WebCe - Commercial Lines 101 Questions and Answers 100% Correct

What is the underwriter's goal? - ANSWER-To write a book of business in which the actual losses approximate the expected losses. Gertrude is going to become an insurance agent. She would like to work in an agency that represents many different insurance companies. Gertrude will go to work for a(n) - ANSWER-Independent agency When a client suffers a loss, MegaInsurers is expected to respond promptly to settle the resulting claim. Depending on the line of insurance, claim costs generally consume between 50 and 90 percent of: - ANSWER-The premium dollar. Anderson Auto Insurance Company has established its rates, and the rates are deemed to be fair by the insurance regulators in the states where Anderson does business. Anderson is very concerned about setting adequate rates because inadequate rates can lead to: - ANSWER-Anderson's insolvency. What role does a state insurance department play in the regulation of policy forms? - ANSWER-The state insurance department approves the forms. Grand Insurance has a number of claims that are being processed, with an estimated value of $4 million. This estimate is known as the: - ANSWER-Loss reserves. Kevin, the owner of ABC Contractors, is issued a commercial general liability policy by Speedy Insurance. The policy states that Speedy Insurance agrees to pay for all liability arising from bodily injury or property damage that occurs during the policy period. This is found in the _________________ of the policy: - ANSWER-Insuring agreement. Frank, a small business owner, is upset because his commercial liability policy is filled with exclusions. His agent should point out all the reasons for the exclusions. Which of the following is NOT a reason for the exclusions? - ANSWER-The exclusions help keep insurer profits high. Andy Agent tells Carrie Businessowner that her business auto policy will be written on a standard form, endorsed with a state-specific endorsement to tailor coverage for her specific needs. Andy tells Carrie that the standard form is advantageous because: - ANSWER-It reduces Andy's need to compare numerous insurers' policies word for word to determine which provides the most favorable coverage for Carrie's company. A commercial property policy written on an "all risks" basis covers losses: - ANSWER-From all cau