2024/2025 EXAM QUESTIONS P&C TEST WITH 100% CORRECT VERIFIED ANSWERS GRADED A, Exams of Business Administration

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2024/2025 EXAM QUESTIONS P&C TEST WITH 100%

CORRECT VERIFIED ANSWERS GRADED A

The Watercraft Liability endorsement provides which coverage? A Property damage arising out of motorboat being operated in a race B Property damage arising out of the racing of sailing vessels C Bodily injury and property damage arising out of the ownership and use of boats rented to others D Bodily injury sustained by an employee in the course of employment B Property damage arising out of the racing of sailing vessels Which of the following is a characteristic of a Mutual Insurance Company? A. A policyholder is a voting member on the Board of Directors B Members are provided insurance by the company C Stockholders have ownership D Dividends are returned profits B Members are provided insurance by the company The Home Day Care endorsement does not provide which of the following? A Coverage on the residence premises B A policy year aggregate limit for personal liability and medical payments C Medical payments D Coverage for a day care employee D Coverage for a daycare employee Which of the following is not an additional coverage under the Building and Personal Property coverage form? A Debris removal

B Fire department service charge C Preservation of property D Peak season D Peak Season All of the following are producer responsibilities, EXCEPT: A Solicit and accept applications, and forward them to the insurer B Provide quotes and collect premiums C Represent the insurer D Issue policies D Issue policies - insurer issues policies PRODUCER does not A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? A Direct B Strict C Absolute D Contingent B Strict Which of the following is not covered by the Robbery or Safe Burglary of Other Property insuring agreement? A A burglary B An ATM hacked so that it dispenses money to the hacker C A credit union held up at gunpoint D Shoplifting by a customer B ATM hacked All of the following are true of automobile physical damage Coverage D, except: A It covers damage to the insured auto regardless of liability B It covers damage to the insured auto and to another auto with which it collided

C Collision coverage usually is written with a deductible D Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision coverage B covers damage to insured auto & other auto Under a Commercial Crime policy written on a Loss Sustained Form, what is the latest date a covered loss can occur? A 1 year following policy expiration B The policy expiration date C 2 years following policy expiration D The retroactive date B The policy expiration date The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called a: A Shipping Receipt B Bill of Transportation C Bill of Acceptance D Bill of Lading D Bill of Lading Private Insurers are not allowed to write Workers' Compensation Insurance in which of the following states? A Monopolistic B Competitive C Compulsory D Voluntary A Monopolistic

A loss caused by which of the following would be covered under a BOP? A Increased cost of construction B Earth movement C Mechanical breakdown D Off-premises power failure A Increased cost of construction - The Increased Cost of Construction Additional Coverage provides $10,000 coverage for costs incurred to comply with an ordinance or law regulating repairing or replacing damaged building parts. Which of the following is not true about insurance? A It transfers risk B It protects against uncertainty C It eliminates risk D It is a means of sharing loss C eliminates Property damage covered by a liability policy includes which of the following? A Damage to property of others in the insured's care, custody, or control B Damage to tangible property, including loss of use of that property caused by the insured's negligence C Damage to the insured's products arising out of the products D Damage to property owned by, or leased to, the insured B Damage to tangible property, including loss of use of that property caused by the insured's negligence All of the following are true about the Limits of Liability under Section II of the BOP, except: A The Liability and Medical Expense limit applies per person or organization for personal injury claims B

The Medical Expense limit is a per person limit C The Damage to Premises Rented to You limit applies only to premises rented to the insured D The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit D The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit - The Products and Completed Operations aggregate limit is twice the Liability and Medical Expense limit. Which of the following statements about the National Flood Insurance Program is false? A Coverage becomes effective after a 24-hour waiting period B Two deductibles apply separately to the building and contents C Mudflow is covered; mudslide is not covered D Property removed to protect it from flood is covered for 45 days at other locations A Coverage becomes effective after a 24-hour waiting period - Coverage usually become effective after a 30 - day waiting period; some exceptions apply. Which of the following is not considered an uninsured motorist vehicle under the Personal Auto Policy? A A hit and run vehicle B A vehicle newly acquired by the named insured that has not been reported to the insurer C A vehicle for which there is no liability policy

D

A vehicle insured by a bankrupt insurance company B A vehicle newly acquired by the named insured that has not been reported to the insurer Z is a distributor of natural gas. While connecting gas to B's house, an explosion occurs and the house is destroyed. Z's defense is that B did not turn off the pilot light on her furnace before the hookup as instructed by the company. The court ruled that the activities of connecting gas lines were so dangerous that Z's defense did not relieve its liability. What legal principle is applicable in this case? A Contributory negligence B Comparative negligence C Assumption of risk D Absolute liability D Absolute liability A chemical manufacturer requires protection for pollution liability and clean up costs. Which of the following pollution liability coverages should the business purchase? A Pollution Extension Endorsement B Pollution Liability Coverage Form C Limited Pollution Extension Endorsement D Limited Pollution Liability Coverage Form B The Pollution Liability Coverage Form provides coverage for both pollution liability and governmentally- mandated clean up. All of the following are true of the Personal Jewelry Floater, except: A

It has a Pair and Sets Clause B It has a 60-day automatic coverage for newly acquired items C Appraisal is usually mandatory D It can be written on a valued basis B It has a 60-day automatic coverage for newly acquired items - Automatic Coverage under the Personal Jewelry Floater is 30 days. Which Business Auto Symbol is the most broad of all Symbols? A Symbol 1 B Symbol 3 C Symbol 2 D Symbol 4 A Symbol 1 - Symbol 1 includes any auto, whether owned or not by the insured if it is used in the insured business. All of the following are true of the supplemental extended reporting period, except: A The one time premium may not exceed 200% of the annual premium for the coverage part B It must be purchased within 60 days after the end of the policy C The insurer may cancel it after the premium has been paid by the insured D It is an optional extended reporting period of unlimited duration

C The insurer may cancel it after the premium has been paid by the insured - Once the premium has been paid, the Supplemental Extended Reporting Period Endorsement cannot be cancelled. Which statement regarding the Medical Payments Coverage of the Business Auto Policy is true? A Medical Payments Coverage also pays loss of income during disability arising from a covered accident B Medical Payments Coverage is designed to provide medical payments coverage for employees C Coverage is limited to medical expenses incurred in the first year after the accident D The BAP does not automatically include Medical Payments Coverage D The BAP does not automatically include Medical Payments Coverage - Medical Payments Coverage is available by endorsement to the Business Coverage Form. The coverage is not automatically included in the commercial auto forms. In commercial liability policies, the word 'tail' is synonymous with: A Extended reporting period B Endorsement C Supplementary payments D Retroactive date A Extended reporting period An insurer must offer alternative deductible amounts applicable to hurricane losses equal to $500, 2%, 5%, or 10% of the policy dwelling limits, unless: A The specific percentage deductible is less than $ B

The specific percentage deductible is more than $ C The specific percentage deductible is less than $ D The specific percentage deductible is equal to $ C The specific percentage deductible is less than $ Specified Causes of Loss under Physical Damage Coverage of the Business Auto Coverage Form includes all of the following, except: A Theft B Windstorm, hail or earthquake C Flood D Glass breakage D Glass breakage The Part of the Workers' Compensation Policy that includes States that are listed in the Information Page, is called: A The All-States Endorsement B Part Six - Conditions C The General Section D Part Three - Other States Insurance D Part Three - Other States Insurance

The maximum amount that a coverage will pay for loss to any one injured party regardless of overall policy limits, is known as the: A Per occurrence limit B Per person limit C Aggregate limit D Split limit B Per person limit Under a CGL, at what point in time is the earned premium determined by the premium audit? A At the time the premium deposit is made B At the beginning of the policy period C Monthly D At the end of the policy period D At the end of the policy period - An additional premium is required if the earned premium is greater than the premium deposit. A premium credit (or refund) may apply if the deposit was greater than the minimum premium required by the audit. For which of the following persons is the Drive Other Car endorsement intended? A The officers and directors of a corporation B Individuals who do not own an auto C Owners of school buses

D

Truckers and motor carriers B Individuals who do not own an auto The Department of Financial Services can impose which of the following penalties? A Fine for violation of a cease and desist order up to $50, B $100,000 fine for a willful violation for submitting fraudulent signatures C Imprisonment up to 2 years for churning D $10,000 fine for failure to answer a subpoena A Fine for violation of a cease and desist order up to $50,000 - A willful violation for submitting fraudulent signatures is $75,000 per violation and $5,000 per violation for a non-willful violation. All of the following are true of Builders Risk forms, except: A Coverage terminates when the policy expires or it is cancelled B Coverage is always written on an open perils basis C There is no vacancy provision D Coverage does not apply to outside radio and television antennas B Coverage is always written on an open perils basis ACV is generally used for which of the following types of claims? A Businessowners Property B Workers' Compensation C

Auto Physical Damage D Umbrella C Auto Physical Damage Which of the following is NOT a general duty and power of the Office of Financial Regulation? A Taking over insolvent companies and attempting to restore financial integrity B Auditing insurers C Qualify all foreign corporations to do business in Florida D Enforcement of the Insurance Code C Qualify all foreign corporations to do business in Florida - Qualifying all foreign corporations to do business in Florida is a general duty and power of the Secretary State, not the Office of Financial Regulation. Which of the following is false regarding dwelling policies? A Farm dwellings are not eligible B Mobile homes are eligible if written on a DP- 1 C Trees, shrubs and plants are covered for up to $2,500 total D Incidental business occupancies are permitted C Trees, shrubs and plants are covered for up to $2,500 total - The limit for trees, shrubs and plants is $500 for any 1 item or 5% of Coverage A. After the first 60 days a policy is in force, the underwriter cannot cancel for which of the following reasons?

A

License suspension B Nonpayment of premium C Unacceptable driving record since effective date D Material misrepresentation C - After the first 60 days a policy is in force, notice of cancellation will be effective only if it is based on nonpayment of premium, material misrepresentation or fraud, or suspension or revocation of the license or registration of the named insured or other operator covered by the policy. Which of the following is true about binders? A A binder always expires 15 days after its inception date B A binder will not end when the policy is issued C The premium amount is not stated in a binder D A binder does not name the company providing coverage C The premium amount is not stated in a binder - A binder is a legal agreement that serves to effect insurance coverage temporarily until the actual insurance policy can be issued. It contains only the essential coverage information, except the premium amount. Which of the following is true regarding Property Off Premises coverage under the Building and Personal Property Coverage Form? A It is offered as an Additional Coverage B Property in a motor vehicle or in the care, custody, and control of a salesperson is included

C

Property Off Premises is covered only for 30 days after its removal from the premises D There is a coverage limit of $5,000 on Property Off Premises B Property in a motor vehicle or in the care, custody, and control of a salesperson is included Which of the following statements is false regarding appointments? A An agent is required to have a separate appointment by each insurer by whom he/she is appointed B An agent may present a proposal to an insurer that has not appointed him/her, if the sale is in the business for which he/she is licensed C An agent may hold all categories of appointments as to which he/she has qualified and been licensed D An agent is not required be appointed with an insurer in order to earn a commission, but must be appointed to deliver a policy D An agent is not required be appointed with an insurer in order to earn a commission, but must be appointed to deliver a policy Policy A provides liability coverage to Fred's Grocery up to $500,000. Policy B provides coverage for the same risks up to $1.5 million. Both policies pay on a pro rata basis. If Fred's Grocery is determined to have a legal liability of $400,000 to a claimant who was injured on the property, how much will Policy A pay? A $400, B $100, C $50,

D

$500,

B $100,000 - Pro rata liability requires that each policy pays no more than its share of the loss. The total insured amount carried by Fred's Grocery is $2 million ($500,000 + $1.5 million). Policy A's share of that amount is 25% ($500,000 ÷ $2 million). Therefore, its share of any loss would be 25% of the loss amount. 25% of $400,000 is $100,000. Under the Voluntary Compensation Endorsement to a Workers' Compensation Policy, an employer must provide which of the following? A The class of employees to be covered B The designated beneficiary C The benefits of the designated State's Workers' Compensation law D The number of years the business has had employees A The class of employees to be covered Policyholder L has a DP-1 with a Coverage A amount of $300,000. Following a severe storm, she suffers a covered loss to the dwelling of $275,000 and a covered loss to a detached swimming pool of $30,000. How much will L's policy pay? A $250, B $300, C $305, D $275,

B $300,000 - The pool is covered under Coverage B, which pays up to 10% of Coverage A, or $30,000. However, because L's policy is written on the DP-1 form, the Coverage B limit is included in, not additional to, the Coverage A limit. Therefore, the most the policy will pay is $300,000. Which of the following best defines short rate cancellation? A The premium is fully earned by the insurance company B The insured will receive none of the unearned premium C The insured will receive less than the full amount of the unearned premium D The insured will receive exactly half of the unearned premium C The insured will receive less than the full amount of the unearned premium Actual cash value may be defined as: A The cost to replace or repair property, minus depreciation B The cost to replace or repair the property C The agreed upon specific value determined before the policy was issued D The original purchase price of property, minus depreciation A The cost to replace or repair property, minus depreciation An agent who induces a client to use the cash value of an existing policy to buy an additional but unneeded policy is guilty of _______________. A Churning B Fraud C

Twisting D Rebating A Churning - Churning is the practice whereby policy values, such as cash value, in an existing life insurance policy, annuity contract, and/or any riders, are used to purchase another insurance policy or annuity contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation. Which of the following best describes the situation when a property has neither contents nor occupants? A Abandonment B Unoccupancy C Vacancy D Ordinance or Law C Vacancy Which of the following statements is false regarding Certificates of Authority? A No person can act as an insurer unless authorized by a Certificate of Authority B A Certificate of Authority is not required for authorized reinsurance transactions C A Certificate of Authority is not required to transact surplus lines insurance D Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a Certificate of Authority commits a misdemeanor

D Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a Certificate of Authority commits a misdemeanor - actually commits a felony of the 1st, 2nd, or 3rd degree. Q runs a stop sign causing an oncoming vehicle to swerve and hit a tree. Q is guilty of: A A criminal violation B Trespassing C Negligence D No wrongdoing C Negligence All of the following are true of the Dwelling Policy Broad Form, except: A The dwelling and contents are covered for the broad form perils B Losses to the dwelling are paid on a replacement cost basis C The broad form automatically covers incidental business occupancies D The broad form covers dwellings located on farms D The broad form covers dwellings located on farms All of the following are methods of loss valuation, except: A Stated amount B Blanket value C Actual cash value

D

Replacement cost B Blanket value Which of the following is true regarding a negligence claim? A An uninjured party to an accident is presumed to be negligent B The claimant must demonstrate that the wrongful actions of the insured were the direct or proximate cause of the claimed injury or damages C Every accident resulting in bodily injury or property damage is due to a negligent act D In every accident there is one or more negligent parties B The claimant must demonstrate that the wrongful actions of the insured were the direct or proximate cause of the claimed injury or damages All of the following statements regarding the property policy structure are correct, except: A The insuring agreement describes the perils that are covered under the policy B The insured's duties and obligations are listed in the conditions section C The Declarations Page lists other parties having an insurable interest in the property D Additional coverages are added to the policy for an additional premium D Additional coverages are added to the policy for an additional premium - Additional coverages are automatically included without an additional premium. When the insurance company and insured cannot agree upon the amount of the loss, the person selected to help the two hired appraisers is called a(n): A Agent

B

Adjuster C Umpire D Claim representative C Umpire - Both the insurance company and insured's representatives (usually appraisers) will select a third person to serve as an umpire. If the two appraisers fail to agree on the appraisal, they will submit their differences to the umpire, and an agreement of any two of the three will set the amount of the loss. A contract between the agent and the party paying the negotiated fee must be signed by both parties and retained by the agent for how many years? A As many years as the agent receives the negotiated fee B 1 C 3 D 4 A As many years as the agent receives the negotiated fee - A written contract between the agent and the party paying the negotiated fee must be signed by both parties and include the promise that any commissions paid by the insurer will refund the amount paid by the party within 30 days. The contract must be retained by the agent for 3 years. Which of the following is correct with regard to surplus lines? A Applicants for surplus lines coverage must verify that a diligent effort has been made to procure the full amount of required insurance from an authorized insurer before pursuing surplus lines coverage B

The premium rate at which the coverage is exported may be lower than the rate in actual and current use by a majority of the authorized insurers for the same coverage on a similar risk C Residential and multi-peril residential policies are subject to the diligent effort requirements D The policy form under which the insurance is exported may be more favorable in coverage or rates to the insured than similar contracts in actual current use in Florida by the majority of authorized insurers C Residential and multi-peril residential policies are subject to the diligent effort requirements Which of the following is not found on the Declarations Page? A Limit of liability B Insured property address C Exclusions D Expiration date of the policy C Exclusions All of the following are included in the Declarations of a property policy, except: A The amount of coverage B The amount of premium C The named insured's mailing address D The perils insured against D The perils insured against

In the event of the total loss of a building, the insurer's liability under the policy if caused by a covered peril will be the amount of money for which the property was insured. This describes which of the following? A Replacement Cost B Insurance to Value C Valued Policy Law D Agreed Value C Valued Policy Law - The policy Coverage A amount will be the insurer's liability regardless of the replacement cost of the dwelling, but it does not apply if there has been any change increasing the risk without the insurer's consent or fraudulent or criminal fault on the part of the insured or acting in the insured's behalf. A homeowners insurance agent may only share a commission or any valuable consideration with one who: A Has a license to sell homeowner insurance B Has an appointment and license to sell homeowner insurance C Does not have an appointment to sell homeowner insurance D Has a license to only sell life insurance B Has an appointment and license to sell homeowner insurance When a policy covers the peril of Windstorm or Hail, a risk may be eligible for a credit to the wind portion of the premium. Which of the following do these credits NOT apply to?

A

Roof-Wall Connection B Flooring C Roof Shape D Opening Protection B Flooring Which of the following statements is correct concerning the required time periods under loss payments? A The insurer must pay or deny the entire portion of the claim within 15 days after receipt of notice of a property insurance claim B The insurer must begin investigating the claim within 14 calendar days after receiving proof of loss statements C An agent or insurer must acknowledge receipt of a communication regarding a claim within 10 working days D The insurer must pay or deny the entire portion of the claim within 90 days after receipt of notice of a property insurance claim D The insurer must pay or deny the entire portion of the claim within 90 days after receipt of notice of a property insurance claim - The insurer must begin investigating the claim within 10 working days after receiving proof of loss statements. An agent or insurer must acknowledge receipt of a communication regarding a claim within 14 calendar days. The insurer must pay or deny the entire portion of the claim within 90 days after receipt of notice of a property insurance claim.

Which of the following handles unclaimed property? A The Department of Financial Services B The Division of Consumer Services C The Department of Commerce Division of Unclaimed Funds D The Division of Rehabilitation and Liquidation C The Department of Commerce Division of Unclaimed Funds A diligent effort for a residential structure with a dwelling replacement cost of $250,000 means rejections from how many authorized insurers are required? A 3 B 1 C 4 D 2 D 2 - For a residential structure with a dwelling replacement cost of less than $1 million, rejections from three authorized insurers are required, and if $1 million or more, rejection from at least one authorized insurer is required to constitute diligent efforts to obtain insurance from an unauthorized insurer. Which of the following is NOT a purpose of licensing? A For the applicant to be familiar with the Florida insurance laws B To authorize and enable the licensee to actively and in good faith engage in the insurance business as an agent C To facilitate the public supervision of such activities in the public interest

D

To authorize the agent to insure risks D To authorize the agent to insure risks - insurer auth NOT agent The Market Investigation division includes four sections with unique duties. Which of the following is not one of those four sections? A Life and Health B Special Investigation Unit C Approval D Market Analysis C Approval Which of the following statements is false with regard to payment of claims? A Health insurers must pay all claims, for payment under a health insurance policy, within 45 days after receipt of the claim by the health insurer B A dual endorsement from any mortgage holder or lienholder is required for amounts payable under the policy for personal property and contents C A property insurer must pay claims directly to the primary policyholder, payable to the primary policyholder only D If there is a lien on a damaged vehicle, payment of the claim must be made jointly to the owner of the damaged vehicle and the first lienholder of record