Mike's P&C Bubba Final Exam 2019 (Revised 2021) PDF

*[Bubba Brooks Final Examination ]* 1. The Commissioner is elected/appointed for how long? Elected/4 years 2. Define Risk, Loss, Peril & Hazard. 3. Name the assigned Risk pool for: Workers Compensation-NCCI National Council on Compensation Insurance Homeowners Georgia Fair act-(...

*[Bubba Brooks Final Examination ]* 1. The Commissioner is elected/appointed for how long? Elected/4 years 2. Define Risk, Loss, Peril & Hazard. 3. Name the assigned Risk pool for: Workers Compensation-NCCI National Council on Compensation Insurance Homeowners Georgia Fair act-(fair) Fair access to Insurance requirements Automobile Georgia AIP 4. Define the Four Hazards. Physical, Moral, Morale, Legal 5. Define the Law of Large Numbers & a Homogeneous Exposure Unit. Large Number predictability increase/Larger numbers more accurate the prediction 6. Which is the Proximate Cause: A tornado hits Savannah, knocks down a power line. The power line lands on a car full of drunks and lights them up, causing the driver to run into the back of a truck loaded with live alligators, who get angry and rip off the driver's legs and eats them. The alligators die of toxic alcohol consumption poisoning and the gator owner sues everyone. Tornado 7. When is Insurable Interest measured in Life Insurance vs. P. & C.? Life insurance is based upon policy Effective Dates P&C is time of Loss 8. Explain the difference between Fiduciary and Utmost Good Faith. 9. Insurance is defined as: Sharing Losses and transferring risk 10. Explain Indemnify, Indemnity and Indemnification. Indemnity-The promise to pay proceeds Indemnify- The act of paying Indemnification- To make whole without a gain. Same as Indemnity. 11. Define Controlled Business. What percentage? Controlled business like family, co workers and employees buying insurance can not be equal to 25% or more. Ex's and Friends are not Controlled Business. 12. What is the purpose of the Georgia FAIR Plan? To give people insurance that cant get it and are high risk 13. Explain the Essential Elements of an Insurance Contract. Agreement, Consideration, Conditions, Legal Purpose 14. What is the contract named that is one of chance? Aleatory 15. What is the contract named that is an act for a promise? Unilateral 16. Representation vs. Warranty vs. Misrepresentation. 17. Any ambiguity between an insured and an insurer, in court, would usually favor which part? What is the contract called? (aka) Unclear Contract Provisions. Insured Adhesion 18. What is the difference between material facts and concealment? Material fact is things Under writer needs to know Concealment-Failure to disclose known material Fact 19. When would counter offer and invitation to make an offer occur? During the agreement stage when the insurer rejects the original offer but makes a counter offer. 20. Define the doctrines of Waiver, Oral Evidence Rule, Parol Evidence Rule, Estoppel and the Entire Contract. Waiver Oral Evidence Rule Cannot be used if agent says after policy is issued Parol Evidence Rule prohibits anything said before policy was written Estoppel stops the company from denying claim Entire Contract The policy with the application attached 21. What is the Guaranty Association? The Insolvency pool ? Who funds it? How much is paid if an insurer becomes insolvent and the insured files a claim? \$300,000. (Life insurance cash values pays up to \$100,000). 22. What are the Code Violation Penalties? Cease and Desist order 1000.00 for unknown 5,000 for known Probation for one year 23. What are the License Violation Penalties? Up to one year Imprisonment Up to 500 Fine OR BOTH. 24. What are the additional penalties for violating a Cease & Desist? Up to 10,000 fine Suspension or Revocation of License 25. If less that 36 months insured, when can an insurer cancel and/or non-renew a PAP? Any Felony 26. Explain the difference between a license being revoked, suspended and put on probation? Revoke cancel for 5 years and cannot do anything Suspended can't write insurance from 3months to a year Probation can still write insurance but is being watched and has been fined. 27. When does a license have to be renewed? What is shown on a license? 2 years on your birth month Name, Address, Type of License, Expiration, other conditions, 28. Who can bind coverage? Up to 90 days. Most P&C agent but not all agents 29. What is the purpose of rate regulation? to be certain rates are not excessive, inadequate or unfairly discriminatory. 30. If the Commissioner believes you are guilty of an Unfair trade practice, what is the first procedure he takes? Cease and desists 31. Name the requirements to be able to get a premium reduction for defensive driving? Defensive driving school, Honor roll or deans list, Single, UNDER AGE 25. 32. What's the difference between a resident and a nonresident license? 33. What's a reciprocal license? States treat each other the same 34. Define "Insurer's Capacity".. The Most the state allows to be written by one insurer 35. What kind of hazard is it when Hot Wires are exposed and hanging from a ceiling? Physical 36. Explain 7-10-50-50-20. What are the fines for the violation of the F.C.R.A of 1971? 7 years 10 years bankruptcy 50,000 life 50,000 loan 20,000 application for annual salary Fines are 5,000 and 1 year prison or both 37. What are the consumer's rights? Must be notified 3 days after request Investigative consumer report must be given within 5 days of recpt or when first requested 38. Who is a mortgagee, a mortgagor, an oblige and obligor? Mortgagee is bank, Mortgagor is person, Oblige person who receives the bond money if the Principal defaults, Obligor is Company and/or Principal. 39. What's a special multi peril policy? Commercial Package Policy old name. 40. What's a mulity peril policy? Any property policy that write more than one peril insured against 41. Who signs the counter signature when required? Licensed resident agent 42. HO and Farm Property: How much for Theft loss of credit cards? \$500 with zero deductible. 43. What is usual procedure after an employee is caught stealing money from his employer? Must terminate 44. Who qualifies for a license? Resident for 6 months, age 18. 45. Who gets a temporary license? For how long? 6 months, 3 months renewed three times for a total of 15 months. Person coming from another state- 90 Days can use their resident license while processing to get Georgia resident. 46. To be a Self-Insurer, a person must meet what two requirements? Must have enough money to pay claims Should be able to use the law of large numbers 47. Tell all you know about a Surplus Lines Broker. They Sell Excess insurance that other companies will not underwrite. Like Flood Insurance when you need more than the \$250,000 the NFIP offers. 48. What is the "Access to Records: Corrections" Notice? Agent has 60 days to make it right after 60 days the state will audit and bill you for cost if you have not completed 49. Who pays the expenses if a person is examined by the Insurance Department AFTER AN ALLEGATION BUT IS NOT AT FAULT? The state 50. If you receive the proposed report after the exam, what action can the person take? Appeal within 30 days 51. Can Commissioner's order be appealed? Where? Who can appeal? Yes, superior court of Fulton County , The person who case was filed or Intervenor. 52. Define the three major Landmark cases. Paul vs Virgina Southeastern Underwriters McCarran- Ferguson act of Congress that the insurance industry is still governed under since 1945, state by state. 53. Name the "Prohibited Combinations of Insurance." Lloyds Title Insurers must be a stock company and only sell Title Insurance. Reciprocals 54. Does a Limited Subagent need a License and/or Exam? Yes, but the license requires only 20 hours and no exam. 55. What coverage would an Agent have under E. & O.? Directors and Officers (D&O) covers the Board of Directors if they are sued by the stockholders. 56. A. Domestic Insurers must be examined at least once every 5 years by the Commissioner. B. Rating Organizations to be examined every 5 years or As deemed Necessary. C. Record of C.E.C. hours must be kept for at least 5 years. D. Advertising file kept for 4 years. E. Record of Procured Coverages must be kept for at least 5 years. F. Record of Replacements 3 years. G. Agent's License 2. H. Agency License 2. 57. An open end contract is used by Assessment Issuers. What does it mean? They can charge more premium if what they charge was inadequate 58. What is the responsibility of an Attorney in fact? Manages a Reciprocal 59. What kind of company is the Lloyd's of London, a stock or mutual or reciprocal? Not an insurance company-what are they? 60. Explain my magnificent acronym, ABC PIG FARM. 61. Explain transfer of rights vs. transfer of rights of recovery. Assignment clause tranfers your rights Subrogation is transfer of rights to recovery- 62. A CPP must have four components. Name them. Declarations Conditions Coverage parts Endorsements 63. Name the CGL 2 major sub-lines. Losses are covered in which sections? Premises/operations Products/Completed Operations 64. Explain the Retroactive Date Rule on a C.G.L. Once established may be advanced only with written consent of first named insured, and only for insured Request, change in carrier, Change in exposure, Insured failure to disclose material risks facts. 65. Once in effect, may an ERP be cancelled? NO 66. What is the diffference between Mini, Midi and Full tail coverage? Are they written on both a Claims Made and Occurrence form? Mini Tail 60 days after expiration to report Midi-5 years after occurrence reported Full tail is optional and costs up to 200% of the annual premium. 67. Where is the coverage territory for a CGL? US and all territories 68. Is an Employee a Named Insured on a Comprehensive Personal Liability Policy? No. but would be covered on CGL 69. Who is an "Other Insured" on a CGL? Spouse, directors, stockholders 70. Does a CGL have host liquor coverage and/or liquor liability standard? No. Only Host Liquor Liability comes standard. 71. What are the four classes of Inland Marine? Trans and Commo Domestic shipments and transportation Commercial property Floaters Risks Personal Property Floaters Risks 72. What are the cancellation provisions of a PAP, a HO, Commercial Lines, Workers Compensation and the BAP? Pap 10-10-30 HO 10-10-30 Commerical 10-10-45 Workers Comp 10-10-75 73. Whats FAIR stand for? Fair access Insurance Requirements 74. Define Proximate Cause. The start, what started the event if no break or interruption in the chain of events. 75. Define Claims Made vs. Occurrence Trigger for coverage ? Claims made is when the claim is first made Occurrence is during the policy period when BI or PD occurs 76. What is Blanket coverage? Single amount at ingle or multiple locations. Know difference between a Blanket BPP versus a Blanket Umbrella. The Umbrella is Liability coverage only. 77. Who has the Burden of Proof under a Name Peril Policy? Insured 78. Who has the Burden of Proof under an All Risk Policy? Insurer 79. Define the difference between the following: Intervening Cause, Assumption of Risk, Contributory Negligence, Comparative Negligence and the Last Clear Chance Rule. Intervening Cause what's the cause of the accident and prevented the defendant from doing what a prudent person would have done. Assumption of Risk taking a chance is a risky situation Contributory Negligence not doing something that you should do-Not wearing seat belt Comparative Negligence when both plaintiff and defendant are equally responsible. Can't claim if more than 50% at fault. Clear Chance rule to get out of the way of accident 80. Is the BAC written with Single or Split Limits standard? Written in Single, endorsed for Split Limits. 81. What's the difference between a Direct Loss and an Indirect Loss? Direct loss is Financial loss for losing property Indirect loss is from the direct loss 82. What's the other name of Indirect Loss? Consequential Loss 83. What is a sub-limit? Places a maximum of a certain type of loss. A limit within a limit. (Like Boiler and Machinery's Expediting Expense is limited to \$25,000 even if you have \$500,000 of overall limits). 84. The acronym D.I.C.E. ed stands for what? Declarations, Insuring agreement, Conditions, Exclusions/endorsements, Definitions 85. Explain actual cash value, replacement cost and valued policy? Actual Cash Value less Depreciation Replacement cost is current cost without deprectiation. Vslued policy pays full amount of policy in event of loss Stated Amount would be like an antique car. 86. What is a concealment and fraud provision in property insurance? The entire policy will be voided if policy holder misrepresents on the application. 87. What is the Appraisal Condition? Allows policy holder to get an adjuster if they don't agree and can get an umpire. Two out of three ain't bad. 88. What is the Standard Mortgage Clause (AKA Mortgage Holder Condition) Establishes the rights of the Mortgagee 89. What is a Lease Clause? States who is liable between landlord and tenant 90. What is Vacant vs. Unoccupied? When is a commercial building vacant? Vacant-No content-no people Unoccupied- has content-no people Commerical building is vacant until at least 31 percent is occupied, but has a 15% penalty on some losses if claim is when the building is over 60 days vacant. 91. Explain the demolition cost endorsement and the demolition clause. Demolition clause excludes demo cost Demolition cost endorsements pays the cost of Demo 92. Explain the dwelling policy optional theft and optional personal liability. What is the name of that policy if purchased as a separate, Stand Alone? Dwelling Policy-optional Theft-it covers dwelling and theft Optional Personal Liability. It covers personal liability in or out side of home to someone else and to yourself if you damage someone else's property 93. What is the deductible for the Dwelling Policy? 250 94. The Inflation Guard Endorsement does what? Increase 6% every 3 years for HO 8% per year for BOP 95. Where can a person obtain Workers Comp from in Georgia? Private insurers Self insurers NCCI 96. Workers Comp- What are the benefits? Medical Income Partial Disability Scheduled Injury Death Benefits Rehabilitation Benefits 97. A. What is the Second Injury Fund, the Other States Provisions? Second injury treats a second injury as if it was the first, to encourage hiring of those with previous handicaps/injuries. The Employer would not have his rates increase if they had the second injury. B. Is Georgia Elective or Compulsory Law? Elective c\. Explain the Disability definitions. Physical or mental condition that limits a person. D. The Waiting Period before receiving Disability Loss of Work Payment? 7 Days E. When are they Retroactive? Beyond 21 days F. When does W/C go into effect? Day One G. Define the Doctrine of Exclusive Remedy? 98. What is NOT covered, under an Agent's E. & O.? BI claims are not Covered, nor intentional causes by the agent. 99. What is the purpose of an Umbrella policy? Must there be an underlying policy? On what basis is it written? To pay excess. Yes, usually there is an underlying policy To cover liability after the basic had exhausted. 100. In Ocean Marine, define the four coverages. Hull Cargo Freight P&l 101. What is a Warehouse to Warehouse Clause in the Cargo coverage of Ocean Marine? Cargo is covered from point A to B even when it is off the ship. 102. Explain the InchMaree Clause, General Average, Particular Average. Covers bursting of boilers, breaking of shafts, latent defect and negligence of crew General average is like pro-rata all concerned share the loss Particular average is the one losing the cargo pays for their losses 103. What coverages under the H.O. and D.P. and BOP policies apply the deductible before paying loss payment? HO applies to all losses on an occurrence basis. The HO does not charge a deductible for the Section II , Liability. DP applies to all direct property loss BOP-loss of optional coverages (money, securities, employs dishonesty, extra grade floor glass and outdoor signs 104. In the HO series, which form (s) provides a renter with coverage for Contents? HO4 105. What HO Form is the broadest of all HO's? HO3 with HO15. The HO-8 Modified Basic is the least broadest. 106. DOPL is used to describe what coverages in HO's? Dwelling Other structure Personal Property Loss of use (indirect) 107. Are additional coverages found in Section I or Section II of a HO Policy? Section I and Section II. There are two sets of Additional Coverages. 108. The basis of recovery under the HO's and DP's are paid out at ACV, or Replacement Cost, for Coverages A and B? Replacement Cost on Coverage A and B. The SFP, DP1 and HO-8 only pay ACV. 109. Explain HO's additional coverage called "Damage to property of others". Can anyone intentionally causing damage to the property of other be covered? Who? Yes. A child under 13 years old can intentionally do damage and cover up to \$500, with zero deductible. The parents would be held vicariously liable for the excess over \$500. 110. The only DP and HO Forms that cover a Mobile Home that you own are.... HO-7. 111. What HO Form would you buy to cover a mobile home if you are a tenant? HO4 112. What DP for an owner/occupant of a mobile home? DP1 and the HO-7 113. If the first named insured of a CPP dies, who do the policy rights transfer to? Legal Representative, until the next renewal and will then be reviewed by the insurer. 114. Can Coverage "C" Personal Property, of a HO, raise and or lower its limits? Yes, but can only be lowered to 40% minimum. The HO4 minimum is \$6,000. The HO6 is a min of 10,000 for Contents. (Personal Property). 115. Who pays Defense Costs or claims if the insured is legally liable for under a HO Policy? Included in or IN ADDITION to the policy limits? 116. When does the time allowed to make a claim under a HO's Medical Payment expire? What is the maximum Payable? To whom would it be payable to? 3yrs up to \$1000.00, Payable to third parties. 117. Name reasons to cancel a P.A.P. Any Felony 118. Minimum Financial Responsibility Law? Must carry 75,000 CSL or 25,000/50,000/25000 split 119. What are the penalties for failure to comply with \#118. Misdemeanor- from 200 to 1000 fine One year in Jail 60 days suspension of license 120. What is the legal name for the state's Assigned Risks? Automobile Insurance Plan 121. Is UM and UIM required to be on all PAP's? Explain. Yes, it is required "to be offered" but not required that you have it. The insured has to add it to Commercial Auto if needed. You take it off the Personal Auto But add it to Commercial Auto. 122. Explain Newly Acquired Additional Vehicle, Newly Acquired Replacement Vehicles. IF you get a new vehicle you are covered for 30 days for no broader than what the policy already had. Newly Acquired Replacement vehicle is covered until policy period expires, except Part D, (Collision and Other Than Collision is for only thirty days). 123. What is the Omnibus Clause? It covers the named insured and family members without them being specifically named on the Declarations page. 124. What are Eligible Vehicles under the PAP? Vehicle shown in Declarations, owned trailer, Newly acquired Additional Vehicle, Replacement vehicle, non-owned temp substitute 125. What are Eligible Risks under the BOP? Apartment Buildings Office building up to 6 stories or up to \$100,000 square feet. Mercantile or wholesale risks that do not exceed 25,000 ft Service or processing risks Ltd Fast-food restaurants Convenience stores with gas pumps less than 50% of gasoline sales. 126. What re the Ineligible Risks under the BOP? Bars, grills, restaurant Auto dealers, auto repair and service operations. No service stations. Banks, Financial institutions, Savings and Loans. Places of amusement, fairs, circuses, arcades. Hospitals, but Drug stores are eligible 127. What are the additional coverages found under the BOP? Debris removal Removal (up to 30 days) Fire department service charge up to 1000 Business income Extra expense Pollutant clean up and removal 128. Under the BAC, who is an insured? Who is not? VEHICLES that are owned, lease, hired or borrowed. Explain the DOC, Drive Other Car Endorsement. Hired versus Non Owned vehicles. 129. BAC physical damage Covers (3). Name Them Comp, Specifies Perils and Collison 130. Explain the difference Between garage liability and Garage keepers. Garage Liability covers Injury and Garage keepers covers the customer's Car 131. Truckers Coverage Form, Section III, trailer interchange agreement, Covers What? Covers non owned trailers and equipment 132. BAC Medical Payments and Uninsured Motorist. Are they Standard? No they need to be endorsed onto Commercial Auto. They come standard on PAP (Personal Auto) and must be rejected in writing if not wanted. 133. Name the BAC Symbol with the most broad coverage? Any auto , Symbol \#1. 134. Hired Auto defined in the BAC is? All but those owned by employee or family's 135. Newly Acquired Autos in the BAC is? Automatic coverage until policy term if symbols 1-6 If symbol 7 coverage for 30 days, if replacement or if insurance company insurers all autos 136. Extension of Covered Autos: Liability Only (BAC) extends to the following? Nonowned trailer/trailers 137. BAC Covered Autos is for Business that own, lease, hire or borrow vehicles whether associations, corporations, sole proprietorships or Partnerships. Is any of this false? No 138. Explain EIEE, on the earthquake form. 139. Explain the value Reporting forms "Advance Premium" and Final Premium", the peak Season endorsement, 100% Co-Insurance Required, Honesty Claims and penalty for failure to Submit Reports when due. Advance premium is charge in the beginning Final Premium is Charge at end based upon value reported The peak season Endorsement covers inventory at the Peak season. 100% co insurance the honesty clause-full reporting required Failure to Submit reports-No more than 75% of last report. 140. Business Income losses are determined by....NIPCOE. Business income is net income plus continuing operating expenses 141. Name the 4 locations of business income from dependent property. RC/LM Contributing locations Recipient Locations Manufacturing Location Leader locations 142. Explain Leasehold Interest Coverage Income form Vs. Leasehold Coverage. Leasehold interest pays for leaseholder if he loses the lease due to a peril Leasehold insurance pays the landlord if he loses a tenant due to a peril 143. What would be covered by buying "profits insurance"? Covers lost profits on finished good 144. If Condo Association and Condo Unit Owners are both covering a loss, which would pay primary? What does the Condo owner insure under Condo Association? Association coverage is primary They jointly own the building, grounds and facilities. They buy Unit Owners to cover their own property within their walls of each of their units. 145. Commercial Glass.....does it cover frames? YES 146. Define Loss Conditions. All polices in GA give the insured 60 days for signed Sworn Proof of loss to be given to the insured from the date company request it. Crime insurance is 120 days All policies must pay the claim within 30 days after receiving the proof loss form or 30 days to notify their intensions. Fire policy is 60 147. Define a CPP's "duplicate coverage". 2 or more policies coverages will not pay twice the same claim 148. What are the Commercial's four Causes of Loss Forms coverages? Basic, Broad, Special, and Earthquake 149. What is the valued Policy Law in Georgia? How could it violate the Principle of Indemnity? Must pay the full amount of a property policy's limit if due to a total fire loss of a One or Two family dwelling. It violates Indemnity when they are required to pay more than it took to restore because the insurer overwrote the amount. 150. What are additional coverages in a builder's risk? Debris up to 25% of loss Loss to property up to 30 days Fire department charge up to 1000 Extracting pollutants from land or water up to 10,000 151. Name the CGL contractual agreements (aka Insured contract) Lease of premises Sidetrack agreement Elevator maintenance Easement or license agreement Obligations by ordinance to indemnify a municipality Where insured assumes tort liability 152. Define Loading, unloading, Mobile equipment, work, fire legal liability, Advertising Injury. BB-91 153. What is a Claim Trigger intended to tell? When the Claim was first made or when the BI or PD occurred 154. What is an Amendatory Endorsement? Changes Policy Language 155. What does a floater insure? It follows or floats with the insured object. Can be sold as individual or attached endorsement to other forms. 156. What is a Blanket Position Bond? Is the insured named on the bond? AB-risk? Covers the all in the business without naming names or positions. 157. What is a De Novo hearing? Prima Facia Evidence? Entirely new proceeding. Starting Over. WE have all the evidence needed and will not require new witness or new evidence. 158. What is a Discovery Period used for? Allows you to look back into claim and get information about what was lost, normally up to 12 months after the employee is caught in the dishonest acts. 159. Business Income is not written with a deductible and a 50% coinsurance requirement is usually acceptable. True 160. What does "Principle of Entirety" mean? All Premiums are considered Earned. 161. How much will a PAP pay for an insured's Bail Bond? 250 maximum. 162. Explain the Towing and Labor option for PAP vs. BAC? 163. Explain Transportation Expenses difference in a PAP and the BAC? Under pap \$20 per day and up to 600 first 2 days not covered. (48 hour time deductible). 164. What does a CPL cover? Fill in gaps that not covered- flood, earthquake, mysterious disappearance. It is a liability policy only. 165. What policy insures Growing Crops? Crop coverages starts when there is a visible sprout or stand showing above the ground. 166. Would Flood Insurance pay for tidal waves, landslides, sewer tank, overflows, mudslides, growing crops and livestock? 167. Name the only dwelling covered at Replacement Cost on a Flood policy. Single Family dwelling, but the home's contents are at ACV. Commercial is only ACV. 168. Who regulates flood, fair and federal crime? Flood is FEMA of HUD.. Fair is State of GA Federal Crime- FEMA of HUD. l 169. Explain Monoline vs. Package Policies. Monoline is one Coverage Part Package is two or more Coverage Parts 170. What is an Interline Endorsement? Are those that apply or could apply to more than one coverage part on a cpp. Designed to eliminate redundancy or reduce number of endorsements. 171. Explain the difference between Name Schedule Bonds, Position Schedule Bonds and Blanket Bonds. Name scheduled only covered the named person Position Schedule only covers job position Blanket Bond cover everyone in business without naming the names or positions. 172. What would Crime Coverage K and L cover? K-loss to guest property while in a safe deposit box L-guest property while in the insured premises or possession-vehicle not covered 173. Define Burglary, Robbery, Theft, Custodian, Messenger, Extortion, Invitee and Safe Burglary. Burglary taking property from inside by evidence of forcible entry Robbery taking property by someone as result of threats and do bodily harm and the victim actually witnessed it. Theft any act of stealing. (Larceny would be the second best answer). Custodian the name insured or partners or employee while having care of insureds property. INSIDE. Messenger the name insured or partners or employee taken care of property outside the premises. OUTSIDE. Extortion the surrender of property away from the premises as result of threats Invitee person being held captive (like a bank customer). Safe Burglary the taken of property from within locked safe, cash register by forced entry 174. Who benefits from the purchase of a Fidelity Bond? Obligee 175. Which one is called "Dishonesty Insurance", a Surety Bond, or a Fidelity Bond? Fidelity Bond 176. Who benefits from the purchase of a Fiduciary Bond? Obligee 177. What is the standard deductible on Inland Marine? 250 178. On Inland Marina, what if there are "Two or more Coverages"? It pays no more than the actual loss 179. What does Accounts Receivable Coverage insure? protects a company against financial losses caused by damage to its **accounts receivable** records 180. Explain the Jewelers Block, commercial inlands marine floater. Jewelers Block cover the entire inventory of Jewelry, customer's jewelry while in custody of the store, and loaning the diamonds to the stars during the Grammy and Oscar award ceremonies. Coverage special equipment on and off premises on in transit 181. Does Boiler and Machinery cover BI liability, extra expense, business interruption? It covers Property Damage liability standard. Extra expense and business interruption can be added 182. What is the Suspension Provisions for B & M? Can suspend the provisions immediately without advance notice, the suspension takes effect when written notice is delivered to or received by mail by the insured. The policy must be endorsed by the Insurer to remove the suspension 183. What are the Six Object Definitions of B & M? Pressure and Refrigeration (Air conditioners in a hotel or Coolers in the grocery store). Mechanical objects Electrical objects Turbine objects Comp coverage excluding Machinery Comp coverage including Machinery 184. What is a small business defined as on B & M? 185. What are the two types of BI available under Aviation Insurance? Who writes it? Including and excluding passengers Associated aviation underwriters Us Aircraft insurance group Lloyds Hangarkeepers covers the customer's aircraft if damaged by the Hangar's mechanics. 186. Explain the Difference in Conditions Policy? Designed to supplement protection and fill insurance gaps Written as excess-written on all risk basis Often written to cover flood, earthquake, weather, mysterious disappearance, covers direct and indirect losses Usually excluded losses that are common-fire lighting, wind, hail, explosion, riot, smoke, aircraft, vehicles 187. Who can bind coverage? What is a binder? Most P and C agents can bind for UP TO 90 DAYS. **Insurance binders** are contracts of temporary **insurance** pending the issuance of a formal policy or proper rejection of the application by the insurer. Can be written or oral 188. If the Hotel California insures their building for \$500,000 with company ABC and \$250,000 with company TNT, in the event of a loss, what would each company pay if they were both primary, and paying pro-rata based on Proportionally by Limits? What would be paid if company TNT were declared insolvent, prior to the loss? What would be paid on a \$10,000 loss if ABC was primary? What would be paid if ABC and TNT were pro-rata and paying Equal Shares? ABC 66.7% and TNT 33.3% (2/3rds by ABC and 1/3 by TNT). ABC 66.7 ABC would not pay anymore even if TNT was bankrupt ABC would Pay 100% up to their limits, if they were primary. TNT would not pay until ABC exhausted Under equal shares, each company would pay their equal shares (50%) each. When the lesser insurer exhausted, the majority company would go back and pay the difference. 189. Name the insurance licenses available in Georgia. Life, Accident and Sickness (aka Life and Health) P and C Adjusters Counselors Limited Subagent Surplus Lines. 190. Explain B & M's replacement cost vs. ACV Basis of Recovery Provisions as to covering obsolete or not in use objects. B&M is Replacement Cost basis unless ACV is endorsed. No coverage to Obsolete or useless property or while being tested 191. Who does not have to be licensed around the business? Lawyers and CPA's can occasionally counsel if incidental to their practice. 192. Rates cannot be Excessive, inadequate or unfairly discriminatory. 193. How can an insurer satisfy its obligation of notifying all insureds of cancellation on a commercial policy? Who gets the claim payment check? 1\. Certified mail. 2\. The First Named Insured. If deceased, it goes to the Legal Representative 194. Dwelling Policies: are farms eligible for a DP? What businesses are covered under a DP? How many people working on the premises at one time? DP and HO will not insure a farm. Eligiible Business are the same on DP and HO. (Not a garage or tv repair shop, but an insurance agent/adjuster, etc) No more than 2 people working on premises at one time. 195. Under the DP, is replacement cost or A.C.V. paid for buildings for all three forms? Explain in detail. The DP1 is ACV. The DP2 and DP3 is Replacement cost if 80% ins to value. All other is ACV 196. Are all coverages standard on all three DP Forms? If not, explain. NO there are endorsements to DP to make it similar to HO, if the insured wanted to add Theft and Liability coverages. 197. Explain all coverage amounts under the HO-4 and HO-6. How much coverage "C" is standard under the HO-6? O for dwelling on HO4 which is a renter and 1000 for HO6 which is condo owner Personal property on HOA is 6000 and 10,000 on HO6 198. EXACTLY how does the Mortgage Clause work? Who gets paid if the Insured is guilty of Fraud or Intentional Acts? It states that Mortgagee or will be paid for claims. If the insured is guilty of a crime like Arson, it will pay the Mortgagee (to the lender). 199. Define Collision, as pertaining to the P.A.P. The upset of your Covered auto or non-owned auto or its impact with another vehicle or object. 200. Which is defined as money: Currency, coins, bank notes, travelers checks, money orders, tokens, tickets, revenue, stamps, securities. Coins, bank notes, travelers checks and money orders 201. Are outdoor signs covered under a business and personal property coverage form? For how much? Attached or unattached? When are they covered under a builders risk? Yes- 1000 if attached for the BPP, BOP and Builders Risk. Unattached the BPP sign is \$1000, the BOP is \$2500 but the Builders Risk is zero signs unattached. Covered under builders risk if attached to building, but NOT if the sign is Unattached. 202. What is the co-insurance clause percentage age requirements for the following: business income has 50% Property Insurance has a 80% Builders risk 100% Commercial sign floaters 100% Value Reporting 100% 203. When does the Agent's certificate of authority expire? 204. When will pollution cost endorsement pay if a car hits your truck loaded with pollution, primary or secondary? The Tortfeasor (the one at fault) will pay primary. The Pollution cost endorsement pays after the wrongdoer paid first. 205. The BAC covers liability assumed under contract, only when? When the Insured Contract agreements require it. See BB-91. 206. Under the BOP, explain the loss of income and the extra expenses coverage, is to time limits. it helps avoid loss of income and/or suspension of operations for first 12 months 207. E. & O. does not cover B.I. and P.D. Claims except........ Architects and engineers 208. For what reasons can the state revoke an insurer's C.O.A.? Violation of insurance code Misrepresentation Obtaining license by fraud, concealment Misuse of monies **Comingling and Embezzlement** Failure to follow rules and regulation Failure to pass exams Felony Writing over insurance 209. Prohibited practices: Misrepresentations, Insurance charges must be specified, no excess or under charges. True 210. Define negligence and the four elements that must exist for negligent liability to exist. The failure to do what is a reasonably prudent person would do under given circumstances Breach of duty Resulting injury or damage Proximate cause Reasonable duty to act or not to act under given circumstances 211. Explain the purpose of the "first named insured" on commercial. The Man that make decisions --the buck stop here-in charge 212. Explain the three Vacancy Conditions (Commercial, personal lines and standard fire policy). BB-76. Commercial Vacancy vacant for 60 consecutive days Personal Lines Vacancy after 30 consecutive days if vacant unoccupied or being constructed if losses are due to freezing SFP vacancy states after 60 Consecutive days 213. What are the reasons for a PAP to be cancelled and/or renewed? Under safe burglary coverage explain covered losses. Reasons for cancellation would be a felony Damage to premises, safe burglary of property other than money and securities inside in a safe or vault, robbery outside in the care of an armored car and it covers the safe or cash register that is stolen. 214. Explain the "self-insured retention", under umbrellas and why some are written to "follow form". In an Umbrella, the basic policy may not cover something that the umbrella would Cover. An SIR (Self insured Retention limit) may be required to be paid before the umbrella would pay. 215. The P.D. Liability under aircraft liability applies to claims due to the ownership, use, or maintenance of the insured aircraft. True? True 216. Hull Coverage is Physical Damage. What does it cover and exclude? Bodily Injury (including or excluding) passengers PD liability Medical Payments 217. How far back would an insurer normally check a Claims and Occurrence Information Record for General Liability, Claims Made Form? Three Years. 218. Explain the different contract bonds: Bid Bonds, Performance and Payment Bonds (AKA Labor and Material Bonds), Completion Bonds, and Supply Bonds. Bid Bonds- It's a bond that covers the bid that a company submits to guarantee the quote and Job Performance and payment bonds-is based upon satisfaction of project Completion Bonds-guarantee that job will be complete even if they run out of money Supply bonds- ensure that a contractor **supplies** the necessary goods for a project as stipulated by a contract 219. What is the workers comp optional deductible and who pays it? Even number 100, 200, 300, 400, 500, 1000, 1500, 2000, 2500- Employer Pays the deductible to the Insurer. The injured employee does not pay it. 220. If a Hairdresser gave a lady a perm, at the hairdresser's home, which later turned the lady's hair green and melted her skin down to the skull, which cause brain damage, under which policy would the victim have been likely to collect first? Home Owners, CGL Products/Completed Operations, CGL Premises/Operations, the Hairdresser's Non-Medical Professional Liability (E&O), or the ABWOG (The American Bald Women of Georgia) CGL Products/completed 221. What's covered under the pap's I. M.? There is No such thing. The PAP automatically comes with UM and UIM but it can be rejected in writing. See BB-59. 222. If Bruce Springsteen has a claim on his home, and wishes to have the insurance company pay directly to the Roofing company, what is it called when he gives that right to the Roofing Co.? Transfer rights (Assignment Clause). Could be called Clause, Condition, Provision or Period. 223. If you came home and found someone in your house, thinking he were a burglar, DETAINED him until the police arrived, and later discovered he was a plumber on a planned service call that your spouse arranged, what, if any kind of coverage may pay for the suit? If you had added the personal injury Endorsement HO-81 to your homeowner policy, or if you had an umbrella, the lawsuit for wrongful detention would have been covered 224. What crime coverage pays if a messenger were robbed of "Other than money & Securities"? Form E 225. What coverage pays if a burglar stole money from the premises? Form C. Remember!! Form A, Employee Dishonesty is the only one that pays if the Employee steals Money, or POTMAS or Securities from the Employer. 226. Would an employee be covered on the BAP, if they are driving their personal auto for business purposes? Would they be covered under the BAP if driving a company car for business purposes? YES, if the Employer had added the Employees as Additional Insureds. YES, if they added the Extended Non Owner Liability endorsement for the insured using their car for business use. 227. Where is the coverage, "Mysterious Disappearance" found? Under HO 3 with the HO15, or under the HO5 Comprehensive. It is also found on the Floaters like PAF, PPF and PEF. BB-66. Form A of Crime insurance could cover it, too. 228. Name the type of policy that may require that the insurer get WRITTEN approval from the insured prior to paying a claim? Professional Liability. E&O, D&O, Malpractice. 229. Workers Comp: What is the Doctrine of Absolute Liability? You are absolutely Liable and have no defense. 230. What is it called if you parachute with the knowledge that you have large rips in the nylon? What is it called when you have large rips in the chute? What is called when you hit the ground? Risk. Physical Hazard. End of story. Morale is when you are eaten up with Ignorance. 231. Which DP, HO, and Commercial Cause of Loss Form would cover damage caused by termites? By weight of rain on the roof? Which covers wind and water damages? Termite damage is not covered. In the rare instance it would be covered only if the hidden insects caused a collapse of all or part of the building. All broad and special cover collapse. Basic forms NEVER cover Collapse definition. Know the difference in Broad Form versus Collapse (BB84 and BB85). Which is Weight of People. Which is Weight of Rain on the Roof? 232. If a burglar broke into a store, name the following losses that would be covered under the premises and burglary crime coverage: \$2,000 in cash, \$5,500 in value of stock (but the stock retails for \$12,000), and \$914.66 in building damage. The wholesale value of the stock (\$5500) and the 914.66 in building damage 233. Boys and Girls, if your dog bites your neighbor, Mr. Rogers, causing \$300 in bodily injury and then Mr. Rogers sues you for \$50,000 what part of the Homeowners policy pays, and how much? Medical Payments pays the first \$1,000 within three years. Personal Liabilty Pays 50,000 234. Where is OCP Liability found? What does it cover? Commercial General Liability. OCP covers the Owner and Contractor against Claims caused by subcontractors 235. Who is covered under the Farm Property's Medical Payments? 236. What is the difference in DP and HO when covering watercraft? DP covers row boats and canoes ONLY HO covers row boats and canoes plus boats with outboard motors if 25 hp or less and 50 hp or less for inboard and vessels of less than 26 feet. **REVISED EDITION - May 16, 2021**