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4-40 Designation
Insurance 4-40 Designation
| Question | Answer |
|---|---|
| The insured’s house is totally destroyed in a fire. The house is insured for $200,000. The adjuster who investigates the claims determines the ACV of the home is $185,000. Which of the following is true? | The Florida Valued Policy Law requires the insurer to pay $200,000 |
| When two or more policies apply to the same loss, the one that pays first is called? | Primary |
| Coinsurance requires the insured to carry a minimum amount of insurance on the building or be responsible for a portion of a partial loss. All of the following are factors used in determining the co-insured loss settlement, EXCEPT? | Deductible |
| All of the following are characteristics of a contract, EXCEPT? | Consideration must be given to at least one party |
| Comparative negligence? | Reduces the insured's damages by the degree of negligence |
| The chance of financial loss is known as a/an? | Risk |
| All of the following are part of an insurance policy, EXCEPT? | Assignment |
| Insurance may apply separately to each insured, as if the other insureds did not exist. This is known as the doctrine of? | Severability |
| Hurricane insurance in coastal areas in Florida is written subject to which of the following deductibles? | Percentage |
| ACV is defined as? | Replacement cost minus depreciation |
| The concept that one should not profit from the payment provided by an insurance policy is know as? | Indemnity |
| Which loss settlement provides ‘new for old?’ | Replacement cost |
| All of the following are examples of a peril, EXCEPT? | Gasoline stored in an open container |
| All of the following are characteristics of an insurance contract, EXCEPT? | Private |
| If an insurance policy is unclear or ambiguous, in whose favor does the policy respond? | The Insured |
| An oral or written statement providing immediate insurance protection that is valid for a specified period, and is designed to provide temporary coverage until a policy can be issued or denied is called? | Binder |
| Payment the insurance company makes directly to the insured is? | Property or first party insurance |
| A partial owner of a building cannot receive full value for the building in the event of a loss because of? | Insurable Interest |
| When there is an unbroken connection between an occurrence and the damage that arises from the occurrence, all damage that occurs is the result of that occurrence. This principle is called? | The principle of proximate cause |
| To be considered an insurance contract, a policy must be? | Written |
| The dollar amount that the insured pays to the insurance company before the insurer is required to pay the remainder of the loss is known as? | The deductible |
| The clause that protects the lender in a real property policy is the? | Mortgagee Clause |
| When the insured transfers their rights to collect for damages to the insurer, it is known as? | Subrogation |
| When a policy change results in broadened coverage with no additional premium, the insured automatically receives the benefit under the principle of? | Liberalization |
| The clause that prohibits the insured from dumping damaged property on the insurance company and demanding to be paid in full is? | The Abandonment Clause |
| The term “ethics” refers to? | All of the answers are correct |
| Which of the following is not a method of establishing rapport with a customer? | Acting superior |
| Customer Service Representatives cannot? | Offer legal advice |
| Policyholder Joe Smith calls the office to review his auto policy because his 16-year-old daughter just received her driver’s license. Joe is concerned that his policy includes roadside assistance. he is motivated by? | Safety and security needs |
| What is the longest amount of time you should leave a customer on hold without checking in? | 30 seconds |
| Errors and Omissions claims are a result of? | Both A & B |
| Unethical behavior affects? | All of the answers are correct |
| Which of the following phrases should be avoided when you are trying to solve customer problems? | I’m just the customer service rep |
| “I’m so sorry to hear about your wife. I’ll be happy to make that change on your policy.” This statement is an example of which active listening technique? | Acknowledging |
| When answering the telephone at the insurance agency, the Customer Service Representative should include all of the following, EXCEPT? | Information about the services you provide |
| Dan has a Personal Auto Policy w/ Liability of 10/20/10 and basic PIP with a $1,000 deductible. He is running one day when a car strikes him. A week later he dies. Medical bills are 7,5k & lost wages are 1k. How much, if any, will PIP pay in this claim? | 10,800 |
| The insured, a resident of Florida, was in an accident in Georgia. The Florida car was insured with liability limits of 10/20/10. Georgia’s minimum liability limits are 20/40/10. How will the Florida policy respond? | 20/40/10 |
| Which policy provides Liability, Medical Payments, and Uninsured Motorist Coverage for a named individual who does not own an automobile? | Named Non-Owned Coverage |
| Joe is an owner insured for PIP. In which of the following situations does Joe have his PIP benefits available to him? | In an accident while riding as a passenger in a friend’s car in Florida |
| Joe is injured when the jack slips as he is changing a tire in his driveway. The bill for his treatment in the emergency room is $450. Where will Joe go first to collect for his medical expenses? | His PIP insurance |
| Jim owns an auto and he is involved in an auto accident. He suffered $4,000 in medical expenses and $4,000 of lost income. How much does his insurance pay if he has Extended PIP? | 7,200 |
| Jane is driving Mary’s car. Jane has an at-fault accident with Bob. Mary has liability limits of 10/20/10. Jane has liability limits of 100/300/100. If Bob has $40,000 in bodily injury, how much will be collected from Jane’s policy? (IGNORE PIP) | 30,000 |
| The insured bought a new car with a Mechanical Breakdown Policy. When the odometer reaches 40,000 the car has a serious breakdown involving the transmission. How does the Mechanical Breakdown Policy respond? | No coverage because the policy expired |
| If an insured has $100,000 of “unstacked” UM coverage with three cars on the policy, how much is available under a UM claim? | 100,000 |
| Hail damage to an auto is an example of? | Other than collision |
| Susie is driving down the street when a dog runs in front of her car. She swerves to avoid the dog and hits a tree. This is an example of? | Collision |
| Tom is injured in a not at fault auto accident and has temporary injuries. What can be recovered in a tort claim if he has $16,000 in medical bills with a $1,000 PIP deductible? | 6,000 |
| Under a PAP, when does the insurance company cease to defend the insured? | When the policy limit is exhausted |
| All of the following UM options are available to an insured, EXCEPT? | May purchase UM coverage more than liability limits |
| Joe works for Sinks-R-Us, Inc. he is supplied with a company car, which he gets to take home every night. Joe wants to make sure the Liability coverage under his PAP covers him while driving his company car. What coverage would you add to Joe’s PAP? | Extended Non-owned Liability coverage |
| The insured is driving down the road when a low-hanging branch strikes and cracks his windshield. The insured has a $500 collision deductible and a $250 other than collision deductible. The cost to replace the windshield was $650. The claim will pay? | 650 |
| The insured has a PAP with single liability of $50,000. The following loss occurs: $37,000-BI pedestrian; $3,000-Display window; $10,000-Sports car; $1,500-Legal defense. How much would his policy pay for the loss? | $51,500 |
| The insured is an owner and is insured for PIP. She is injured in an accident and has the following damages: medicals-$12,000, lost wages-$6,000. How much will PIP pay if there is a $1,000 deductible? | 10,000 |
| An insured borrows his neighbor’s trailer to pick up his new furniture. Which of the following best describes the insured if he has an accident? | His PAP extends liability to the trailer and Part D-Physical Damage extends $1500 coverage to the borrowed trailer |
| Who are the covered persons under medical payments of a PAP? | All of the answers are correct |
| The Florida Financial Responsibility Law is triggered by? | An accident involving bodily injury or property damage |
| Uninsured Motorist Coverage is used to cover the insured for? | Bodily injury only |
| Trucker insurance premiums are based on all, EXCEPT? | Age of the driver |
| All of the following are covered under PAP liability, EXCEPT? | Damage to property owned by the insured |
| Sam is an owner & not insured for PIP. Sam borrows Fred’s car, which is insured for PIP. Sam has an at-fault accident when he strikes Betty’s car. Betty is insured for PIP. Betty is injured and has $5,000 in medical bills. Which of the following is true? | Betty must use her own PIP to pay her medical bills |
| An HO-4 policy is designed for a? | Renter |
| Which of the following are available as HO hurricane deductibles? | All of the answers are correct |
| Tommy and Chris leave their golf clubs in the trunk of Tommy’s car when they stop to eat lunch. Both sets of clubs are stolen. Which policy covers Chris’ clubs? | Chris' HO |
| A house under construction is eligible for a homeowner policy if? | The insured will be the owner-occupant |
| In all DP policies, what percent of the Coverage A limit can be applied to “other structures”? | 10% |
| What condition must be met in a HO Policy for replacement cost to settle the loss? | The insured must carry insurance of at least 80% of the cost to replace the dwelling |
| The insured lives in their principal residence 80% of the year. How would a flood loss be paid? | Replacement Cost |
| Homeowner policies are rated on all of the following, EXCEPT? | Age of the homeowner |
| What is the deductible for a Personal Articles Floater (PAF)? | -0- |
| Joe had a Dwelling Policy with $40,000 Coverage A limit. A covered loss occurred that totaled the dwelling and the detached garage. The loss to the detached garage was $6,000. How much will be paid to Joe to cover this loss? | 44,000 |
| An insured has $200,000 Coverage A – dwelling coverage, under his HO-3 Policy. He incurs the following damage from a covered peril: fence - $5000; gazebo - $7500; tool shed -$15,000. His HO Policy will pay? | $20,000 |
| Which of the following is not covered under Coverage C of a HO Policy? | An aquarium is knocked over and the fish die |
| Which coverage never appears in a HO-4 form? | Both Coverage A and B |
| When a community applies for flood coverage, until they are approved they are under? | The Emergency Program |
| Which HO form covers a condo owner? | HO-6 |
| The coverage territory for Personal Inland Marine Insurance (PAF) is? | Worldwide |
| Under a Dwelling Policy, all of the following are eligible, EXCEPT? | A 1-6 family dwelling |
| All of the following are eligible for a homeowner policy, EXCEPT? | Dwellings owned by a corporation |
| If Coverage A under an HO-3 policy is $100,000, the Coverage D limit would be? | 30,000 |
| If an Umbrella Policy serves as primary coverage, what part of the policy allows the insurer to apply a deductible? | The Self-insured Retention |
| If Coverage A is $250,000, Coverage B is? | $25,000 |
| The clause that protects the lender in a real property policy is the? | Mortgagee Clause |
| Outdoor equipment used to service the premises is covered under? | Coverage C |
| If flooding is confined to one area, the flood water must cover? | Over two acres of land |
| If an insured sells his house to another person, the buyer is prohibited from receiving the seller’s insurance policy because insurance is a contract of? | A personal nature |
| When a covered property is damaged, the cost for temporary repairs and the cost to expedite permanent repairs or replacement is covered under? | Expediting Expenses |
| Under the Business Income Coverage, the period of restoration begins? | 72 hours after the date of direct damage |
| All of the following are included in the definition of a “building”, EXCEPT? | Copy machines |
| Under the Business and Personal Property Coverage Form, all of the following are additional coverages, EXCEPT? | Cost to hire a night watchman |
| Under the Business and Personal Property Coverage Form, the provision for suspension for certain perils applies after? | 60 days vacancy |
| Three types of property are covered under the Building and Personal Property Coverage Form. They are? | Building; Business Personal Property; Personal Property of Others |
| The Builders Risk Coverage Form covers? | Buildings under construction |
| The Builders Risk Coverage Form assumes which coinsurance provision? | 100% |
| The insured owns a fireworks factory, which is especially busy during the months of June and July. Which endorsement should they purchase to cover their inventory during these months? | Peak Season |
| Both commercial property and liability were combined into one policy, thus saving money on underwriting expense. What is this combination called? | Package Policy |
| The provision in the Builders Risk Coverage Form that penalizes the insured for underinsurance is called? | Adequate Insurance Clause |
| The insured has a building that has been vacant for 75 days. Which of the following are covered? | Weight of ice and snow |
| In the event that the Condominium Association Coverage Form and the Condominium Unit Owners Coverage Form both cover a loss, which of the following is true? | The Association Form is primary and the Unit Owner Form is excess |
| Which exposures are covered by the Leaseholder Interest Coverage Form? | All of the answers are correct |
| A florist wanted coverage on business contents, which vary in amount over the course of a year. Which form best fits this situation? | Value Reporting Endorsement |
| The retroactive date under the CGL established the earliest date a claim will be paid by the insurance company under the? | Claims-Made Form |
| A claim is made under a CGL for a slip and fall injury. Two years later, the injured person comes back saying the injury has flared up. Is the reoccurrence covered under CGL Medical Payments? | No, expenses are covered within one year of the injury |
| Acme Toys has a CGL policy. They hold a party and one of the guests has a little too much to drink. If the guest injures someone and the injured party sues the Acme Toys, the CGL policy? | Will cover the claim |
| Mr. Smith buys a CGL claims-made policy on 1-1-04 w/ a retroactive date of of 1-1-04. He buys another CGL claims-made policy on 1-1-05 w/ retroactive 1-1-05. accident occurs on 7-1-04 & claimant files this injury on 9-1-05. Which policy covers? | Neither policy covers |
| All of the following are covered under Supplemental Payments in a CGL, EXCEPT? | Lost wages up to $100/day |
| The basic amount of Medical Payment coverage under a CGL policy is? | $5,000 |
| Tom purchases a CGL – Occurrence Form with an effective date of 1-1-03. He purchases a claims-made CGL with an effective date of 1-1-04. An injury from 8-1-03 is filed in 2005 when a claim is made. Which policy covers the injury? | 1-1-03 policy |
| Physicians, Surgeons, and Dentists Insurance will cover? | All of these answers are correct |
| What is unique about lawyer’s professional liability insurance? | It deducts claims expenses first and the balance is payable for the claim |
| Which of the following is not a covered territory for a CGL policy? | Mexico |
| An employee is hurt on the insured’s premises. Three months later the employee dies. Are the employees funeral expenses covered under the company’s CGL Medical Payments? | No, employees are not covered for Med Pay |
| How long does the insured have to request the “Supplemental Extended Reporting Period” after the expiration of the claims-made CGL policy? | 60 days |
| Securities were purchased for $150,000. They were stolen and sold for $175,000. On the day the theft was reported, the securities were valued at $162,000. How much would be paid? | $162,000 |
| How many people can a private employment hire before they are required to purchase workers' compensation? | Four |
| What is the amount allotted for funeral expenses under Florida's Workers' Compensation law? | $7,500 |
| Bill sent a cashier’s check through the mail, but it never arrived at the destination of the recipient. Under which bond can the cashier’s check be replaced? | Lost Instrument Bond |
| Joe is off the job for 27 days due to a work-related injury. Joe can receive workers' compensation benefits for how many days? | 27 days |
| What is not a penalties for non-compliance with workers' compensation laws | The employer’s business property may be seized. |
| Bond underwriting looks at the Three C's... | Character Capability Collateral/Capital |
| Which bond guarantees performance in conformity with the law? | License Bond |
| Failure to comply with the Florida Workers' Compensation law is? | a third-degree felony |
| Bill was employed by Jane’s Flower Shoppe for two days when he receives a work-related injury. Bill misses 14 days of work. How long does Bill have to wait before he can begin receiving workers' compensation benefits? | 7 days |
| Which bond protects the consumer against misrepresentation of a securities dealer? | Blue Sky Bond |
| An employee is injured on the job and is out of work for 10 days. How many days’ wages can this employee recover? | 3 days |
| Under Part One of the Workers' Compensation Policy, what is the limit for recovery of medical bills incurred by an employee as a result of work-related injuries? | No limit |
| Contract bonds include all of the following | Maintenance Bond Bid Bond Performance Bond |
| On the way to the bank to make a deposit, an employee loses the bank bag. How is this money covered? | Money and Securities |
| The three parties to a bond are? | Surety, Obligee, and Principal |
| A fourth party to a bond is called a? | Indemnitor |
| An employee of ABC Financing altered and cashed a check for $2000. The loss is payable under which insuring agreement? | Employee Theft |
| What is the maximum death benefit payable to eligible dependents under Florida's Workers' Compensation law? | $150,000 |
| Under the Workers' Compensation Policy, what is the waiting period for disability benefits to begin? | 7 days |
| A Florida employee was sent to Boston to work for one week. While in Boston, they were injured on the job. How is the injury covered under WC benefits? | The injury is covered under Florida’s Workers' Compensation law |
| In the non-construction industry, all of the following employments are exempt from workers' compensation, EXCEPT? | Casual labor completed in 30 days for $750 |
| Employees of ABC Manufacturing are required to wear steel-toed shoes when they are in the factory. An employee who injures their foot because they are not wearing safety shoes while in the plant would have their benefits reduced by? | 25% |
| Safe Burglary is defined as? | The taking of property by someone who has entered the premises unlawfully as evidenced by visible signs of forced entry |
| Which government agency is in charge of the regulation of Florida's Workers' Compensation law? | The Division of Workers' Compensation of the Department of Financial Services |
| The insured vessel was damaged and they had to store the cargo away from the damaged vessel. What section of the Ocean Marine policy would address this concern? | The Sue and Labor Clause |
| Which Commercial Inland Marine policy would cover those who ship and receive goods on a single trip basis? | Trip Transit |
| The master of the ship voluntarily sacrifices the ship’s cargo to save the ship. If the loss is settled with each interest paying a pro-rata share of the loss, it is known as? | General Average |
| One category of Commercial Inland Marine insurance is “Instrumentalities of Transportation and Communication. These are covered under this form: | Bridges and Tunnels Pipelines Radio and TV Towers |
| The collision or “running-down” clause is part of which Ocean Marine policy? | Liability Coverage |
| Which Commercial Inland Marine policy protects those who ship and receive goods on an annual basis? | Annual Transit |
| All of the following are among the broad classes of Ocean Marine Insurance: | Hull Cargo Freight |
| Perils of the Sea includes all of the following: | Wind Collision and sinking Waves |
| Jettison is defined as? | Throwing cargo overboard to save the ship |
| A worker left his tools at a job site overnight and the tools are stolen. Which Commercial Inland Marine policy would cover the loss? | Contractor's Equipment Floater |
| Joe wrote a policy through the Florida Automobile Joint Underwriting Association, and the company issued the policy. What is the company issuing the policy called? | A servicing carrier |
| The residual market that is a source for persons who are unable to purchase auto insurance through normal channels is the? | FAJUA |
| Which is the largest limit available for commercial vehicles in the residual market? | Any higher limits required by any law |
| Jane has a health insurance policy that prevents cancellation during the policy period, but reserves the right of the insurer to non-renew the policy once it expires. This is an example of? | Optionally renewable |
| Which best describes health insurance? | Disability insurance |
| A selected group of hospitals and doctors in a given area who have joined together to reduce medical costs is? | A PPO |
| Bob has a basic health insurance policy. He has a covered accident in which he suffers an injury to his mouth that requires dental treatment. Which of the following is true? | Dental expenses will be paid |
| A homeowner could not find coverage on the open market and looked to the residual market for coverage. What Joint Underwriting Association would handle this risk? | Citizens |
| Health insurance protects against all of the following, EXCEPT? | Injury of the job |
| Which of the following describes a Guaranteed Renewable policy? | The insurer is required to renew to a stated age, but may increase premiums |
| An organization that provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium is? | An HMO |
| Joe pays his health insurance premium on a monthly basis. If he forgets to pay this month’s premium, how long will the policy remain in force after the premium date? | 10 days |
| All of the following are true concerning Joint Underwriting Associations | JUA operations are overseen by a Board of Governors Policyholders must be unable to purchase insurance on the open market Citizens replaced FRP & CJUA and Florida Windstorm |
| Under Medicare Supplement insurance, the maximum waiting period before coverage applies to pre-existing conditions is? | 6 months |
| How is funding determined for Tier Three employers? | It is based on an assessment of Tier Three participants |
| If a health insurance policy cannot be cancelled and can be renewed at the option of the insured to a stated age with no premium increases, this policy is? | Noncancelable |
| Which of the following is not a requirement to qualify for the FWCJUA? | Must have been unable to obtain coverage from at least three other carriers |
| the following would result in license suspension | Making false entries on an insurance application Selling a product for which one is not licensed Calling another agent or adjuster a crook |
| A service rep moved from one city in Florida to another. What length of time does she have to notify the Department of Financial Services of the address change? | 30 days |
| What is a foreign insurance company? | A company chartered outside the state of Florida |
| Who does the service rep represent when they are working on a claim? | The company |
| What is the minimum age that a person can obtain a customer service rep’s insurance license? | 18 |
| A company was incorporated in Massachusetts and has their home office in that state. What type of company is this when they do business in Florida? | They are a foreign company |
| The continuing education requirement to maintain a customer service representative’s license in Florida is? | Ten hours every two years |
| What is the function of the Insurance Department? | To administer insurance laws |
| A company had its certificate of authority revoked because of bad sales practices. This type of company is known as? | An unauthorized company |
| Representing to an applicant that a specific ancillary coverage or product is required by law in conjunction with the purchase of a motor vehicle insurance when such a coverage or product is not required by law is known as? | Sliding |
| If a customer service rep terminates their insurance appointment, how long from the date of the termination do they have to reactivate their appointment? | 4 years |
| Which of the following is not one of the duties of FLDFS? | To set rates for various company products |
Created by:
mmonta