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texas exam
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transpertation expenses

20 per day up to $600 is available. Coverage begins 48 hours after a theft loss and 24 hours for any other covered loss


If the insured trades vehicles, the newly acquired vehicle

automatically covered. Liability coverage is continuous until the end of the policy period. To continue physical damage coverage certain restrictions and limitations apply.


A deductible usually applies to which of the following automobile policy coverages

Physical Damage


special damages

involve expenses where the costs are known or can easily be determined.


Symbol 1-5

physical and liability


symbol 6-19

liability no physical



collison with an object or vehical or when a car is overturned



any loss other than collision or overturn


specified auto-

fire lighting explosion theft windstorm hail equake flood mischief. not glass breakage.


maximum payable for auto electronic equipment permanently installed



provided worldwide for insureds for a period of

30 days


covered pollution costs

any expenses from govermnet ordedr to test the pollutants from a car. does not ccover normal operative mechanics of car like exhaust.


The supplementary payments under the personal auto policy:

Will pay the insured up to $200 per day for loss of earnings due to testifying at a trial concerning an accident caused by the insured is correct



The owner’s property is temporarily in the possession of another and will ultimately revert back to the owner


Used clothing would be covered on

replacement cost basis.


How many days does the insured have to file for proof of loss under a homeowner policy issued in Texas?

91 days is correct.


Which is not covered under the HO forms



Under an HO-3 form, what coverage is provided for watercraft lost due to theft

1,500 under special limits


A standard ISO homeowner policy is best described as

Package policy that provides property and liability insurance


Homeowner policies provide liability coverage for which of the following?

Property Damage and Bodily Injury is correct.


HO automatically coveres

lawn mowers.


Friendly fire

damage from a fire that was in its specfied location



It has left its place of containment.


What does the "identity fraud expense" endorsement to a homeowner policy cover?

Covers expenses up to $15,000. This includes attorney fees to cover defense costs..


Are employers required to have workers comp in texas?

Employers may elect to provide workers compensation insurance but are not required to do so. If they do not, they may be sued by employees for work-related injuries and occupational diseases.


A first party claimant is the entity that receives the benefit of an insurance policy that specifically covers their property. A first party claimant can be all of the following

an individual, corporation, association, partnership, or other legal entity.


The Foreign Coverage Endorsement should be added to the company's workers compensation policy. However, this endorsement applies for a period of no longer than

90 days


How long after being notified of an injury does an insurance carrier or self-insured employer have to contest the compensability of a workers' compensation claim?

Within 60 days


Subsequent Injury Fund

provide an incentive for employers to hire employees who have already suffered a work-related injury.


What is the minimum weekly income benefit payable under the Texas workers compensation law?

15% of the state average weekly wage is correct.


maximum medical improvement

Two years from the date income benefits begin to accrue.


The required unmodified workers compensation premium is



Longshore harbor act-

martime workers who are disabled from injuries sustained on the navigable waters of the US, loading, or unloading a vessel


The Jones Act-AKA mercahnt marine act of 1920

allows for martime workers to sue employers for negligence that results from negligence of employer.


black lung benfefits act

cocompensation to coal miners


Federal employees comp act FECA

federal and postal workers protection


federal employers liability act

appllies to railroads


The premium charged for a standard Workers Compensation policy is based primarily on a company's:



Like physical damage coverage on an auto policy, the watercraft and yacht policies provide for the adjusting of physical damage losses to covered property on

an actual cash value basis.


For equipment breakdown policy, what is not covered

structures supporting the equipment that breaks


severability of insurance

insurance applies separately to each insured. However, if more than one insured is involved in the same loss the limits are not increased.


personal articles floater fine arts.

are reimbursed for their full value, regardless if the value of the item depreciates over time


Marine-oil haulers are only required to carry

$1,000,000, look for key word here is "excess oil" and when followed up with "explosives" makes this freight hazardous requiring the $5,000,000 limit.


aircraft policy
Commercial flights, passenger is covered

the second they step on the plane, not before or after.


Marketing distribution systems.

The selling of insurance products through the use of captive agents, independent agents, or insurance company employees in a call center are examples of


The penalty for a violation

may not exceed $25,000 unless a greater or lesser penalty is specified in another insurance law in the state.


Under the dwelling insurance program, an endorsement may be attached to the policy to cover dwellings during the course of construction. The insurance company must be advised when construction is completed, and within

within 60 days after the insured takes occupancy of the dwelling.


Which of the following most accurately describes the "debris removal" clause?

It covers the cleanup costs associated with a covered property loss


Which of the following dwelling forms provides broad perils coverage for personal property?

DP-2 and DP-3 only is correct.


The DP Forms have a blank limitation of the Coverage C amount when personal property is OFF the premises.



Commercial liability also known as

business liability


What is excluded under Commercial liability

automobile dealerships


Commercial liability coverage A

bodily injuiry and property damage


Commercial liability coverage B

personal injury and advertising liability. wronful arrest, wronful eviction. invasion of privacy.


Coverage C

medical payments. covers anything within one year of the accident regardless who was at fault.


occurance form

when injury happens durring policy period


claims made form

when claim is reported


Basic extended reporting is provided

free of charge for up to 60 days after the policy expires


supplimental extended reporting

up 200% of the original premium extends this for an unlimited duration


laser beam endorsent

allows insurer to exluded specific accidents from coverage.


products and completed operations

company selling manufactured goods needs products. construction company needs completed operations. excludes engineers architechs and surveyors.


Endorsement CG 2407-

covers injuries now on the premises. used by restaurants that serve food.


bail bonds amount covered



contingent liability refers to

work of independent contractors


The maximum limit an insurer must offer for Personal Injury Protection



Personal Injury Protection does not cover

pain and suffer"


Personal Injury Protection covers injuries up to

3 years after.


Which of the following time periods is ordinary payroll coverage limited to in case of a business income loss under the BOP?

60 days is correct.


jewelers block policy what is excluded

if the insured wears their products and it is damaged or stolen, it will not be covered.


ABC Office Temps and Clean-Rite Dry Cleaning are both located in a strip mall and share a common party wall. Fire begins in the dry cleaners and damages the party wall. Clean-Rite decides to go out of business. How will the BOP policy of ABC Office Temps respond regarding the party wall?

ABC’s policy will repair the party wall and subrogate against Clean-Rite is correct.


red tags

Coverage is suspended until repairs are made


Standard deductible for equipment breakdown



The BOP has limitations on the square footage in regard to eligible risks. What is the maximum square footage a building can contain and still be eligible for the policy?

35,000 square feet.


insurance company can cancel the policy if the risk is blank vacant



What is required in order for seasonal increase coverage to apply under the BOP

-the limit of insurance must be at least equal 100% of the average personal property values for the previous 12 months.


What are the unique features of the Businessowners policy form?

The property coverage is open peril with no coinsurance requirement.


In the Building and Personal Property Coverage form, under Loss Conditions, the Vacancy Clause states that when the policy is issued to the owner or general lessee of a building, such building is vacant unless at least

31% filled


An Installation Floater

provides property coverages for work performed until accepted by the owner.


Hull coverage

damage to or loss of the ship itself. Written on a valued basis.


Sue and labor clause

- in the event of a loss, crew must immediately take all possible steps to minimize any further loss.



voluntary act of destruction where cargo is thrown overboard in order to save the ship or the crew.


For ocean- insurance is terminated the second

any change of ownership occurs.


Adventure clause

protects against hazards to a vessel while a loss at sea.


Lay up endorsement

covers a watercraft at a reduced premium when a boat is in storage.


Break bulk

loose cargo stowed on the ship.



shipping based on large cargo carrying containers that can be moved to trucks without rehandling of contents.


Bulk shipments-

shipments not packaged, loaded directly into the ship. Example, coal, scrap, ore, iron. Rice.


Warehouse to warehouse clause

covers cargo while in transit over water. Coverage applies until reaching destination warehouse.



covers any costs incurred from delay in unloading a vessel.


Freight insurance

covers loss of income/ shippers feesfrom shipping of cargo if the cargo is lost, does not cover the cargo itself.


Inchmaree clause

An ocean marine insurance provision adding coverage for damage directly resulting from the bursting of boilers, breakage of shafts, other mechanical failures, latent defects in the ship's equipment or machinery, and faults or errors in the navigation or management of the ship.


General average

all share loss


Particular average

only one party takes the loss.


In ocean marine- must make claim within

180 days of accident or it is not covered.


Inherent vice-

means the potential of the property to self destruct.


Ivel clause

to provide excess hull and collision liability coverage.


A conventional cargo ship is used to transport

break-bulk cargo or bulk cargo.


The hull physical damage deductible applies to which of the following losses?

Collision is correct


The boat is in transit and if physical damage should occur to the boat

watercraft policy will cover



The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner.


Personal article floater:

The personal inland marine coverage form which provides open peril insurance for specific classes of personal property on an itemized and scheduled


Commercial inland marine Key characteristic is

the fact that is it involves transport by land.


Controlled standardized form

uniform use


Non controlled

written by individual companies


Annual transit policy

- this is a non controlled form for the protection of frequent shipper goods.


Trip transit policy-

this is a non controlled form to protect single shipments on specified property.


Motor truck cargo policy

non controlled and covers materials while in transit via truck.


Free on board FOB shipping point-

-means the title to the property in transit transfers to the buyer the moment it leaves the shipper.


Free on board destination point

means the title to the property remains with the shipper until it arrives and is accepted by the buyer.


Contractor’s equipment coverage form

a non controlled form that insures various types of construction equipment.


Commercial articles coverage form

non controlled form used to insure interests of the owner of commercial cameras, instruments and related equipment


Equipment dealers form

covers open perils for dealers in mobile agricultural and construction equipment.


Jewerly block coverage- must take inventory every

12 months.


What commercial inland marine form covers loss due to damage of records

accounts receivable


Valuable papers and records covers

deeds, drawings, maps, books files and mortgages


What is the ideal form of protection for the frequent shipper of goods

annual transit policy


Installation floater

covers work installed and delivered but not yet accepted or paid for.


Bailee policy-

protects insured from loss or damage to customers property, like a cleaners.


What is the only coverage territory approved for Equipment dealers policy-

US Puerto Rico and Canada.


Garagekeepers specified causes of loss does not specify

physical damage, such as windstorm


The term "average" in ocean marine insurance refers to

loss or damage.


legal liablity garage

customor must prove the garage was at fault.


primary liablity garage

covered without proof of negligence.


if a vehical is driven 50 miles from the workshop

it is no longer covered.



continuous and repeated expoisure to the same conditions


garagekeepers exludes almost all the following except

stereo system permanently installed in car (almost always on the exam)


Which sections of an insurance policy states who may be considered an insured in addition to the named insured?

definitions page.


A company's promise to pay for damage caused by or resulting from a covered cause of loss would be found in which of the following sections of a Commercial Property Policy?

Insuring Agreement is correct.


A company's promise to pay for damage caused by or resulting from a covered cause of loss would be found in which of the following sections

Insuring Agreement


Insurable Interest

Lawful economic interest in the preservation of the subject of insurance, free from loss or destruction or monetary impairment is the definition of


Which of the following is the type of report indicating the initial results of the investigation of a claim

field report.


Signing someone else's name or falsifying documents is considered



The insured owns a home with a swimming pool. The pool is not fenced. If a child were to drown in the pool, which of the following liability doctrines would most likely apply?

Attractive Nuisance .


Since the insurance company drafts the insurance contract and it is not negotiable, if it is found to be ambiguous the courts will interpret the contract against the party that prepared it. This is an example of

contract of adhesion



the principle that precludes a person from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination.


An initial premium charged the insured under a reporting form type of policy is called the

deposit premium


Terrorism risk 2015 act: what is excluded



Terrorism risk 2015 act what is the only thing covered in case of war

Workers compensation coverage


Under the Terrorism Risk Insurance Reauthorization Act of 2015, the Secretary of the Treasury is charged with certifying that an act of terrorism has occurred and that it would be covered under the Act. However, before certification is complete the Secretary of the Treasury must consult with

The Secretary of Homeland Security


In liability insurance the term "occurrence" means:

Continuous or repeated exposure to the same conditions. is correct.


Bail bonds

court or litigation bond, which are sometimes called financial guarantee bonds


loss sustained form

coverage while the policy is in force and for up to one year after the policy expires


discovery form

while the policy is in force and 60 days after the policy has expired.


fidelity bonds-

bond for employee theft and forgery.


surety bond

gaurantees that at certain acts will occur.


public bonds-

bonds to protect public entitites


replevin bond

guarantees that if proprty is determined to belong to the other party it will be returned.


robery bond

protects against criminal acts from theft.


to be defined as burgalery, there has to be

signs of visable forced entry



someone who has control of insured property outstide of the premises of the work place


three types of limits for commerical umbrella

per occurrence, personal injury and aggregate limit.


Must acknowledge within

15 days of claim


a dwelling vacant for more than blank is not covered

60 days


An emergency license in Texas is effective for a period not to exceed

90 days.


A licensee must maintain records of evidence of each continuing education course completed for a period of

four years


Under Homeowners insurance, "Medical Payments to Others" coverage will cover necessary medical expenses incurred within:

3 years


An employer in Texas whose workers compensation coverage is terminated or cancelled must notify each employee that the coverage has been terminated or cancelled not later than

15 days after the coverage is terminated or cancelled.


Medical payments coverage under a BOP applies to expenses incurred by non-insureds for bodily injury and reported to the insurer within

1 year


Death benefits

paid to spouse and children at 66 2/3% of workers wages subject to weekly maximum and minimum.


must respond to an inquiry in writing not later than the after the date the inquiry was first received.

10th day


anything over 500K

must be electronically transfered


Must examine a carrier once every

five years


Must renew every blank on the adjusters birthday suspended or revoked

two years


what is the renewal fee

50 dollars


what is the emergency licence fee

20 dollars


how many hours of continuing education for each reporting period

24 hours


how many hours of education must be in ethics

2 hours


how many days must education be finished before renewal

30 days


if you are continually licenced for blank you no longer have to renew your license.

20 years


penalties for criminalty of an adjuster-

500 fine, six months in jail, or both.


if insured is notified insurerer will pay, payment must be made no later than

the fifth business day of said notice.


settlment offers must be responded to within

10th day


Standard form #24

commonly used financial institution bond used by banks and various financial oriented agencies. The other bonds are fidelity and surety bonds and are used to either guarantee performance of a task or that dishonest acts will not happen. The financial institution bonds are similar to the crime insurance policies used by businesses.


The employer is required to report to their insurance carrier the fact that an employee is absent from work as a result of a work-related incident more than

1 day


Commercial Glass Coverage is suspended if, at the time of loss, the building has been vacant for more than:

60 consecutive days. is correct.


Under workers compensation in Texas, income benefits may not be paid for an injury unless the injury results in disability that lasts longer than what period of time?

1 week


Preservation of Property" coverage when property is removed from the premises to protect it from a covered cause of loss. The coverage will apply at other locations for up to:

30 days


Premium costs for Workers Compensation insurance are paid by

employers only


The personal inland marine coverage form which provides open peril insurance for specific classes of personal property on an itemized and scheduled basis is called a:

Personal article floater. is correct.


A commercial umbrella policy would, in most cases, provide which of the following coverages?

Excess coverage over an insured auto liability claim is correct.


Ruth has been in an auto accident caused by a third party. Her vehicle is totaled and she has injuries and loss of wages. The adjuster states that he does not want to pay for anything until she agrees to the damage to repair her vehicle and her special damages. This is considered:

An unfair claims settlement practices act. is correct.


When an insured is fulfilling the duty of proving a loss by taking an inventory of the damaged property, who pays the expenses incurred by the insured?

The insured.


Even when extended coverage perils are added to a DP-1, not all of these perils are as broad as they are under the DP-2. The extended coverage perils which are broader under the DP-2 are:

Explosion, smoke and vehicles. .


An insured is covered under an HO-3 form. If the insured hits his own house and also damages the garage and the attached fence with his vehicle, what coverage would apply?

All of the items are covered under the HO-3 if the insured damages his own property with his vehicle. This is also true of the HO-5 form. These two forms provide open peril coverage and do not exclude this kind of loss.


Oliver Dogwood was in an auto accident which destroyed his car. While investigating the accident, Adjuster Doright found that Mr. Dogwood paid $1,000 for the vehicle. After checking with others he found the same vehicle with an asking price of $1,700, a retail price of $2,150 and a dealer price of $1,750. What amount will Mr. Dogwood receive?

2,150 is correct. always pay the retail price


The insured carries an auto policy and a personal umbrella policy. In case of a loss, how would the policies respond to pay a covered claim?

The personal auto policy would be the primary and would pay up to the policy limits, then the umbrella policy would be excess to pay up to its policy limits.


Property with no occupants or contents is considered to be _____ whereas property with no occupants but with contents is considered:

Vacant/Unoccupied is correct.


Subject to all other reasons for the termination of income benefits, what is the maximum length of time a disabled employee can receive income benefits in Texas?

: 401 weeks.


The insured carries a yacht policy and is pulling a water skier. The skier is a family member and is injured. What coverage might apply to this accident?

Medical payments coverage.


That branch of the law which defines rights and duties is referred to as:

Substantive Law..


How is property covered under an unendorsed BOP form

Coverage is written on an open peril basis


Under the Texas financial responsibility law, what is the minimum limit of liability that must be carried by the insured in an accident involving more than one injured party?



A dwelling insured under an HO-3 form has been vacant for 61 consecutive days. The dwelling has been vandalized. The vandals decide to set fire to the dwelling to conceal any evidence of their presence. The insurer will:

The insurer will deny the loss because the fire loss is as a result of the vandals setting fire to the dwelling. All of the damage is considered vandalism. Since the dwelling has been vacant for longer than the 60-day limit, coverage would not apply to any vandalism damages. Note: In New York the provisions that restrict coverage for vacant dwellings, the allowed vacancy period is reduced from 60 days to 30 days.


Which of the following would be covered under the "other than collision" coverage of a personal auto policy?



Mr. Robin is retired and lives in an older home in Maine. He has an old floor furnace to heat his home that is in need of repair and he forgets to have it checked. In the winter he stays in Florida for a month with his daughter. While Mr. Robin is away the furnace malfunctions and all his water pipes freeze and burst causing massive water damage. The furnace is also destroyed. He has a broad form homeowner policy, which includes water damage from a heating or plumbing system. What will the adjuster do?

Pay for all damage except the furnace.


After suffering a work-related injury, how soon must the employee (or someone acting on their behalf) notify the employer of the injury?

30 days. is correct


Fidelity bonds which apply coverage to an employee or employees acting in collusion with others are called:

Commercial blanket bonds.


Which of the following best demonstrates the meaning of "contract of adhesion?"

Since the insurance company formulates the policy language, the courts usually will resolve any ambiguities in the insured's favor


In claims adjusting, which of the following is not considered an unfair claims act?

Failing or refusing to separate the damaged from the undamaged property in order to properly evaluate the loss and damages owed the insured..


A damage award against a manufacturer of a defective automobile over and above the award for pain and suffering and special damages would be considered what kind of damages?

Punitive Damages


An item is covered on a personal articles floater. Under which of the following circumstances would the item be covered?



A ship has negligently collided with another ship and caused severe damage. What coverage would apply to cover this claim?

: Hull insurance with the "running down clause"..


A deductible usually applies to which of the following automobile policy coverages

Physical Damage is correct.


What commercial auto policy form would be used to cover a company that transports their own property and property of others?

: The motor carrier form.


Dwelling forms may be used to insure residential structures which:

Contain no more than 4 occupancy units. .


John Smith has just made his last car payment which concludes his contract. The finance company, for reasons not immediately apparent, has the car repossessed. If Mr. Smith brings a suit, the court will allow Mr. Smith to retake possession of the car pending the court’s final ruling as to ownership if Mr. Smith provides the court a:

Replevin bond..


In order for a principal-agent relationship to exist there must be a:

: A contractual agreement..


Which commercial property form provides the broadest coverage

Special form is correct.


All of the following are excluded under the Commercial Building and Personal Property Form, EXCEPT:

Furniture and fixtures. .


Coverage for earthquakes and volcanic eruptions may be attached to Commercial Property Insurance. When the Earthquake Causes of Loss Form is attached, a series of earthquakes or volcanic eruptions will be treated as a single event whenever the series of shocks or eruptions occurs within a:

. 1 week 7 days


In which of the following situations should an adjuster consider obtaining a non-waiver agreement?

: In dealing with a potential coverage dispute.


The form used to report the insured’s actual and estimated business income under an Equipment Breakdown policy is called:

Business income—Report of Values .


direct" question by an adjuster addressed to an interviewee?

A "direct" question seeks specific pieces of information. Claim representatives use direct questions to elicit information, clarify an interviewee's statements and help reduce the likelihood that he or she will change their statement later. The other answers are considered "open ended" questions which call for an explanation or elaboration.


One of the purposes of the coinsurance clause is to:

Encourage insureds to insure property for most if not all of its value


What coverage under the BOP automatically applies if a customer slips and falls on the named insured's premises, regardless of legal liability?

Medical expense coverage is correct.


Which of the following can bind an insurance coverage by oral or written agreement?

Property and casualty producer is correct.


The insured has a one family dwelling with a detached garage. The dwelling is insured for $200,000. How much coverage applies to the garage?

20,000. The policy provides for 10% of the dwelling limit. Therefore, the garage is insured for $20,000 for the same perils that apply to the dwelling.


Your car is damaged in an auto accident. While it is being repaired, the body shop loans you a replacement. From a coverage standpoint this replacement vehicle is known as:

: A temporary substitute. is correct


Personal Injury Protection provided by auto liability coverage does not cover

A pedestrian .Personal Injury Protection (PIP) does not cover a pedestrian struck by the insured in an auto accident. Auto bodily injury coverage would provide coverage.


If a large employer has a current Workers Compensation policy with an experience modification factor above 1.00, which of the following is the most accurate statement?

The employer has had a worse-than-expected claims experience during the last few years. is correct.


An alien insurance company is

insurance company not in the US


A company that repairs customers' aircraft may need _______to cover the accidental damage to the customers' property.

Hangarkeeper’s Legal Liability.


What feature is common to most property insured under a commercial inland marine policy?

Usually in transit.


Loss of rental income on an apartment building caused by an insured peril is best described as:

: A consequential loss.Consequential losses include time element losses. This coverage provides loss of income incurred by a business that is caused by a direct loss from an insured peril.


What is the limit that will be paid for the fire department service charge in the BOP form



The doctrine of reasonable expectations is based primarily on

Contract Law.


What is the name of the fund in Texas that provides a portion of lifetime income benefits to a worker who has sustained a second work-related injury

Subsequent Injury Fund


An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $100,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary policy or the Umbrella policy. How will this loss likely be settled?

The correct answer is: The insured will pay the full $100,000 loss..


What type of automobile coverage might a person need if he or she does not own a vehicle?

A named non-owner auto policy.


If an employee is eligible to receive impairment income benefits, what is payment based on?

70-% of the employee’s average weekly wage


A civil wrong, considered to be a violation of another's natural right, not covered by a specific contract or law, is called a:



An insurance agent represents the interest of:

The insurance company. .


Under the dwelling policy, what is the purpose of adding the EC (extended coverage) endorsement?

It adds additional perils to the coverage. .


If a person is found guilty of violating USC Section 1033 regarding Federal Fraud and False Statements, the Attorney General may do which of the following?

Assess a civil penalty in the amount the person received or offered for the prohibited conduct or $5,000 whichever is greater..


Which of the following is true regarding debris removal under the dwelling forms?

Coverage is included in the dwelling and contents coverage.


Under the Terrorism Risk Insurance Program Reauthorization Act of 2015, the maximum limit for the Act for total claims paid under the Act by either private insurers or the government is still limited to:

100 billion .


Which of the following allows the insured to increase their contents coverage amount for specified periods of time when inventory may be higher than usual?

Peak Season Endorsement.


The insured’s have a homeowner policy with a $5,000 loss deductible. The husband has purchased some expensive camera equipment to take on a cruise for recording their trip. Also special scuba gear and sportswear have been purchased for both. They are concerned about fire and theft. What coverage would you recommend?

Personal effects form


A policyholder would expect to find which of the following information in the insuring agreement section of an auto policy?

: The promise of the insurance company to pay on the behalf of the insured


What is the time limit for a person to file a claim for death benefits after an employee's death?

No later than the first anniversary after the death of the employee


An insurance broker is a person who represents:

An insured or prospective insured


The insured has a primary liability policy with a limit of $300,000 per occurrence and a $1 million umbrella liability policy with a $10,000 self-insured retention limit. The insured became liable for $800,000 in damages that are excluded by the underlying policy, but not by the umbrella policy. How would this case likely be settled?

The insured would pay $10,000, and the umbrella policy would pay $790,000. is correct.


Prior to commencing subrogation, the insurer should

The insurer should obtain a signed subrogation agreement, trust agreement or loan receipt from the insured.


If the claim is not denied, an insurance carrier must initiate compensation under the laws promptly. Not later than the ___ day after the date on which an insurance carrier receives written notice of an injury, the insurance carrier must begin payment of the benefits.

: 15th is correct.


In case of a loss, how many days notice does the insured have after notification of a claim to submit the claim to the underwriters of the ocean marine coverage?

180 days.


A vehicle rolled over exiting the interstate. The insured carries collision coverage with a $1,000 deductible and other than collision coverage with a $500 deductible. The damage to the vehicle is $2,000. What amount is the insurer responsible to pay?

1,000.A vehicle that rolls over and sustains damage is considered to be a collision claim versus an other than collision claim. The damage to the vehicle is $2,000 and the deductible is $1,000. Therefore, the insurer is liable for $1,000.


Ocean marine coverage for losses to the insured vessel caused by bursting boilers, latent defects in the vessel and negligence of the master or crew members are addressed by which of the following?

The Inchmaree clause.


All forms and endorsements must be filed _____ before the date of use in Texas.

: 60 days.


In terms of fidelity bonds, what does “name scheduled” refer to?

The bond covers only those persons listed by name on the bond’s schedule..


Under business income coverage, what coverage continues payment of income after the period of restoration is complete?

Extended Business Income.


Which of the following sections of an insurance policy states who may be considered an insured in addition to the named insured?



Under Homeowners insurance, "Medical Payments to Others" coverage will cover necessary medical expenses incurred within:

: 3 years of the accident causing the injury


When may an insured sue their insurance company?

: Not until the insured has complied with all policy provisions and within the time limit specified in the state laws.


The mandatory recoupment of the federal share through policyholder surcharges under Terrorism Risk Insurance Program Reauthorization Act of 2015 was increased from 133% to:

140% is correct.


If an insurance company covered an excluded claim it may have to continue paying other such claims because of:



Which of the following coverages may be added by endorsement to an Equipment Breakdown Policy?

Business Income


Mr. Adams is having his brakes repaired at the garage. The mechanic test drives the vehicle and hits a tree. What coverage would respond to protect the garage for repairs to Mr. Adam’s vehicle?

Garage Keepers Legal liability .Garage Keepers Legal liability coverage protects the garage for damages to a customer’s vehicle. This includes theft, fire collision and a few other perils.


What coverage is provided under the BOP for a steam boiler explosion

Steam boiler explosion is excluded under the BOP.


On the way to Europe, heavy seas place a cargo ship in danger of sinking. The crew decides that if they dispose of the heavy equipment they are hauling the ship won’t sink. They toss overboard 10 tractors owned by John Deere. The cartons of cotton balls owned by Eli Cotton are safe as is the whipped marshmallow cream being shipped for Kraft Foods. When they get to Europe, Eli and Kraft are asked to share in the loss that John Deere sustained. This is an example of:

General Average Clause.


Which of the following types of property may be insured under a furriers block policy

Stocks of furs owned by the insured furrier.


An unendorsed Homeowner Policy provides no coverage for liability arising out of business related exposures, other than for permitted incidental occupancies. The ______Endorsement provides liability coverage for a business conducted away from or on the residence premises.

Home Business Pursuits


The maximum seating capacity and total floor space for a fine dining restaurant covered under a BOP is?

150 seats with 7,500 total square feet.


In insurance terms, the phrase "severability of insurance"

: The insurance applies separately to each insured. .


Watercraft coved boats

50 HP or less

25 feet or less

sailing 26 ft or less

reported 45 days after acquisition


What is insurance

Insurance is a social device for spreading the chance of financial loss among a large number of people.


Transacting insurance:

includes soliciting insurance, collecting premiums and handling claims


Law of Large Numbers

is a statistical concept that relates to probability. It is one of the factors insurance companies use to determine rates.


Intervening cause

an independent action that breaks the chain of causation and sets in motion a new chain of events.


McCarren-Ferguson Act:

passed by congress in 1945 and states that regulation of insurance companies should remain at the statel level.


Reciprocal insurance exchange:

associations that agree to share risk equally among its members. Lloyds is an example.


Fraternal Benefit Society

incorporated by society or order, without capital stock, that is operated on the lodge system and conducted solely for the benefit of its members and their beneficiaries, and not for profit. Mostly write life and health insurance.



occurs if the buyer of an insurance policy receives any part of the agent’s commission or anything of significant value as an inducement to purchase the original policy.



: is the unethical act of persuading a policy owner to drop a policy solely for the purpose of selling another policy without regard to the possible disadvantage to the policy owner.


EC perils

windstorm, civil common, smoke, hail, aircraft, vehicles, volcanic eruption, explosion and riot. WC SHAVVER


Broad perils

burglary damage, ice and snow weight, glass breakage, accidental discharge of water or steam, falling objects, freezing pipes, electrical damage, collapse and tearing apart/cracking/burning. BIG AFFECT


What amount, if any, is paid for burial expenses under the Texas workers compensation law?

up to $10,000.


All of the following types of signs can be covered by the Sign Coverage Form, except

Signs carved in stone or brick.


Which of the following homeowner forms does not provide full coverage on the dwelling - Coverage A



Which of the following may cancel a Commercial Package Policy

The first named insured.


What is the most important advantage to an employer under the self-insured Texas workers compensation plan?

Save premium


A common carrier has signed a contract to deliver goods of the seller. The goods are to be shipped "Free on Board Destination". When does the responsibility of the seller end?

Not until the goods are delivered to the buyer in accordance with the contract terms..


The "last clear chance doctrine" addresses:

Avoidance of the occurrence on the part of the plaintiff..


The Homeowners policy provides a special limit for Damage to Property of Others in the Section II (liability) Additional Coverages of:



The limit of a bond is known as its:



Risk is best defined as

An uncertainty of loss.


Reporting forms

require insureds to periodically report values of autos the insured holds for sale, and premiums are charged accordingly.


In which part of an insurance contract would you expect to find a description of the duties and obligations of the insured?



Under a personal auto policy, what is Coverage D

Coverage for Damage to Your Auto.


An aleatory contract is most accurately described by which of the following

It is a contract in which the performance of one party is contingent upon the occurrence of a fortuitous (accidental) event.


When an insurer cancels a dwelling policy for non-payment of premium, it must give the insured advance notice of at least:

10 days. .


The workers compensation law of the State of Texas is administered and operated by what body?

Division of Workers Compensation.


What endorsement may be used on the dwelling policy to keep values current with the replacement cost of the buildings?

The Automatic Increase Endorsement


Which of the following would NOT be found in the conditions section of a homeowner insurance policy?

Insurance premium


The insured is moving to a new location. Coverage for contents provided under a Homeowner Policy would be:

The insured is moving to a new location. Coverage for contents provided under a Homeowner Policy would be:


Transportation expenses in a personal auto policy apply to what type of loss?

Indirect loss


Who is the principal in a bid bond?

The Contractor


When someone dies without a will they are said to have died:



An adjuster's report that contains all the facts, evidence and disposition of the claim and is considered to be the final report is known as the:

Full Report


If a named insured obtains "newly acquired property" such as a new outboard motor after their Personal Watercraft policy period begins, that property is covered under the policy for a maximum of ____ days after the date it came into the insured's possession.



A person who has been previously convicted of operating a motor vehicle in violation of the motor vehicle liability requirement may be subject to a maximum fine of up to: