MN Insurance Exam MN Property and Casualty Insurance Questions & Correct Answers. Grade A+, Exams of Insurance law

Download MN Insurance Exam MN Property and Casualty Insurance Questions & Correct Answers. Grade A+ and more Exams Insurance law in PDF only on Docsity!

MN Insurance Exam Property and

Casualty, MN Property & Casualty

Insurance, MN Insurance Exam Property

& Casualty, Minnesota laws, rules for

property insurance quiz, MN Laws,

Rules, and Regulations Pertinent to

Property Insurance Only 2024-2025.

Questions and Correct Answers. Graded

A+

___ credit hours per licensed producer - ANS24 credits ___ prelicensing hours per major line of authority - ANS20 hours $__ for property damage of others in any one accident - ANS$10, $___ fine per day if a person violates, aides, or abets a written cease and desist order - ANS$10, $___ for bodily injury to one person in any one accident - ANS$30, $___ for bodily injury to two or more persons in any one accident - ANS$60, $___ for income loss, funeral expense, and survivor's loss - ANS$20, $___ per line of authority for an applicaton fee - ANS$ 1 Year - ANSThe policy term is ___ years 10 days - ANSA FAIR plan inspection report is due within ___ business days after the inspection 10 Days - ANSThe insurer must provide the mortgage ___ days written notice of cancellation 12:01 am - ANSThe policy begins and ends at ________ am standard time

2 Years - ANSInsured lawsuits against the insure must be initiated within ___ years after the loss 20 Days 20 Days - ANSA policy in effect for less than _____ days can be cancelled for any reason, with at least ____ days notice of cancellation. Insurer must give _____ days cancellation notice, if due to nonpayment of premium 25 people $50, $300,000 - ANSA township mutual fire company can be formed when there are at least ____ people living in adjoining counties who own __________ worth of property. The township mutual is an assessable insurance company, but it must maintain a minimum reserve of ____________. 30 Days - ANSCancellation: insurer must give _____ days notice on homeowners cancellation 30 Days - ANSThe insurer must give the insured notice of how it will handle the loss within ___ days after receipt of proof of loss 5 Days - ANSOnce a loss has been settled, payment for the claim must be made within ____ business days 5 Days - ANSThe plan must make an underwriting decision within ____ business days of receiving completed application 59 Days - ANSIf the inspection reveals that the applicant is not eligible, the plan must inform the applicant within ____ days of the inception of the policy a commissioner can examine who? - ANS- any company authorized to do business in MN

• any person involved in formation of insurer -a licensed producer or solicitor
• a person engaged in business of adjusting losses or financial premiums a FAIR plan inspection report is due within __ business days after the inspection - ANS10 days a homeowners policy in effect for less than 60 days can be cancelled for any reason with at least ___ days notice of cancellation - ANS20 days A homeowners policy may be non-renewed based on which of the following requirements? - ANSWith written notice that future losses may result in non renewal a lapsed licensee can reinstate license within ___ months - ANS12 months

a license is suspended for any period no less than - ANS3 months a licensee's time to notify the commissioner of address change is __ days - ANS10 days a non at-fault claimant may sue the at-fault party if the disability lasts for __ days - ANS60 days a person entitled to basic economic loss benefits must notify the insurer within __ months of the date of accident - ANS6 months a premium paid at the time of the application constitutes what? - ANSan offer a promotional advertising item or gift of $___ or less per year is not a rebate - ANS$ a temporary insurance producer license may be issued for up to ___ days - ANS days Abandonment - ANSThe insured cannot simply abandon the property to the insurance company in exchange for the full-insured value. Absolute/Strict Liability - ANSliability without fault Actual Cash Value - ANSMethod for placing value on property as of the time of its loss or damage. It may be determined as replacement cost less depreciation. The market value of an item may be used to help determine this. Actual Cash Value - ANSthe payment you receive is based on the replacement cost of an item minus depreciation Adhesion - ANSone party has greater power over the other when drafting the contract Adjusters - ANSInvestigate, evaluate, settle insurance claims on behalf of the insurer or insured Adverse information remains in a credit report for ___ years. - ANS7 years Adverse selection - ANSthe tendency of persons with a higher-than-average chance of loss to seek insurance at standard rates Advertising includes - ANS- printed and published material

• letters -billboards -radio and TV after - ANS

After 60 days of an effective policy, what can an insurance cancel homeowners insurance because? - ANS-nonpayment of premium -fraud when making a claim -omission of material facts -physical changes in property thats not restored within reasonable time after a total of $___ of permanent total disability benefits have been paid, the amount of benefits paid by the employer are reduced by the amount of any government disability benefits, including SS benefits - ANS$25, After getting the notice of termination, how many days can the producer file written comments concerning the termination with the commissioner? - ANS30 days Aggregate Limit - ANSLimit stated in the policy representing the total amount for all claims paid during the policy period. Once this limit has been met, the insured is without coverage. Aleatory - ANSpayouts to insured are unbalanced Alien Insurer - ANSlike china doing business in the US All of the following are true regarding a township mutual fire company EXCEPT - ANSThe min reserve is $1 mil an insurance company must complete the claim investigation within __ days - ANS days an insurance company that terminates an appointment must notify the commissioner within ____ days - ANS An insurer must mail notice of non-renewal to the insured at least how many days before the non-renewal becomes effective? - ANS60 days Annual Transit Policy - ANScovers all shipments during the year Apparent Authority - ANSauthority thats assumed appraisal - ANSevaluation or estimation of worth Appraisal Process - ANSIn case of losses involving property, it is often nessecary to obtain estimates of the damaged property before payment can be made. This involves all types of property losses such as automobiles, structures, and their contents. Special appraisers or estimators may be required for fine arts, stained glass or other items that require a higher level of expertise.

Arbitration - ANSsettling a dispute by agreeing to accept the decision of an impartial outsider Are stock companies profits taxable? - ANSYes avoid risk - ANSnever getting into a car BAILED - ANSBonds Aid Interest Loss of earnings Expenses Defense Costs Bailee Liability - ANS- Covers damage to customer's property

• Pays customer Binders - ANSused before issuing a policy to provide immediate protection until the actual policy is issued Blanket Coverage - ANSPolicy which provides a single limit of insurance for all property falling within a specific class. like covering your house, car and boat? BOP Standard deductibe - ANS$ Broker - ANSrepresents the insured Builders Risk Coverage Form - ANSA form that covers buildings in the course of construction, including additions or alterations to existing buildings. burglary - ANStaking property from inside the premises (usually breaking in, making a visible forced entry) Business Income Coverage - ANSPays for losses of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations. Business Owners Policy (BOP) - ANSA policy that combines property, liability and business interruption coverage for small- to medium-sized businesses. Business Personal Property - ANSProperty owned, leased or rented by a business that is used to conduct business (computers, desks, file cabinets, etc.) can a dwelling be under construction? - ANSyes cancellation - ANSoccurs before the policys expiration date

Cancellation of coverage under the FAIR plan requires how many days advance written notice? - ANS15 days Cancellation of homeowners policy requires how many days advance written notice? - ANS30 days Cause of Loss Forms - ANSBasic, Broad, Special claim records must be retained for ___ years after the claim is paid or denied - ANS years Coinsurance - ANSrequires the insured to carry a minimum amount of insurance. normally 80% did/should x loss Combined Single Limit - ANSauto insurance liability coverage that combines both bodily injury and property damage liability Commercial Package Policy (CPP) - ANSPolicy that covers two or more lines of business by combining ISO's commercial lines coverage parts. Comparative negligence - ANSinvolves both parties being at fault, and plaintiff cannot recover damages if they're greater than the defendants. complaint records must be retained for ___ years after the date received - ANS4 years comprehensive - ANSgod sent things like (deer crossing road, theft) Concealment - ANSThe withholding of known facts which, if material, can void a contract. conditional - ANS- contracts require certain conditions to be fulfilled in order for performance under the contract to be enforced.

• insured must pay the premium for coverage and file a claim if a loss occurs conditions - ANSrules for the policy, duties, and obligations Conditions - ANSSet provisions, rules of conduct, duties and obligations for the parties. A number of common insurance conditions describe such things as the policy period and territory. It also includes the insured's obligation to provide proof of loss, how settlements are handles when other insurance is involved, and the right of each party to cancel the policy. consultant - ANSsomeone who offers advice

contributing negligence - ANSPlaintiffs lack of action negatively affects the treatment out come, contributing towards the negligence. "spilt oil all over, then decided to climb a latter because hes stupid and falls) Coverage A - ANSDwelling. it covers structures attached to the dwelling, materials and supplies for use in the construction or repair of the dwelling Coverage A Exclusions - ANSExclusions: •Intended BI or expected PD •Liquor liability •Workplace accidents to employees covered by WC •Pollution Liability •Acts of War •Ownership & Operation of aircraft, watercraft, vehicles •Injury or damage caused by Mobile Equipment in transit •Damage to property owned by insured, rented to insured, occupied by insured or in the care, custody or control •Cost of product recall Coverage A: Bodily Injury and Property Damage Liability - ANSBI & PD, caused by occurance, duty to defend the insured Coverage B - ANSOther Structures. insures buildings on the premises that are separated from the dwelling by a clear space or connected only by fence or similar connection, utility line. cannot be used for commercial, manufacturing or farming purposes. Coverage B - Personal and Advertising Injury - ANSoffenses, libel slander and advertisements Coverage B - Personal and Advertising Injury Liability exclustions - ANSmaterial thats published before effective date, trademark bad Coverage C - ANSpersonal property Coverage C- Medical Payments Exclusions - ANSemployee, or payable under workers comp Coverage C: Medical Payments - ANSprovides necessary medical, surgical, ambulance, hospital, professional nursing or funeral expenses for injuries to third parties Coverage D - ANSFair Rental Value (Up to 10% of Cov. A) -Pays Landlord for damages due to covered peril -Pays for loss in rents landlord would have collected -Monthly basis pay is 1/12 of coverage amount

Coverage D - Fair Rental Value - ANSabout payable to an insured homeowner for loss of rental income due to damage that makes the premises uninhabitable Coverage D: Loss of Use (Homeowners) - ANScovers losses incurred as a result of your home being uninhabitable Coverage L - ANSPersonal Liability - covers for damages that the insured becomes legally obligated to pay because of an occurrence. Policy limit is $100, Coverage M - ANSMedical payments to others - the insurer will pay all necessary medical expenses incurred within three years of an accident that causes bodily harm. Max of $1, Declarations - ANSPolicy includes the identity and address of the name insured, the policy term or period, the amount of insurance or limits of liability, the policy premium, and any applicable deductibles. Will also include either a property description or a schedule of coverage parts, and a list of any endorsements. Declarations - ANSwho, what, when, where, and how much Deductible - ANSAmount you must pay before you begin receiving any benefits from your insurance company Definition of the Insured - ANSAn insurance contract must identify the persons or parties who are insured under the policy. THE NAMED INSURED Definition of the Insured - ANSThose that have insurable interest in the property who would suffer a financial loss if the property were damaged by an insured peril can be considered an insured. In personal insurance, this can include family members without listing their names on the declarations page of the policy. Additional insureds such as a lien holder. Difference between dwelling policy and homeowners policy - ANS-dwelling provides more limited property coverage than homeowners -dwelling covers property only while homeowners covers property and liability coverages direct loss - ANSphysical loss to property (house burning down) Direct Writing Companies - ANS- Companies whose products are sold by employees, not independent contractors.

• This type of producer may be compensated by a salary, commission, or both.
• The insurance company owns the renewals of the policies sold on their behalf. Directors and Officers Liability Insurance - ANSprovides financial protection from the consequences of litigation involving wrongful acts on the part of directors and officers

disability benefits are equal to ___% of the employees gross weekly wage up to a maximum of ___% of the statewide average weekly wage - ANS66 2/3% and 102% do dwellings have to be occupied by the owner? - ANSno Doctrine of Reasonable Expectations - ANSStates that a policy includes coverages that an average person would reasonably expect it to include, regardless of what the policy actually provides. Domestic Insurer - ANSinsurance company doing business within one state Domestic shipments can only be covered by - ANStruck, train, air or mail DP-1 covers - ANSnon attached buildings DP-2 (Covers) - ANSDamage by burglars, falling objects, weight of ice, snow, or sleet Duties of the Insured - ANS-pay premiums -notify the insurer of insured events within a reasonable time -cooperate with insurer's investigation Duties of the Insured - ANSThe insured is required by the policy provisions to report a claim to the company as soon as practical. The insured must also preserve the undamaged property to the best of his/her ability to avoid additional loss. dwelling broad form covers? - ANSeverything in the broad form including, damage to property caused by burglars (not theft of property tho) weight of ice snow, falling objects, freezing of plumbing Dynamic Risk - ANSThis is associated with chance. Example would be a new and fatal virus spontaneously erupting into society. This is not insurable. each insurer must retain a record of all non renewals and company initiated cancellations for ___ years - ANS each insurer must retain a record of all non renewals and company inititaed cancelalltions except those for nonpayment of premium for __ years - ANS3 years Elements of a Contract (CLOAC) - ANSConsideration, legal purpose, offer, acceptance, competent parties Elements of Insurable Risk - ANS(CANHAM) Calculable, Affordable, Non-Catastrophic, Homogeneous, Accidental, Measurable

Employment practices liability insurance (EPLI) - ANSProtects an employer against claims by workers that their legal rights as employees of the company have been violated. endorsments - ANSmake changes to the original policy endorsments - ANSused to add coverage or modify coverage Equipment breakdown insurance - ANSInsurance that covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power. Errors and Omissions - ANSA Professional Liability coverage that protects the insured against liability for committing an error or omission in performance of professional duties. Estoppel - ANSmeans that once a waiver has been created (a right has been waved, it can't be changed. Examples of surplus lines - ANSCargo Ships, Oil Rigs, Casinos, Amusement parks Excess coverage - ANSpays whatever is not paid by the primary policy up to the amount of the loss or excess coverage limit, whichever is less. Excess lines - ANSspecialized insurance coverages exclusions - ANSitems not covered Exclusions - ANSMay describe property, perils, hazards, or losses arising from specific causes that are not covered by the policy. Exposure - ANSA condition or situation that presents a possibility of loss. Express Authority - ANSthe authority of an agent, Expressed Waiver - ANSOccurs when the insurer the insurer or its representatives purposely gives up known right under the contract. Extra Expense Coverage - ANSInsurance coverage for extra expenses incurred by the named insured to avoid or minimize the suspension of operations resulting from direct damage caused by a covered cause of loss. FAIR - if the inspection reveils that the applicant is not eligible, the plan must inform the applicant within __ days of the inception of the policy - ANS59 days

FAIR - the plan must make an underwriting decision within __ business days of receiving the completed application - ANS5 days Fair Credit Reporting Act - ANSprotects consumers by requiring that the consumer be notified in certain situations and by establishing provisions for the removal or incorrect information FAIR plan cancellations require at least __ days written notice to be insured - ANS days FAIR plan does what? - ANSassists applicants in securing property or liability insurance FAIR plan policy term is - ANS1 year Federal employers liability act (FELA) - ANScomp for rail road workers financial and complain records must be kept on file for ___ years - ANS First violation for violating MN nonrenewal statutes - ANS$ Flood Insurance Coverage A Standard Deductibe - ANS$1, Flood Insurance Coverage B Standard Deductible - ANS$1, for a nonrenewal, notice must be mailed to the insured at least __ days before the effective date - ANS60 days For an earthquake how many hours and how many deductibles - ANS168 hours and only 1 deductible For personal injury protection, how much is the minimum per person? - ANS$40, for reasonable and necessary medical expenses what is the amount? - ANS$20, for underinsured, $___ minimum limit because of the injury or death of one person in any accident - ANS$25, Foreign Insurer - ANSinsurance company doing business outside its home state forgery - ANSis signing the name of another person Forgery - ANSThe fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another. Fraternal Benefit Societies - ANSMust be nonprofit, have a lodge system, and offer insurance to its members only

fraud - ANSlying on purpose. INTENTIONAL funeral and burial benefits shall be reasonable expenses not to exceed $___ - ANS$5, government covers what? - ANSWar Risk, Nuclear energy, flood, federal crop Gramm-Leach-Bliley Act - ANSprotects the confidentiality of personal financial information Hazard - ANSAny condition that increases the possibility of a loss hazard - ANSincreases the chance of loss (gas next to a fire place) HO-2 - ANS(broad form): covers the dwelling, other structures, and personal property on a named perils basis HO-3 - ANSspecial form; provides open peril coverage for loss to dwelling and other structures; broad coverage for personal property HO-4 - ANSrenters insurance, no dwelling coverage HO-5 - ANScomprehensive form, provides open peril coverage for both the dwelling and other structures and personal property HO-6 - ANScondominium owners HO-8 - ANSpolicy is for OLDER HOMES that have a replacement cost that is much higher than its market value - basic coverage Homeowners Basic Form Perils - ANSWC SHAVVER + vandalism + Theft Homeowners Coverage B covers ____ - ANSstructures on the premises set apart from the home like a detached garage. Cannot be used for business How do you get a nonresident license? - ANS-they currently have a license and are in good standing within their home state -must file an address change

• no license application required how long is vacancy? - ANS60 days How many apartments can a dwelling be? - ANSno more than 4

How many days does an insurer have to reply to customer claims and inquries? - ANS10 days How many days does the insurance company get to send a written notice to the commissioner about termination to the producer? - ANS15 days how many hours of continuing education must be in ethics? - ANS How many parties is involved when the insurer and insured can't agree on the value of loss? - ANS3 - the umpire is the 3rd how many years can you reapply for a license when your license had been revoked? - ANS2 years How many years is a license period - ANS2 years how many years must bankruptcy information remain in the credit report for - ANS years how much does the dwelling policy cover for a fire department service charge? - ANS$ How much is the penalty for failing to appoint a producer? and up to? - ANS$25 up to $ how much must a township mutual maintain? - ANSminimum of $300, How often can a commissioner examine insurance companies? - ANSas often as necessary but MUST be every 5 years if the car owner doesn't have collision - ANSthe insured must request coverage within 4 days Implied Authority - ANS Implied Waiver - ANSMay result from some kind of neglect on the part of the agent or adjuster. In mutual companies, what are insurance dividends considered as? - ANSa refund of overpaid premium, not taxable In order for an insurer to cancel FAIR plan coverage, it must provide the insured with... - ANS15 days advance written notice Income loss benefits provide compensation for % of gross income to a maximum of $_ per week - ANS85% and $

indirect loss - ANSloss as a result of a direct loss ( house burned down, now we gotta stay in a hotel) Insurable Interest - ANSBefore a person can obtain an insurance policy, they must have this in the property being insured. A person is deemed to have this in property when he has a lawful, substantial, economic interest in the preservation of the property. The term "person" includes an individual, company, insurer, association, organization, reciprocal, partnership, or any other legal entity. Insurable interest - ANSthe interest you have in insurance (ex. i have no interest in taking out insurance for taylors car. its not mine? Insurance - ANSa contract between two parties in which one party protects the other against certain types of loss in exchange for payments Insurance adjuster - ANSClaims examiner overseeing an industry related claim case Insurance company must give __ days notice of homeowners cancellation - ANS days insured's lawsuits against the insurance company must be initiated within __ years after the loss - ANS2 years insurer must give __ days cancellation notice, if due to nonpayment of premium - ANS20 days Insuring Agreement - ANSDescribes the covered perils, or risks assumed, or nature of coverage, or makes some reference to the contractual agreement between insurer and insured. In package policies each different coverage form includes its own insuring agreement. Insuring Agreement - ANSpromise to pay and perils covered Is liability coverage provided with all HO forms? - ANSLiability coverage is included in all the homeowner's policy forms. Jones Act - ANSworkers comp for ship's crew. injuries caused by employers or ship owners negligence law of large numbers - ANSthe more the data the more reliable the statistics will be Liability for damage to property rented is or isnt covered? - ANSit is not Licensee may request a hearing within __ days of commissioners order after hearing request, the commissioner has ___ to hold the hearing - ANS30 and 30

Limitations - ANSMay eliminate or reduce coverage, but only under certain circumstances or when specified conditions apply. Limits of Insurance - ANSA - per occurance B- per person C - per person Lloyd's Association - ANSgroup of individuals who share the risk and the exposure

• known for insuring unusual risks (BIG money things like cargo ships) longshore harbor workers comp act - ANScomp for longshore and harbor marine workers Loss Ratio - ANSloss ratio = incurred losses/earned premiums Material Fact - ANSa fact that would cause an insurance company to decline a risk Material Misrepresentation - ANS- a false statement that changes the outcome of issuing a policy
• makes a contract void if found medical malpractice - ANSprofessional negligence of physicians or providers Medical Payments under casualty insurance covers... - ANSmedical and funeral expenses within 3 years Methods of Handling Risk (STARR) - ANSSharing Transfer Avoidance Retention Reduction Misreprentation - ANSmaking false statement regarding dividends or financial condition of the insurer Misrepresentation - ANSA false statement or lie that can render the contract void. Moral Hazard - ANSA condition of morals or habits that increases the probability of a loss from peril. moral hazard - ANSthey just want money from the insurance company Morale hazard - ANSbeing careless "my insurance will pay for it, its fine"

Morale Hazard - ANSHazard arising out of an insured's indifference to loss because of the existence of insurance. Mortgagee Rights - ANSRights granted to a mortgagee (lender), under a property contract issued to a mortgagor, by virtue of the mortgagee's financial interest in the property. Motor truck cargo - ANStruckers form covers the insureds bailee responsibility (carrying someone elsed stuff) Mutual Companies are managed by who? - ANSboard of directors mutual companies are owned by? - ANSpolicy holders mysterious disappearance - ANSmeans property of the insureds property that vanished without explanation Named nonowner coverage - ANScovers someone who does not own an automobile but may drive borrowed or rented autos Named Peril - ANSThis form lists the specific perils to be covered in the policy. National Flood Insurance Program - ANSThe federal government's program to provide Flood insurance at subsidized rates. Negligence - ANScareless neglect, often resulting in injury Negligence - ANSCaused by improper product design, improper assembly of the product, failure to inspect or test the product, etc. network liability covers.. - ANScyber liability Newly Acquired Auto - ANSautomatically has the same coverage as current covered autos for 14 days. non at fault claim may sue the at fault party if medical expenses excees $___ - ANS$4, Nonconcurrency - ANSwhen there are two or more policies covering the same property but providing different or non-identical coverage. nonrenewal - ANSoccurs at the expiration date notice of cancellation for car insurance is __ days in advance if the policy is being cancelled for any other reason - ANS30 days

notice of cancellation for car insurance is __ days in advance if the reason is non payment of premium - ANS10 days Notice of Claim - ANS- The policyowner's obligation to the insurer to provide notification of loss within 20 days after the occurrence (or as soon as is reasonably possible).

• 20 days notice of nonrenewal of car insurance is __ days - ANS60 days number of years licensing exam results are valid - ANS3 years Obligations of the Insurance Company - ANSan insurance company, in return for premium, must be fair in underwriting and must pay covered losses. Occurance form - ANScoverage triggered by bodily injury or physical damage that occurs during the policy period Occurence - ANSA sudden and unforeseen event resulting in financial loss. It may also be continuous or repeated exposure to an event that results in financial loss. occurrence - ANSan accident, including continuous or repeated exposure to substantially the same general harmful conditions. Occurrence Form - ANStriggered by damage or injury that occurs during the policy period once a loss has been settled, payment for the claim must be made within __ business days - ANS5 days Open Peril - ANSDoes not list the perils but provides broader coverage. Oral binders must be followed up in writing within how many business days? - ANS days oral binders must be put in writing to the insured within ___ business days - ANS other-insurance provisions - ANSprevent profiting from insurance and violation of the principle of indemnity Part A: Liability Coverage - ANSCovers body/property damage caused by insured
• think you being the insured and being "liable" for something/someone Part B: Medical Insurance - ANSvoluntary program that covers physicians' fees and related medical services

Part D: Coverage for Damage to Your Auto - ANSprovides coverage for damage or theft of an auto Parts of a Property or Casualty Insurance Contract (DICEE) - ANSdeclarations, insuring agreements, conditions, exclusions, and definitions (explainations) Peril - ANSActual cause of a loss (fire, windstorm, hail) Peril - ANScause of loss (fire) Personal Articles Floater - ANSprovides all risk coverage, including fire, theft, etc for certain types of personal property such as jewelry. White traveling? physical hazard - ANSlike a wet floor Policies must be delivered to the insured within __ working days of the producer's receipt from the insurer - ANS30 days Policy Application - ANSprinted form that includes questions about a prospective insured and the desired insurance coverage and limits. Policy forms, applications, and advertising must be retained for __ years after the effective date - ANS3 years Premises and Operations - ANSon and off the premises premium refunds must be sent to the insured within ___ days of the producers receipt from the insurer - ANS5 days Primary Coverage - ANSattaches immediately upon the occurrence or loss Principle of Indemnity - ANSThe insurer agrees to pay no more than the actual amount of the loss producer - ANSme Products and Completed Operations - ANSA form of insurance, which covers a company against liability arising out of its products or its completed operations. Ex Salmonella Proof of loss - ANSA formal statement made by the insured to the insurance company regarding a loss. The purpose of this is to place before the company sufficient information concerning the loss to enable it to determine its liability under the policy or bond.

Proof of Loss - ANSA statement of facts about a loss for which the insured is making a claim. Property policy begins at : standard time - ANS12:01AM proximate cause - ANSLegal cause. It exists when the connection between an act and an injury is strong enough to justify imposing liability. Pure Risk - ANSA situation where there is only the possibility of a loss. Example would be catastrophic medical expenses, liability law suit, damage to property by fire. This type of risk is insurable. pure risk - ANSchance of loss reasons one would be eligible under the FAIR plan? - ANSpoor credit history, high number of claims, property condition Rebating - ANSoffering something to help sell Reciprocal - ANSmembers of unincorporated group insure eachother and share losses. (Cover eachother, what goes around like a reciprocal) reduce risk - ANSwearing a seat belt Rehab treatment must be reported to the insurer within ___ days - ANS60 days Reinsurance - ANSinsurance for insurance companies to help spread the risk Replacement Cost - ANSCovers property - both building a contents - on the basis of fill replacement cost without deduction for depreciation of any loss sustained, subject to the terms of the co-insurance clause. Replacement Cost - ANSThe current cost to purchase new, the item that was lost, with no deduction or depreciation. The full value will be paid up to the limit of the policy less any deductible. replacement cost insurance - ANSThere is no deduction for physical depreciation in determining the amount paid for a loss representation - ANSbelieved to be true Representations - ANSstatements that the applicant believes are true retain risk - ANSpaying for it yourself. like walmart has so much money they dont need to take out insurance

Retroactive Date - ANSThe date on or after which bodily injury or property damage must occur (or a personal and advertising injury offense must be committed) in order to be covered. retrospective rating - ANSthe insureds premium on losses incurred during the policy period Risk - ANSchance or uncertainty of loss Risk - ANSPossibility that a loss might occur and is the reason that people buy insurance. Risk purchasing group - ANSA group of businesses from the same industry that join together to buy liability insurance from an insurance company robbery - ANSthe taking of property from a person's possession by using force or threats Safe Burglary - ANSThe unlawful taking of property from within a locked safe or vault Salvage - ANSIf the insurer pays a loss on behalf of the insured, the insurer is entitled to the salvage to reduce the claim salvage value - ANSthe estimated value of a fixed asset at the end of its useful life schedule rating - ANSapplies a system of debits or credits to reflect characteristics of a particular insured Scheduled Personal Property Endorsement - ANSprovides coverage for specific items of property like a watch that exceeds the internal limit on the policy second violation for violating MN nonrenewal statutes - ANS$ Section 1 of the homeowner's policy covers what? - ANSthe home and its contents Section 2 on Homeowners Policy - ANSLiability and medical payments. paid to others only share risk - ANStwo or more individuals or businesses agree to pay a portion of any loss incurred by any member of the group Single Limit - ANSPays up to one amount as the maximum limit of liability of the insurer with respect to any one accident/occurrence involving either or both bodily injury and property damage. Solicitor - ANScan sell insurance but not countersign

Sources of Underwriting Information - ANS- application

• agent's report
• inspection report
• physical inspection
• physical examination Specific Coverage - ANSInsures one property on one policy for one specific amount of insurance. Speculative Risk - ANSA situation where either profit or loss in possible. Example would be betting on a horse race or investing in real estate. This type of risk in not insurable. Speculative risks - ANSrisks where there exists both the change of gain and the chance of loss Split Limits - ANSExpressed by two figures. There may be a limit representing the max payable for each person injured per occurrence for bodily injury and another limit applicable to the claims of all persons injured in the accident or occurrence. Split limits - ANSseparate limits for bodily injury and property damage liability coverage Stated Amount - ANSinsured up to this amount Static Risk - ANSThese factors are historical factors that do no frequently fluctuate. They result from "static" or "unchanging" environment. Example would be an area that may only flood every 100 years. This type of risk is insurable. Stock companies are managed by who? - ANSBoard of directors Stock companies are owned by who? - ANSShareholders Subrogation - ANSthe insurer has the right to sue an at fault party for damages the insurer had to pay to the insured. common when the at fault party doesnt have insurance Subrogation Clause - ANSUsed when the insurer has paid a covered claim on the behalf of the insured that is caused by another party. The insurance company is entitled to the insured's right of recovery from the negligent party. This is sometimes called the "Transfer of Right of Recovery Against Other to Us" Supplemental Payments - ANSThings specified in auto policies that the insurance company will pay for in addition to the auto policy limits of liability Surplus Lines - ANS

surplus lines - ANS- allows producers to place insurance risks with eligible nonadmitted surplus lines insurers

• Can only be sold to certain high-risk insureds
• Cannot be sold solely for a cheaper rate than licensed/admitted insurers survivors economic loss benefits are subject to a maximum of $___ per week - ANS$500 Terrorism Risk Insurance Act (TRIA) - ANSRequires insurance companies to offer terrorism insurance to their commercial policyholders. the applicant has the right to challenge any erroneous information contains in the consumer report within __ days - ANS30 The commissioner examines each insurer every __ years - ANS5 The HO-2 policy provides an additional % amount of coverage ont he dwelling for loss of personal property but only % of the personal property limit can be applied to property - ANS50% and 10%. meaning you would cut the number in half then minus 10% the insurance company must give the insured notice of how it will handle the loss within __ days after receipt of proof of loss - ANS30 days the insurer must file a notice of appointment within __ days of the first sale by the producer - ANS15 days the pair or set condition - ANSStates that in the case of a loss to an item that is part of a pair or set, the insurance company is not obligated to pay the value of the entire set. the penalty for rebating is $ to $_ per violation - ANS$60 - $200 the producer must notify the commissioner of any administrative action take or criminal prosecution against the producer within ___ days - ANS30 days the producer must notify the commissioner within ___ days of any felony or gross misdemeanor conviction, guilty plea, or plea of no contest - ANS10 days the standard underwriting experience period in MN is __ years - ANS3 years theft - ANStaking of property Theft of jewlery, watches, fure, and precious stones is valued at? - ANS$1,500 third violation for violating MN nonrenewal statutes - ANS$500

Three type of adjusters - ANS1. An independent adjuster settles losses on behalf of more than one insurer

2. A public adjuster acts solely to represent the interests of the insured
3. A staff adjuster is an employee of the insurance company adjusting losses solely for that company tort - ANSA civil wrong Total repair or replace? who decides? - ANSinsurance company Transfer risk - ANSinsurance companies Transportation expense - ANSrental cars, buses, taxis, train Trip transit - ANSCovers a single shipment-one time, one way Twisting - ANStaking an insured from another company Types of Risk Exposures - ANSpremises and operations, product and completed operations umbrella policy - ANSInsurance that provides additional liability protection beyond that in an automobile or homeowner's policy. Unauthorized insurance companies sell... - ANSsurplus lines insurance products under the dwelling policy, mobile homes must be? - ANSpermanently located. Underinsured Motorist - ANShas no liability insurance at the time of the accident or has a lower insurance underwriting - ANSthe process of selecting, classifying, and pricing applicants for insurance unearned premium refund to be issued within ___ days - ANS30 days Unilateral - ANSone sided meaning the insurance company is legally bound to perform its part of the agreement. the insured can cancel at any time Unoccupancy - ANSA property that contains personal property but has no occupants. Unoccupancy - ANSThe premises are void of people. utmost good faith - ANSinsurance company and insured rely on eachother to do their job

vacancy - ANSnot people or personal property Vacany - ANSThe building is void of contents and people. The building is simply not being used. In most cases the insured can purchase Vacancy permit coverage restored for an additional premium. Valued policy law states that - ANSthe face amount will be paid in full in the event of a total loss vandalism and malicious mischief coverage doesn't cover? - ANSdamage to glass, losses by theft, and vandalism when the building was vacant for more than 60 days Vicarious Liability - ANSliability for the actions of another Waiver - ANSAn intentional, knowing relinquishment of a legal right. Waiver - ANSGenerally defined as the voluntary or intentional relinquishment of a know right. An example would be an insured who fails to report a claim in a timely manner. There are two types; Expressed and Implied. WC SHAVVER - ANSWINDSTORM, CIVIL COMMOTION, SMOKE, HAIL, AIRCRAFT, VEHICLES, VOLCANO, EXPLOSION, RIOT What are some additonal coverages in the homowners policy? - ANSDebris removal, fire department service charges, and loss assessment What can an insurance company NOT cancel because? - ANS-properties location

• age of structure -insured was canceled by another company -property was insured under the FAIR plan -insured inquired about coverage for hypothetical or potential claim what can you get with extended coverage? WCSHAVVER - ANSRiot, explosion, vehicles, smoke, hail, civil commotion, aircraft, windstorm, volcanic eruption, vandalism and malicious mischief (in conjuction) What can you NOT put in a report? - ANSbankruptcies over 10 years, suits & judgements over 7 years, arrests or crime reports, anything else that took place over 7 years what coverage is also included in dp-2 and dp-3 - ANSCoverage E - additional living expenses (like staying in a hotel) what covers the insured own goods in the insureds own trucks - ANSowners form

what does an insured get back when they cancel their homeowners insurance? - ANSany excess premium paid What does the dwelling basic form cover? - ANSCoverage A - Dwelling Coverage B - Other structures Coverage C - personal property Coverage D - fair rental value What does the Managing General Agency do? - ANS-hires producers -supervises a territory

• responsible for agent activities
• must be licensed as insurance producer what does the MN insurance guaranty association do? - ANSprotects insured form insurers inability to pay claims due to bankruptcy what is a full refund of unearned premium? - ANSpro-rata what is eligible under the FAIR plan? - ANShomes, businesses, apartments, condos, factories, and farms who have been denied insurance What is not allowed in advertising - ANS-deceptive words
• using words like: all, full, comprehensive, complete, unlimited, up to, or as high as -no exaggeration what is not covered after 60 days of vacany? - ANSvandalism, glass, breakage, theft, and water damage What is not covered by coverage C? - ANSmonday, credit cards, animals, motorcycles, boats, grave markers, and water or steam What is the commissioner empowered to do? - ANS-enforce and create rules for enforcing insurance laws
• conduct investigations and hold hearings examine and approve policy forms -examine books, records, and documents of producers
• appoint staff to assist with enforcement what is the dwelling policy used for? - ANSused by owners who do not qualify for homeowners policies and include homes that are rented to tenants what is the most coverage available for a single family dwelling covered under the regular flood program? - ANSBuilding- $250,000 and Contents - $100,000 what is the partial refund of unearned premium? - ANSshort rate