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Property + Casualty
| Question | Answer |
|---|---|
| Under a businessowner policy an insured can cancel the policy when? | At any time by mailing a written notice of the cancellation. |
| What is covered under the Mail floater of a Commercial Inland Marine policy ONLY if it is sent by registered mail? | Currency and unsold traveler's checks. |
| Under an equipment breakdown policy, what is the amount expediting expenses must NOT exceed in order to use their coverage in combination with all damages? | Expediting expenses must not exceed $25,000. |
| If an insured has 4 separate but identical policies written over the same building and a total loss occurs, how much will each of the policies cover (assuming each policy has pro rata liability other ins clause)? | Each policy will pay 25% of the loss. (Splitting the cost evenly.) |
| List all of the components of a typical insurance policy. | Declarations, definitions, insuring agreement, additional coverage, conditions, endorsements, exclusions and policy limits. |
| Define hazards in relation to insurance purposes. | Events or conditions that increase the chances of an insured loss occurring. |
| Under a dwelling policy form, what is the max time limit during which multiple volcanic activities would be considered part of one occurrence? | 72 hours. |
| Are policy provisions and clauses included in any part of a policy structure? | No. |
| Which coverage form would provide coverage for all incoming and outgoing shipments? | Annual transit form. |
| What is true regarding the fire department service charge under the builders risk form? | It is an additional coverage. |
| What is a liability coverage that is NOT covered under a homeowners policy? | Personal injury liability. |
| What coverage does the extra expense coverage form provide? | Coverage that will permit the insured to continue in business without interruption following a property damage loss. Extra expense coverage is for money spent to minimize a business interruption after a direct property loss. |
| Define subrogation. | The legal process that gives the insurer, after payment of loss, the right to seek recovery from a third party that was responsible for the loss. |
| What is a peril NOT covered under a broad form dwelling policy? | Theft. |
| Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected? | No more than the per occurrence limit applies, no matter how many insureds are involved. The insurance applies separately to each insured. This condition does not increase the insurer's liability for any one occurrence. |
| Elaborate homes and those with detailed designs or decorative architecture with replacement costs greater than ACV or market value are insured on what type of HO form? | HO-8 |
| The major portion of the premium for an equipment breakdown policy pays for what? | For inspections and examinations. |
| According to the definition provided by the Insurance Code in connection with the MS Windstorm Underwriting Association the term "insurable property" means what? | Real property and its contents at a fixed location in the coast area. |
| After a producer's license expires, he may reinstate it without having to take the licensing exam if he files for reinstatement within what period of time? | 12 months |
| What is the maximum fine for violating state insurance laws? | $5,000 |
| An insurance producer just sold an insurance policy to his sister. This is an example of what kind of business? | Controlled business. |
| What is the formula for determining ACV? | Current replacement cost - Depreciation = Actual Cash Value |
| What 3 types of coverage forms are available for a dwelling policy? | DP-1 (basic), DP-2 (broad), and DP-3 (special) |
| What should you know about a DP-1 (basic) coverage form? | It has the most limited coverage, losses are covered on an actual cash value basis, and no minimum amount of insurance is required |
| What should you know about a DP-2 (broad) coverage form? | Losses are covered on a replacement cost basis, minimum required amount of coverage at 80%. |
| What should you know about a DP-3 (special) coverage form? | Broadest coverage, losses are covered on a replacement cost basis. |
| What 6 types of coverage forms are available for a homeowners policy? | HO-2 (broad), HO-3 (special), HO-4 (contents), HO-5 (comprehensive), HO-6 (condominium unit owners), and HO-8 (modified coverage) |
| What should you know about an HO-2 (broad) coverage form? | Covers dwelling and personal property for broad perils. |
| What should you know about an HO-3 (special) coverage form? | Protects dwelling and other structures for open perils and personal property for broad perils |
| What should you know about an HO-4 (contents) coverage form? | Protects personal property for broad perils |
| What should you know about an HO-5 (comprehensive) coverage form? | Covers dwelling and other structures for open perils |
| What should you know about an HO-6 (condominium unit owners) coverage form? | Covers personal property for broad perils. |
| What should you know about an HO-8 (modified) coverage form? | Dwelling and personal property for basic perils. |
| What is included under Coverage A in a dwelling policy? | Dwellings, attached structures, materials and supplies |
| What is included under Coverage B in a dwelling policy? | Other structures; structures on residence premises separated from the dwelling |
| What is included under Coverage C in a dwelling policy? | C="Contents"...Personal property (of both the insureds and of others), property located at another residence premises and worldwide coverage |
| What is included under Coverage D in a dwelling policy? | Fair Rental Value; income from a rental property |
| What is included under Coverage E in a dwelling policy? | Additional Living Expenses; for alternative housing for the insured due to a covered loss |
| What is included under Coverage A in a homeowners policy? In which HO coverage forms is Coverage A available? | Dwellings, attached structures, materials and supplies. Available in all forms except HO-4. |
| What is included under Coverage B in a homeowners policy? In which HO coverage forms is Coverage B available? | Other structures (on residence premises separated from the dwelling). Available on all forms except HO-4. |
| What is included under Coverage C in a homeowners policy? In which HO coverage forms is Coverage C available? | Personal Property (of the insured and of others), property located at another residence premises and worldwide coverage. Available in all HO forms. |
| What is included under Coverage D in a homeowners policy? In which HO coverage forms is Coverage D available? | Loss of use, additional living expenses due to a covered loss. Available (up to a specified limit) in all HO forms. |
| What is included under Coverage E in a homeowners policy? | Personal liability, legal liability for negligence resulting in bodily injury and property damage. |
| What is included under Coverage F in a homeowners policy? | Medical payments to others, medical expenses within 3 years of an accident, no-fault coverage. |
| Define adverse selection. | Insuring of risks more prone to loss than the average risk. |
| What are the three types of hazards? | Physical, moral, and morale |
| What are the four required elements of an insurance contract? | 1. Agreement; offer and acceptance 2. Consideration; exchange of something of value 3. Competent Parties; legal and mentally competent 4. Legal Purpose; insurable interest/consent |
| Define insurable interest. | Financial interest in the life of another person or in a piece of property. |
| Define underwriting. | Risk selection and classification. |
| What are the eight options for loss valuation? | 1. Actual Cash Value (ACV) 2. Replacement Cost 3. Functional Replacement 4. Market Value 5. Agreed Value 6. Stated Amount 7. Salvage Value 8. Valued Policy |
| Define replacement cost. | Cost to replace damaged property with like kind and quality at current price, no deduction for depreciation. |
| Define functional replacement. | Cost to replace damaged property with less expensive but modernized construction or equipment |
| Define market value. | Cost a buyer would pay for the property prior to loss, based on the value of location or land. |
| Define agreed value. | Cost agreed upon at the time the insurance is written. |
| Define stated amount. | The maximum payable amount scheduled in the policy. |
| Define salvage value. | Estimated property recovery cost |
| Define valued policy. | Payment of the full policy amount regardless of the actual value or depreciation. |
| What are the 3 types of liability? | 1. Absolute 2. Strict 3. Vicarious |
| What are the 5 limits of liability? | 1. Per occurrence 2. Per person 3. Aggregate 4. Split 5. Combined Single |
| Define arbitration. | Claim settlement method through an independent arbitrator when there is a dispute between the insurer and the insured. |
| What are the 5 exclusions under a HO policy? | 1. Ordinance or law 2. Earth Movement 3. Flood 4. Power Failure 5. Intentional Acts |
| Define monoline policy. | Policy written as a single coverage |
| Define package policy. | Policy written as a single contract that includes more than one type of coverage. |
| What are the 3 causes of loss forms under a Commercial Policy? | Basic, broad, and special |
| What is the basic structure of a Commercial Package Policy (CPP)? | Policy declarations + Policy conditions + any of the coverage modules. |
| List the different coverage modules offered in a Commercial Package Policy (CPP). | Commercial property, general liability, crime, auto, equipment breakdown, inland marine, and farm. |
| What are the 2 types of forms found under Commercial General Liability (CGL)? | 1. Occurrence Form; pays for losses that occur during the policy period, even if discovered after the policy period. 2. Claims-Made Form; pays for losses reported during the policy period as long as the loss occurred on or after the date in policy |
| What 3 types of coverages are offered under Commercial General Liability (CGL)? | 1. Coverage A; Bodily Injury and Property Damage 2. Coverage B; Personal and Advertising Injury 3. Coverage C; Medical Payments |
| What are the 6 types of coverage forms available under Commercial Property | 1. Building and Personal Property 2. Condominium Associations 3. Condominium Commercial Unit 4. Builders Risk 5. Business Income 6. Extra Income |
| What are the features of a Businessowners Policy (BOP)? | Prepackaged, stand-alone policy, property and liability coverage in a single contract, small to medium size, low-risk businesses, and no coinsurance. |
| ABC Publishing copied XYZ Publishing's book, changed the title/chapters, and put a different cover on it. XYZ files a claim against ABC. Will a commercial general liability (CGL) policy cover the claim? | No, because the claim results from copyright infringement and is not in an advertisement. |
| What is true regarding the commercial general liability policy's Coverage C - Medical Payments? | It provides necessary medical, surgical, ambulance, hospital, nursing, or funeral expenses for injuries to third parties. Payments will be paid without regard to the fault or negligence of the insured. |
| An employee who delivers overnight packages in injured while voluntarily running the "package race" at the mandatory company picnic. Would workers compensation benefits be provided in this situation? | Yes. |
| On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site. Would workers compensation benefits be provided in this situation? | No. |
| An attorney does not properly defend a client due to his own personal dislike of the client. Would this situation be covered under a professional liability policy? | No. |
| In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period? | Loss Sustained Form |
| What are the minimum auto liability limits for the state of Mississippi? | $25,000 for bodily injury/death to any 1 person in any 1 accident $50,000 for bodily injury/death to any 2 ppl in any 1 accident $25,000 for damage to property of others in any 1 occurrence |
| What is the term used to describe an authorized insurer? | Admitted |
| After a producer's license expires, he may reinstate it without having to take the licensing exam if he files for reinstatement within what time period? | 12 months. |
| If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered what? | An unfair trade practice |
| What is NOT covered by the condominium unit owners endorsement? | Furniture in the building. |
| Of the following, which would NOT be considered a flood: Overflow of tidal waters, Mudslides, Runoff of surface waters, or Sewer backup | Sewer backup |
| Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for those reports? | Within 30 days after the end of each month. |
| In return for premium, an insurance company has agreed to do what for the policyholder? | Be fair in underwriting and pay covered losses. |
| A business using its own trucks to move its own cargo would insure the cargo using what form? | Motor truck cargo - owners form. |
| The personal injury liability endorsement to an HO policy applies to all of the following EXCEPT: Invasion of privacy, False arrest, Slander, A third party breaks a leg when the insured knocks him down | A third party breaks a leg when the insured knocks him down. |
| All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT: Weight of ice/snow/sleet, Water damage, Replacement cost, or Falling objects | Replacement cost |
| What type of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation? | Agreed value |
| Which type of property valuation works best for property whose value doesn't fluctuate much? | Agreed value |
| A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all the following types of coverage EXCEPT what? Personal | Workers compensation coverage. |
| True or false: The coinsurance formula will also be applied to the total losses. | False |
| Which inland marine coverage condition sates that payment of any claim will not reduce the limit of insurance, except in the case of a total loss on a scheduled item? | Reinstatement of limit |
| An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? | Contractors equipment floater |
| True or false: Both flood and earthquake perils are excluded in all property policies. | True |
| Losses that result from the freezing of a plumbing system while the dwelling is vacant would be excluded under a HO policy UNLESS what? | The insured had drained the plumbing system (taken necessary measures to protect the property). |
| How long is a waiting period upon purchase of flood coverage through NFIP? | 30 days |
| Would an insured who has a personal property coverage under a special form dwelling policy be covered if his large dog damaged the contents of his home? | No, damage that results from domestic animals is excluded under the special form dwelling policy. |
| What type of liability would a person who owns a swimming pool have? | Absolute. |
| With respect to an auto insurance policy that has been in effect for 60 days or more, the only reason that allows the insurer to cancel the policy with 10 days advance notice is what? | The named insured failed to pay the premium when due. |
| When an insurer intends to not renew an automobile insurance policy beyond its current expiration date, the insurer must give how many days' advance notice of their intentions? | 30 days |
| The commissioner of insurance may examine books and records of any of the following except? | Policyholders of any contract of insurance delivered in Mississippi |
| If a producer's appointment is denied by the commissioner, the commissioner must notify the appointing agency within what time frame? | 5 days |
Created by:
itscourtneym