General Insurance Concepts
Which of the following is an example of a peril? (wind, laziness, hazardous chemicals, untrained workers)
wind
Which type of property insurance is associated with coverage for continuing operating expenses? (Act of Civil Authority, Business Income, Business Overhead, Extra Expense)
Business Income
A construction company owns several bulldozers, cranes, and other mobile machinery used at various job sites. Which type of inland marine policy specifically covers direct physical loss or damage to this type of equipment?
installation floater
commercial auto policy
contractors equipment floater
builders risk policy
contractors equipment floater
T/F Losses from power outages are only covered if the outage results from a covered peril at the residence premises.
TRUE
FALSE
True
T/F Flood policies from the NFIP automatically provide replacement cost coverage for all types of buildings, including commercial buildings and condominiums.
False
According to the risk management process, proactively considering potential losses from events like the departure of a key employee or disruptions from a critical supplier occurs during which essential first phase? (identifying risks, determining frequency/severity, risk monitoring/review, implementing risk controls)
identifying risks
A retail store heavily relies on foot traffic generated by a large, nearby amusement park. If the amusement park suffers a major fire and closes for months, causing the retail store's income to drop significantly, this type of dependent property is known as a(n): (recipient property, leader property, manufacturing property, contributing property)
leader property
A bakery’s refrigeration unit fails due to a defective motor, causing spoilage of ingredients. Which insurance would best address both the equipment repair and the spoilage loss?
Crime insurance
Equipment breakdown insurance
Commercial property insurance
Flood insurance
Equipment breakdown insurance
For the purpose of the coinsurance clause, when is a damaged home's replacement cost calculated by the insurance company?
At time of application
At time of loss
At time of policy delivery
At time of renewal
At time of loss
Which of the following types of property are excluded from flood contents coverage? (Trees, Washer/Dryers, Money, Personal Property Outdoors)
Trees, Money, Personal Property Outdoors)
An applicant purposely didn't disclose information that would have increased the insurance premium. What is the status of the person's insurance?
Insurer can void the contract
Which of the following perils is typically included in the Basic cause-of-loss form for commercial property insurance?
(accidental discharge of water (other than sprinkler leakage), falling objects, weight of snow, ice, or sleet, sprinkler leakage)
sprinkler leakage
Which of the following best describes the main categories of property insurance in ocean marine insurance?
cargo insurance and liability insurance
hull insurance and protection and indemnity insurance
cargo insurance and offshore oil rig insurance
hull insurance and cargo insurance
hull insurance and cargo insurance
Beyond the general exclusions of theft and personal liability, which of the following is another common exclusion found in standard dwelling policy forms, including the DP-3 Special Form?
damage caused by earthquake
damage caused by windstorm
damage caused by fire
damage from smoke if caused by agricultural smudging
damage caused by earthquake
If you move your contents to a new location to protect them from flood damage, what is the maximum amount your policy will generally provide for storage expenses?
What is $1,000
Within an insurance company, which professional is primarily responsible for evaluating applications, assessing risks, and deciding whether to accept a risk and at what premium, based on the company's guidelines?
underwriter
With a broker's help, a business has chosen to insure its property by using the intermediate cause-of-loss form. Which ISO form was likely used?
(all-risk, broad, special, basic)
broad
Which coverage in a farm insurance policy would you apply if a barn used for business purposes is damaged in a storm?
Coverage G: Other farm structures
Coverage B: Other structures appurtenant to dwelling
Coverage E: Scheduled farm personal property
Coverage C: Household personal property
Coverage G: Other farm structures
An HO-3 policy uses which cause-of-loss form?
Basic
Broad
Special
Named-peril
Special
If an item insured under a Personal Articles Floater (PAF) is damaged by a covered peril, how will the insurer typically determine the amount to pay, up to the policy's stated dollar limit for that item?
The payout is usually the lesser of several valuation options: the cost to repair, the cost to replace, or the item's actual cash value, not exceeding the scheduled amount.
An old, unmaintained electrical system in a building that increases the chance of a fire is best classified as what type of hazard?
Physical Hazard
Although it has been shut down by a fire, a business is still required to make mortgage payments to a lender... the mortgage payment is a(n):
(Restoration expense, Payroll expense, Continuing normal operating expense, Extra expense)
Continuing normal operating expense
An electrical contractor is hired to install a new, complex wiring system throughout an existing office building. Which type of inland marine policy would be most appropriate to cover the wiring materials before and during installation?
builders risk policy
installation floater
contractors equipment floater
commercial articles floater
installation floater
Which type of loss is most likely to trigger a sublimit on coverage for valuables?
Fire
Theft
Hail
Inherent vice
Theft
What is a typical feature of earthquake insurance deductibles compared to standard homeowners insurance deductibles?
A set percentage of the dwelling's insured value