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Question 1 of 165

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1. A commercial building and Personal Property form provides coverage for:

Select one of the following:

  • a. A Patio attached to the building

  • b. Business personal property

  • c. Personal Auto Held for Sale

  • d. Guard Dogs

Explanation

Question 2 of 165

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2. Special Form or Open Perils Coverage

Select one of the following:

  • a. Provides Coverage against the name perils

  • b. Provides coverage against scheduled risks

  • c. Is limited by the name exclusions

  • d. Includes no exclusion

Explanation

Question 3 of 165

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3. Which of the following terms is defined as the uncertainty of future outcome?

Select one of the following:

  • a. Risk

  • b. Hazard

  • c. Peril

  • d. Cause

Explanation

Question 4 of 165

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4. A commercial Package Policy must include at least how many coverages parts?

Select one of the following:

  • a. One

  • b. Two

  • c. Three

  • d. Four

Explanation

Question 5 of 165

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5. S is purchasing a commercial property policy to cover a commercial building with a replacement cost of $100,000. The policy includes an 80 percent Coinsurance clause. To avoid a coinsurance penalty in the event of a particle loss, S should purchase a policy with minimum, limits of at LEAST which of the following amount?

Select one of the following:

  • a. $100,000

  • b. $90.000

  • c. $80,000

  • d. $20,000

Explanation

Question 6 of 165

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Which of the following policy forms would best protect a business that musk keep operating after a loss?

Select one of the following:

  • a. Extra Fees

  • b. Business Income

  • c. Gross Earnings

  • d. Contingent Business Interruption

Explanation

Question 7 of 165

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7. Pro-Rata cancellation occurs when:

Select one of the following:

  • a. A policy is nonrenewed

  • b. A mortgage has been satisfied

  • c. An insurer cancels a policy at inception

  • d. An insure cancel a policy at any time

Explanation

Question 8 of 165

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8. An insurer 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 MAXIUM of which of the following amounts?

Select one of the following:

  • a. $1,000

  • b. $1,250

  • c. $1,400

  • d. $1,500

Explanation

Question 9 of 165

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9. The maximum amount a policy will pay in the event of a loss is called the:

Select one of the following:

  • a. Coinsurance amount

  • b. Deductible

  • c. Limit of liability

  • d. Pro rata return

Explanation

Question 10 of 165

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10. Which of the following homeowners coverages does not generally contain a deductible?

Select one of the following:

  • a. Personal property

  • b. Other structures

  • c. liability

  • d. Dwelling

Explanation

Question 11 of 165

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11. All of the following perils are coverage under a building and Business Personal Property Coverage Form with a cause of Loss-Basic Form attached Excepts

Select one of the following:

  • a. Smoke

  • b. Sprinkler Leakage

  • c. Sinkhole Collapse

  • d. Earth movement

Explanation

Question 12 of 165

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12. The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences except:

Select one of the following:

  • a. Mudslides

  • b. Runoff from heavily rain

  • c. Overflow of tidal waters

  • d. Watermain breakage

Explanation

Question 13 of 165

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13. Under A homeowners policy, an insured is required to take all of the following actions when a coverage loss occurs excepts

Select one of the following:

  • a. A give prompt notice to the insurer or its producer

  • b. Hire an appraiser to determine the amount of loss

  • c. Notify the police if the loss is the loss is the result of theft

  • d. Protect the property from further loss

Explanation

Question 14 of 165

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14. During a tornado, a ban is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the.

Select one of the following:

  • a. Fire

  • b. Collapse of the wall

  • c. Tornado

  • d. Smoke

Explanation

Question 15 of 165

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15. A fire in an insured’s restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fires cause extensive damage to floors and furnishings, The water damage is best described as:

Select one of the following:

  • a. A time element loss

  • b. A consequential loss

  • c. A direct loss

  • d. An indirect loss

Explanation

Question 16 of 165

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16. Which of the following business would be eligible for a businessowner policy?

Select one of the following:

  • a. Auto body shop

  • b. Theater

  • c. Branch bank

  • d. Barber shop

Explanation

Question 17 of 165

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17. An insurer owns a set of six drawing pens designed and used by Benjiam Franklin. Each pen is worth $1,000 alone, but 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?

Select one of the following:

  • a. $1.000

  • b. $2.000

  • c. $7,000

  • d. $12,000

Explanation

Question 18 of 165

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18. X insurance a home for $100,000 under a dwelling Property Broad From (DP-2). If a flood causes a $1,000 in damage to the home’s content, which of the following Maximum amount will X’s insurance Pay?

Select one of the following:

  • a. $0

  • b. $800

  • c. $900

  • d. $1,000

Explanation

Question 19 of 165

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19. All of the following options are examples of insurable EXCEPT.

Select one of the following:

  • a. A persons interest in property she is buying on contract

  • b. A tenant interest in improvement she has made to a leased building

  • c. A tv repairmen interest in a customer TV which has been repaired but is still in premise

  • d. An individual interest in property her parents will someday leave to her

Explanation

Question 20 of 165

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20. A Commercial Property policy services which of the following responsibilities as a duty of the insured?

Select one of the following:

  • a. To return the policy of it is cancel by the insurer

  • b. To proved a sworn Proof of loss statement of requested by the company

  • c. To pay the mortgage in full in the event of a total loss

  • d. To pay premiums within thirty days after receiving an invoice

Explanation

Question 21 of 165

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21. In order to issue a written binder for a commercial property policy what is the MINIMUM consideration a product must secure from an applicant?

Select one of the following:

  • a. A promise to pay the premium

  • b. A signature on premium finance agreement

  • c. Payment of six months premium

  • d. Payment of twelve months premium,

Explanation

Question 22 of 165

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22. The producer for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy?

Select one of the following:

  • a. Declaration

  • b. Insuring agreement

  • c. Conditions

  • Exclusions

Explanation

Question 23 of 165

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23. Which of the following statement about a mortgage rights under the dwelling property basic form (DP-1) in Incorrect?

Select one of the following:

  • a. No act by the insured will jeopardize repairs the mortgagee’s rights.

  • b. The mortgagee may file a Proof of Loss if the inured fails to do so.

  • c. The mortgage is entitled to receive prior notice of a policy’s cancellation

  • d. The mortgage may abandon the insured property to the insurer

Explanation

Question 24 of 165

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24. An insured has an HO-3 Form. When using a snowblower borrowed from a neighbor, the insured strikers a large rock and causes $2,000 worth of damage to the snowblower. Under which section for the policy could payment be made on the insured’s behalf?

Select one of the following:

  • a. Personal property

  • b. Building

  • c. Personal liability

  • d. Loss of use

Explanation

Question 25 of 165

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25. Who of the following perils is covered under the Commercial Property Basic Cause of Loss form?

Select one of the following:

  • a. Collapse

  • b. Sinkhole collapse

  • c. Falling object

  • d. Breakage of glass

Explanation

Question 26 of 165

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26. A deer jumps through the window of an insured’s home, damaging the interior and exterior walls, Which of the following Homeowners Forms listed below is the LEAST comprehensive form the will still provide coverage for this loss?

Select one of the following:

  • a. HO-1 form

  • b. HO-2 Form

  • c. HO-3 Form

  • d. HO-5 From

Explanation

Question 27 of 165

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27. A family take their 50 horsepower outboard 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?

Select one of the following:

  • a. Dwelling

  • b. Homeowners

  • c. Boatowners

  • d. Yachts

Explanation

Question 28 of 165

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28. A primary obligation of an insure is to:

Select one of the following:

  • a. Pay the claims covered under the policy

  • b. Provide a finical statement with each policy

  • c. Make inspections and surveys on insured property

  • d. Prepare an inventory after a loss

Explanation

Question 29 of 165

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29. DP-2 is considered to be which of the following types of form?

Select one of the following:

  • a. Special

  • b. Basic

  • c. All-risk

  • d. broad

Explanation

Question 30 of 165

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30. The principal of indemnity is designed to avoid:

Select one of the following:

  • a. two policies sharing payments for a loss

  • b. overpayment of a claim

  • c. the return of earned premiums

  • d. a coinsurance clause of less than 80 percent

Explanation

Question 31 of 165

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31. The owner-operator of a computer store often leaves expensive computers balanced negligently on the edges of tables, believing that any damage to the computer will be paid by the insurance policy. This situation is BEST described as a:

Select one of the following:

  • a. moral hazard

  • b. morale hazard

  • c. catastrophic hazard

  • d. Psychological Hazard

Explanation

Question 32 of 165

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32. Which of the following phrases BEST defines a hazard?

Select one of the following:

  • a. A condition that increases the chance of a loss

  • b. The uncertainty of a loss

  • c. The cause of a loss

  • d. An unexpected loss

Explanation

Question 33 of 165

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33. Which of the following statements is CORRECT about the Fair Credit Reporting Act?

Select one of the following:

  • a. It requires an insure to send an applicant a copy of the application credit report.

  • b. If requires an insure to obtain a credit report on an application.

  • c. It allows an insurer to obtain a credit report without the application’s permission.

  • d. It provides a method for an application to correct any incorrect information in the credit report.

Explanation

Question 34 of 165

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34. Inland marine insurance is commonly used to insure all of the following items EXCEPT:

Select one of the following:

  • a. Automobiles

  • b. Stamps

  • c. Camera equipment

  • d. Jewelry

Explanation

Question 35 of 165

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35. In a commercial property form if a building is a left vacant coverage for vandalism will continue for up to how many days?

Select one of the following:

  • a. Thirty

  • b. Forty-five

  • c. Sixty

  • d. Ninety

Explanation

Question 36 of 165

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36. Which of the following coverage may be added by endorsement to a Boiler and Machinery Policy?

Select one of the following:

  • a. Expediting expenses

  • b. Extra expense

  • c. Property damage liability

  • d. Damage to property of the inured

Explanation

Question 37 of 165

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37. Which of the following source may be used it provide property insurability information?

Select one of the following:

  • a. Police records

  • b. Physical inspections

  • c. Checking account statements

  • d. Lie detector tests

Explanation

Question 38 of 165

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38. Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the inure?

Select one of the following:

  • a. Negligence

  • b. Liability

  • c. Accident

  • d. Occurrence

Explanation

Question 39 of 165

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39. An insured owns an antique marble statue valued at $3,000 which is covered under a Personal Articles Floater. Damage to the state would be covered in all the following situations EXCEPT:

Select one of the following:

  • a. It was accidentally damage by a housekeeper

  • b. It was damage in a flood

  • c. A guest of the inured maliciously damage it

  • d. The inured threw it

Explanation

Question 40 of 165

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40. A company 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 Commercial Property policy?

Select one of the following:

  • a. Declarations

  • b. Insuring Agreement

  • c. Conditions

  • d. Exclusions

Explanation

Question 41 of 165

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41. Actual Cash Value is most often defined as which of the following options?

Select one of the following:

  • a. Replacement cost less depreciation

  • b. Amount paid less depreciation

  • c. Fair market value plus appreciation

  • d. Appraised Value

Explanation

Question 42 of 165

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42. The Personal Liability section of a Homeowners policy covers which of the following options?

Select one of the following:

  • a. Damage to an insured property caused by a visitor

  • b. Bodily injury to a resident cause by a neighbor’s dog

  • c. Property damage cause by war

  • d. Bodily insurer caused by the personal activities of an insured

Explanation

Question 43 of 165

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43. G insures G’s television repair shop under a Building and Personal Property Coverage form with limits of $100,000 on the building and $50,000 on business personal property. A fire causes $10,000 in damage to the building and $20,000 in losses to the contents. G also have $1,000 for debris removal. If the policy has a deductible of $250, G will receive a Maximum of which of the following amounts of the insurer?

Select one of the following:

  • a. $29,750

  • b. $30,000

  • c. $30,750

  • d. $31,100

Explanation

Question 44 of 165

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44. A building adjacent to an insurer business is servilely damaged by fire. Because of the nature of the damage to the adjoining property, the inured is denied access to the business by the fire department. If the insured’s property is covered under a Business Income Coverage Form the insure will cover the loss of earnings for a MAXIUM of:

Select one of the following:

  • a. three weeks

  • b. thirty days

  • c. sixty days

  • d. six months

Explanation

Question 45 of 165

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45. An applicant statement included in the insurance contract that the property to be insured has an operable sprinkler system is:

Select one of the following:

  • a. agent binding authority

  • b. a warranty

  • c. a representation

  • d. an affidavit

Explanation

Question 46 of 165

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46. Information provided by the insured in a Proof of Loss is considered:

Select one of the following:

  • a. a warranty

  • b. a representation

  • c. an assignment

  • d. an agreement

Explanation

Question 47 of 165

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47. Which if the following perils is covered by Broad Form periled but is not covered by the Basic Form?

Select one of the following:

  • a. Vandalism

  • b. Weight of ice and snow

  • c. Riot

  • d. Windstorm

Explanation

Question 48 of 165

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48. Under a Personal Property Floater, a loss is covered when it occurs:

Select one of the following:

  • 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

Explanation

Question 49 of 165

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49. N’s next door neighbor, S, dumps hot ashes in N’s trash dumpster starting a fire and causing servicing damages to N’s home. N’s company pays the loss and then goes after S for payment this is an example of

Select one of the following:

  • a. Pro rata liability

  • b. Assignment

  • c. Appraisal

  • d. Subrogation

Explanation

Question 50 of 165

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50. Which of the following terms can be defined as a policy provision that omits certain risks from coverage?

Select one of the following:

  • a. Declarations

  • b. Insurance Agreement

  • c. Conditions

  • d. Exclusions

Explanation

Question 51 of 165

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51. In order to be reimbursed for a covered loss under a Standard fire policy in this state, an insured MUST

Select one of the following:

  • a. Contact an independent claims adjuster

  • b. Protect the property from further loss

  • c. Provide a proof of loss statement when ten days

  • d. Obtain a written appraisal of the damages

Explanation

Question 52 of 165

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52. After an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment its due within a MAXIMUM of how many days?

Select one of the following:

  • a. Five

  • b. Thirty

  • c. Sixty

  • d. Ninety

Explanation

Question 53 of 165

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53. Coverage of good in transit is usually provided by which of the following types of insurance?

Select one of the following:

  • a. Casualty

  • Surety

  • c. Inland Marine

  • d. Automobile

Explanation

Question 54 of 165

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54. Under the standard flooded insurance policy, all of the following loss avoidance are covered up to $1,000 when damage to the insured property due to the flooding is imminent EXCEPT:

Select one of the following:

  • a. Sandbags, including the sand to fill then

  • b. Tools required to secure the property

  • c. Plastic sheeting and lumber

  • d. The value of work, at the federal minimum wage, that a member of the household performs

Explanation

Question 55 of 165

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55. Which of the fowling situations is considered an insurance transaction?

Select one of the following:

  • a. Two insurance companies share actuarial data

  • b. Two parties negotiate the term of coverage when executing an insurance contract

  • c. An independent audit company reviews a domestic insurance’s records for a fee.

  • d. An insured sends a policy to the bank in preparation for a mortgage closing

Explanation

Question 56 of 165

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56. The purpose of the FAIR Plan is to provide:

Select one of the following:

  • a. Automobile insurance for high-risk drivers

  • b. Crime insurance for residents of high-risk neighborhoods

  • c. Property insurance on recreational vehicles for which such coverage is unavailable in the regular market

  • d. Basic property insurance for which coverage is not available in the regular market

Explanation

Question 57 of 165

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57. XYZ Insurance Company recently received its certification of authority to sell property insurance in Illinois, XYZ is an Iowa insurer but will sell its products through its licensed Illinois producers. Which of the following statements is CORRECT about XYZ Company’s involvement in the FAIR Plan?

Select one of the following:

  • a. XYZ may not join the FAIR Plan, because it is a foreign company

  • b. XYZ may not join the FAIR Plan, because its producers are licensed in Illinois

  • c. Membership in the FAIR Plan is optional for XYX.

  • d. XYZ must belong to the FAIR Plan because it has a certification of authority to sell homeowners insurance in Illinois.

Explanation

Question 58 of 165

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58. The Insurance Commissioner is empowered to:

Select one of the following:

  • a. enforce state laws relating to insurance

  • b. pass state laws relating to insurance

  • c. write policy forms for mandatory insurance coverages

  • d. set rate for mandatory insurance coverages

Explanation

Question 59 of 165

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59. To obtain coverage from this state’s FAIR plan, an applicant MUST:

Select one of the following:

  • a. Show that a diligent search was made through established markets

  • b. Apply at least thirty days prior to the desired effective date of the coverage

  • c. Pay a premium surcharge based on the applicant’s past claims experience

  • d. Pay a premium surcharge based on the type of property to be insured

Explanation

Question 60 of 165

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60. An insurer that generally fails to affirm or deny coverage of claims within a reasonable period if time after receiving Proof of Loss may be found guilty of

Select one of the following:

  • a. A breach of fiduciary responsibility

  • b. An improper claims practice

  • c. Defamation

  • d. misrepresentation

Explanation

Question 61 of 165

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61. If a commercial insurer fails to meet the requirements of the forty-five days Notice of Nonrenewal Rule prior to the expiration date of the existing policy, the company “must”

Select one of the following:

  • a. extend the current policy for one year and waive the premium

  • b. reduce coverage to develop a new premium that does not exceed the expiring policy premium

  • c. provide a renewal policy that matches the expiring policy coverage and premium

  • d. pay a $3,000 fine per violation to the Division of Insurance

Explanation

Question 62 of 165

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62. After an insurance producer license is issued, a licensee MUST complete how many hours of approval continuing education course every two years?

Select one of the following:

  • a. Ten

  • b. Fifteen

  • c. Twenty

  • d. Twenty-four

Explanation

Question 63 of 165

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63. The insurance Commissioner may issue a limited insurance representative license to an individual who wants to sell which of the following types of policies?

Select one of the following:

  • a. Fire

  • b. Automobile

  • c. Mortgage Guaranty

  • d. Health

Explanation

Question 64 of 165

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64. An individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy on its behalf is know as:

Select one of the following:

  • a. An adjuster

  • b. A consultant

  • c. An insurance broker

  • d. An insurance producer

Explanation

Question 65 of 165

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65. Making false or misleading statements about dividends or shares of surplus previously paid on an insurance policy is know as:

Select one of the following:

  • a. Unfair discrimination

  • b. Rebating

  • c. Coercion

  • d. misrepresentation

Explanation

Question 66 of 165

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66. Upon determining that a producer has violated the insurance law, the Insurance Commissioner is required to take which of the following actions:

Select one of the following:

  • a. Place the license on probation immediately

  • b. Publish notice of violation

  • c. Hold a hearing of the violation

  • d. Submit the infraction to the Department of Insurance

Explanation

Question 67 of 165

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67. An incorporated insurer with capital divided into shares and owned by its shareholder is know as:

Select one of the following:

  • a. A stock company

  • b. A mutual company

  • c. A fraternal benefit society

  • d. An association group

Explanation

Question 68 of 165

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68. If an owner-occupied dwelling is totally destroyed without criminal fault on the part of the insured. The amount of the loss covered by a property policy would be “based on”

Select one of the following:

  • a. A depreciated value of the dwelling

  • b. The policy limits

  • c. The market value of the dwelling

  • d. The assessed value of the dwelling

Explanation

Question 69 of 165

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69. Which of the following persons may assign a Standard Fire policy?

Select one of the following:

  • a. A claims adjuster

  • b. The Superintendent of Insurance

  • c. The insured with permission of the insurance company

  • d. The insured only

Explanation

Question 70 of 165

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70. In this state, a domestic insurer is defined as a company that:

Select one of the following:

  • a. Operates in this state but its incorporate in another state

  • b. Operates in this state but is domiciled in another state

  • c. Is headquarters in this state

  • d. Is incorporated in this state

Explanation

Question 71 of 165

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71. An insurer that permits different rate classifications for individuals of the same class and same hazard may be guilty of:

Select one of the following:

  • a. Boycotting

  • b. Unfair discrimination

  • c. Misrepresentation

  • d. Defamation

Explanation

Question 72 of 165

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72. All of the following item contained in a basement are covered under the standard flood insurance policy EXCEPT:

Select one of the following:

  • a. Drywall for walls and ceilings and the cost of labor to nail it, unfinished and not taped, to the framing

  • b. Function electrical outlets and switches

  • c. Carpet permanently installed over unfinished flooring

  • d. Fuel tanks, it installed in their functions locations and connected to a power source

Explanation

Question 73 of 165

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73. A Candidate for licensure as property insurance producer must have completed a MINIMUM of how many hours of pre-licensing education?

Select one of the following:

  • a. 45

  • b. 30

  • c. 15

  • d. 7.5

Explanation

Question 74 of 165

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74. An insurer that intends to nonrenewed a Homeowners policy MUST take which of the following actions?

Select one of the following:

  • a. Obtain coverage for the policyholder from another insurer

  • b. Obtain coverage for the policy holder under FAIR plan

  • c. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy expiration date

  • d. Send a notice stating the reason for nonrenewal to the insured

Explanation

Question 75 of 165

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75. The Insurance Commissioner may suspend, revoke, or deny producer’s license for all the following reasons EXCEPT:

Select one of the following:

  • a. Untrue statements on the license application

  • b. Conviction of a misdemeanor

  • c. Incompetency

  • d. Converting funds

Explanation

Question 76 of 165

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1. The attempt to restore an insured to the insured’s provision financial condition before the loss occurred is BEST described as:

Select one of the following:

  • a. Indemnification

  • i. Subrogation

  • b. Coinsurance

  • c. Self-insurance

Explanation

Question 77 of 165

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2. The Conditions section of an insurance policy state the:

Select one of the following:

  • a. deductible amount; if any

  • b. Policy term

  • c. Policy provisions

  • d. duties of the insured

Explanation

Question 78 of 165

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3. In the event of a loss under a Personal Auto Policy, an insured is required to submit to the insurance company all of the following information EXCEPT:

Select one of the following:

  • a. A Proof of Loss statement if requested

  • b. A Notice of Claim

  • c. A list of any know witnesses

  • d. An appraisal of the damaged property

Explanation

Question 79 of 165

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4. Which of the following individuals is a named insured under a Personal Auto policy?

Select one of the following:

  • a. A person who is listed in the Declaration section

  • b. A valet who parks an insured’s car

  • c. An insured’s employer who drives the insured’s car for personal use

  • d. A neighbor who drives an insured's car with permission

Explanation

Question 80 of 165

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5. Under a Commercial General Liability policy, Personal and Advertising Injury Liability coverage does NOT apply to damage resulting from

Select one of the following:

  • a. Slanderous statements made by an advertising firm

  • b. Copyright infringement by a department store

  • c. Harmful, truthful information published by a realtor

  • d. Invasion of an individual’s privacy

Explanation

Question 81 of 165

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6. In an application for marine insurance, a yacht owner states that the yacht will only be sailed on inland waters. If the insured subsequently sail the yacht on the seas, coverage may be denied because the insured has breached:

Select one of the following:

  • a. The Inchmaree clause

  • b. The policy clause

  • c. A representation

  • d. A warranty

Explanation

Question 82 of 165

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7. Which if the following occurrence would be included under the definition of a personal injury

Select one of the following:

  • a. A customer injured in a department store when a sign falls on her shoes for medical cost and pain and suffering

  • b. An employee injured lifting a heavy carton sues hie employer for costs

  • c. An individual fired from her job sues her employer for unemployment benefits

  • d. A tenant evicted by his landlord sued the landlord for invasion of privacy and wrongful eviction

Explanation

Question 83 of 165

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8. Premium costs for standard Workers Compensation insurance are paid by:

Select one of the following:

  • a. employers only

  • b. employees only

  • c. employers and employees jointly

  • d. The Workers Compensation Board

Explanation

Question 84 of 165

1

9. W, an electrician, caused damage to the main wiring of a shopping center while working on another building. As a result, the shopping center was forced to close early for the day. The loss resulting from this damage would be considered which of the following types under W’s Commercial General Liability policy?

Select one of the following:

  • a. Products

  • b. Completed Operations

  • c. Premises

  • d. Operations

Explanation

Question 85 of 165

1

10. Which of the following statements best describes a representative in an insurance application?

Select one of the following:

  • a. It is a statement made by the insured that certain conditions exist at the time of application

  • b. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term.

  • c. It explains the promise of the insurance company

  • d. Is its part if the insuring Agreement

Explanation

Question 86 of 165

1

11. The Arbitration clause in a Personal Auto policy would be used in which of the following circumstances?

Select one of the following:

  • a. The insurance company and a pedestrian struck by the insured’s auto cannot reach an agreement regarding the settlement of a claim

  • b. The insured and an injured third party cannot reach an agreement regarding the settlement of a claim

  • c. The insured and the insurance company cannot reach an agreement regarding the settlement for a claim

  • d. The court have ruled against an injured third party

Explanation

Question 87 of 165

1

12. Which of the following injuries is covered under the medical payments section of an insured’s Commercial General Liability policy?

Select one of the following:

  • a. An employee breaks an ankle in the insured’s warehouse

  • b. An individual is injured participating in an athletic event on the insured property

  • c. A supplier is injured while visiting the insured showroom

  • d. A Tenant in the insured apartment building slips in their apartment and requires x-rays

Explanation

Question 88 of 165

1

13. An insurance binder is best described as:

Select one of the following:

  • a. A large bound volume of rules, rates, and forms

  • b. A rate manual supplied by one of the rating organizations

  • c. A temporary agreement to pay a claim pending final settlement

  • d. Temporary short-term evidence of coverage

Explanation

Question 89 of 165

1

14. Which of the following individuals is likely to have a vailed Workers Compensation claim?

Select one of the following:

  • a. A retired employee injured while visiting his old workplace

  • b. An employee who suffers a diabetic coma from failure to take prescribed medicine

  • c. A sole proprietor injure in auto accident while driving to a friend’s house

  • d. An employee injured while undergoing job training

Explanation

Question 90 of 165

1

15. A Commercial General Liability policy provides coverage for which of the following hazards?

Select one of the following:

  • a. Professional liability

  • b. Employee Injury Liability

  • c. Pollution Liability

  • d. Premises Liability

Explanation

Question 91 of 165

1

16. Insurance purchased to protect an insured from death. Injury, disability or property damage of another is defined as:

Select one of the following:

  • a. Credit Insurance

  • b. Property Damage Legal Insurance

  • c. Liability Insurance

  • d. Accident and Health insurance

Explanation

Question 92 of 165

1

17. In a state where minimum auto bodily injury liability limits are 20/40, S is driving with limits of 20/40. S is responsible for an accident with T in which T suffers bodily injury in the amount of $120.000. T has non-stacked Underinsured Motorists limits of 100/300. How much will T’s policy pay toward T’s injury

Select one of the following:

  • a. $20,000

  • b. $80,000

  • c. $100,000

  • d. $120,000

Explanation

Question 93 of 165

1

18. Which of the following claims may be covered by under Bodily Injury Liability coverage?

Select one of the following:

  • a. Physical equipment

  • b. False arrest

  • c. Libel

  • d. Suicide

Explanation

Question 94 of 165

1

19. Which of the following coverages may be written with Worker’s Compensation?

Select one of the following:

  • a. Products

  • b. Contractual

  • c. Employers Liability

  • d. Completed Operations

Explanation

Question 95 of 165

1

20. An insured has an automobile policy with a combined single limit of $500,000 for Bodily Injury and Property Damage. After an accident a court awards $300,000 bodily injury and $25,000 property damage to Claimant A, and $200,000 bodily injury and $25,000 property damage to Claimant B. In this situation, the insurance company’s limits for liability is:

Select one of the following:

  • a. $300,000

  • b. $350,000

  • c. $500,000

  • d. $550,000

Explanation

Question 96 of 165

1

21. Which of the fowling vehicles is considered a covered auto under a Personal Auto Policy?

Select one of the following:

  • a. A vehicle used by the insured to transport passengers to and form an airport for a fee

  • b. The insured’s all-terrain vehicle with three wheels

  • c. A replacement car purchase by the insured a week aga but not yet reported the insurance company

  • d. A company car provided to the insured by an employer

Explanation

Question 97 of 165

1

22. Which of the following policies is intended to broaden the coverages and increase the limits of underwriting insurance?

Select one of the following:

  • a. Owners and Contracts Protective Liability

  • b. Umbrella liability

  • c. Excess lability

  • d. Commercial General Liability

Explanation

Question 98 of 165

1

23. J drives L’s car. Both J and L have a personal Auto Policy. Which of following statements is CORRECT concerning coverage if J causes an accident?

Select one of the following:

  • a. J’s policy only will pay for any damage

  • b. L’s policy only will pay for any damage

  • c. L’s policy is primary and J’s is excess

  • d. J’s policy is primary and L’s is excess

Explanation

Question 99 of 165

1

24. A legal obligation for injuries that are sustained due to failure to preform a duty is know as:

Select one of the following:

  • a. negligence

  • b. liability

  • c. physical hazard

  • d. claims payment

Explanation

Question 100 of 165

1

25. in a commercial General Lability policy, medical payment expense must be:

Select one of the following:

  • a. caused by the negligence of the insured

  • b. caused by the product manufactured by the insured

  • c. report withing one year of the date of the accident

  • d. report withing two years of the policy expiration

Explanation

Question 101 of 165

1

26. After paying a claim, an insurance company may have the right to purchase legal action against the negligent party. This right is called

Select one of the following:

  • a. Assignment

  • b. Other insurance

  • c. Subrogation

  • d. Action against the company

Explanation

Question 102 of 165

1

27. Which of the following sections of a policy limits coverage?

Select one of the following:

  • a. Policy summary

  • b. Conditions

  • c. Binders

  • d. Exclusions

Explanation

Question 103 of 165

1

28. The principal of a actual cash value is applied to claims for which of the following polices?

Select one of the following:

  • a. Accidental Death

  • b. Auto Physical Damage

  • c. Variable Annuity

  • d. Workers’ Compensation

Explanation

Question 104 of 165

1

29. In insurance, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor interned?

Select one of the following:

  • a. An accident

  • b. An occurrence

  • c. An event

  • d. A condition

Explanation

Question 105 of 165

1

30. In insurance, all of the following losses are examples of pure risk EXCEPT:

Select one of the following:

  • a. Auto accident

  • b. Flood damage to a home

  • c. Decline of stock values on the stock market

  • d. Fire damage

Explanation

Question 106 of 165

1

31. The limits of liability are found in which of the following sections of a casualty policy?

Select one of the following:

  • a. Conditions

  • b. Insuring Agreement

  • c. declarations

  • d. Definition

Explanation

Question 107 of 165

1

32. The acts of intentionally withholding from an insurance application a fact that would affect insurance of the policy is referred to as:

Select one of the following:

  • a. Concealment

  • b. Misrepresentation

  • c. Defamation

  • d. twisting

Explanation

Question 108 of 165

1

33. a bond guaranteeing the obligation of one party to another by a third party know as a:

Select one of the following:

  • a. municipal bond

  • b. fiduciary bond

  • c. surety bond

  • d. guarantee bond

Explanation

Question 109 of 165

1

34. Products Liability coverage would insure damages that arise from which of the following situations?

Select one of the following:

  • a. A manufacturer is required to recall a defective product

  • b. a contractor installs inferior-grade siding on a budling

  • c. A customer receives an electrical shock from a curling iron during an in-store demonstration

  • d. A bicycle rider is injured when a wheel manufacturers

Explanation

Question 110 of 165

1

35. The Fair Credit Reporting Act requires the:

Select one of the following:

  • a. Insurance company to review the applicating’s credit history prior to underwriting a policy

  • b. Insurance producer to summarize a policy for the insured

  • c. Insurance producer to review the applicant a credit report may be obtained

  • d. Insurance company to inform the application a credit report may be obtained

Explanation

Question 111 of 165

1

36. Which of the following liability coverages may require the insured’s consent company settles and pays a loss?

Select one of the following:

  • a. Professional

  • b. Automobile

  • c. Products

  • d. Contractual

Explanation

Question 112 of 165

1

37. An employer wishes to purchase liability coverage to protect against employees who bring suit due to an employment-related offense. What type of policy would be most appropriate for the employer?

Select one of the following:

  • a. Employment practices liability (EPLI

  • b. Commercial General Liability (CGL)

  • c. Owners and Contractors Protective Liability (OCP)

  • d. Bodily Injury Liability (BI)

Explanation

Question 113 of 165

1

38. An insured is required to take which of the following actions immediately after an occurrence?

Select one of the following:

  • a. Request a subrogation statement from the producer

  • b. Give notice of a claim to the insurance

  • c. Notify an independent adjuster

  • d. Obtain a written report from the police department

Explanation

Question 114 of 165

1

39. A person is acting negligently if they:

Select one of the following:

  • a. Buy a sportscar

  • b. Fail to act prudently

  • c. Work at home

  • d. Spend more than they earn

Explanation

Question 115 of 165

1

40. Anything that increase the chance the chance of loss is know as(n)

Select one of the following:

  • a. Risk

  • b. Hazard

  • c. Direct loss

  • d. Indirect loss

Explanation

Question 116 of 165

1

41. Under a Fidelity Bond, which of the following individuals is considered the oblige?

Select one of the following:

  • a. An employer

  • b. An employee

  • c. A subcontractor

  • d. A creditor

Explanation

Question 117 of 165

1

42. Which of the following losses would be covered under an Inside the Premises- Robbery and Safe Burglary of Other Property form?

Select one of the following:

  • a. Valuable papers kept in a locked safe are destroyed by fire

  • b. Cash is stolen form a locked safe that shows no sings of forced entry

  • c. jewelry is stolen from a locked safe that shows no sings of forced entry

  • d. Gold bards are stolen from a locked safe that shows no sings of forced entry

Explanation

Question 118 of 165

1

43. If an insured intentionally conceals a material fact about an auto to be covered by a policy, coverage may be:

Select one of the following:

  • a. Voided

  • b. Suspended

  • c. Reduced

  • d. Restricted

Explanation

Question 119 of 165

1

44. Actual cash Value is most often defined as:

Select one of the following:

  • a. Replacement cost less depreciation

  • b. Original purchase price less depreciation

  • c. Sted amount a policy will pay

  • d. Cost to replace

Explanation

Question 120 of 165

1

45. A policyholder would except to find which of the following information in the insuring agreement section of an auto policy?

Select one of the following:

  • a. Bodily injury limit of ability

  • b. The insurance company’s promise to pay on the behalf on the insured

  • c. Exclusions regarding certain uses of the auto

  • d. The obligation of the insured on the event of the loss

Explanation

Question 121 of 165

1

46. Investment consultants should purchase which of the fowling protect themselves from errors and omissions claims?

Select one of the following:

  • a. Owner’s and Contractors Protective Liability

  • b. Premise and Operations Liability

  • c. Professional Liability

  • d. Products and Completed Operations Liability

Explanation

Question 122 of 165

1

47. A business insured under a commercial general liability policy has a General Aggregate limits of $1,000,000 and Occurrence limit of $100,000. An injured party is awarded $100,000. What limits will remain available to the insured?

Select one of the following:

  • a. General Aggregate of $1,000,000. Occurrences limit of $100,000

  • b. General Aggregate of $900,000. Occurrences limit of $100,000

  • c. General Aggregate of $1,000,000. Occurrences limit of $0

  • d. General Aggregate of $900,000. Occurrences limit of $0

Explanation

Question 123 of 165

1

48. Which of the following vehicles is considered a temporary substitute auto under a Personal Auto policy?

Select one of the following:

  • a. A neighbor’s pickup truck borrowed by an insured to run an errand

  • b. An auto purchased by an insured to replace a previously owned vehicle

  • c. An auto rented by an insured when the insured is on vacation

  • d. An auto rented by an insured when the insured’s car is in a garage for repairs

Explanation

Question 124 of 165

1

49. Which of the following sections of an insurance policy would explain the term “ auto”?

Select one of the following:

  • a. Declaration

  • b. Definitions

  • c. Insuring agreement

  • d. Obligations of the insurance company

Explanation

Question 125 of 165

1

50. In a store, all of the following situations would be considered theft EXCEPT:

Select one of the following:

  • a. Merchandise being stolen with evidence of forced entry

  • b. A clerk witnessing a customer shoplifting merchandise

  • c. A clerk being robbed at gunpoint

  • d. The store’s year-end inventory coming up short by 5 percent

Explanation

Question 126 of 165

1

51. Which of the following statements is a considered an insurance transaction?

Select one of the following:

  • a. Two insurance companies share actuarial data

  • b. Two parties negotiate the term of coverage when executing an insurance contract

  • c. An independent audit company revies a domestic insurance company’s records for a free

  • d. An insured spends a policy to the bank in preparation for a mortgage closing

Explanation

Question 127 of 165

1

52. An incorporated insurance company with capital divided into shares and owned by its shareholders is know as:

Select one of the following:

  • a. A stock company (TXPg.44)

  • b. A mutual company

  • c. A fraternal benefit society

  • d. An association group

Explanation

Question 128 of 165

1

53. Making false or misleading statement about dividends or shares of surplus previously paid on an insurance policy is known as:

Select one of the following:

  • a. unfair discrimination

  • b. rebating

  • c. coercion

  • d. misrepresentation (TXPg.60)

Explanation

Question 129 of 165

1

54. In this state, a domestic insurance company is defined as a company that

Select one of the following:

  • a. Operates in this state but its incorporated in another state

  • b. Operates in this state but is domiciled in another state

  • c. Is headquartered in this state

  • d. Is incorporated in this state (TXPg,10)

Explanation

Question 130 of 165

1

55. An insurance company may deny an employee’s claim for Workers Compensation benefits if the employee was:

Select one of the following:

  • a. Traveiling on company business when the injury occurred

  • b. Drunk and caused the injury

  • c. Careless and caused the injury

  • d. Injured through the actions of a fellow employee

Explanation

Question 131 of 165

1

56. An insurance company that generally fails to affirm or deny coverage of claims withing a reasonable period of time after receiving Proof of Loss may be found guilty of

Select one of the following:

  • a. A breach of fiduciary responsibility

  • b. An improper claims practice

  • c. Defamation

  • d. misrepresentation

Explanation

Question 132 of 165

1

57. Which of the following companies MUST participate in the Auto Insurance Plan?

Select one of the following:

  • a. All companies that sell auto insurance in this state

  • b. Only companies that sells more than 1,000 auto polices per year in this state

  • c. Only the ten largest auto insurance companies in this state

  • d. Only surplus lines insurance companies that sell auto insurance in this state

Explanation

Question 133 of 165

1

58. The Workers Compensation Act provides coverage for all of the following losses EXCEPT:

Select one of the following:

  • a. A personal injury arising out of, of in the course of, employment

  • b. an on-the-job injury sustained by an employee who was intoxicated (TXPg.32)

  • c. an on-the-job injury inflicted by a third party against an employee

  • d. death that occurs at an employee’s home but results from a lung disease that is job-related

Explanation

Question 134 of 165

1

59. An employer who has been refused Workers Compensation coverage by at least four insurance companies may apply for covered with:

Select one of the following:

  • a. the FAIR Plan

  • b. the Assigned Risk Plan

  • c. the Joint Underwriters Association (JUA)

  • d. a reinsurance facility

Explanation

Question 135 of 165

1

60. Proof of Motor Vehicle Liability insurance is requested of a driver:

Select one of the following:

  • a. When registering a vehicle

  • b. When applying for a driver license (TXPg.79)

  • c. After acquiring a vehicle

  • d. After an automobile accident involving bodily injury

Explanation

Question 136 of 165

1

61. Which of the following statements is CORRECT about Uninsured/Underinsured Motorist coverage in this state?

Select one of the following:

  • a. It is required coverage in all policies in any amount

  • b. It must be issued at limits equal to the Bodily injury/Physical Damage policy limits.

  • c. It is required in all policies in the amount chosen by the insured only

  • d. It is subject to rejection by the policyholder in writing

Explanation

Question 137 of 165

1

62. If an insured has more than one auto policy that provides, Uninsured Motorist coverage, which of the following statements about the recovery of benefits is CORRECT?

Select one of the following:

  • a. Benefits are limited to the requirements established by the Financial Responsibility Act

  • b. Benefits are paid only by the policy with the highest limits

  • c. Total recovery is restricted to the average limits of this coverages

  • d. Total recovery is restricted to the highest limits of those coverages

Explanation

Question 138 of 165

1

63. The nonrenewal of an auto policy does not become effective until how may days after the insured notice from the insurance company?

Select one of the following:

  • a. 10

  • b. 25

  • c. 30 (TXPg.72)

  • d. 45

Explanation

Question 139 of 165

1

64. Under the Automobile Insurance Plan (AIP), all of the following coverages are available to the eligible owner of a private passenger vehicle EXECPT:

Select one of the following:

  • a. Rental Reimbursement (TXPg.32)

  • b. Personal injury protection (PIP)

  • c. Underinsured Motorist

  • d. Bodily injury

Explanation

Question 140 of 165

1

65. The amount if an injured employee’s Workers Compensation disability payments is based on the employee’s:

Select one of the following:

  • a. Severity of injury

  • b. Degree of occupational hazard

  • c. Years of covered employment

  • d. Average weekly wage (TXPg.88)

Explanation

Question 141 of 165

1

66. A candidate for license as a casualty insurance producer must have completed a MINIMUM of how many hours of relicensing educational?

Select one of the following:

  • a. 45

  • b. 30

  • c. 15 (TXPg.53,24)

  • d. 7.5

Explanation

Question 142 of 165

1

67. After an insurance producer license is issued, a licensee MUST complete how many of approved continuing education courses every two years?

Select one of the following:

  • a. Ten

  • b. Fifteen

  • c. Twenty

  • d. Twenty-four (TXPg.53)

Explanation

Question 143 of 165

1

68. The insurance Commissioner is empowered to:

Select one of the following:

  • a. Enforce state laws, relating to insurance (Pg.39)

  • b. Pass sate laws relating to insurance

  • c. Write point form for mandatory insurance coverages

  • d. Set rates for mandatory insurance coverages

Explanation

Question 144 of 165

1

69. Proof of financial responsibility for damages caused by automobile accident may be shown by all of the following documents EXCEPT:

Select one of the following:

  • a. An automobile insurance policy

  • b. A certification of self-insurance

  • c. A deposit of securities

  • d. A certified finance statement (TXPg.78,79)

Explanation

Question 145 of 165

1

70. An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:

Select one of the following:

  • a. Boycotting

  • b. Unfair discrimination (TXPg.61)

  • c. Misprinting

  • d. defamation

Explanation

Question 146 of 165

1

71. An induvial appointment by an insurance company to solicit applications for a policy of insurance or to negotiate a policy on its behalf is know as:

Select one of the following:

  • a. an adjuster

  • b. a consult

  • c. an insurance broker

  • d. an insurance producer

Explanation

Question 147 of 165

1

72. A private passenger auto policy may be cancelled more than sixty days after the effective date for which of the following reason?

Select one of the following:

  • a. A change in the insured’s occupation

  • b. The addition of a teenage driver to the policy

  • c. Suspension of the insured’s driver’s license

  • d. A change in the insured’s martial status

Explanation

Question 148 of 165

1

73. The insurance Commissioner may suspend, revoke, or deny a producer’s license for all of the following reason EXCPET:

Select one of the following:

  • a. Untrue statements on the license application

  • b. Conviction of a misdemeanor

  • c. incompetency

  • d. converting funds

Explanation

Question 149 of 165

1

74. The insurance commissioner may issue a limited insurance representative license to a individual who wants to sell which following types of policies?

Select one of the following:

  • a. Fire

  • b. Automobile

  • c. Morage Guaranty

  • d. Health

Explanation

Question 150 of 165

1

75. Upon determining that a producer has violated the insurance law , the insurance Commissioner is required to take which of the following actions?

Select one of the following:

  • a. Place the license on prohibition immediately

  • b. Publish notice of the violation

  • c. Hold a hearing on the infraction (TX Pg. 8)

  • d. Submit the infraction toe the Department of Insurance for review

Explanation

Question 151 of 165

1

1. Which of the following Homeowners coverage does not generally on the following , homeowners coverage does not generally contain a deductible?

Select one of the following:

  • i. Liability

  • random

Explanation

Question 152 of 165

1

2. In a commercial property form, if a guideline is left vacant, coverage of vandalism will contain for up to how many days?

Select one of the following:

  • i. 60 Days

  • random

Explanation

Question 153 of 165

1

3. Which of the following perils is covered under the Commercial property basic cause of loss form?

Select one of the following:

  • i. Sinkhole Collapse

  • random

Explanation

Question 154 of 165

1

4. Commercial Building and Personal Property form provides policy, what is the minimum consideration a producer must secure from an applicant

Select one of the following:

  • i. Payment of twelve months premium

  • Random

Explanation

Question 155 of 165

1

6. A Commercial Package policy must include at least how many coverage parts?

Select one of the following:

  • i. Two

  • random

Explanation

Question 156 of 165

1

7. The personal liability sections of homeowners policy covers when of the following?

Select one of the following:

  • i. Bodily injury covered by the personal activities of an insured

  • random

Explanation

Question 157 of 165

1

16. If the insure is unilateral increase premiums of decreasing benefits at the renewal of – commercial policy , the named insured must be notified (blank) days after the renewal

Select one of the following:

  • i. 45 (days)

  • random

Explanation

Question 158 of 165

1

18. The personal liability section of a homeowners policy covers which of the following options

Select one of the following:

  • i. Bodily injury caused by the personal activities or an insured

  • random

Explanation

Question 159 of 165

1

19. All of the following perils are covered under a building and business personal property coverage form with a cause of loss basic form attached except

Select one of the following:

  • i. Earth movement

  • random

Explanation

Question 160 of 165

1

20. A building adjacent to an insured business a surety damaged by fire, because of the native of the damage to the adjoining dropped, the insured is denied access to the business by the dire department. If the insured property is covered under which if a Business income coverage form, the insurer will cover the full of earrings for a maximum of

Select one of the following:

  • i. Three weeks

  • random

Explanation

Question 161 of 165

1

21. Which of the following coverage may be added by endorsement to a boiler an machinery policy?

Select one of the following:

  • i. Extra expense

  • random

Explanation

Question 162 of 165

1

22. When an insurer plan to nonrenewal a commercial property insurance policy, it must be given the policyholder a written floater of its intent to non renewal as least ow may days in advanced?

Select one of the following:

  • i. 45 Days

  • random

Explanation

Question 163 of 165

1

23. Within how many days must a property insurer pay an a claim after the settlement is reached

Select one of the following:

  • i. 20 days

  • random

Explanation

Question 164 of 165

1

24. Can an insurer cancel a property policy for nonpayment of premium?

Select one of the following:

  • i. Which 10 days written notice and reason of cancellation given to the insured

  • random

Explanation

Question 165 of 165

1

36. The non renewal of an auto policy does not become effective until, how many days after the insured receives notice from the insurance companies?

Select one of the following:

  • 37. 45 (days)

  • random

Explanation