All of the following people would be considered insureds EXCEPT

The 22 year old nice of the insured who is visiting

All of the following are characteristics of the dwelling policy EXCEPT

The dwelling must be owner occupied

Under Workers Compensation, each job classification has

A rate reflective of its loss experience.

Under which of the following conditions can broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling

The declarations page of the homeowners policy provides all of the following information EXCEPT

A statement that earthquake damage is not covered

What type of property would NOT be covered under the dwelling policy special form Coverage A

Land on which the dwelling is located

All are true of the SC Valued Policy law EXCEPT

Both real and personal property

Actual Cash Value (ACV)

Current Replacement Cost - Depreciation

Workers Compensation insurers in SC

Must give 5% premium disc to those who maintain drug free

According to the 2nd injury fund which is not true?

1st injury must have occurred working for the same employer

When doing the WC rate experience modification,

The frequency of claims is more imprt that the size of claim

a self-contained prepackaged policy

the causes of loss insured against in an insurance policy

The insured has violated the contract w/o the knowledge of the mortgage holder. After a loss

The insured cannot collect but mortgage holder will be paid

In SC, the Workers Compensation Law

Applies to all employers with 4 or more employees

Under the PAP liability for bodily injury resulting from the insureds use of a nonowned auto is

Provided by the insured's policy on a excess basis

Personal injury liability for false arrest, libel, slander, defamation, and invasion of privacy

is not automatically covered, can be added by endorsement

AJ sells her house to K. K wants to keep AJ's current homeowner's policy. Which is most likely?

K will need written consent from insurer B4 being reassigned

HO-2 -3 -5 provide replacement cost coverage if the house is insured for at least

80% of its value on the date of the loss

Which of the following perils is covered by the Ho-2 and HO-3?

Sudden and accidental rupture of a heating system

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Final Exam

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Questions 87

Answers

1
Home has HO2 policy. due to repairs there is a opening in the roof. Rain cause $20000 of damage
The ACV of damage
Nothing
Replacement cost
80% of replacement cost
2
You drop a box through the ceiling causing $1000 of damage. You have a HO-3 policy
$1000
$1000 minus the deductible
$500
$500 minus the deductible
3
All of the following people would be considered insureds EXCEPT
The 15 year old foster child residing in the premises
The 22 year old nice of the insured who is visiting
The mother of the insured who residing in the household
The legal rep of a deceased insured
4
All of the following are characteristics of the dwelling policy EXCEPT
Dwellings up to four family units are elible
Coverage includes the dwelling only, contents only, or both
The dwelling must be owner occupied
dwelling can be completed or under construction
5
Under Workers Compensation, each job classification has
A separate modification factor.
The same premium rate.
A rate reflective of its loss experience.
A premium discount.
6
You have relocated to a new state and still own your home and still have furniture in it.
Unoccupied
Vacant
Condemned
Under repair
7
Part of the policy that sets forth the rules of conduct, duties, and obligations of the parties
Declarations
Conditions
Exclusions
Insuring clause
8
Policyholders might receive dividends from a mutual insurer.
True
False
9
Under which of the following conditions can broad theft coverage be added to a dwelling policy?
If the policy has been in effect for 60 days
If permission is granted by the department of insurance
If the insured is owner-occupant of the dwelling
Broad theft coverage cannot be added to a dwelling policy
10
The declarations page of the homeowners policy provides all of the following information EXCEPT
The amount of premium charged for each coverage
A statement that earthquake damage is not covered
A statement that earthquake damage is not covered
The insured's address
11
What is the term for the amount of a loss that the insured must cover out of pocket?
Deductible
Coinsurance
Self-insured retention
Primary amount
12
What will Misty sign BEFORE sky diving?
Warranty
Waiver
Death Cerificate
Good Faith
13
What type of property would NOT be covered under the dwelling policy special form Coverage A
Outdoor equipment located on the premises
Land on which the dwelling is located
Attached structures
Material and supplies on the premises used to alter dwelling
14
The insured made her final payment but did not remove the bank from policy. The bank receives
nothing
The standard minimum of 10% that is paid to lenders
Up to the amount of debt that the insured has with the bank
All of the payment would be made to the mortgagor in policy
15
The risk of loss may be classified as
High risk and low risk
Named risk and un-named risk
Pure risk and speculative risk
Certain risk and uncertain risk
16
All are true of the SC Valued Policy law EXCEPT
Only to the peril of fire
Real property but not personal
Both real and personal property
The insured and insurer agree on value of building
17
For the purpose of insurance risk is defined as...
The cause of loss
The uncertinty of loss
An event that increases the amount of loss
The certainty of loss
18
The land on which a house sits is not insurable on HO policies.
False
True
19
Actual Cash Value (ACV)
Depreciation
Depreciation - Current Replacement Cost
Current Replacement Cost - Depreciation
Current Replacement Cost + Depreciation
20
What is one of the methods of handling risk?
Avoidance
Not Catastrophic
Due to Chance
Definite and Measurable
21
What is an insurance company that is incorporated in another state of territorial possession
Domestic
Alien
Nonadmitted
Foreign
22
Workers Compensation insurers in SC
Charge all companies w the same size payroll the same rates
charge each insuredthe same rates regardless of claimhistory
Are required to be part of the assigned risk plan
Must give 5% premium disc to those who maintain drug free
23
According to the 2nd injury fund which is not true?
the 1st injury could have been any pre-existing condition
Both A & B
the 1st injury must have been job related
1st injury must have occurred working for the same employer
24
When doing the WC rate experience modification,
the size of the claims and the frequency of claims are =
The size of the claims paid is more import thanthe frequency
The frequency of claims is more imprt that the size of claim
It applies to only certain types of business
25
Broad theft coverage endorsement on dwelling form specifies all of the following limits EXCEPT
1000 on silverware
200 on money
1500 on securities
1500 on jewelry
26
In SC, optional coverage with regards to a personal auto policy
Property damage liability
Uninsured motorist coverage
bodily injury liability
Underinsured motorist coverage
27
a BOP is
Part of a commercial package policy
a special policy designed for large retail operations
a monoline policy
a self-contained prepackaged policy
28
What is a perils?
the causes of loss insured against in an insurance policy
the causes of loss insured against in an insures policy
the causes of gain insured against in an insures policy
the causes of gain insured against in an insurance policy
29
Process insurer uses to evaluate apps and determine if issued, terms, conditions, & rates
Coding
Acceptance
Underwriting
Rating
30
which of the following other coverages is NOT included in the basic form dwelling policy
Removal coverage
Personal property temporarily away from the insured premises
Breakage of glass
Tenant's improvements, alterations, and additions
31
Personal property being moved to a new location can be covered for up to #days w/o notice
90
5
30
60
32
Excluded classifications of employees under a WC Policy are
Statutorily defined
Are not defined in the Policy
Selected by the insurer
Selected by the insured
33
The insured has violated the contract w/o the knowledge of the mortgage holder. After a loss
the pro rata liability clause applies
Neither the insured nor the mortgage holder will be paid
The insured cannot collect but mortgage holder will be paid
Both the insured and mortgage holder will be paid
34
Which Insurer offers life insurance and annuities to its members?
Lloyds Of London
Risk Retention Groups
Fraternal Benefit Societies
Reciprocal
35
Which of the following dwelling policy forms primarily insures a structure on an ACV basis?
DP 2
All DP forms
DP 3
DP 1
36
Which of the following risks is eligible for coverage under a BOP
Condominiums
Automoblie dealers
Banks
Bars or taverns
37
Which of the following dwelling coverage forms would pay replacement cost for the dwelling?
DP-1
DP-2 and DP-3
All dwelling property coverage forms
DP-3 only
38
In SC, the Workers Compensation Law
Applies to all employers regardless the #/type of employees
Apples to only employers with full time employees
Applies to all employers with 4 or more employees
Is elective and may be rejected by the employer
39
handles the special ins needs of businesses that use their vehicles to haul goods for others
garagekeepers coverage form
Commercial carrier coverage form
Cargo carriers coverage form
truckers coverage form
40
Under the PAP liability for bodily injury resulting from the insureds use of a nonowned auto is
not covered
Provided by the insured's policy on a primary basis
shared on a pro rata basis
Provided by the insured's policy on a excess basis
41
Misty really likes sky diving. What type of hazard is this?
Physical
Morale
Loco
Moral
42
Rates that are established based on the similarities of the risk with other risks are known as
Manual rates
"A" rates
Experience Rates
Merit rates
43
The homeowners policy covers collapse caused by all of the following EXCEPT
Hidden insect or vermin damage
Weight of too many people attending and event in the house
Foundation cracks
Weight of snow
44
Personal injury liability for false arrest, libel, slander, defamation, and invasion of privacy
is not automatically covered, cannot be added by endorsement
is not automatically covered, can be added by endorsement
is automatically covered, cannot be added by endorsement
is automatically covered, can be added by endorsement
45
AJ sells her house to K. K wants to keep AJ's current homeowner's policy. Which is most likely?
K will have to apply for coinsurance.
The policy will have to be cancelled.
K will need written consent from insurer B4 being reassigned
The homeowner should let the K take over the payments.
46
SC employers must comply with WC laws if they have how many employees
elective regardless of number
4 or more employees
10 or more
at least 4 full time employees
47
Which of the following is NOT an element of negligence?
Libel
Breach
Unbroken chain
Duty
48
HO-2 -3 -5 provide replacement cost coverage if the house is insured for at least
75% of its value on the date of the loss
40% of its value on the date of the loss
80% of its value on the date of the loss
25% of its value on the date of the loss
49
Which of the following property coverages would provide protection to contents damaged by fire?
B
D
C
A
50
A meteorite hits your car. which coverage would cover the loss
Collision
other-than-collision
liability
Uninsured motorist
51
Which of the following perils is covered by the Ho-2 and HO-3?
Sudden and accidental rupture of a heating system
Flood
Loss due to power interruption that occurs off the premises
War
52
For business income coverage, the waiting period that must occur b4 the period of restoration
72 hours
30 hours
15 hours
45 hours
53
Which method of loss valuation is contrary to the basic concept of indemnity?
Replacement Cost
Agreed value
Functional replacement cost
Market value
54
What is a definition of a unilateral contract?
there is an exchange of unequal amounts or value
Only one of the parties to the contract is legally bound
"take it or leave it"
Between insurance company and individual
55
Who are required to be members of the SC P&C Insurance Guaranty Association?
All admitted P&C insurers
Only insurers selling workers compensation in SC
All admitted insurers
all admitted P&C insurers and nonadmitted P&C insurers in SC
56
Which of the following is used in the formula for calculating the ACV of a property?
Agreed value
Replacement cost
Stated Value
Fair market value
57
In the dwelling policy, which of the following other structures would be covered?
Used by the insured in which to operate retail business
Used as part of a farming operation
Used by the insured to house a manufacturing operation
Rented to a neighbor for use as a private garage
58
Ty's car was totaled and the ownership was transferred to the insurer. The Insurer sold the car
Subrogation
Salvage
Liberalization
Duty to defend
59
Which of the following homeowners polices covers those who rent their dwelling?
HO-6
HO-1
HO-4
HO-2
60
Which of the following businesses wouldbe eligible for BOP
BB&T
GameTime Bar and Grill
Carowinds
Martin's Funeral Home
61
In dwelling policies, automatic increase in insurance is
Coverage by endorsement
Coverage without additional premium
Coverage for newly acquired property
Automatic Coverage
62
Which of the following would be considered a risk sharing arrangement?
Surplus Lines
Reciprocal
Mutual
Stock
63
Loss Ratio
(Incurred Loss - Earned Premium)/Loss adjusting expense
(Incurred Loss + Loss adjusting expense)/Earned Premium
(Incurred Loss - Loss adjusting expense)/Earned Premium
(Incurred Loss + Earned Premium)/Loss adjusting expense
64
Income benefits under WC statutes have all of the following EXCEPT
A waiting period applies before benefits begin
Both total and partial disabilities are covered
weekly benefit % is different for permanent and temporary
65
An entity that an agent represents regarding contractual agreements with third parties
Principal
Insured
Designee
Client
66
Coinsurance
SHOULD/DID * LOSS SUSTAINED= AMOUNT PAID
DID/SHOULD * LOSS SUSTAINED= AMOUNT PAID
LOSS SUSTAINED/SHOULD * DID = AMOUNT PAID
There is not formula
67
Which of the following symbols used in business auto coverage is correctly described
Symbol 7 - hired autos only
Symbol 9 - nonowned autos only
Symbol 2 - owned auto subject to no-fault
Symbol 1 - owned auto only
68
My car is covered in SC under a personal auto policy. I am also covered where?
Anywhere in the world
Only in SC
Any other state
Mexico
69
A dwelling policy will pay loss of use due to civil authority for a maximum of
1 month
2 weeks
90 days
1 week
70
Losses from the freezing of plumbing while the home is vacant wouldbe EXCLUDED under HOP UNLESS
the insured purchased special form coverage
the insured purchases the water damage endorsement
the dwelling had been vacant for no more than 90 days
the insured had drained the plumbing system
71
Alexis buys hockey tickets. A puck breaks her nose. What may bar her from recovering damages?
Comparative negligence
Assumption of risk
Defense against negligence
Contributory negligence
72
Payment foe medical exp, loss wage, funeral exp is known as what type of compensatory damages
Special
General
Normal
Tort
73
What is named on the declarations page of a property or liability policy?
Additional insureds
Beneficiaries
First named insured
All insureds
74
Homeowners policies provide coverage for
Business property while on the residence premises
Losses caused by off-premises power failure
The land under the residence
Property of tenants roomer boarders not related to insured
75
This endorsement must be attached to all motor carriers' polices under its jurisdiction
MCS 80
MCS 90
Garage
MCS 70
76
A participating insurance policy may do which of the following?
Pay dividends to the stockholder
Pay dividends to the policyowner
Require 810% participation
Provide group coverage
77
On an Ho policy, lawsuits maybe filed by the insured against the insurer up to a max of
18 months after a loss
6 months after a loss
12 months after a loss
24 months after a loss
78
Which of the following would be covered under the falling abject peril?
Interior building damage if exterior was damaged first
Damage to the buildings awnings
Exterior pavement and patio damage
Damage to outdoor radio and t.v. antennas
79
Which of the following statements is true concerning a WC and Employers Liability Policy?
Claims of surviving children are not covered.
Claims of a surviving spouse are not covered
Exposures in states listed on info page will be covered
all exposures in the US and Canada are covered
80
A BOP is most similar to
cargo
homeowners
auto
umbrella
81
To be eligible for BOP, an office building CANNOT be higher than
2 stories
6 stories
10 stories
3 stories
82
What are the four elements of a Legal Contract?
Consideration, Legal Purpose, Agreement, Good Faith
Consideration, Legal Purpose, Agreement, Competent Parties
Warranty, Legal Purpose, Agreement, Waiver
Warranty, Legal Purpose, Agreement, Good Faith
83
What tool does the insurance company use to predict loss?
Law of group evaluation
Law of Large Numbers
Law of averages
Law of Masses
84
Which WC conditions states that the 1st named insured will act on behalf of all insureds
Transfer of your rights and duties
Sole representative
Cancellation
Inspection
85
Your house has been vacant for 70 days. Which of the following is true?
glass breakage as a result of vandalism is covered
Loss by vandalism and malicious mischief is excluded
Damage to glass building blocks is not covered
Loss by theft is covered
86
Which federal act provides benefits to injured civilians who are employed by the federal gov't
Federal Employers Liability Act (FELA)
Federal Employees Compensation Act
The Jones Act
U.S. Longshore and Harbor Workers Compensation Act
87
Which of the following is true regarding personal liability coverage?
must add a supplement or written as a separate policy
It is included in all dwelling policies
it does not cover medical payments to others
It is the same as in homeowners policies

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