Fire Exam 3 Home / Fire Exam 3 Welcome to your Fire Exam 2 1. What course of action does a party to a contract have if the other party is found to be in breach of that contract? Please select your answer Damages for breach, reasonable attorney fees and costs Nothing, unless the injured party can prove the damages are substantial Reasonable attorney fees and costs only Damages caused by the breach only 2. A representation in an insurance contract qualifies as which of the following? Please select your answer An amendment An Implied warranty An express warranty A policy provision 3. What does it mean if an agent's license is inactive? Please select your answer The agent can still transact insurance business in CA, but not in any other state until it is reactivated The agent can transact insurance business if it is done with another agents approval The agent cannot transact any insurance business for which a valid, active license is required 4. The ordinance and law exclusion/limitation found in property policies such as the commercial property coverage, and in the homeowner's policy have the following effect: Please select your answer It warrants that an insured has not knowingly violated an ordinance or law It excludes that part of the loss resulting from the enforcement of a building ordinance or law The insured may not remove or modify the effect of the exclusion It reduces the coverage on any loss if the loss was caused by the insured violating the ordinance or law 5. Extra expense insurance covers: Please select your answer The extra expense that a business incurs to continue a business while damage to the premises are being restored Increased expense of repairing property that has appreciated The loss of profit a business incurs when it is shut down after a loss by a covered peril Payroll and other overhead incurred when a business is shut down after a loss 6. A plate glass/glass coverage form is needed by some insureds. Which of the following statements about the coverage for the peril of glass breakage in commercial property for a "building and personal property" basic, broad and special causes of loss forms is true? Please select your answer There is no glass breakage coverage in the broad or special forms No policy limits apply to glass breakage coverage in the special form, all named perils There is limited glass breakage coverage in both of the broad and special forms There is limited glass breakage coverage in the basic form 7. In the state of CA, no rate will remain in effect if it is considered to be any of the following, except: Please select your answer Unfairly discriminatory Excessive Inadequate Impartial 8. The amount paid for damage to property which is equal to the price for which it could have been sold is: Please select your answer Market value Actual cash value Stated amount Replacement amount 9. The limited Mexico endorsement applies to trips to Mexico with a duration of: Please select your answer 7 days or less 10 days or less 2 days or less 14 days or less 10. Which of the following types of coverage would pay for losses which occurred during the policy period and are found for up to one year after policy termination? Please select your answer Discovery Claims made Loss sustained Occurrence 11. Which coverage is needed to protect physicians, surgeons, and dentists for their professional activities? Please select your answer Errors and omissions coverage Employer's liability Commercial general liability Malpractice coverage 12. What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer, and then issues a policy from that application? Please select your answer Forward to the Commissioner a notice of appointment within 14 days of receipt of application The agent must become an employee of the company within 30 days of receiving the application Name the agent to the list of the company's approved agents Send the agent an appointment approval notice within 30 days of policy issuance 13. X is in an accident with Y, X suffers $5,000 of damage but it is determined that Y is 60% responsible for the accident. How much would X receive under contributory negligence rules? Please select your answer $2,000 $0 $3,000 $5,000 14. If an insured borrows a neighbor's vehicle to run a personal errand, how do the policies respond in the event of an auto accident? Please select your answer The driver's policy is primary and the neighbor's policy is excess Only the neighbor's policy provides coverage; there is no coverage by the driver's policy Both policies respond on a pro-rata basis The neighbor's policy is primary and the driver's policy is excess 15. The equipment dealer's coverage form covers all of the following types of property, except: Please select your answer Motor vehicles designed for highway use Dealer's used stock Customer's equipment in for service Dealer's new stock 16. The insurer decides not to renew an Insured’s Personal Auto Policy, PAP, How much notice must the insurer provide to the insured? Please select your answer 10 days 30 days 20 days 5 days 17. A reporting form is used for property insurance Please select your answer To report losses and adjust insurance in force to conform When the insured's premises are subject to periodic safety inspections To maintain the correct limits of coverage without over or under insuring when the value or volume of the property varies during the policy term To establish a guaranteed amount of insurance based upon a report of values submitted before the beginning of the policy term 18. All of the following contribute to the rising cost of Worker's Compensation Insurance, except: Please select your answer Fraudulent claims Under-reported payroll by employers Employers who fail to secure the payment of workers compensation as required by law The growing population 19. Which type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to an individual or family from causes such as injury, disability, death, sickness, or unemployment? Please select your answer Personnel loss exposure Personal loss exposure Personal property loss exposure Liability loss exposure 20. All of the following would be considered benefits of insurance, except: Please select your answer Retention of the loss by the insured They can be a source of investment funds Redemption of the financial uncertainty of the insured Payment for the cost of covered losses 21. Which of the following is also known as a human loss exposure? Please select your answer Indirect loss exposure Personnel loss exposure Personal loss exposure Liability loss exposure 22. If a tenant is insured under a building personal property coverage form, when is the property considered vacant? Please select your answer When the structure is being renovated as the result of a fire When there is insufficient business personal property present to conduct customary operations When the insured's operation is halted due to a strike When less than 31% of the total building space is rented to others or in use by the insured 23. A commercial property policy can provide coverage for all of the following, except: Please select your answer Direct losses Indirect losses Tangible losses Intangible losses 24. Which of the following types of coverage would be needed to cover a contractor's bulldozers which are used in the contractor's business but are not held for sale? Please select your answer Contractor's equipment floater Older truck cargo floater Annual transit policy Installment sales floater 25. It is a violation of the CA Insurance Code to act as a producer for a non-admitted carrier unless: Please select your answer The producer is an insurance solicitor The producer is a surplus lines broker It is always a violation, no matter what type of producer The producer is dually licensed in at least two states 26. In California, excess and surplus lines coverage needs to be placed through: Please select your answer A surplus lines broker An admitted insurer Lloyds of London An excess and surplus lines solicitor 27. Under a scheduled personal property endorsement, loss to stamps are excluded when they are: Please select your answer Located in Canada Being shipped by registered mail Being shipped with a freight company While the insured is temporarily in Japan 28. Which of the following is most likely to be eligible for the CA Fair Plan? Please select your answer An insured who has had a drivers license for less than two years. A poorly maintained dwelling with faulty wiring An insured with a very bad driving record A well-maintained dwelling located in a hazardous brush area 29. What items of personal property are included in Coverage A under a HO-3 policy? Please select your answer Decorative fountains Lawnmower used to maintain the exterior premises Paint on the premises to be applied to the interior Detached fences 30. Mitchell's (unendorsed) personal auto policy liability coverage would pay for: Please select your answer The cost of repairing the neighbor's fence that Mitchell damaged due to the negligent operation of his car Mitchell's broken windshield caused by a rock thrown by the tire of a passing car Mitchell's rental car expense, when his car is unusable due to a collision that was not his fault Damage or injury caused intentionally by Mitchell 31. All Workers Compensation policies provide Please select your answer Major medical coverage with 20% co-payment; co-payment has an annual stop-loss of $1,500 Compensation for worker related injuries without regard to fault Adequate retirement benefits 24-hour on and off the job coverage for workers 32. All of the following are principal rating factors under Proposition 103 for personal auto policies, except: Please select your answer Number of listed drivers Years of driving experience Driver's safety record Annual miles driven 33. Under a builders risk form, how much insurance is required to pay any loss without a penalty for underinsurance? Please select your answer 80% of the value at the time of the loss 100% of the completed value 100% of the value at the time of the loss 80% of the completed value 34. Which of the following persons is not an insured under Section I of a homeowner's policy? Please select your answer The named insured's (resident) 25 year old nephew The named insured's (resident) spouse The named insured's (non-resident) spouse The named insured 35. An umbrella policy Please select your answer Provides broad excess liability coverage over one or more primary policies Provides coverage for outdoor fairs and exhibitions in case of bad weather Provides excess physical damage coverage Provides broad primary coverage for most personal or commercial loss exposures 36. All of the following expenses are covered in addition to the limits of liability under Coverage A of a personal auto policy, except: Please select your answer Loss of earnings to attend trials at the company's request Pre-judgment interest Premium for appeal bonds Cost of bail bonds related to a covered accident 37. Under a commercial property coverage form, all of the following properties are included in the definition of "building," except: Please select your answer Permanently installed fixtures Outdoor fixtures Patio Personal property used to maintain the premises 38. Carmen is driving her own car on behalf of her employer. Carmen's negligent operation of her car injures a member of the public. The employer may be held liable because of what is called: Please select your answer Vicarious liability Gross negligence Absolute liability Contributory negligence 39. Which of the following perils is insured against in the Special form but not in the Basic form? Please select your answer Collapse Fire Internal explosion Lightning 40. Which of the following types of policies pays for bodily injury or property damage which occurs, or is discovered during the policy period? Please select your answer Pollution liability policy Occurrence general liability policy Auto liability policy Claims made commercial liability policy 41. If an armored car carrying an insured's bank deposit is robbed, what insurance would the insured need to be covered? Please select your answer Employee theft Funds transfer fraud Outside the premises-theft of money and securities Money orders and counterfeit money 42. Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car on a regular basis? Please select your answer The broadest coverage of any of the autos listed in the declarations The financial responsibility coverage limitations The coverage of the vehicle primarily operated by the named insured The policy excludes this usage 43. A possibility of financial loss resulting from the ownership of property is known as: Please select your answer Insurable interest Valuation Indemnity Legal liability 44. If the vacancy permit endorsement is added to a building and personal property coverage form, the vacancy conditions under the basic policy is: Please select your answer Waived during the permit period Waived only for designated perils during the permit period Waived during the policy period Waived only for designated perils during the policy period 45. You are to meet with a small furniture manufacturer and make property and liability insurance recommendations. You have insured many risks of this type in the past and have a good idea of what their needs may be. There are several popular ways of determining business loss exposures. Which of the following ways are the least professional and the least likely to correctly identify the loss exposures? You: Please select your answer Meet with key people and complete a loss exposure questionnaire developed for their general type of risk Get a copy of all current policies and determine what coverage they have been carrying and how much they have been paying Take a walk through the business to observe operations and work flow, and ask their key people about the company and its operations. 46. Where would an insured who is in the business of importing exotic animals from Africa most likely go to obtain insurance coverage? Please select your answer Foreign insurer Alien insurer State Competitive Fund Excess and surplus lines insurer 47. A commercial building and a personal property coverage form covers three kinds of property, one which has "your business personal property." "Your" refers to: Please select your answer Only the named insured(s) shown in the declarations Only the first named insured shown in the declarations Any party who has an insurable interest in the property located at the insured address The named insured and others whose property is in the care, custody or control of the insured 48. Which of the following losses is not covered by either the personal auto policy collision or other than collision coverage? Please select your answer Sean's car is stolen when he leaves the keys in the ignition, and the doors and windows are unlocked while he runs into the grocery store. Sean's car is washed away during a flood Sean's car is severely damaged by a storm when a sign is blown off the roof of a building and hits his car Sean leaves his personal (non-business) laptop computer in his car overnight. His car is parked in the driveway in front of his house. The computer is stolen from his car. 49. A is in an accident with B. A suffers $10,000 of damage but it is determined that A is 25% responsible for the accident. How much would A receive under comparative negligence rules? Please select your answer $7,500 $0 $2,500 $10,000 50. Ordinance or law coverage provides protection for which of the following losses? Please select your answer The residual property value of a home that must be demolished to comply with building code requirements. The increased expense incurred for the insurer to repair or rebuild property according to building code specifications. The cost of demolition and debris removal of undamaged property. All of the above are covered. 51. What is the primary difference between a HO-2 and a HO-4 policy? Please select your answer Property insured under Coverage A Perils insured against under Coverage C Inside limits of liability for specified personal property Description of an insured premises 52. Jack, a condo owner, wants a fire and allied lines coverage for personal property, liability coverage for himself and family members, and protection for assessments or damage for the building structure and other common areas. Which homeowners form would you recommend? Please select your answer HO-4 HO-2 HO-3 HO-6 53. Which property coverage form is best suited for a structure under construction? Please select your answer Builders risk coverage form Standard property policy Building and personal property coverage form Reporting form 54. What perils are insured against under the "additional coverages - property removed" of a homeowners policy? Please select your answer Broad form perils All perils Perils of transportation Basic form perils 55. Equipment Breakdown insurance covers all of the following, EXCEPT: Please select your answer Equipment powered by internal pressure Mechanical equipment used to produce energy Tools subject to regular replacement Communications equipment 56. Hull coverage in an ocean marine policy covers which of the following? Please select your answer Cargo being transported on the ship The freight charged for the transportation of the cargo The ship owner’s liability The vessel itself, including engines and fuel 57. The CA Insurance Code: Please select your answer Requires agents to keep records of any compensation they may have received for their services involved with premium financing Prohibits agents from receiving compensation for premium financing Sets the percentage of interest that may be charged in a premium finance contract Requires agents to provide premium financing services. 58. The Commercial General Liability (CGL) contract contains an exclusion for liquor liability. The purpose of this exclusion is to exclude coverage for law liability losses arising from: Please select your answer An insured serving alcohol at such functions as company picnics and holiday office parties An insured's special loss exposures resulting from the insured being involved in the alcoholic beverage business The illegal manufacture, sale, or possession of alcoholic beverages The serving of alcoholic beverages by any insured at any business function 59. Which of the following is commonly found in liability policies, thus creating the need for inland marine coverage? Please select your answer A debris removal coverage A valuation clause A care, custody, and control exclusion A coinsurance clause 60. The measure of loss potential which is used for pricing of insurance is known as: Please select your answer An exposure unit A claim A covered loss Loss transfer 61. Coverage on an annual transit policy is usually provided on which of the following basis? Please select your answer Open peril Extended coverage Theft only Named peril 62. A newly acquired motorcycle is not automatically covered under a personal auto policy (PAP) because: Please select your answer Motorcycles cannot be insured under the PAP Motorcycles are too dangerous to insure Motorcycles are insured under a homeowners policy The unendorsed policy does not cover two-wheeled vehicles 63. Which of the following is not a federal program? Please select your answer Workers’ Compensation Federal Deposit Insurance Corporation Federal Crop Insurance Corporation National Flood Insurance Program 64. Under the "examination of your books and records" condition of a commercial policy, when may an insurer examine an insured's books and records? Please select your answer At any time during the policy period and up to three years afterwards Only when authorized by the insured At any time Only upon receiving a court order allowing the inspection 65. Which type of loss is a business exposed to death, retirement, resignation, or disability of a key employee? Please select your answer Human loss exposure Personnel loss exposure Personal loss exposure Workers compensation exposure 66. The applicant wants a homeowners policy that has open peril coverage on his home (building structure). Assuming he is eligible for the policy, which policy would you recommend? Please select your answer HO-2 HO-3 HO-6 HO-8 67. What is the limit for sound reproducing equipment under the coverage endorsement for excess sound reproducing equipment, audio, visual and data electronics, tapes, records, disks, and other media endorsement in a PAP? Please select your answer $200 $500 The amount scheduled on the endorsement $1,000 68. The state law that regulates insurer practices regarding underwriting, sales, rate-making, and claims handling are called: Please select your answer Ethical standards surveillance Standard regulation Insurer policing Market conduct regulation 69. Under a building and personal property coverage form, if the insured building has been vacant for more than 60 consecutive days. What effect will this have on a vandalism loss? Please select your answer The amount of the loss will be reduced by 15% The amount of the loss will be reduced by 60% There is no effect The loss is excluded 70. Which of the following is a true statement about CAARP? Please select your answer Only agents with two or more years of experience are eligible to place business with CAARP The minimum liability for CAARP policies are $15,000/$30,000/$5,000 CAARP offers dwelling coverage, but not homeowners Commercial risks are not eligible for CAARP 71. Which of the following is a true statement about CLCA? Please select your answer The minimum liability for CLCA policies are $10,000/$20,000/$3,000 Only agents with two or more years of experience are eligible to place business with CLCA CLCA offers dwelling coverage, but not homeowners Commercial risks are not eligible for CLCA 72. Which exclusion in the causes of loss — special form - excludes coverage for mudflow? Please select your answer Ordinance or law Water (flood) Utility service Governmental action 73. What additional coverage is provided in a DP3 that is not included in a DP1? Please select your answer Other structures World-wide coverage Collapse Fire department service charge 74. The PAP collision deductible is $1,000 and the other than collision deductible is $500. How much would the insurer pay for an accident involving the overturn of one vehicle resulting in $2,000 of damage? Please select your answer $1,000 $1,500 $0 $2,000 75. The PAP collision deductible is $1,000 and the other than collision deductible is $500. How much would the insurer pay for an accident involving a tree falling on your vehicle resulting in $2,000 of damage? Please select your answer $1,500 $1,000 $0 $2,000 76. Why would an insured need an inland marine policy if she is shipping stock on her own trucks? Please select your answer Stock is only covered if it is being shipped through an insured delivery service Stock is only covered if it is in the building or within 100 ft. of the building premises An inland marine policy is not needed; insured stock is covered anywhere within the coverage territory Stock is never covered under a business personal property form 77. A dwelling fire policy's coverage is to a homeowner's policy, as a commercial property policy coverage is to a: Please select your answer Business income — extra expense policy Commercial general liability policy Business auto policy Business owner's policy 78. The amount to replace an insured's damaged property, less depreciation, is known as the: Please select your answer Actual cash value Replacement value Stated amount Agreed amount 79. Which of the following types of loss would result in a claim for monetary damages due to injury to another or damage to another's property? Please select your answer Personal property loss Physical loss Real property loss Liability loss 80. What is the difference between the per accident limit in a split limits policy and the single limits? Please select your answer The per accident limit applies to all claims, and the single limit applies only to bodily injuries There is no difference The per accident limit applies only to bodily injuries, and the single limit applies to all claims The per accident limit applies to property damage, and the single limit applies to all claims 81. Which peril(s) may be included in the vacancy permit endorsement? Please select your answer All of the above Building glass breakage Sprinkler leakage Vandalism 82. If an insured rents an auto while on vacation, what coverage, if any, will be available for physical damage coverage under a personal auto policy? Please select your answer The coverage of the last auto shown in the declarations No coverage available The broadest coverage on any auto shown in the declarations The least coverage on any auto shown on the declarations 83. If an insured signs a claim form for a claim which is fraudulent, the insured may be guilty of Please select your answer Perjury Nothing, if the claim is never paid Misrepresentation Obstruction of justice 84. When is a fire and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a personal auto policy? Please select your answer At policy delivery At renewal At proposal At application 85. In reference to the coverages provided in the basic form, the boat owner's policy is similar to what other policy? Please select your answer The commercial ocean marine policy The homeowner's policy The personal auto policy A commercial inland marine policy 86. If an insured with a personal auto policy has an accident in a state with personal injury protection (PIP), how does the policy respond? Please select your answer Coverage automatically is broadened to provide PIP The insured may apply for the additional PIP coverage within 10 days of the accident PIP coverage is provided only for medical providers in that state Coverage remains as written 87. What is the minimum discount percentage for the "good driver" discount? Please select your answer 5% 20% 10% 25% 88. What is the primary difference between umbrella and excess liability policies? Please select your answer The umbrella affords defense costs; the excess liability does not The umbrella covers intentional acts; the excess liability does not The umbrella covers most liability exposures; the excess liability may cover only one line The umbrella has fewer supplementary features and is less expensive than the excess policy 89. What additional coverages are available under the scheduled personal property endorsement that is not available under an unendorsed homeowner's policy Please select your answer Theft Damage to a camera in an auto accident Vandalism to artwork Breakage of glassware caused by an earthquake 90. The intentional relinquishment of a known right is: Please select your answer Estoppel Concealment Warranty Waiver 91. The commercial property conditions include a condition called "liberalization." The effect of this condition is: Please select your answer To automatically apply broader coverage to the commercial property coverage part if a policy form revision would broaden coverage without an additional premium To protect the insured from policy cancellation once the policy has been in effect for 90 days To require the insurer to liberally construe the other commercial property conditions in case of disagreement between the insurer and the insured Allow the insurer to set property values based upon current data as long as it does not reduce the loss payment 92. What does a release bill of lading do for a common carrier Please select your answer Limits the carriers liability on the shipment Provides insurance coverage to the customer by the shipper Releases the customer from all responsibility Releases the carrier from all responsibility 93. What is one reason a person may purchase a dwelling form policy instead of a homeowner's policy? Please select your answer The dwelling form provides broader coverages The dwelling is occupied by two families The dwelling form provides greater flexibility in selecting coverage The owner does not reside in the dwelling 94. An open-peril policy protects against the loss from: Please select your answer Any peril, other than those specifically excluded Perils found outside in the open Mainly, perils of the sea Only the perils openly named in the policy 95. Which of the following types of insurance was designed to cover domestic shipments, means of transportation, personal property floater risks, and commercial property floater risks? Please select your answer Ocean marine Inland marine Business personal property Auto liability 96. What is the primary difference between an HO-3 and an HO-5? Please select your answer Coverage D limits Coverage A property Coverage A and B perils Coverage C perils 97. Which of the following statements is not true? A fire & casualty managing agent: Please select your answer Holds a license as a fire and casualty agent Has the power to appoint, supervise and terminate the contracts of agents Does not have the authority to collect premiums from producing broker-agents Has the power to accept or decline risks 98. In the business of insurance, concealment is defined by all of the following statements, except: Please select your answer Concealment is grounds for declination by the insurer Concealment does not occur if no inquiry is made Concealment can be unintentional Concealment can be intentional 99. All of the following are characteristics of an "ideally insurable loss exposure," except Please select your answer Losses that are accidental Losses that are catastrophic Losses that are definite and measurable Large number of exposure units 100. The liability coverage in a yacht policy is referred to as: Please select your answer Protection and indemnity Hull coverage Personal liability protection Inchmaree Clause 101. All of the following types of businesses would need a special inland marine coverage for their stock, except: Please select your answer Grocers Jewelers Stamp and coin collectors Furriers 102. What else must an applicant for a fire and casualty license, life agent license, or personal lines agent license complete in addition to pre-licensing classroom study? Please select your answer A diversity awareness course provided by the State of CA A 12-hour course on ethics and the CA code A contract law course at any approved college location A sales training course provided by the insurance department 103. The personal auto policy territory limits include: Please select your answer Montreal, Canada Tokyo, Japan London, England Mexico City, Mexico 104. The amount to replace property with a like property of the same quality and construction is the: Please select your answer Stated value Market value Actual cash value Replacement cost 105. The collision coverage of a personal auto policy covers: Please select your answer Collision coverage does not cover any of these losses A vandal making a deep scratch on the car with a screwdriver Damage caused by the insured by driving into a tree that had fallen during a recent storm A desert sand storm pitting the car windshield 106. Which of the following perils is included in the broad form, but not in the basic form. Please select your answer Falling objects Volcanic action Sink hole collapse Sprinkler leakage 107. Which type of a crime policy will pay for a loss, which is found during the policy period, even if the loss occurred prior to the effective date of the policy? Please select your answer Loss sustained Claims made Occurrence Discovery 108. A personal auto policy (PAP) insured's car was a total loss when the car was stolen and wrecked. The insured has the following coverages: liability, medical payments and "other than collision." Her PAP: Please select your answer Liability coverage will pay for the loss Medical payments will pay for the loss Will not pay for this loss — no coverage Other than collision" will pay for the loss 109. The watercraft endorsement on a homeowner's policy extends coverage for: Please select your answer Physical damage and liability coverage for watercraft listed on the schedule Liability coverage for all owned watercraft Liability coverage for watercraft listed on the schedule Physical damage and liability coverage for all owned watercraft 110. Mary has an HO-3 policy with replacement cost coverage on the insured buildings. The cost of replacement on the dwelling is $100,000, and the other structure (a garage) is $20,000. To be certain of replacement cost coverage on a partial loss to either structure, she must carry a minimum of: Please select your answer $80,000 on the dwelling; $8,000 on the garage $80,000 on the dwelling; $16,000 on the garage $100,000 on the dwelling; $20,000 on the garage $100,000 on the dwelling; $10,000 on the garage 111. Mary has an HO-3 policy with replacement cost coverage on the insured buildings. The cost of replacement on the dwelling is $100,000, and the other structure (a garage) is $20,000. To be certain of replacement cost coverage on a partial loss to either structure, she must carry a minimum of: Please select your answer $80,000 on the dwelling; $8,000 on the garage $80,000 on the dwelling; $16,000 on the garage $100,000 on the dwelling; $20,000 on the garage $100,000 on the dwelling; $10,000 on the garage 1 out of 111 Name Email Business Phone Time's upTime is Up!
