Exam practice questions

Question 1

In a commercial general liability policy, medical payments pay for medical expenses

a. Incurred and projected
b. For injuries reported within 2 years from the date of the incident
c. Only if the insured is legally liable
d. Without regard to fault

Answer 1

d Without regard to fault

Question 2

2. Which type of insurance protection guarantees protection against legal liability from any risk arising from the ownership, maintenance, or use

a. Errors and omission insurance
b. Professional liability
c. Employment related practices liability
d. Commercial general liability

Answer 2

b. Professional liability

Question 3

3. In PA, what is the minimum amount required for damages for liability to cover motor vehicles accidents?
   a. 5K,10K,3K
   b. 10K, 20K, 5K
   c. 15K, 30K, 5K
   d. 25K, 50K, 10K

Answer 3

C. 15K, 30K, 5K

Question 4

4. Under an equipment breakdown coverage form, a breakdown would include
   a. Wear and tear
   b. Leakage of valves
   c. Explosion of a pressure vessel
   d. Failure of a safety device

Answer 4

C. Explosion of a pressure vessel

Question 5

5. Which of the following benefits are not paid under workers comp laws?
   a. Medical
   b. Rehabilitation
   c. Pain and suffering
   d. Disability income

Answer 5

c. Pain and suffering

Question 6

6. What is the effect on a personal automobile policy in PA, if an insured switches from a $250 deductible for a $500 deductible
   a. The physical damage premium is reduced
   b. The physical damage limits are increased
   c. There is no deduction for depreciation when losses are settled
   d. The policy no longer satisfies the commonwealths financial responsibility law

Answer 6

A. The physical damage premium is reduced

Question 7

7. Which of the following is covered under the builder’s risk form
   a. A contractor’s pickup truck
   b. A contactor’s tools
   c. A sig on the property advertising a contractor’s work
   d. Lumber stored on site to be used in framing

Answer 7

b. A contactor’s tools

Question 8

8. The coverage that covers beyond the expiration of a liability policy written on a claims made basis is referred to as
   a. Extension coverage
   b. Umbrella coverage
   c. Extended reporting periods
   d. Shop base provisions

Answer 8

c. Extended reporting periods

Question 9

9. The main purpose of the Nationwide Maritime Definition is to

a. Define the categories of risk for which underwriters can write coverages.
b. Describe the imports that are allowed to be sold and delivered.
c. Allow producers to customize coverage for a variety of perils.
d. Define the insurable interest of shippers.

Answer 9

a. Define the categories of risk for which underwriters can write coverages.

Question 10

10. Which is not an exclusion from a commercial automobile insurance policy

a. Work related injuries to employees including these covered under workers comp.
b. Operating a covered vehicle of a speed deemed reckless by authorities.
c. War or war like activates.
d. Intentional injuries

Answer 10

b. Operating a covered vehicle of a speed deemed reckless by authorities.

Question 11

11. Which is covered by the outside the premises crime insuring agreement?
    a. Motor vehicles owned by the insured
    b. Property owned by the insured being transported without authorization or under threat
    c. Property owned by the insured lost through deception or trickery
    d. Securities in the possession of an armored car service

Answer 11

d. Securities in the possession of an armored car service

Question 12

12. In a homogenous policy which of the following would not be contained in the conditions section of the policy
    a. The amount of the premium
    b. The duties of an insured after a property loss
    c. The settlement options
    d. The subrogation right of the insurer

Answer 12

a. The amount of the premium

Question 13

13. In the workers compensation policy part 2 provides the employer for
    a. Workers comp benefits
    b. Employee liability
    c. Employee theft

Answer 13

b. Employee liability

Question 14

14. An insurance contract is a contract of utmost good faith because the insurer relies on the truthfulness of the applicant and the insured relies on the promise to

a. Issue a policy.
b. File reports with the insurance policy.
c. Pay the claims.
d. Charge a fair premium

Answer 14

c. Pay the claims.

Question 15

15. Under a dwelling policy, which coverage part insures buildings on the premises that are connected to the dwelling only by a fence?
    a. Coverage A
    b. Coverage B
    c. Coverage C
    d. Coverage D

Answer 15

b. Coverage B (Coverage B covers other separate structures at the same location, such as detached garages and outbuildings (fences, sheds, etc.)

Question 16

16. The federal law that requires insurance companies to explain their information sharing practices to their customers is the

a. Fair Claims Act
b. Gramm Leach Bliley Act
c. Terrorism risk insurance act
d. Patient protection and affordable care act

Answer 16

b. Gramm Leach Bliley Act

Question 17

17. Which of the following statements about uninsured motorist coverage for personal automobile insurance policies in PA is true?

a. Is mandatory in all personal automobile policies.
b. It must be offered to an insured who can reject signing a waiver.
c. It is available only if an insured signs a separate application for coverage and meets an insurer underwriting standards.
d. It eliminates the need for an insurance applicant to purchase any type of liability insurance on an automobile that has such coverage.

Answer 17

b. It must be offered to an insured who can reject signing a waiver.

Question 18

18. The standard mortgage clause states a loss is payable to the

a. Insured only
b. Mortgagee only
c. Mortgage and the insured
d. Contractor performing the repairs

Answer 18

c. Mortgage and the insured

Question 19

19. The broad theft coverage endorsement on a dwelling policy includes coverage for all of the following except

a. Vandalism
b. Attempted theft
c. Personal injury
d. Malicious mischief

Answer 19

c. Personal injury

Question 20

20. A temporary insurance producers license may be insured without examination to

a. The executor of the estate of a deceased licensed insurance producer.
b. Any individual upon discharge from the United States armed forces.
c. A producer requesting authority to represent an additional carrier.
d. An individual applying to sit for an insurance licensing exam.

Answer 20

a. The executor of the estate of a deceased licensed insurance producer.

Question 21

21. A producer who offers a potential insured $50 from their commission as an incentive to buy insurance is guilty of

a. Coercion
b. Inducement
c. Redlining
d. Twisting

Answer 21

b. Inducement

Question 22

22. Falsifying the terms benefits advantages or conditions of an insurance policy is an example of the following

a. Forgery
b. Coercion
c. Concealment
d. Misrepresentation

Answer 22

d. Misrepresentation

Question 23

23. The national flood insurance program policies cover

a. Property against all from a flood.
b. Water damage caused by a burst pipe.
c. Sewer backs up into a dwelling.
d. Loss of use

Answer 23

a. Property against all from a flood.

Question 24

24. The PA insurance department is responsible for all of the following except

a. Insurers
b. Producers
c. Shareholders
d. Form approvals

Answer 24

c. Shareholders

Question 25

25. When the commissioner believes a producer is violated an insurance law the commissioner has the authority to a. Terminate the producer’s appointment. b. Cancel the producer’s fiduciary responsibility. c. Issue a cease and desist order against the producer after a hearing. d. Increase the producer’s continuing education.

Answer 25

c. Issue a cease and desist order against the producer after a hearing.

Question 26

26. A commercial general policy occurrence form covers claims that only a. Occur within the policy period. b. Occur outside the policy period. c. Are reported within the policy period. d. Are settled within the policy period.

Answer 26

a. Occur within the policy period

Question 27

27. Coverage E personal liability applies to which of the following a. Motor vehicle liability involving a vehicle registered. b. Watercraft owned by an insured and rented to others. c. Defense costs if a suit is groundless, false or fraudulent. d. Expected or intended injury.

Answer 27

c. Defense costs if a suit is groundless, false or fraudulent.

Question 28

28. Which of the following types of policies would cover a chief executive for suits by stockholders? a. Directors and officers insurance b. Trustees’ professional liability insurance c. Fiduciary liability insurance d. Malpractice insurance

Answer 28

a. Directors and officers insurance

Question 29

29. Which of the following would be a specific duty of the insurer in a liability policy? a. Reporting a loss b. Subrogation of a loss c. Providing a legal defense d. Protecting property from further loss

Answer 29

c. Providing a legal defense

Question 30

30. Which type of authority is not granted in the contract, but a producer is assumed to have in order to conduct a. Implied b. Express authority c. Apparent authority d. Licensee authority

Answer 30

a. Implied

Question 31

31. Leah provides transportation for her client to their business lunch. Leah’s client closes the car door on her own hand. What type of coverage applies a. Physical damage b. Liability c. Medical Payments d. Health Insurance

Answer 31

c. Medical Payments

Question 32

32. All the following are considered covered vehicle under a personal automobile policy except a. Private passenger vehicle acquired during the policy period b. Vehicle listed in the declarations c. Trailer owned by the insured d. Motorcycle

Answer 32

d. Motorcycle

Question 33

33. A temporary insurance producer license may be initially issued for a maximum of a. 30 days b. 90 days c. 180 days d. 365 days

Answer 33

c. 180 days

Question 34

34. Lightning strikes a house and causes a fire. The fire department extinguished the fire which results in water damage. The water damage represents which type of loss. a. Direct b. Excluded c. Indirect d. Residual

Answer 34

c. Indirect

Question 35

35. Which of the following is not covered under supplementary payment coverage of the liability section of the personal automobile policy? a. Bail Bonds b. Post judgment interest c. Rental costs d. Appeal bonds

Answer 35

c. Rental costs

Question 36

36. According to the assignment condition, a policy can only be transferred to another person with the written permission of the *** a. Insured b. Producer c. Assignee d. Insurer

Answer 36

a. Insured

Question 37

37. A producer fiduciary responsibility includes which of the following activities a. Properly remunerating persons who furnish leads on products b. Recording the receipt and remitting of premiums due to an insurer. c. Guaranteeing payment to the insureds for losses covered by polices that the producer sold d. Providing needed insurance to prospective insureds through any sources that are available

Answer 37

b. Recording the receipt and remitting of premiums due to an insurer.

Question 38

38. All of the following perils are included in an unendorsed Dwelling Basic Form DP1 except a. Theft b. Fire c. Lightning d. Internal explosion

Answer 38

a. Theft

Question 39

39. An insurance contracts states that when a loss occurs an individual should be restored to financial condition just prior to the loss. What principle is interested? a. Adhesion b. Warranty c. Consideration d. Indemnity

Answer 39

d. Indemnity

Question 40

40. Coverage D of the farm property provides additional coverage for which of the following? a. Poultry and livestock incidental to farm use b. Growing crops beyond 250 feet of the covered residence c. Living expenses for the loss of use of living quarters in residence premises. d. Barns or farm outbuildings or structures other than private garages that are used primarily for farming purposes

Answer 40

c. Living expenses for the loss of use of living quarters in residence premises.

Question 41

41. A limit of insurance that determines the maximum amount that can be paid out annually a. A face amount b. A single limit c. An aggregate limit d. An occurrence limit

Answer 41

c. An aggregate limit

Question 42

42. When can a producer share a commissioner with another producer a. It is never a legal act b. When both live in PA c. When the unlicensed person does not live in PA d. When the other producer is licensed in the same limit of business.

Answer 42

d. When the other producer is licensed in the same limit of business.

Question 43

43. What law do all insurers and their producers need to comply with in regards to information being obtained from a third party concerning the applicant a. Dodd Frank Act b. Mccarren Ferguson Act c. Fair Credit Reporting Act d. Unauthorized Insurers Service of Process act

Answer 43

c. Fair Credit Reporting Act

Question 44

44. A business can increase coverage limits temporary by way of *** a. A peek season limit of insurance endorsement b. A value reporting form endorsement c. An extended reporting period d. A retroactive date

Answer 44

a. A peek season limit of insurance endorsement

Question 45

45. In PA if an insurer withdraws from the market a notice of nonrenewal for a commercial policy must be sent to the insured a minimum of how many days in advance of the non-renewal of policy *** a. 15 b. 30 c. 45 d. 60

Answer 45

d. 60

Question 46

1. The Jones act is a federal law that allows members of ships crews to sue for injuries caused by a. Other people b. Passengers’ negligence c. Employer’s negligence d. The employee other employees

Answer 46

c. Employer’s negligence

Question 47

47. A general liability policy covers bodily injury as a result of a. An automobile injury b. A work-related injury c. An intentional injury d. An injury on the premises

Answer 47

d. An injury on the premises

Question 48

48. Coinsurance encourages policyowners to insure property to a. To value b. Below value c. Above value d. To market value

Answer 48

d. To market value

Question 49

49. In a dwelling policy an unoccupied property refers to one that has no a. Owner b. Inhabitants c. Furniture d. Locks or alarms

Answer 49

b. Inhabitants

Question 50

50. A producer is required to report to the commissioner any charges filed against him or her in any jurisdiction within how many days of being charged *** a. 15 b. 30 c. 45 d. 60

Answer 50

b. 30