Jeremy owns a home that is recently damaged due to a hurricane. The repair estimate
is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the
damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage
will pay for the hotel room bill?
A. Fair Rental Value
B. Value Obligation
C. Loss of Use
D. Insurers Duties -ANSWER-C. Loss of Use
Rationale:The insurer will pay any necessary and reasonable expenses associated with
a daily living routine.
Frank owned a home that was destroyed by a hurricane. Both ABC and XYZ Banks
were listed as additional interests on his homeowner policy. The insurance company will
make a payment to:
A. The first mortgagee, ABC
B. The Insured
C. Jointly to ABC and XYZ
D. All listed interests -ANSWER-D. All listed interests
Rationale:Remember that the insurer is not responsible to know the degrees of interest.
In the event of a loss, one payment is made by the insurer and it is up to the additional
interests on working out their share.
Insurance applies separately to each insured as if other insureds did not exist. This is
defined as:
A. Severability
B. Conditional
C. Warranty
D. None of the above -ANSWER-A. Severability
Property insurance policies usually contain a(n) __________ clause, stating the insured
cannot dump damaged property on the insurer and demand its full value:
A. Pro Rata
B. Abandonment
C. Liberalization
D. All of the above -ANSWER-B. Abandonment
A(n) __________ is one wherein economic loss would be suffered from an adverse
happening to the subject:
A. Conditional Contract
B. Personal Contract
C. Economic Contract
,D. Insurable Interest -ANSWER-D. Insurable Interest
States that if the insurer adopts a revision which would broaden coverage without
additional premium within some period of time prior to the policy period or during the
policy period, the insured receives the benefit of such broadened coverage.
A. Cancellation Clause
B. Policy Period
C. Pro Rata
D. Liberalization -ANSWER-D. Liberalization
Rationale:The time frame is typically 60 days.
The __________ states that when there is an unbroken connection between an
occurrence and damage that grows out of the occurrence, then the resultant damage is
all a part of the occurrence.
A. Doctrine of Proximate Cause
B. Doctrine of Perils & Hazards
C. Insurance Policy Handbook
D. Doctrine of Property Insurance -ANSWER-A. Doctrine of Proximate Cause
Rationale:For example, if a property insurance policy covers the peril of fire but further
damage is caused by smoke, water used to extinguish, and the process of moving
property away - fire is considered to be the *proximate cause* of all of the damage.
The Loss Settlement Valuation that subtracts an allowance for depreciation is defined
as?
A. Actual Cash Value
B. Replacement Cost
C. "Old for New"
D. None of the Above -ANSWER-A. Actual Cash Value
A policy condition, either based on information in the insured's application or inserted by
the insurer, is defined as:
A. Warranty
B. Misrepresentation
C. Concealment
D. None of the Above -ANSWER-A. Warranty
The following are basic characteristics of a property or liability insurance contract,
except:
A. Personal Contract
B. Conditional Contract
C. Loss of Settlement Contract
D. Contract of Adhesion -ANSWER-C. Loss of Settlement Contract
,The Insurer's responsibility to pay for a property loss may be conditioned on the insured
having used reasonable means to avoid the loss, to protect the property against further
loss, and to give the insurer proof of the loss is defined as?
A. Conditional Contract
B. Adhesion Contract
C. Indemnity Contract
D. All of the Above -ANSWER-A. Conditional Contract
"may be conditioned"
Which of the following is not one of the "Thresholds" in the "No-Fault" law?
A. Death of the Insured
B. Temporary Injury of the Insured
C. A permanent loss of a bodily function
D. Permanent scarring on the face of the insured -ANSWER-B. Temporary Injury of the
Insured
Rationale:Also included: permanent injury other than scarring and disfigurement
Under Mechanical Breakdown Coverage, new cars are eligible for service up to:
A. 36 Months/36,000 Miles
B. 24 Months/36,000 Miles
C. 12,000 Months/12,000 Miles
D. 12 Months/36,000 Miles -ANSWER-A. 36 Months/36,000 Miles
Used vehicles: 12 Months/12,000 Miles
If financial responsibility doesn't exist at the time of an accident, which of the following
things must happen to avoid penalties?
A. The legally valid claims of others must be satisfied (up to 10/20/10)
B. The owner and operator must provide certification of future responsibility for future
accidents
C. Both A & B
D. None of the Above -ANSWER-C. Both A & B
As to required proof for future accidents by purchase of auto liability insurance, the
insurer must make a filing (Form SR-22) certifying that coverage is in effect, and this
certification must remain on file for __________ years:
A. 1
B. 3
C. 4
D. 2 -ANSWER-B. 3
The Business Automobile Policy includes all of the following coverage forms except:
A. The Garage Coverage Form
B. The Trailer Interchange Coverage Form
C. The Truckers Coverage Form
, D. The Business Auto Coverage Form -ANSWER-B. The Trailer Interchange Coverage
Form
Personal Injury Protection, or PIP, has a __________ per person, per accident limit.
A. 10,000
B. 20,000
C. 1,000
D. Depends on the damaged property -ANSWER-A. 10,000
Used to insure businesses engaged in selling, servicing, repairing, parking or storing
automobiles:
A. Servicing Coverage Form
B. Garage Coverage Form
C. Truckers Coverage Form
D. None of the Above -ANSWER-B. Garage Coverage Form
The following examples are referred to as __________ liability limits: 25/50/25 or
10/20/10.
A. Split
B. Single
C. Straight
D. None of the Above -ANSWER-A. Split
10/20/10 =
10,000 per person injured
20,000 all injuries combined
10,000 property damage
Example of straight liability limit = $30,000
Jeremy has a not at fault accident. If he has PIP with a $1,000 deductible, how much
can he expect his PIP coverage to pay toward his medical bills that total $3,000?
A. $1,600
B. $1,000
C. $2,400
D. $3,000 -ANSWER-A. $1,600
3000 (bills) - 1000 (deductible) =
2000 x .80 (eighty percent)
Frank has a not-at-fault accident, he has basic PIP, no deductible and Med pay of
$5,000. How much will his Med Pay contribute to medical bills of $15,000?
A. $15,000
B. $5,000
C. $3,000
D. $0, Frank is not-at-fault -ANSWER-B. $5,000
Medical Payment limits apply per person; Frank will receive full amount towards medical
bills.
is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the
damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage
will pay for the hotel room bill?
A. Fair Rental Value
B. Value Obligation
C. Loss of Use
D. Insurers Duties -ANSWER-C. Loss of Use
Rationale:The insurer will pay any necessary and reasonable expenses associated with
a daily living routine.
Frank owned a home that was destroyed by a hurricane. Both ABC and XYZ Banks
were listed as additional interests on his homeowner policy. The insurance company will
make a payment to:
A. The first mortgagee, ABC
B. The Insured
C. Jointly to ABC and XYZ
D. All listed interests -ANSWER-D. All listed interests
Rationale:Remember that the insurer is not responsible to know the degrees of interest.
In the event of a loss, one payment is made by the insurer and it is up to the additional
interests on working out their share.
Insurance applies separately to each insured as if other insureds did not exist. This is
defined as:
A. Severability
B. Conditional
C. Warranty
D. None of the above -ANSWER-A. Severability
Property insurance policies usually contain a(n) __________ clause, stating the insured
cannot dump damaged property on the insurer and demand its full value:
A. Pro Rata
B. Abandonment
C. Liberalization
D. All of the above -ANSWER-B. Abandonment
A(n) __________ is one wherein economic loss would be suffered from an adverse
happening to the subject:
A. Conditional Contract
B. Personal Contract
C. Economic Contract
,D. Insurable Interest -ANSWER-D. Insurable Interest
States that if the insurer adopts a revision which would broaden coverage without
additional premium within some period of time prior to the policy period or during the
policy period, the insured receives the benefit of such broadened coverage.
A. Cancellation Clause
B. Policy Period
C. Pro Rata
D. Liberalization -ANSWER-D. Liberalization
Rationale:The time frame is typically 60 days.
The __________ states that when there is an unbroken connection between an
occurrence and damage that grows out of the occurrence, then the resultant damage is
all a part of the occurrence.
A. Doctrine of Proximate Cause
B. Doctrine of Perils & Hazards
C. Insurance Policy Handbook
D. Doctrine of Property Insurance -ANSWER-A. Doctrine of Proximate Cause
Rationale:For example, if a property insurance policy covers the peril of fire but further
damage is caused by smoke, water used to extinguish, and the process of moving
property away - fire is considered to be the *proximate cause* of all of the damage.
The Loss Settlement Valuation that subtracts an allowance for depreciation is defined
as?
A. Actual Cash Value
B. Replacement Cost
C. "Old for New"
D. None of the Above -ANSWER-A. Actual Cash Value
A policy condition, either based on information in the insured's application or inserted by
the insurer, is defined as:
A. Warranty
B. Misrepresentation
C. Concealment
D. None of the Above -ANSWER-A. Warranty
The following are basic characteristics of a property or liability insurance contract,
except:
A. Personal Contract
B. Conditional Contract
C. Loss of Settlement Contract
D. Contract of Adhesion -ANSWER-C. Loss of Settlement Contract
,The Insurer's responsibility to pay for a property loss may be conditioned on the insured
having used reasonable means to avoid the loss, to protect the property against further
loss, and to give the insurer proof of the loss is defined as?
A. Conditional Contract
B. Adhesion Contract
C. Indemnity Contract
D. All of the Above -ANSWER-A. Conditional Contract
"may be conditioned"
Which of the following is not one of the "Thresholds" in the "No-Fault" law?
A. Death of the Insured
B. Temporary Injury of the Insured
C. A permanent loss of a bodily function
D. Permanent scarring on the face of the insured -ANSWER-B. Temporary Injury of the
Insured
Rationale:Also included: permanent injury other than scarring and disfigurement
Under Mechanical Breakdown Coverage, new cars are eligible for service up to:
A. 36 Months/36,000 Miles
B. 24 Months/36,000 Miles
C. 12,000 Months/12,000 Miles
D. 12 Months/36,000 Miles -ANSWER-A. 36 Months/36,000 Miles
Used vehicles: 12 Months/12,000 Miles
If financial responsibility doesn't exist at the time of an accident, which of the following
things must happen to avoid penalties?
A. The legally valid claims of others must be satisfied (up to 10/20/10)
B. The owner and operator must provide certification of future responsibility for future
accidents
C. Both A & B
D. None of the Above -ANSWER-C. Both A & B
As to required proof for future accidents by purchase of auto liability insurance, the
insurer must make a filing (Form SR-22) certifying that coverage is in effect, and this
certification must remain on file for __________ years:
A. 1
B. 3
C. 4
D. 2 -ANSWER-B. 3
The Business Automobile Policy includes all of the following coverage forms except:
A. The Garage Coverage Form
B. The Trailer Interchange Coverage Form
C. The Truckers Coverage Form
, D. The Business Auto Coverage Form -ANSWER-B. The Trailer Interchange Coverage
Form
Personal Injury Protection, or PIP, has a __________ per person, per accident limit.
A. 10,000
B. 20,000
C. 1,000
D. Depends on the damaged property -ANSWER-A. 10,000
Used to insure businesses engaged in selling, servicing, repairing, parking or storing
automobiles:
A. Servicing Coverage Form
B. Garage Coverage Form
C. Truckers Coverage Form
D. None of the Above -ANSWER-B. Garage Coverage Form
The following examples are referred to as __________ liability limits: 25/50/25 or
10/20/10.
A. Split
B. Single
C. Straight
D. None of the Above -ANSWER-A. Split
10/20/10 =
10,000 per person injured
20,000 all injuries combined
10,000 property damage
Example of straight liability limit = $30,000
Jeremy has a not at fault accident. If he has PIP with a $1,000 deductible, how much
can he expect his PIP coverage to pay toward his medical bills that total $3,000?
A. $1,600
B. $1,000
C. $2,400
D. $3,000 -ANSWER-A. $1,600
3000 (bills) - 1000 (deductible) =
2000 x .80 (eighty percent)
Frank has a not-at-fault accident, he has basic PIP, no deductible and Med pay of
$5,000. How much will his Med Pay contribute to medical bills of $15,000?
A. $15,000
B. $5,000
C. $3,000
D. $0, Frank is not-at-fault -ANSWER-B. $5,000
Medical Payment limits apply per person; Frank will receive full amount towards medical
bills.
