Fire Exam 4 Home / Fire Exam 4 Welcome to your Fire Exam 4 1. If the limits of liability on a structure are $300,000, and the structure is worth $500,000, how much would be owed on a fire loss of $120,000 if the policy has an 80% coinsurance requirement and there is a $1,000 deductible? Please select your answer $89,000 $90,000 $112,500 $111,500 2. If the limits on a structure are $75,000, and the structure is worth $125,000, how much would be owed on a fire loss of $50,000 if the policy has an 80% coinsurance and there is a $1,000 deductible? Please select your answer $48,000 $40,000 $37,500 $36,500 3. A device which is used to minimize small claims and which helps to keep insurance premiums down is: Please select your answer coinsurance a value policy a deductible arbitration 4. Coverage A under a dwelling policy covers all of the following except: Please select your answer A laundry room attached to the dwelling Building equipment and outdoor equipment A storage shed connected to the dwelling by a utility line Materials and supplies used for construction or repair of the dwelling 5. Vehicles which may be insured by a personal auto policy (PAP) are described in the eligibility rules. Each of the following is true about vehicles eligible for PAP coverage except: Please select your answer Vans used in a delivery business are eligible Vehicles with fewer than four wheels are not eligible Vehicles owned by an individual or married couple may be insured Private passenger autos used for business may be insured 6. Dave has an automobile insured by a personal auto policy. He trades in his car and purchases a new private passenger auto as a replacement vehicle. If he does not notify the insurance company, the liability coverage for his replacement vehicle will apply automatically: Please select your answer for 10 days until the end of the policy period for 30 days for 60 days 7. Under the dwelling property forms, personal property moved to a new principle residence will be automatically covered at the new location (subject to policy expiration) for a period of: Please select your answer 30 days 60 days 20 days 10 days 8. Which dwelling policy forms provides coverage for loss of rental value? Please select your answer Broad and Special forms only Basic and Broad forms only Basic, Broad and Special forms Special form only 9. Which of the following situations would be covered by liability insurance under a personal auto policy? Please select your answer An insured causes injuries while operating a taxi cab An insured damages another vehicle while driving a motorcycle An auto mechanic has an accident while road testing a customer’s vehicle An insured who rents a private garage backs in and damages the garage 10. An insurance company has made an underwriting profit when: Please select your answer its expense ratio is less than its loss ratio its loss ratio is less than its expense ratio its combined ratio is greater than 100% its combined ratio is less than 100% 11. National flood insurance is available for: Please select your answer private residences only Residential and non-residential buildings and contents private residences and residential contents only residential and non-residential buildings only 12. Some property insurance policies provide for payment of the full policy limit in the event of a total loss by a covered peril, regardless of the actual value of the property. These policies are known as: Please select your answer Indemnity policies ACV policies Valued policies Market value policies 13. Each of the following is true about homeowners personal property coverage except: Please select your answer Personal property of a guest may be covered Special sublimits apply to some type of personal property The basic form does not include personal property coverage The full limit applies to personal property any where in the world 14. Furniture which is destroyed when a building burns down is an example of what kind of loss? Please select your answer direct indirect consequential residual 15. Under the building and personal property coverage form, what obligation, if any, does the insurer have to a mortgagee in the event the company wishes to cancel the policy? Please select your answer The company has no obligation The company must give the mortgagee 10 days written notice of intent to cancel in all cases The company must give the mortgagee 10 days written notice if cancellation is for nonpayment of premium, and 30 days notice of cancellation for any other reason The company must notify the insured, who is then responsible for advising the mortgagee 16. An insured has coverage under a reporting form and actual values have consistently been $60,000 during each reporting period. The insured has consistently underreported values at $30,000. A $10,000 loss occurs. The company will pay: Please select your answer One-half of the loss The full loss One-third of the loss One-sixth of the loss 17. An insured has coverage under a reporting form and actual values have consistently been $60,000 during each reporting period. The insured has consistently underreported values at $30,000. A $40,000 loss occurs. The company will pay: Please select your answer $20,000 80% of the loss The full loss $30,000 18. Each of the following business occupancies would be permitted in a dwelling insured under a dwelling form except: Please select your answer A beauty shop run by the insured and her daughter A photographic studio A professional office providing services to clients A small shop carrying merchandise for sale 19. Interline endorsements apply or could apply: Please select your answer To more than one coverage part of a package policy Only to inland marine coverage To property and liability coverage only Only when a broad causes of loss form is attached to a policy 20. The business income coverage form applies to: Please select your answer Loss of income as the result of destruction of accounts receivable Loss of revenues while operations are suspended due to property damage Loss of cash receipts because of burglary or robbery Loss of money because of employee dishonesty 21. General liability insurance does not cover liability arising out of: Please select your answer Aircraft owned by the insured Contractual liability Host liquor liability Mobile equipment on construction sites 22. Anyone willfully engaging in an unfair method of competition may be liable for a fine of up to: Please select your answer $10,000 $1,000 $2,500 $5,000 23. The penalty for a person found guilty of submitting fraudulent claims for the payment of a loss is: Please select your answer Up to five years in jail and a fine of up to $25,000 Up to three years in jail and a fine of up to $20,000 Up to two years in jail and fine of up to $10,000 Up to five years in jail and a fine of up to $150,000 24. Which of the commercial property causes of loss forms provide theft coverage? Please select your answer The special form only The broad and special forms only None of the forms provide theft coverage The basic, broad and special forms 25. The term “time element coverage” is used when the amount of loss depends on: Please select your answer The time between the date of loss and expiration date The time it takes to repair, rebuild or restore damaged property The time between the effective date and date of loss The time of year when a seasonal business suffers a loss 26. When general liability “claims made” coverage is written, a “laser beam” endorsement may be used to: Please select your answer Add special conditions applicable to defense contractors Provide special coverages for certain high technology risks Exclude specific accidents, products, work or locations Eliminate coverage for nuclear hazards 27. The “Inchmaree clause” in ocean marine policies provides coverage for which of the following? Please select your answer Loss of shipping charges Physical damage to the ship Cargo damage due to negligence of the crew Liability due to collision loss 28. The “Inchmaree clause” in ocean marine policies provides coverage for which of the following? Please select your answer Loss of shipping charges Physical damage to the ship Cargo damage due to negligence of the crew Liability due to collision loss 29. All of the following are factors for rating physical damage coverage on a personal auto policy (PAP) except: Please select your answer Driving safety record Year of the vehicle Make of the vehicle Model of the vehicle 30. Which of the following describes a stock insurance company? Please select your answer Agents of the company receive shares of stock as compensation for selling policies Insureds receive shares of stock in proportion to premiums paid Owned by the insureds as policyholders The company is managed by a board of directors who are elected by shareholders who own a fixed amount of capital stock in the company 31. All the following are not examples of insurable risk situations, except: Please select your answer a landlord wants to purchase insurance on a tenant's automobile parked in a garage which the landlord owns an automobile owner wants to purchase insurance on the garage in which she regularly parks her vehicle a landlord wants to buy insurance on a tenant's belongings a tenant wishes to purchase insurance coverage on improvements which he made on a building owned by the landlord 32. How is insurance marketed through direct mail companies? Please select your answer Salaried Employees Solicitors Surplus Lines Brokers Independent agents 33. Which is a correct statement about insurance? Please select your answer it is a form of gambling it is a form of transferring risk it is a form of retaining risk it is a form of leveling the law of averages 34. Which of the following refers to the method whereby an insurance company must receive an official approval from the state Dept. of Insurance before it uses new rates? Please select your answer mandatory rates file and use prior approval use and file 35. Which of the following is based on the experience of the prospective insured? Please select your answer Merit rating Manual rating Judgment rating Retrospective rating 36. A commercial property cause of loss form does not cover any losses caused by: Please select your answer Smoke damage from industrial operations (agricultural smudging) Lightning Explosions Loss by removal from premises when insured perils endanger covered property 37. To determine the actual cash value of a commercial building for coinsurance purposes, use: Please select your answer The county assessor's office figures The price the client paid for the property, less the value of the land The actual cash cost of replacing the building Fair market value 38. Which of the following is based on the experience of the underwriter? Please select your answer Retrospective rating Merit rating Judgment rating Manual rating 39. Liability losses are which of the following? Please select your answer third party claims first party claims second party claims fourth party claims 40. A one word definition for subrogation would be? Please select your answer subordination substitution salutation substandard 41. Which of the following is an example of functional replacement cost? Please select your answer Replacing a lathe and plaster wall with sheetrock Installing new skylights after a loss Replacing a pinewood deck with a redwood deck Installing a fireplace after a loss when there wasn’t one before 42. Aggregate limit is defined as which of the following: Please select your answer minimum a policy will pay during a policy period maximum a policy will pay per claim minimum a policy will pay per claim maximum a policy will pay during a policy period 43. Which of the following is correct about supplementary payments? Please select your answer It doesn’t reduce your property limits for a loss It reduces what your property policy will pay during a loss It doesn’t reduce your liability limits for a loss It reduces what your liability policy will pay for a loss 44. The following factors are used for physical damage coverage except: Please select your answer Make of the vehicle Driving safety record Year of the vehicle Model of the vehicle 45. How many classes of insurance may be offered to the public? Please select your answer 5 3 20 30 46. Who makes an insurance contract? Please select your answer The insurer The Insurance Commissioner The Department of Insurance The insured 47. Who enters into an insurance contract? Please select your answer The insurer The Insurance Commissioner The Department of Insurance The insured 48. Which of the following sells insurance? Please select your answer both of the above insurance brokers insurance agents neither of the above 49. Which of the following may bind coverage on behalf of an insurer? Please select your answer insurance agents insurance brokers both of the above neither of the above 1 out of 49 Name Email Business Phone Time's upTime is Up!
