Name: Score:
378 Multiple choice questions
Term 1 of 378
The purpose of the Expediting Expenses coverage of a standard Equipment Breakdown policy is:
To pay for regular maintenance of the equipment.
To reimburse for lost income during equipment downtime.
To pay for the extra expense of having equipment repairs performed faster to get the
insured back in business quickly.
To cover the cost of purchasing new equipment after a breakdown.
Term 2 of 378
Joseph Jones purchased a new car stereo system from Dailey's Auto Enhancements. Daily's
permanently installed the stereo system in the console area of the car, where he could access it
easier while driving than the typical area in the dashboard. The cost of the new system,
disregarding any installation costs, was $2,000. One year after installation, Joseph's car was broken
into and the stereo was stolen. At this point, the ACV of the system had fallen to $1,700.
Disregarding any deductible, how much will Joseph's policy pay on this claim?
Indemnify Insurance will pay the claim.
$35,700.
Symbol 25.
$1,000.
,Term 3 of 378
Morton loses control of his car and hits Jordan's car that was parked legally along the street
where Morton was driving. The damage to Jordan's car is covered by which coverage of Morton's
personal automobile policy?
Part A -- Liability
Property damage coverage.
Part c -- uninsured motorist
Part b -- medical payments
Term 4 of 378
Which of the garage policy coverages will pay for physical damage to a garage customer's auto
regardless of legal liability?
Garagekeepers direct primary coverage.
$56,375
The coverage is not additional insurance and does not increase the limits of the policy.
Collision.
Term 5 of 378
The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the
owner. In ocean marine coverage, what is this called?
Barratry.
The Inchmaree Clause.
General Average.
Seaworthiness.
,Term 6 of 378
Catherine suffered a covered cause of loss that resulted in water in her basement along with
other damage. Alan, an adjuster for Binders Keepers Insurance, tells Catherine to immediately
have the water damaged carpeting and wall paneling removed from her basement, so that mold
will not cause further damage. Alan then begins the process of identifying coverage under the
policy and finds that the water damage is not covered. Which of the following statements is TRUE
regarding this claim?
Shooting the gun was an intentional act committed by George, but the consequences of act
(his neighbor being shot) were not intended.
Because Alan told Catherine to remove the carpeting and paneling before he checked the
coverage, he waived the right of Binders Keepers to deny the claim..
Carissa's injuries are not compensable as she was commuting to work and coverage does
not apply in that case..
Coverage will not apply if the storage unit has been on the insured premises for longer than
90 days, even if the business personal property has only been stored there for less than 90
days.
Term 7 of 378
Which of the following would be covered under any of the Homeowners forms?
The implied warranties are attached to the policy as an endorsement..
Explosion of a hot water heater that damages carpeting.
Failing to deny coverage of a claim within a reasonable amount of time after concluding the
investigation
Commercial property coverage can be written as both a monoline policy and as part of a
package policy.
, Term 8 of 378
Which of the following statements regarding uncontrolled Commercial Inland Marine forms is
NOT TRUE?
The HO-8 form specifies a limit of $1,000 for theft.
The results of mediation.
The DP-1, DP-2, and DP-3 forms
The forms can be used as part of a Commercial Package policy.
Term 9 of 378
The "control of property" condition of the Commercial Property policy:
States that only acts of the insured will affect the coverage.
States that all acts of negligence will void the policy.
States that coverage is only valid if the insured is present.
States that a negligent act of someone beyond the insured's direction or control will not
affect the coverage..
Term 10 of 378
Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially
generated electrical current"?
Coverage applies regardless of the cause of the fire.
A fire must be the result of the artificially generated electrical current for coverage to
apply..
Coverage is limited to fires caused by natural disasters.
Only electrical appliances are covered under this form.
378 Multiple choice questions
Term 1 of 378
The purpose of the Expediting Expenses coverage of a standard Equipment Breakdown policy is:
To pay for regular maintenance of the equipment.
To reimburse for lost income during equipment downtime.
To pay for the extra expense of having equipment repairs performed faster to get the
insured back in business quickly.
To cover the cost of purchasing new equipment after a breakdown.
Term 2 of 378
Joseph Jones purchased a new car stereo system from Dailey's Auto Enhancements. Daily's
permanently installed the stereo system in the console area of the car, where he could access it
easier while driving than the typical area in the dashboard. The cost of the new system,
disregarding any installation costs, was $2,000. One year after installation, Joseph's car was broken
into and the stereo was stolen. At this point, the ACV of the system had fallen to $1,700.
Disregarding any deductible, how much will Joseph's policy pay on this claim?
Indemnify Insurance will pay the claim.
$35,700.
Symbol 25.
$1,000.
,Term 3 of 378
Morton loses control of his car and hits Jordan's car that was parked legally along the street
where Morton was driving. The damage to Jordan's car is covered by which coverage of Morton's
personal automobile policy?
Part A -- Liability
Property damage coverage.
Part c -- uninsured motorist
Part b -- medical payments
Term 4 of 378
Which of the garage policy coverages will pay for physical damage to a garage customer's auto
regardless of legal liability?
Garagekeepers direct primary coverage.
$56,375
The coverage is not additional insurance and does not increase the limits of the policy.
Collision.
Term 5 of 378
The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the
owner. In ocean marine coverage, what is this called?
Barratry.
The Inchmaree Clause.
General Average.
Seaworthiness.
,Term 6 of 378
Catherine suffered a covered cause of loss that resulted in water in her basement along with
other damage. Alan, an adjuster for Binders Keepers Insurance, tells Catherine to immediately
have the water damaged carpeting and wall paneling removed from her basement, so that mold
will not cause further damage. Alan then begins the process of identifying coverage under the
policy and finds that the water damage is not covered. Which of the following statements is TRUE
regarding this claim?
Shooting the gun was an intentional act committed by George, but the consequences of act
(his neighbor being shot) were not intended.
Because Alan told Catherine to remove the carpeting and paneling before he checked the
coverage, he waived the right of Binders Keepers to deny the claim..
Carissa's injuries are not compensable as she was commuting to work and coverage does
not apply in that case..
Coverage will not apply if the storage unit has been on the insured premises for longer than
90 days, even if the business personal property has only been stored there for less than 90
days.
Term 7 of 378
Which of the following would be covered under any of the Homeowners forms?
The implied warranties are attached to the policy as an endorsement..
Explosion of a hot water heater that damages carpeting.
Failing to deny coverage of a claim within a reasonable amount of time after concluding the
investigation
Commercial property coverage can be written as both a monoline policy and as part of a
package policy.
, Term 8 of 378
Which of the following statements regarding uncontrolled Commercial Inland Marine forms is
NOT TRUE?
The HO-8 form specifies a limit of $1,000 for theft.
The results of mediation.
The DP-1, DP-2, and DP-3 forms
The forms can be used as part of a Commercial Package policy.
Term 9 of 378
The "control of property" condition of the Commercial Property policy:
States that only acts of the insured will affect the coverage.
States that all acts of negligence will void the policy.
States that coverage is only valid if the insured is present.
States that a negligent act of someone beyond the insured's direction or control will not
affect the coverage..
Term 10 of 378
Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially
generated electrical current"?
Coverage applies regardless of the cause of the fire.
A fire must be the result of the artificially generated electrical current for coverage to
apply..
Coverage is limited to fires caused by natural disasters.
Only electrical appliances are covered under this form.
