Property and casualty insurance Exam Questions and Answers Part one 2024/2025

Property and casualty insurance Exam Questions and Answers Part one 2024/2025 Which of the following are the authorities that an agent can hold? - ANSWER-Express and implied Which of the following terms refers to such disabilities the loss of a limb, hearing, or eye sight? - ANSWER-Permanent partial disability Who is NOT considered an employee in a commercial general liability (CGL) policy? - ANSWER-Temporary worker The major portion of the premium of an equipment breakdown policy pays? - ANSWER-For inspections and examinations An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how, much should he insure the property for? - ANSWER-80% of the property's replacement cost or more Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must - ANSWER-Respond to the consumer's complaint. All of the following are found in the declarations section of a policy EXCEPT the - ANSWER-Exclusions. The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? - ANSWER-Up to $2,000 All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT - ANSWER-Dividends from a mutual insurer. Which of the following may be covered by electronic data processing coverage form under an inland marine policy? - ANSWER-a) Computer hardware that is specifically scheduled. b) Extra expense the insured incurs to continue the business following a loss. c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs The party to a surety or fidelity bond who promises to fulfill the obligation is the - ANSWER-Principal The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? - ANSWER-Computer fraud Which of the following would NOT be covered under the liability section of a personal auto policy? - ANSWER-Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within - ANSWER-30 days. What will happen if a house covered by a standard mortgage clause is a total loss? - ANSWER-The insurer pays the mortgagee according to the mortgagee's interest in the property. What is the civil penalty for violating a cease-and-desist order of the Commissioner? - ANSWER-$10,000 The Business Pursuits endorsement under Section II of a homeowner’s policy will cover all of the following EXCEPT - ANSWER-Business liability. If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss? - ANSWER-$8,000 The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called - ANSWER-Avoidance. In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by - ANSWER-The insurer. Which of the following entities must approve all continuing education courses in this state? - ANSWER-The Commissioner An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of - ANSWER-Concealment A common exclusion found under physical damage to your auto includes - ANSWER-Mechanical breakdown. Which of the following is true regarding a risk retention group? - ANSWER-It is a liability insurance company owned by its members. Which of the following best describes a misrepresentation? - ANSWER-Issuing sales material with exaggerated statements about policy benefits A builder's risk form is most often written as which of the following? - ANSWER-Completed value form An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? - ANSWER-Per occurrence Which of the following is an example of a protective safeguard in a businessowners policy? - ANSWER-Automatic sprinkler system If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? - ANSWER-The change must be reported to the Commissioner. If more than one person has an insurable interest in the property covered under a dwelling policy, - ANSWER-The insurer will be liable for only the insured's interest in the damaged property. Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay - ANSWER-$100,000. An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if - ANSWER-A joint ownership coverage endorsement is added. Which of the following is defined as a covered cause of loss in businessowners property coverage? - ANSWER-Leakage from fire-extinguishing equipment The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners’ medical payments coverage will - ANSWER-Apply to injuries of any guests or visitors. All of the following are exclusions under farm property coverage EXCEPT - ANSWER-Loss of use. Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? - ANSWER-3 years .....