1. Which of the following perils is covered under the Commercial Property Basic Cause of Loss form?
1. A. Collapse
2. B. Sinkhole collapse
3. C.
... [Show More] Falling objects
4. D. Breakage of glass - correct answer Answer: B Sinkhole Collapse
The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences EXCEPT:
A.
mudslides
B.
runoff from heavy rain
C.
overflow of tidal waters
D.
water-main breakage - correct answer Answer: D Water-Main Breakage
Which of the following statements about a mortgagee's rights under the Dwelling Property Basic Form (DP-1) is INCORRECT?
A.
No act by the insured will jeopardize the mortgagee's rights.
B.
The mortgagee may file a Proof of Loss if the insured fails to do so.
C.
The mortgagee is entitled to receive prior notice of a policy's cancellation.
D.
The mortgagee may abandon the insured property to the insurer. - correct answer Answer: D The mortgagee may abandon the insured property to the insurer.
Which of the following Homeowners coverages does NOT generally contain a deductible?
A.
Personal property
B.
Other structures
C.
Liability
D.
Dwelling - correct answer Answer: C Liability
Inland Marine insurance is commonly used to insure all of the following items EXCEPT:
A.
automobiles
B.
stamps
C.
camera equipment
D.
jewelry - correct answer Answer: A Automobiles
Information provided by the insured in a Proof of Loss is considered:
A. a warranty
B.
a representation
C.
an assignment
D.
an agreement - correct answer Answer: B a representation
The principle of indemnity is designed to avoid:
A.
two policies sharing payment for a loss
B.
overpayment of a claim
C.
the return of earned premiums
D.
a Coinsurance clause of less than 80 percent - correct answer Answer: B the return of earned premiums
X insures a home for $100,000 under a Dwelling Property Broad Form (DP-2). If a flood causes $1,000 in damage to the home's contents, which of the following MAXIMUM amounts will X's insurer pay?
A.
$0
B.
$800
C.
$900
D.
$1,000 - correct answer Answer: A $0
A fire in an insured's restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fire causes extensive damage to floors and furnishings. The water damage is best described as:
A.
a time element loss
B.
a consequential loss
C.
a direct loss
D.
an indirect loss - correct answer Answer: C a direct loss
A company's promise to pay for damage caused by or resulting from any covered Cause of Loss would be found in which of the following sections of a Commercial Property policy?
A.
Declarations
B.
Insuring Agreement
C.
Conditions
D.
Exclusions - correct answer Answer: B Insuring Agreement
Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured?
A.
Negligence
B.
Liability
C.
Accident
D.
Occurrence - correct answer Answer: D Occurrence
A family takes their 50 horsepower outboard motor boat to the lake on a trailer towed behind their personal auto. The pleasure boat is appropriately covered for physical damage under which of the following policies?
A.
Dwelling
B.
Homeowners
C.
Boatowners
D.
Yacht - correct answer Answer: C. Boatowners
Which of the following terms is defined as the uncertainty of future outcome?
A.
Hazard
B.
Risk
C.
Peril
D.
Cause - correct answer Answer: B Risk
An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts?
A.
$1,000
B.
$1,250
C.
$1,400
D.
$1,500 - correct answer Answer: B $1,250
Which of the following phrases BEST defines a hazard?
A.
An unexpected loss
B.
The uncertainty of a loss
C.
The cause of a loss
D.
A condition that increases the chance of a loss - correct answer Answer: D
Under a Personal Property Floater, a loss is covered when it occurs:
A.
in the insured's home only
B.
in the United States only
C.
in the United States or Canada only
D.
anywhere in the world - correct answer Answer: D anywhere
A Commercial Property policy specifies which of the following responsibilities as a duty of the insured?
A.
To return the policy if it is canceled by the insurer
B.
To provide a sworn Proof of Loss statement if requested by the company
C.
To pay the mortgagee in full in the event of a total loss
D.
To pay premiums within thirty days after receiving an invoice - correct answer Answer: B. To provide a sworn Proof of Loss statement if requested by the company
The Personal Liability section of a Homeowners policy covers which of the following options?
A.
Damage to an insured's property caused by a visitor
B.
Bodily injury to a resident caused by a neighbor's dog
C.
Property damage caused by war
D.
Bodily injury caused by the personal activities of an insured - correct answer Answer: D.
Bodily injury caused by the personal activities of an insured
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A.
coinsurance amount
B.
deductible
C.
limit of liability
D.
pro rata return - correct answer Answer: C. Limit of liability
An insured owns a set of six drawing pens designed and used by Adolf Hitler. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which of the following amounts?
A.
$1,000
B.
$2,000
C.
$7,000
D.
$12,000 - correct answer Answer: C. $7,000
A Commercial Building and Personal Property form provides coverage for:
A.
a patio attached to the building
B.
business personal property
C.
personal auto held for sale
D.
guard dogs - correct answer Answer: B. business personal property
Special Form or Open Perils coverage:
A.
Provides coverage against the named perils
B.
Provides coverage against scheduled risks
C.
Is limited by the named exclusions [Show Less]