. Private residence in which the owner occupant also maintains an office for her accounting business. d The primary purpose of the Business Income coverage forms is to reimburse the insured for loss of income resulting from property damage at the insureds property Coverage for sums an employer becomes legally obligated to pay under common law as a result of a work related injury to an employee is provided by Part two- Employers liability section of the Workers Comp policy The homeowners form that provides open peril coverage on the dwelling and broad coverage on personal property is the HO-3 What is the a coverage extension that is available in the Building and Personal Property coverage form? Property off-premises Which of the following losses to covered equipment would be covered under the Equipment Breakdown Protection coverage form? a. Damage that occurs while the equipment is undergoing a pressure test b. Damage caused by fire c. Damage resulting from a windstorm d. Damage from an explosion caused by the centrifugal force of moving parts. d In PURE contributory negligence states, when an individual is found to have contributed to his or her own loss in any way, another property. may not be held liable Which of the following would NOT generally be included in the Supplementary Payments portion of a Liability policy? a.. Loss of earnings b. Damage to property owned by the insure c. First aid toothers at the time of an accident d. Expenses the insured incurs at the companys request as part of an investigation b According to the cancellation condition in the Common Policy Conditions form, if the insurance company is cancelling a Commercial Package policy for nonpayment of premium, the insured must be given at least ______________ days' notice of cancellation. 10 Which of the following overages IS included in the Homeowners policy but is NOT included in an unendorsed Dwelling policy Liability Trailer Interchange coverage is a part of the Truckers coverage form and Motor Carrier coverage form Open peril coverage for both the dwelling and personal property is provided by the HO-5 Under the Commercial General Liability policy, a separate Aggregate Limit applies to the Products completed operations hazard What Personal Inland Marine form is used to provide open peril coverage on a blanket basis for personal property? Personal property form The insured's home is covered by a DP-3. Two years ago, the insured bought the home for $58,000. Today, its replacement value is $60000. How much Coverage A does the insured need to qualify for replacement cost coverage? $48000 Coverage for which of the following is excluded by a Dwelling policy? a. Improvements, alterations or additions made by an insured at his orher own expense. b. Detached garage on the insureds premises c. Coin collection d. Rent an insured was unable to collect because rental property was damaged c Which of the following lines of insurance CANNOT be included in the Commercial Package policy? a. Ocean Marine b. Crime c. Boiler and Machinery d. Inland Marine a Which one of these Commercial Inland Marine forms CANNOT be included in the Commercial Inland Marine coverage part of the commercial package policy? a. Commercial Articles coverage form b. Valuable papers and records coverage form c. Parcel Post policy d. Signs coverage form c The Extra Expense coverage form provides coverage that will permit the insured to continue in business without interruption following a property damage loss. The business owners policy provides a prepackaged policy of property and liability coverage for certain types of small businesses. Which of the following can be covered as business personal property under the Business owners policy? Exterior building glass What type of Ocean marine insurance provides physical damage coverage for the ship while it is in transit? Hull The party to a Surety bond who promises to do or not do a specific thing is the principal Which of the following perils is covered by the HO-2 and HO-3? a. Sudden and accidental rupture of a heating system b. Loss due to power interruption that occurs off the premises c. Flood d. War a Under the Commercial General Liability coverage form, liability assumed under contract is excluded, except for contracts specifically defined as insured. Who of the following would be considered an insured for Liability coverage under the Personal Auto Policy? The named insured's son, who lives with the insured, while driving a neighbor's car. Under a pure no-fault plan, each party to an auto accident is reimbursed by his or her own insurance company. The insured's property insurance policy has a deductible clause. This means that the insured must pay a certain amount for each loss incur Which one of the following coverage's is not included in the Commercial Crime insuring agreements but can be added by endorsement? Extortion