IDAHO PROPERTY & CASUALTY EXAM PREP QUESTIONS WITH 100% CORRECT ANSWERS

Which of the following statements is false with respect to requirements for rates? A) Rates may not be inadequate B) A purpose of the rate regulation is to diminish competition between insurers C) Rates may not be unfairly discriminatory D) A purpose of the rate regulation is to regulate cooperative action among insurers B The Businessowners Coverage Form to the Businessowners Policy provides coverage on which of the following basis? A) Modified Perils B) Simplified Perils C) Broad Perils D) Open Perils D Which of the following describes the coverage of the Extra Expense Coverage Form? A It covers the loss of business income during the period of restoration B It covers the expense of disposing of spoiled merchandise caused by a power outage C It covers the necessary additional expenses incurred during the period of restoration which would not otherwise have been incurred in the absence of a direct loss D It covers the expense of removing the debris of a covered direct loss C All of the following are true of negligence, except: A It is the failure to use ordinary care B It does not require a duty to be owed C It is a type of tort D It does not include breach of contract B All of the following are Optional Coverages under the Businessowners Policy, except: A Money and securities B Employee dishonesty C Outdoor signs D Personal property of others that is in the insured's care, custody and control D Policyholder S has an HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay? A $2,250 B $2,750 C $250 D $500 B The Collision or Running Down Clause in Ocean Marine Insurance covers: A Collision damage to another vessel when the shipper is liable B Collision damage to the insured vessel when it collides with a pier or fixed object C Damage to the insured vessel caused by running aground D Collision damage to the insured vessel when it collides with another vessel A Which Ocean Marine insurance provision protects against direct damage caused by bursting of boilers? A Boiler & Machinery Clause B Inchmaree Clause C Mechanical Failure Clause D Running Down Clause B Bodily Injury may include which of the following? A Loss of Earnings B Slander C Invasion of Privacy D False Arrest A Which of the following covers an employee in a position of private trust and protects an employer against loss caused by the employee's dishonesty. A Performance bond B Fidelity bond C Lender's bond D License bond B Which of the following is correct regarding products liability under the CGL? A Coverage applies to the bodily injury (BI) and property damage (PD) the product causes, but not to the product itself B Products liability coverage commences immediately upon sale of the product, before the purchaser leaves the insured's premises C Products liability coverage includes dram shop liability insurance D Coverage applies to BI and PD caused by the product, and to damage to the product itself once in the purchaser's care, custody and control A Notice of premium or coverage changes must be sent out with ___ days' notice. A 21 B 25 C 14 D 30 D All of the following are covered perils under the Extended Coverage Endorsement to the DP-1, except: A Vehicles B Weight of ice, snow or sleet C Windstorm D Volcanic eruption B Which statement is true concerning Coverage D of the Homeowners Policy? A The coverage will pay for all the insured's living expenses until the property is restored B If the insured must relocate permanently, payment will be made for 365 days, regardless of the time it takes the insured to settle at the new location C The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living D The coverage will pay until the property is restored, plus 30 days relocation expense C Policyholder M insures her owner-occupied single family residence under a dwelling property policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what policy coverage will pay for M's extra costs to stay in a motel and board her pets while the fire damage is being repaired? A Coverage E B Coverage B C Coverage D D Coverage C A All of the following are true of automobile physical damage Coverage D, except: A It covers damage to the insured auto and to another auto with which it collided B Collision coverage usually is written with a deductible C Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision coverage D It covers damage to the insured auto regardless of liability A All of the following statements about the Musical Instrument Floater are true, except: A It may not be included in the scheduled personal property endorsement B No additional premium is required if instruments are played for hire C Newly acquired items must be reported within 30 days D Claims are settled on an actual cash value B Short rate cancellation occurs when: A An insurer cancels the policy mid-term B The insured cancels the policy mid-term C A policy is flat cancelled D The policy is non-renewed B All of the following are true of a Yacht Policy, except: A Includes both property and liability coverage B Includes coverage for fuel spills and commercial towing C Lay up warranties are permitted D A yacht is covered regardless of its location D While driving in another state with higher coverage requirements, which of the following sections of the PAP automatically provides the required coverage? A Other Insurance B Automatic Extension of Coverage C Any State Coverage D Out of State Coverage D All of the following are true of subrogation, except: A It prevents the insured from collecting twice for the same loss B It helps the insurer control expenses and premiums C It allows the insurer to file suit against the insured D It allows the insurer to attempt collection from a third party to reimburse a loss C The Garage Liability section of the Garage Coverage Form covers which of the following? A Property damage for which the insured is legally responsible B Property in the care and custody of the insured C Injuries covered by Workers' Compensation D Product recall A Policyholder L has a DP-1 with a Coverage A amount of $300,000. Following a severe storm, she suffers a covered loss to the dwelling of $275,000 and a covered loss to a detached swimming pool of $30,000. How much will L's policy pay? A $275,000 B $300,000 C $250,000 D $305,000 B Which of the following best defines a hazard? A It increases the amount of loss B It eliminates the chance of loss C It increases the chance of loss D It is a cause of loss C Which of the following property is covered under the Homeowners Policy? A A speaker system installed in the insured's car B A model airplane C A show dog D A hovercraft B Which type of construction material has a fire-resistance rating between one and two hours for walls, floors and roofs? A Modified fire-resistive B Fire Resistive C Joisted Masonry D Non-Combustible A The Personal Umbrella Policy does not provide coverage for which of the following? A Property damage liability to property in the insured's care B Homeowners liability C Personal injury D Personal automobile liability A The act of negotiating includes the following, except: A Corresponding with a prospective purchaser regarding a policy's benefits with a subsequent sale of insurance B Advising a prospective purchaser regarding a policy's terms with a subsequent sale of insurance C Advising a prospective purchaser regarding a policy's benefits with a subsequent sale of insurance D Advising a prospective purchaser regarding a policy's conditions without a subsequent sale of insurance D