Idaho Property & Casualty Exam Questions & Answers Latest Updated

another name for insurance agent is: principal producer broker recorder - Answer producer another name for insurer is: principal producer broker policymaker - Answer principal The Broad Form Products Coverage endorsement in commercial auto policies does which of the following? Adds property coverage Removes the defective products exclusion Adds the defective products exclusion Removes property coverage - Answer Removes the defective products exclusion All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT The injury or damage must occur after the insured has released physical possession of the product to another. The injury or damage must occur within 90 days after the insured's work is completed. The injury or damage must occur away from the inured premises. The injury or damage must arise out of the insured's product or work. - Answer The injury or damage must occur within 90 days after the insured's work is completed. *The products and completed operations hazard included injuries or damage that occur after the insured has completed its job and left the site, or relinquished control of t product it manufactured or sold. There is no time limit on the injury or damage. CGL Coverage B (Personal and Advertising Injury) will cover An offense committed by an insured whose business is advertising. Inadvertent injury to others caused in the course of advertising the insured's product. The failure of goods o conform to advertised quality or performance. Oral or written publication of material the insured knows is false. - Answer Inadvertent injury to others caused in the course of advertising the insured's product. An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of: Concealment Misrepresentation Fraud Breach of warranty - Answer Concealment When a parent is required to pay for damages caused by his or her children, this is an example of Strict liability Intervening cause Assumption of risk Vicarious liability - Answer Vicarious liability Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies? Mobile equipment is covered for property insurance. The endorsement is available for additional premium. The endorsement is automatic. Liability coverage is not provided on equipment that is being towed. - Answer The endorsement is available for additional premium What is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent? Proximate cause Comparative negligence Relative degree of damage statute Contributory negligence - Answer Comparative negligence Who are the parties to a bond? Principal, obligee, and guarantor Insured and agent Surety and custodian Contractor, broker, and dealer - Answer Principal, obligee, and guarantor Which of the following statements would be an example of a product liability claim? The insured's product has to be recalled because of an expiration date. Faulty packaging of a cereal caused spoilage that resulted in someone getting sick. An insured, while delivering product to a customer hits another car with the delivery truck causing bodily injury and property damage Someone tampers with the insured's product causing the insured to have to recall all products that are on the shelf. - Answer Faulty packaging of a cereal caused spoilage that resulted in someone getting sick. The court finds that both parties of the case are negligent. The extent of negligence is determined for each party, and the amount of damages awarded are adjusted accordingly. This illustrates the process of: Comparative liability Comparative negligence Proportional negligence Proportional liability - Answer Comparative negligence Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? Consumer Protection Agency Insurance Guaranty Association Insurance Consumer Protectorate Insurance Solvency Association - Answer Insurance Guaranty Association What effect does the Terrorism Risk Insurance Act of 2002 have on the war and military action exclusion with regard to property and casualty insurance? Replaces the exclusion for military actions with an exclusion for terrorist acts only. Eliminates the exclusion from policies written after 2002. Nullifies the exclusion of certified acts of terrorism as covered by the act. Narrows the exclusions to include coverage for both terrorist and military actions. - Answer Nullifies the exclusion of certified acts of terrorism as covered by the act. The Gramm-Leach-Bliley Act was passed to: Protect private customer information filed with a financial institution. Define insurance as interstate commerce. Allow consumers access to credit and private consumer reports. Allow insurance companies access to medical information for underwriting purposes. - Answer Protect private customer information filed with a financial institution. Which of the following terms refers to such disabilities as the loss of a limb, hearing, or eye sight? a) Permanent partial disability b) Permanent total disability c) Temporary total disability d) Temporary partial disability - Answer a) Permanent partial disability How long will auto Part B cover medical expenses? Up to 1 year Up to 2 years Up to 3 years Medical payments are excluded. - Answer Up to 3 years Part A - Answer Which part of an auto policy covers liability? Part A Part B Part C Part D - Answer Part A Which part of an auto policy covers medical payments? Part A Part B Part C Part D - Answer Part B Which part of an auto policy covers uninsured/underinsured motorists? Part B Part C Part D Part E - Answer Part C Which part of an auto policy covers Damage to your Auto? Part B Part C Part D Part E - Answer Part D Which part of an auto policy covers Duties After a Loss? Part C Part D Part E Part F - Answer Part E Which part of an auto policy covers general provisions? Part C Part D Part E Part F - Answer Part F Auto Part B covers: medical expenses only medical and funeral expenses medical, funeral, and lose wages It excludes medical expenses. - Answer medical and funeral expenses What does Section I on business auto forms cover? Physical Damage Liability Business Auto Conditions Definitions Covered Auto - Answer Liability What does Section III on business auto forms cover? Physical Damage Liability Business Auto Conditions Definitions Covered Auto - Answer Physical Damage What does Section IV on business auto forms cover? Physical Damage Liability Business Auto Conditions Definitions Covered Auto - Answer Business Auto Conditions What does Section V on business auto forms cover? Physical Damage Liability Business Auto Conditions Definitions Covered Auto - Answer Definitions What does Section II on business auto forms cover? Physical Damage Liability Business Auto Conditions Definitions Covered Auto - Answer Liability What does CGL stand for? - Answer Commercial General Liability The Coverage Territory for Commercial General Liability includes all of the following, EXCEPT: United States U.S. Territories (Puerto Rico, Guam, Virgin Islands) Mexico Canada - Answer Mexico What is Coverage A for CGL (Commercial General Liability)? A) Property Damage B) Bodily Injury C) Personal Injury D) Only A E) A + B - Answer E) A + B What is Coverage B for CGL (Commercial General Liability)? A) Property Injury B) Advertising Injury C) Personal Injury D) B + C E) All of the above - Answer D) B + C What is CGL Coverage C? A) Bodily Injury B) Property Damage C) Personal Injury D) Medical Payments - Answer D) Medical Payments This form would cover a loss that occurred at any time and was discovered during the policy period: Loss Sustained Form Discovery Form Reporting Form Reported Losses Form - Answer Discovery Form This form would cover a loss that both occurred and was discovered during the policy period: Loss Sustained Form Discovery Form Reporting Form Reported Losses Form - Answer Loss Sustained Form Which of the following would be considered an uninsured vehicle? A A vehicle operated by an insured's family member B A vehicle fleeing a hit-and-run accident C A vehicle owned by a self-insurer D A government owned vehicle - Answer B A vehicle fleeing a hit-and-run accident In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? A 1st limit B 2nd limit C 3rd limit D Combined limit - Answer A 1st limit Which of the following would NOT qualify as a hired auto? A An auto leased from a commercial rental company B An auto rented for personal use C An auto borrowed from an employee D An auto hired by an employer - Answer C An auto borrowed from an employee *Hired automobiles include those that are leased, hired, rented, or borrowed, excluding autos that are owned by employees. All of the following are parts of a personal auto policy EXCEPT A Liability coverage. B Garage coverage. C Medical payments coverage. D Duties after an accident or loss. - Answer B Garage coverage. A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? A The driver's policy will act in excess of the passenger's policy. B The passenger's policy would be primary. C Both policies will share equally in the loss. D The driver's policy would be primary. - Answer D The driver's policy would be primary. *Medical payments coverage pays all necessary medical and funeral expenses incurred and services rendered to the insured or passengers in the insured's vehicle, regardless of fault. Which of the following is NOT included in the definition of an "auto" under a commercial auto policy? A A semitrailer B Mobile equipment C A land motor vehicle D A trailer - Answer B Mobile equipment The garage coverage form is used to insure A All types of organizations other than auto businesses and motor carriers. B Owner-operators who use their own trucks to haul property for the motor carriers that hire them. C Auto businesses, such as auto dealers, service stations, and auto repair shops. D Businesses that use automobiles to transport property of others or their own property. - Answer C Auto businesses, such as auto dealers, service stations, and auto repair shops. Which of the following would be considered an insured under a business auto coverage form? A A partner of the named insured for any covered auto owned by that person or a member of his or her household B Anyone while using, with permission, a covered auto owned by the named insured C The owner or anyone else from whom the named insured hires or borrows a covered auto D Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business - Answer B Anyone while using, with permission, a covered auto owned by the named insured What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy? A $250 B $500 C $1,000 D $2,000 - Answer C $1,000 With respect to auto insurance, the term owned autos includes all of the following EXCEPT A Any private passenger auto leased to the named insured for a period of more than 6 months. B A pickup or van titled to and used in the named insured's business. C Any private passenger auto titled to the named insured. D A pickup or van acquired by the named insured during the policy period. Incorrect! For eligibility - Answer B A pickup or van titled to and used in the named insured's business. *For eligibility, the personal auto policy will insure as covered autos those vehicles owned by the named insured and not used primarily for a business, other than farming. Vehicles leased to the named insured for periods of 6 months or longer also are classified as owned for insurance purposes. While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? A Property damage liability B Collision coverage C Other-than-collision coverage D This loss would not be covered. - Answer A Property damage liability The designation symbols used in commercial auto policies can be found in which policy section? A Covered Auto B Liability Coverage C Definitions D Conditions - Answer A Covered Auto All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT A Premiums on appeal bonds in any suit the insurer defends. B Up to $250 for bail bonds required because of a covered accident. C Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. D Up to $200 a day for loss of earnings due to attendance at hearings or trials. - Answer C Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.