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Property & Casualty
| Question | Answer |
|---|---|
| Nonrenewal requires the Insurer to : | Mail notice to the insured in advance |
| When must an insurable interest exist under a liability policy? | At the time of the loss |
| The deductible... | Excludes payment for small claims Lower premium costs Reduces loss costs |
| Property ownership is evidence of | an insurable interest |
| Cancellation involves | termination by either the insurer or insured during the policy term |
| The cause of the loss is | Peril |
| Which is a hazard? a. A collision b. A flood c. A fire d. A slippery road | d. A slippery road |
| Molly has been driving a car which has tires that are severely worn and should be replaced. The tires are an example of a: | Hazard |
| The cause of the loss is: | Peril |
| Cindy and Hal own a commercial building. Cindy asks the Insurer to increase the coverage but Hal objects. What should the Insurer do? | Comply with the desire of whichever insured is named first in the policy's declarations |
| A peril is: b. The proximate cause of the loss | The proximate cause of the loss |
| The Insurer's incurred losses divided by earned premium is the: | Loss ratio |
| Any condition increasing the chance of loss is a: | Hazard |
| The beginning of the policy period is referred to as the: | Effective date |
| A loose handrail on a staircase is a: | Hazard |
| The amount an insured may recover under an airplane policy is restricted by the: | Limit of liability |
| Under the Other Insurance Clause, if the Insured is covered by two policies, what will happen if a loss occurs? | Each policy will pay a part of the loss |
| The Other Insurance Clause: | a. Upholds the principle of indemnity |
| The named Insured is identified in which section of the policy? | Declaration |
| Exclusions are designed to | Reduce moral hazards Eliminate catastrophic perils Reduce physical hazards |
| A sworn statement containing information regarding the claim is: | Proof of loss |
| Which section of the policy contains the Insured's right to bring legal action against the Insurer? | Conditions |
| Which section of the policy contains the policy limits? | Declaration |
| When must the applicant be told that an investigative report will be obtained? | When the application is made |
| The Terrorism Risk Insurance Act (TRIA) was adopted following: | The World Trade Center destruction on 9/11/01 |
| Concealment involves intentionally hiding: | A material fact |
| The purpose of the Fair Credit Reporting Act is to? | Provide fair and accurate consumer credit reporting |
| An applicant intentionally withholds material facts in an application. This is a? | Concealment |
| Which section of a property policy requires the Insured to submit a sworn proof of loss form? | Conditions |
| Representations given by the Insured to the insurer are located in the? | Application |
| The best source of moral character information is the: | Investigate report |
| To collect on a loss, the Insured must comply with the procedures set forth in the? | Conditions |
| Failure to file a Proof of Loss may result in: | Denial of the claim |
| A binder is: | A temporary substitute for permanent policy |
| Which section of the policy describes the coverage? | Conditions |
| A binder provides: | An agreement that a policy will be issued |
| The conditions section of the policy contains: | The insured's obligations if a loss occurs |
| A binder is: | Confirmation of temporary insurance |
| Which section of the policy specifies the Insured's responsibilities? | Conditions |
| Which section of the policy contains the Insurer's promise to pay? | Insuring Agreements |
| An insurance policy may be voided if a warranty has been: | Breached |
| In situations involving misrepresentation, the insurer may: | Cancel the policy |
| Binders must show each of the these EXCEPT: | The date the binder becomes effective Name of insurer and insured List of covered items |
| The primary source of insurability information is the: | Application |
| Which section of the policy contains the Insurer's obligation to repair, replace or pay? | Insuring Agreements |
| When there is a dispute over policy ambiguities, the courts often apply the doctrine of: | Reasonable Expectations |
| Which section of the policy determines the coverage? | Insuring Agreements |
| Which policy section should the Insured check to determine if a particular coverage is provided in a named peril policy? | Insuring Agreements |
| The Proof of Loss form: | Assists in determining the amount of the loss covered by the policy |
| Which of the following is considered to be part of the policy? Application Insured Proof of loss form Premium | Application |
| Which section of the policy contains the identity of the Insured and Insurer? | Declaration |
| A written statement of fact guaranteed to be true is a? | Warranty |
| Insurable losses will be listed in what section of the policy? | Insuring Agreements |
| To determine the applicant's financial standing, an Insurer may use a: | Credit report |
| Which section of the policy contains the Insured's duties in the event of a loss? | Conditions |
| An applicant was denied insurance based on a consumer report. The applicant may: | Receive the name and address of the reporting agency from the Insurer |
| The Insurer can void a policy for | Intentional misrepresentation of a material fact |
| Which section of the policy contains the insured's time limits for bringing suit against the Insurer? | Conditions |
| Which of the following statements regarding a contract of good faith is FALSE? All parties must rely on each other to be honest The insurer relies on the applicant to be truthful The insured relies on the insurer's promise to pay claims All parties | All parties rely on the contract to provide for an equal transfer of value between the parties |
| Even though he owns several boats, the applicant states that he owns no boats. This is an example of: | Misrepresentation |
| Which of the following is issued by the agent to notify the parties of the date coverage becomes effective? | Binder |
| Which section of the policy contains the premium? | Declaration |
| Which section of the policy contains the location of the risk (the insured property)? | Declaration |
| Under the Federal Fair Credit Reporting Act, the Insured has NO right to: | Require that the insurer supply a copy of the report |
| The Fair Credit Reporting Act requires the insurer to: | Inform the applicant that an investigative report will be made |
| Which section of the policy contains coverages eliminated? | Exclusions |
| Which section of the policy states the reasons for which the Insurer will pay claims? | Insuring Agreements |
| Which section of the policy obligates the Insurer to indemnify the Insured? | Insuring Agreements |
| The rules of conduct between the Insurer and Insured are set forth in which section of the policy? | Conditions |
| The creation of a contract requires each of these | Legal purpose Competent parties Consideration |
| Which document specifies the probable cause of a loss and estimates the loss? | Proof of loss |
| A promise by the insured that certain future conditions will exist is a? | Warranty |
| Which section of the policy contains the Insured's obligation to give notice of a loss? | Conditions |
| Evidence of temporary coverage is a: | Binder |
| In addition to requiring that Insurers protect clients' privacy rights, the Gramm-Leach-Bliley Act: | Encourages the states to adopt uniform licensing requirements to make it easier for Producers to sell insurance across state lines |
| An application says no fire wood will be stored on the premises. If a later fire is caused by fire wood stored on the premises, the insurer may refuse coverage if the insured: | Misrepresented material facts |
| The Proof of Loss includes each of the following : | Lienholder identification A sworn statement regarding other insurance The names of all persons with an insurable interest |
| The insured's promise to maintain a burglar alarm system is a? | Warranty |
| Before the policy is issued, the insurance agent may provide a written document to prove that insurance is already in effect. This is: | A binder |
| Which insurance policy section contains the Insured's duties in the event of a loss? | Conditions |
| Which section of the policy contains the provisions permitting the Insurer to inspect the Insured's premises? | Conditions |
| A statement in the proof of loss form is presumed to be a? | Representation |
| An Insuring Agreement is: | A promise to pay |
| Which section of the policy limits the scope of coverage? | Exclusions |
| Insurance covers: | Physical hazards Morale hazards Moral hazards |
| Which section of the policy contains the Insured's duties in the event of a loss? | Conditions |
| Which section of the policy contains the Other Insurance provision? | Conditions |
| The Fair Credit Reporting Act: | Allows consumers to insert corrective statements in their consumer reports |
| The insured's promise to maintain specified anti-theft devices is a? | Warranty |
| A warranty: | Must be complied with strictly Is made by the insured rather than the insurer May be part of the contract |
| Willful failure to disclose material information is a? | Concealment |
| Which federal law requires the insurer to notify the Insured in advance of its intent to obtain an investigative consumer report? | Fair Credit Reporting Act |
| Which section of the policy specifies which stores owned by an Insured are covered? | Declarations |
| Which section of the policy contains the cancellation provisions? | Conditions |
| A binder: | Provides temporary coverage |
| Which section of the policy may require the Insured to use the claim payment to replace the destroyed property? | Conditions |
| A binder becomes effective when: | Made by the agent |
| Concealment is: | Intentional nondisclosure of material facts |
| The binder is actually issued by the: | The agent |
| The Insured's sworn statement made to the Insurer regarding the time and cause of the loss is known as: | Proof of loss |
| Prior to issuing the policy, the agent may provide evidence of temporary insurance. This is a: | Binder |
| Which federal law encourages the states to adopt uniform licensing standards? | Graham-Leach-Bliley Act |
| Which section of the policy contains the Insured's responsibilities? | Conditions |
| The insured intentionally did not inform the insurer that the insured owned only 35% of the property. This is an example of: | Concealment |
| Which section of the policy contains the covered perils? | Insuring Agreements |
| Consideration is evidenced by: | Paying a premium |
| Which section of the policy contains the precise description of covered perils? | Insuring Agreements |
| Binders: | May be oral |
| Which section of the policy requires the Insurer to provide coverage? | Insuring Agreements |
| Which section of the policy contains the company's promise of protection? | Insuring Agreements |
| The insured is entitled to: | Be told the name and address of the consumer reporting company |
| Which section of the policy contains the perils NOT covered? | Exclusions |
| A policy provision that may void the policy if the provision is violated is a: | Warranty |
| Which of the following is FALSE regarding the initial notification that must be provided to consumers when an investigative consumer report will be made? | The notification must include the name, address, and telephone number of the consumer reporting agency |
| The applicant believes the statement to be true with a? | Representation |
| The Insured's promise to maintain a fire sprinkler system is a? | Warranty |
| Concealment involves: | Intentionally failing to disclose a material fact |
| The Proof of Loss must contain each of these: | Any replacement sales receipt if the item has been replaced The cause of the loss A sworn statement |
| The aggregate limit is the limit per: | Policy year |
| Supplementary payments cover: | Defense costs |
| The Insurer won't cover: | Punitive damages |
| Which of the following is an example of vicarious liability? | A store owner is held liable when a store employee carelessly drops a box on a customer's foot |
| Which of the following is NOT a defense against negligence? . Statutes of Limitations Assumption of Risk Presumption of Negligence Contributory Negligence | Presumption of Negligence |
| Negligence is: | Failure to act as a reasonable person |
| Which adds an unspecified amount (rather than a specific amount) to the policy's limit of liability? | Supplementary Payments |
| It is discovered that years of exposure to chemicals released into the environment by a nearby factory is causing people to become ill. The factory's liability policy will provide coverage if the policy has what type of limit? | Per Occurrence |
| Negligence is determined by: | How a reasonable person would have acted under the circumstances |
| Special damages are: | Economic |
| General damages are: | Intangible |
| A person's duty to society and the degree of care required by the law may be insured by providing coverage for: | Liability insurance |
| The maximum amount payable for all losses resulting from one event is known as the: | |
| a. Aggregate limit | Occurrence limit |
| Personal Injury Liability covers each of these EXCEPT: Wrongful eviction Discrimination Slander Malicious prosecution | Discrimination |
| A carpenter working on a house has a hammer slip from his hands, but no damage occurs. This is not an accident because: | No damage occurred |
| Which of the following statements regarding Punitive Damages is FALSE? They are paid to the plaintiff as compensation for the harm the defendant caused They are intended to deter others from acting in a similar way They are intended to punish the defe | They are paid to the plaintiff as compensation for the harm the defendant caused |
| Liability for the destruction of property is covered by: | Property Damage Coverage |
| A liability policy covers: | Property damage |
| Each of the following is an element used to establish negligence | Legal duty Duty to act as a reasonable person |
| A person with an alleged injury notifies a Producer that the Producer's client negligently caused the injury. The producer should first notify the: | Insurer |
| Liability insurance is a: | Two party contract with payment to a third party |
| A car dealer sold a new car. Unfortunately, a shock absorber fell off the car, resulting in an accident. Both the car dealer and the manufacturer will most likely be held liable under the concept of: | Strict liability |
| Which of these involves negligence? A driver runs a stop light A driver goes too fast and hits another vehicle | A driver goes too fast and hits another vehicle |
| The maximum amount payable for all losses during a single policy period is known as the: | Aggregate limit |
| The limit payable for all losses in a policy year is the: | Aggregate limit |
| Liability results from: | Invasion of the rights of others |
| Which of the following involves the concept of "strict liability?" | An automobile crash is caused by a defectively manufactured tire |
| The liability policy may cover each of the following | Personal injury liability (PI) Supplementary coverage Bodily injury coverage (BI) |
| A tenant is wrongfully evicted. This is an example of: | Personal injury |
| "Bodily injury" includes each of the following | Death Pain and suffering Disease |
| An electrical interruption causes a business to temporarily close. The electrical interruption is known as the? | Proximate cause |
| Which of the following will result in an "automatic" assignment of a CPP? | Death of the Insured |
| Which of the following is covered by a Commercial Package Policy (CPP)? | Crime |
| Who can cancel the policy and will receive the premium refund? | First named insured only |
| The most important Insured in a Commercial Package Policy (CPP) is the: | First named insured |
| If the Insured non renews a CPP, the Insured is entitled to: | . No refund |
| Consent of which of the following Insureds is required to change the coverage amount in a CPP? | The first named insured only |
| a. Commercial Crime policy | |
| b. Earthquake policy | |
| c. Flood policy | |
| A | |
| The CPP's declarations section lists: | The property covered |
| Under the CPP's Inspection and Survey Provision: | The insurer does not guarantee that any recommendations it makes are the best course of action |
| Under a CPP, the duration of the policy's coverage is found in the: | Declarations |
| Under a CPP, the Insured must give the Insurer how much prior notice of cancellation? | None |
| The term "CPP" refers to: | A bundling of policies |
| Each of the following could be included in a CPP EXCEPT: | Ocean marine |
| Risk is the: | Uncertainty or chance of loss |
| What type of Insurer is created and owned by the company it insures? | Captive Insurer |
| Under the Federal Do Not Call Registry, telemarketers must update their Do Not Call Lists every: | 31 days |
| Reinsurance is insurance that is purchased by: | A cedant |
| A unique point about this type of insurance company is that it is run by someone known as an "attorney in fact" (not an attorney at law which is a lawyer): | Reciprocal insurer |
| The authority granted to the Producer in the Producer's employment contract is: | Expressed |
| Indemnity is: | Making whole |
| Which of the following is an insurance marketplace made up of members who are grouped into syndicates? | Lloyd's of London |
| Which Insurer doesn't use agents? | Direct Response |
| Which federal agency monitors and regulates the Do Not Call List? | Federal Trade Commission |
| Which is true regarding insurance companies? | Mutuals are owned by the policy holders, have the management members chosen by the policy holders, and pay |
| The Lutheran-run insurance companies are examples of: | Fraternal benefit insurers |
| The Federal Do Not Call List rules apply to: | Telemarketers |
| Insurance covers: | Pure risk |
| A company that has purchased a fire policy on its building has decreased its: | Risk with respect to a loss |
| Which of the following may enforce the federal Violent Crime Control Act? | U.S. Attorney General |
| Incorporating a start-up business is an example of: | Risk shifting (Risk Transfer) |
| A risk management technique which transfers risk is: | Insurance |
| Inserting a Hold Harmless provision in a contract is an example of: | Risk shifting (Risk Transfer) |
| The National Association of Insurance Commissioners (NAIC): | Merely advises the state insurance commissioners |
| Which law deals with money laundering and insurance companies? | USA Patriot Act |
| One insurance company insuring another insurance company is an example of: | Reinsurance |
| The Law of large Numbers allows insurers to: | Predict losses accurately |
| Authority expressed orally by the Insurer to the Agent is: | Express Authority |
| Which law requires businesses to provide an opt-out provision in all unsolicited commercial email messages? | Can-Spam Act |
| A stock company is referred to as a: | Non-participating company |
| The Agent owes fiduciary duties to the: | Insurer |
| Which best demonstrates indemnification? | After a car wreck, an injured person is paid for medical expenses and vehicle damages |
| To avoid the concentration of insurance risks, an insurer should: | Spread the risk |
| An Insurer domiciled in a foreign country is: | Alien |
| The presumed authority necessary to carry out the Producer's routine tasks is known as: | Implied Authority |
| The primary concept behind insurance is: | Transfer of risk |
| As an alternative to buying Workers Compensation Insurance from the State or a Private Insurer, a group of businesses enters into an agreement to pool their risk with each other. What risk management technique are they using? | Risk Sharing |
| Uncertainty of future outcomes is: | Risk |
| Which of the refers to Agents that represent a single Insurer? | Captive Agents |
| Chance of a windstorm causing a loss to one's property is: | Risk |
| Restoring the Insured to the financial condition prior to a loss is: | Indemnification |
| Which marketing distribution system utilizes agents that represent a single Insurer? | Exclusive Agency |
| Which marketing distribution system relies primarily on phone, mail, and internet? | Direct Response |
| The transfer of pure risk is: | Insurance |
| Uncertainty of loss is: | Risk |
| Which of the following is considered to be a "participating" Insurer? | A mutual insurer |
| Who is the principal in the principal agent relationship? | Insurer |
| Insurance: | Transfers risk |
| A licensee may violate federal law and be subject to a fine and prison for doing which of the following? | Sending threatening letters to a state insurance regulator |
| The Law of Large Numbers: | Is used to determine premiums based on historical loss figures |
| Mary has an agreement stating that if she wrecks her car, the Insurer will make the payments to Mary's banker. This is: | An assignment |
| The tendency for high risk people to be more likely to buy insurance than low risk people is referred to as: | Adverse selection |
| Faulty wiring is an example of what type of hazard? | Physical hazard |
| Which of the following is NOT one of the components used to develop rates? Profits Loss costs Loss reserves Business expenses | Loss reserves |
| Which of the following statements is correct? | Rates and premiums are the same thing Premiums are used to calculate rates |
| Fire wood stored next to a wood stove is what type of hazard? | Physical hazard |
| T has insured his $400,000 home for $250,000 under a replacement cost policy. In the event of a total loss, he will recover: | $250,000 |
| The other insurance clause upholds the principle of: | Indemnification |
| The proportionate distribution of the amount to be paid by insurance companies insuring the same loss is covered by: | Other insurance / pro rata |
| The minimum property deductible for Commercial Property Forms is usually: | $250 |
| The earthquake deductible is: | Percentage |
| A certificate of insurance: | Summarizes the policy's coverage |
| A shopping mall with only one exit is what type of hazard? | Physical hazard |
| The liberalization clause applies when: | The coverage is increased but the premium is not |
| The insurer's exposure under a policy is restricted by: | The Limit of Liability |
| Nonrenewal involves: | The insurer's refusal to continue to coverage at the end of the policy term |
| Which section of the policy contains the Insured's duties in the event of a loss? | Conditions |
| Which section of the policy contains the Other Insurance provision? | Conditions |
| The Fair Credit Reporting Act: | Allows consumers to insert corrective statements in their consumer reports |
| The insured's promise to maintain specified anti-theft devices is a? | Warranty |
| A warranty: | Must be complied with strictly Is made by the insured rather than the insurer May be part of the contract |
| Willful failure to disclose material information is a? | Concealment |
| Which federal law requires the insurer to notify the Insured in advance of its intent to obtain an investigative consumer report? | Fair Credit Reporting Act |
| Which section of the policy specifies which stores owned by an Insured are covered? | Declarations |
| Which section of the policy contains the cancellation provisions? | Conditions |
| A binder: | Provides temporary coverage |
| Which section of the policy may require the Insured to use the claim payment to replace the destroyed property? | Conditions |
| A binder becomes effective when: | Made by the agent |
| Concealment is: | Intentional nondisclosure of material facts |
| The binder is actually issued by the: | The agent |
| The Insured's sworn statement made to the Insurer regarding the time and cause of the loss is known as: | Proof of loss |
| Prior to issuing the policy, the agent may provide evidence of temporary insurance. This is a: | Binder |
| Which federal law encourages the states to adopt uniform licensing standards? | Graham-Leach-Bliley Act |
| Which section of the policy contains the Insured's responsibilities? | Conditions |
| The insured intentionally did not inform the insurer that the insured owned only 35% of the property. This is an example of: | Concealment |
| Which section of the policy contains the covered perils? | Insuring Agreements |
| Consideration is evidenced by: | Paying a premium |
| Which section of the policy contains the precise description of covered perils? | Insuring Agreements |
| Binders: | May be oral |
| Which section of the policy requires the Insurer to provide coverage? | Insuring Agreements |
| Which section of the policy contains the company's promise of protection? | Insuring Agreements |
| The insured is entitled to: | Be told the name and address of the consumer reporting company |
| Which section of the policy contains the perils NOT covered? | Exclusions |
| A policy provision that may void the policy if the provision is violated is a: | Warranty |
| The applicant believes the statement to be true with a? | Representation |
| The Insured's promise to maintain a fire sprinkler system is a? | Warranty |
| Concealment involves: | Intentionally failing to disclose a material fact |
| The Proof of Loss must contain each of these: | Any replacement sales receipt if the item has been replaced The cause of the loss A sworn statement |
| The aggregate limit is the limit per: | Policy year |
| Supplementary payments cover: | Defense costs |
| The Insurer won't cover: | Punitive damages |
| Which of the following is an example of vicarious liability? | A store owner is held liable when a store employee carelessly drops a box on a customer's foot |
| Which of the following is NOT a defense against negligence? . Statutes of Limitations Assumption of Risk Presumption of Negligence Contributory Negligence | Presumption of Negligence |
| Negligence is: | Failure to act as a reasonable person |
| Which adds an unspecified amount (rather than a specific amount) to the policy's limit of liability? | Supplementary Payments |
| It is discovered that years of exposure to chemicals released into the environment by a nearby factory is causing people to become ill. The factory's liability policy will provide coverage if the policy has what type of limit? | Per Occurrence |
| Negligence is determined by: | How a reasonable person would have acted under the circumstances |
| Special damages are: | Economic |
| General damages are: | Intangible |
| A person's duty to society and the degree of care required by the law may be insured by providing coverage for: | Liability insurance |
| a. Aggregate limit | Occurrence limit |
| Personal Injury Liability covers each of these EXCEPT: Wrongful eviction Discrimination Slander Malicious prosecution | Discrimination |
| A carpenter working on a house has a hammer slip from his hands, but no damage occurs. This is not an accident because: | No damage occurred |
| Which of the following statements regarding Punitive Damages is FALSE? They are paid to the plaintiff as compensation for the harm the defendant caused They are intended to deter others from acting in a similar way They are intended to punish the defe | They are paid to the plaintiff as compensation for the harm the defendant caused |
| Liability for the destruction of property is covered by: | Property Damage Coverage |
| A liability policy covers: | Property damage |
| Each of the following is an element used to establish negligence | Legal duty Duty to act as a reasonable person |
| A person with an alleged injury notifies a Producer that the Producer's client negligently caused the injury. The producer should first notify the: | Insurer |
| Liability insurance is a: | Two party contract with payment to a third party |
| A car dealer sold a new car. Unfortunately, a shock absorber fell off the car, resulting in an accident. Both the car dealer and the manufacturer will most likely be held liable under the concept of: | Strict liability |
| Which of these involves negligence? A driver runs a stop light A driver goes too fast and hits another vehicle | A driver goes too fast and hits another vehicle |
| A company that has purchased a fire policy on its building has decreased its: | Risk with respect to a loss |
| Incorporating a start-up business is an example of: | Risk shifting (Risk Transfer) |
| Which law deals with money laundering and insurance companies? | USA Patriot Act |
| One insurance company insuring another insurance company is an example of: | Reinsurance |
| Authority expressed orally by the Insurer to the Agent is: | Express Authority |
| The Agent owes fiduciary duties to the: | Insurer |
| Which best demonstrates indemnification? | After a car wreck, an injured person is paid for medical expenses and vehicle damages |
| To avoid the concentration of insurance risks, an insurer should: | Spread the risk |
| Which of the following is considered to be a "participating" Insurer? | A mutual insurer |
| Who is the principal in the principal agent relationship? | Insurer |
| A licensee may violate federal law and be subject to a fine and prison for doing which of the following? | Sending threatening letters to a state insurance regulator |
| The tendency for high risk people to be more likely to buy insurance than low risk people is referred to as: | Adverse selection |
| Which of the following is NOT one of the components used to develop rates? | Loss reserves |
| To prevent recovery beyond the amount of the insured's actual loss, the policy will contain: | An other insurance clause |
| An insurer's discontinuation of a policy after expiration is: | Nonrenewal |
| If your client complains that your premiums are too high, suggest: | Raising the deductible |
| The limit of liability in a policy refers to the extent of the: | Insurer's liability |
| Q sold a building but did not cancel the policy. The building was later destroyed by a covered peril. Q will not collect under the policy | Lack of insurable interest |
| Policy provisions designed to cover property not covered under the policy are known as: | Extensions |
| A brush fire which spreads to a garage is an example of a: | Peril |
| The insured cancels a policy half way through its term yet receives less than a 50% refund. This is: | A short-rate refund |
| The policy specifies the amount of the loss the insured must pay for through the: | Deductible |
| If there is duplicate property insurance, the parties will utilize which provision? | Pro rata |
| Which component of the policy requires the insured to assume a stated amount of the loss? | Deductible |
| What refers to the situation where more than one peril is the cause of a loss? | Concurrent causation |
| A careless employee routinely leaves the rear door to the store unlocked. This is what type of hazard? | Morale hazard |
| With the consent of the insurer. Albert assigned his warehouse insurance policy to Benson. Benson is the: | Assignee |
| A document outlining he coverage with evidence that coverage is in effect is known as a/an? | Certificate of insurance |
| The limit of liability is the most the policy will pay: | Per loss |
| Increasing the deductible: | Lowers the premium |
| Which of the following are developed by assigning rates to various categories or classes? | Manual rates |
| Special covers: | All risks except those excluded |
| A lender financing a boat purchase may require the insured to name the lender as an insured party. The lender has: | An insurable interest |
| The maximum the policy will pay for any one loss is the: | Limit of liability |
| The portion of the claim not covered by the policy is specified in the? | Deductible |
| Which CANNOT be an Insurer's reason for cancellation? | Claims filed |
| A's homeowner policy is valid for one year. During the year, A sold the home to B. A's lender is willing to allow A to transfer the homeowner policy to B. A must first obtain written permission from: | The insurer |
| A written document providing evidence that coverage is in effect and which summarizes the coverage is known as: | A certificate of insurance |
| The deductible: | Specifies the amount of the claim that won't be paid by the policy |
| Deductibles: | Eliminate small claims and reduce administrative expenses |
| Deductibles are used to: | Encourage the insured to be careful |
| Assume that a property is insured by two policies. Each policy has an equal amount of coverage. If the property is damaged by a covered peril: | Both insurers will share equally in the loss |
| The rate multiplied by the number of exposure units is the formula for calculating the: | Premium |
| To have an insurable interest, one must: | Have a monetary interest in the property |
| Which CANNOT have an insurable interest? | Insurer |
| The maximum the insured can collect under the policy is the: | Limit of liability |
| A deductible: | Reduces moral hazards |
| Payment based on the fact the insured owns the property involved is: | Insurable interest |
| One who can lose financially in the event of a loss has: | An insurable interest |
| Which covers only listed perils? | Specified (Named) perils |
| Josephine wants to insure her home. Her fear is that a fire will damage her stained glass window (which she just purchased for $17,000). The value of the home is $100,000 and the policy has an 80% coinsurance requirement. Josephine should purchase a minim | $80,000 |
| Declaration page | Names of covered persons Policy type Policy number and period for which the policy is effective Premium amount Coverage limits Deductible amounts Endorsements Applied discounts |
| Insuring agreement | Who is covered What is covered The insurer’s responsibilities to the insured |
| Exclusions, limitations and conditions | The exclusions section is where you’ll find a list of things not covered by the policy. Exclusions can include specific losses, perils or property types. |
| Riders | add-on coverage that can enhance your policy |
| Definitions | Insurance policies usually have a section for definitions, where key terms are defined. |
| Conditions | obligations that both you and the insurance company have to fulfill the contract. |
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