IDAHO PROPERTY & CASUALTY EXAM PREP
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 -
Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -
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 - Answers -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 - Answers -
A
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 - Answers -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 - Answers -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 - Answers -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 -
Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -B
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 -
Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -
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 - Answers -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 - Answers -
A
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 - Answers -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 - Answers -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 - Answers -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 -
Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -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 - Answers -B
