CISR Insuring Commercial Property Exam 146 Questions with Answers,100% CORRECT

Document Content and Description Below

CISR Insuring Commercial Property Exam 146 Questions with Answers Select the answer that most closely describes Actual Cash Value (ACV). - CORRECT ANSWER A method of establishing the value of prop... erty wherein depreciation and obsolescence are deducted from the value of the property. Select the answer that most closely describes Functional Replacement Cost. - CORRECT ANSWER A provision which changes the policy valuation so as to provide for replacement with a different structure which performs the same service or function, but is less costly. Which of the following statements best defines direct loss? - CORRECT ANSWER Losses incurred when there is tangible visible damage to the insured's property. Which one of the following does not have an insurable interest in a property? - CORRECT ANSWER Neighboring businesses Select the answer that most closely describes Replacement Cost. - CORRECT ANSWER Insurance issued in an amount to cover the property described for a limit that will be adequate to replace the structure at the cost of today's labor and materials. Which one of these statements best describes Coinsurance? - CORRECT ANSWER A contractual promise to carry an amount of insurance equal to, or greater than, a fixed percent of the current value of the property. Failure to comply results in a penalty. Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 What amount of insurance is required to comply with the coinsurance provision? - CORRECT ANSWER $240,000 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 How much will the policy pay? - CORRECT ANSWER $37,500 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 What amount of insurance is required to comply with the coinsurance provision? - CORRECT ANSWER $400,000 What amount of insurance is required to comply with the coinsurance provision, and how much will the policy pay? Building Value (at time of loss) $100,000 Policy Limit $80,000 80% Coinsurance Clause Loss amount $15,000 - CORRECT ANSWER $80,000; $15,000 Using the values listed below, answer the coinsurance problem. Ignore deductibles. Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 Did the insured comply with the coinsurance provision? - CORRECT ANSWER No Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 Did the insured comply with the coinsurance provision? - CORRECT ANSWER Yes Which of the following statements best defines and summarizes all the features of Agreed Value? - CORRECT ANSWER An option in the Commercial Property policy which suspends the coinsurance clause. The insured is required to file a statement of values with the insurance company; the company must agree with the values filed. The policy is written at the agreed value, and then the coinsurance clause is suspended for one year only, not to extend beyond the policy expiration date. Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 How much will the policy pay? - CORRECT ANSWER $37,500 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 Did the insured comply with the coinsurance provision? - CORRECT ANSWER Yes Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 What amount of insurance is required to comply with the coinsurance provision? - CORRECT ANSWER $240,000 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 What amount of insurance is required to comply with the coinsurance provision? - CORRECT ANSWER $400,000 What amount of insurance is required to comply with the coinsurance provision, and how much will the policy pay? Building Value (at time of loss) $100,000 Policy Limit $80,000 80% Coinsurance Clause Loss amount $15,000 - CORRECT ANSWER $80,000; $15,000 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 How much will the policy pay? - CORRECT ANSWER $240,000 Which one of these statements best describes Coinsurance? - CORRECT ANSWER A contractual promise to carry an amount of insurance equal to, or greater than, a fixed percent of the current value of the property. Failure to comply results in a penalty. Which of the following statements best defines and summarizes all the features of Agreed Value? - CORRECT ANSWER An option in the Commercial Property policy which suspends the coinsurance clause. The insured is required to file a statement of values with the insurance company; the company must agree with the values filed. The policy is written at the agreed value, and then the coinsurance clause is suspended for one year only, not to extend beyond the policy expiration date. Using the values listed below, answer the coinsurance problem. Ignore deductibles. Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 Did the insured comply with the coinsurance provision? - CORRECT ANSWER No Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation. The insured reports $120,000 but actually had $160,000 worth of inventory. A loss of $100,000 occurs. How much will the company pay? - CORRECT ANSWER $75,000 Which method of handling changing values is the best method to cover the following situation? "We Love You" Florist Store has an increased inventory from February 1 to February 15, and an increased inventory for the two weeks before Mothers Day? - CORRECT ANSWER Peak Season Endorsement Which method of handling changing values is the best method to cover the following situation? "We Booze You" Liquor Store's inventory changes every week? - CORRECT ANSWER Value Reporting Form Which method of handling changing values is the best method to cover the following situation? XYZ Toy Store has an increased inventory from October 1 to December 31 due to the Christmas season. - CORRECT ANSWER Peak Season Endorsement Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured reports $350,000. A loss of $350,000 occurs. - CORRECT ANSWER $300,000 Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured never files the first report. It is 115 days into the policy. The insured has a loss in the amount of $200,000. - CORRECT ANSWER $150,000 Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured has been reporting his values accurately and on time. He has a covered loss on June 5 in the amount of $150,000. His last report for the month of April, which was received on May 15, showed $100,000 in value. - CORRECT ANSWER $150,000 Complete the practice problem to make sure you understand these ACV and Replacement Cost. An item of property is damaged by a covered cause of loss. For insurance purposes, the item is valued using actual cash value. It costs $2000 to replace it with like/kind materials at the time of the loss. The item was originally purchased for $1500. Depreciation is calculated at 10%. What amount will the insurance company pay to replace the item? - CORRECT ANSWER 1800 Complete the practice problem to make sure you understand these ACV and Replacement Cost. Your insured purchased an item when it was new for $2000. It has since depreciated in value by 10%. The replacement cost today would be $2300. What is the ACV for the fence? - CORRECT ANSWER $2,070 Which method of writing commercial insurance would you use when an insured has a list of specifically listed items at two or more locations? - CORRECT ANSWER Schedule Insurance If the policy is written for blanket limit of $720,000, what would happen in this loss situation? Due to extensive remodeling at Locations 1 and 2, the insured moved all inventory to Location 3. A short time later, Location 3 has a covered business personal property loss of $150,000. - CORRECT ANSWER $150,000 Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 If the policy is written for blanket limit of $720,000, what would happen in this loss situation? Location 1 has a total loss on the Building for $85,000 and a loss of $40,000 on the business personal property. (They had just transferred stock from Location 2.) - CORRECT ANSWER $125,000 Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 The policy is written as a specific limit. Location 1 has a total loss on the Business Personal Property at $40,000 because the company just transferred stock from Location 3. What is the loss payment amount that the insured receives? - CORRECT ANSWER $20,000 Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 If the buildings and contents are blanketed, and the insured has 90% coinsurance, what is the blanket limit of the policy? - CORRECT ANSWER $720,000 All of the following are rights and/or responsibilities of the First Named Insured except: - CORRECT ANSWER Provide a copy of corporate by-laws to the insurer Match the circumstance described to the Commercial Property Condition that applies. An insured has collected insurance proceeds under the Inland Marine Coverage Part, and the insurer will not accept a claim for the same loss under the Property Coverage Part of the policy. - CORRECT ANSWER Insurance Under Two or More Coverages Match the circumstance described to the Commercial Property Condition that applies. The insurer pays an insured for vehicle damage to her building, then seeks reimbursement from the driver of the auto that caused the damage. - CORRECT ANSWER Transfer of Rights of Recovery Against Others to Us Match the circumstance described to the Commercial Property Condition that applies. An insured has a loss that occurs two weeks after the policy expires. - CORRECT ANSWER Policy Period, Coverage Territory Match the circumstance described to the Commercial Property Condition that applies. The insurance company denies loss payment after the insured confesses to starting the fire at his own premises. - CORRECT ANSWER Concealment, Misrepresentation or Fraud Match the circumstance described to the Commercial Property Condition that applies. The insurance company does not pay for loss to the insureds contents in her London office. - CORRECT ANSWER Policy Period, Coverage Territory Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Riding lawn mower - CORRECT ANSWER Building Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Flagpole - CORRECT ANSWER Building Indicate whether the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Improvements and betterments - CORRECT ANSWER Business Personal Property Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Patio furniture - CORRECT ANSWER Building Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Area rug - CORRECT ANSWER Building Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Permanently installed machinery - CORRECT ANSWER Building Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Land - CORRECT ANSWER FALSE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Money and securities - CORRECT ANSWER FALSE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Cargo Shipments - CORRECT ANSWER FALSE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Foundations of buildings, structures, machinery or boilers if their foundations are below the lowest basement floor, or the surface of the ground if there is no basement. - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Retaining walls that are not part of a building - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Bridges, roadways, walks, patios, or other paved surfaces - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Airborne shipments - CORRECT ANSWER FALSE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Fences - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Underground pipes, flues or drains - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. The cost of excavations, grading, backfilling, or filling. - CORRECT ANSWER TRUE Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Bulkheads, pilings, piers, wharves or docks - CORRECT ANSWER TRUE Indicate whether the following type of Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Animals unless owned by others and boarded by you, or if owned by you, only as "stock" while inside of buildings. - CORRECT ANSWER TRUE Indicate whether each of the following statements about the Building and Personal Property Coverage Form is True or False. The Additional Coverage Debris Removal includes the cost to remove debris that results from a covered loss including all pollution clean up costs. - CORRECT ANSWER FALSE Identify the sub-limit that applies to the following Coverage Extension. Personal Effects and Property of Others - CORRECT ANSWER $2,500 per premises Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. The Building and Personal Property Coverage Form, coverage Extensions, are additional amounts of insurance. - CORRECT ANSWER TRUE Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. The Building and Personal Property Coverage Form includes coverage to extract pollutants from land or water when the pollution results from a covered cause of loss at the described premises. - CORRECT ANSWER TRUE Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. If the insured's property is moved to preserve it from loss by a covered cause of loss, it is covered from ANY direct physical loss or damage for up to 30 days after property is moved. - CORRECT ANSWER TRUE Identify the sub-limit that applies to the following Coverage Extension. Valuable Papers and Records - (Other than Electronic Data) - CORRECT ANSWER $2,500 Identify the sub-limit that applies to the following Coverage Extension. Outdoor Property - CORRECT ANSWER $1,000 for all outdoor property per occurrence, but not more than $250 for one tree, shrub or plant Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. In order for the Coverage Extensions of the Building and Personal Property Coverage Form to apply, the insured must comply with the coinsurance provision of the policy. - CORRECT ANSWER TRUE Identify the sub-limits that apply to the following Coverage Extension. Newly Acquired or Constructed Property - CORRECT ANSWER $250,000 per building Identify the sub-limit that applies to the following Coverage Extension. Property off-premises - CORRECT ANSWER None of the above The Building and Personal Property Coverage Form gives the insured coverage for which of the following with no additional limit of insurance? - CORRECT ANSWER Preservation of property Determine the amount an insured would be paid in the described loss situation. Apply the standard $500 deductible. The insured has a fire loss to a structure. To repair the damage, the cost is $450. - CORRECT ANSWER $0 Determine the amount an insured would be paid in the described loss situations. Apply the standard $500 deductible. An uninsured vehicle ran into your insured's building which is insured for $100,000. This insured's Business Personal Property is insured for $75,000. The total cost to repair the building is $40,000, and the vehicle also damaged $30,000 worth of figurines that were in the front window. - CORRECT ANSWER $69,500 Determine the amount an insured would be paid in the described loss situation. Apply the standard $500 deductible. The insured's Business Personal Property was damaged due to the sprinkler leaking. The amount of damage was $850. - CORRECT ANSWER $350 An outdoor sign attached to the side of a building was damaged by vandals. The sign had a value of $4,000 and was not specifically insured. Is there any coverage under an unendorsed Building and Personal Property Form with a Special Causes of Loss Form insuring the building for $200,000 replacement cost coverage? The coinsurance requirement has been met. - CORRECT ANSWER Covered but limitation on payment. Vandalism is a covered cause of loss. Choose the incorrect characteristic of the Optional Coverage - Agreed Value. - CORRECT ANSWER Requires an independent appraisal. Your insured, which has a commercial property policy written on an actual cash value basis, suffers a covered building loss. The actual cash value of the loss is $1,250 and the replacement cost of the loss is $1,900. Assuming that this insured has satisfied all policy conditions, and disregarding deductibles, how much will the policy pay? - CORRECT ANSWER $1,900 Calculate how much would be paid to the insured in the loss situation described. Disregard deductibles.After the insured's building is vacant for 95 days, vandals trash the building. The amount of damage is $7,500. - CORRECT ANSWER $0 Calculate how much would be paid to the insured in the loss situation described. Disregard deductibles.The insured's building is vacant for 56 days. The sprinkler system accidentally discharges and causes $1,500 damage to the walls. - CORRECT ANSWER $1,500 Choose the description that explains best how the Building and Personal Property Coverage Form defines "Vacancy" for a building owner: - CORRECT ANSWER At least 31% of the total square footage is rented or is used to conduct customary operations. All of the following statements are true about the Optional Coverage - Inflation Guard, except: - CORRECT ANSWER Insured must carry a minimum coinsurance percentage of 90% Which of the following is true about the Optional Coverage - Replacement Cost? - CORRECT ANSWER You may take an actual cash value settlement and then change your mind subject to certain requirements. Specify which coverage form, if any, includes coverage for the specified peril. A bucket of paint is spilled on the carpet of the insured's business - CORRECT ANSWER Special Specify which coverage form, if any, includes coverage for the specified peril. The insured's inventory is stolen. - CORRECT ANSWER Special Specify which coverage form, if any, includes coverage for the specified peril. An explosion destroys the insured's building. - CORRECT ANSWER Basic, Broad and Special Specify which coverage form, if any, includes coverage for the specified peril. Although properly maintained, a frozen pipe bursts, resulting in water damage to all contents. - CORRECT ANSWER Broad and Special After wind totally destroys half of an insured's building, an inspector tells the insured that since more than 40 percent of the building was destroyed, he must tear down the remainder and rebuild to comply with current building codes. That includes the increased cost of making the building handicapped accessible. The insured has purchased an Ordinance or Law Coverage endorsement with all options chosen. The policy will pay for which of the following? - CORRECT ANSWER Both A. and B. Specify which coverage form, if any, includes coverage for the specified peril. Light pole falls onto the roof of a building, causing severe damage. - CORRECT ANSWER Broad and Special Specify which coverage form, if any, includes coverage for the specified peril. A sprinkler system accidentally discharges, causing severe water damage. - CORRECT ANSWER Basic, Broad and Special Specify which coverage form, if any, includes coverage for the specified peril. Floodwaters damage the insured's floor coverings and desks. - CORRECT ANSWER None of the above The Special Causes of Loss Form excludes all of the following, except: - CORRECT ANSWER A fire that occurs after a steam boiler explodes and sparks. Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. The insured leaves a window open; rain comes in, causing damage to the building and some of its contents. - CORRECT ANSWER Not Covered Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. Upon taking inventory, the insured notes that several video games are missing. However, the storage room has no indication that a break-in occurred. - CORRECT ANSWER Not Covered Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A fire damages a building that is primarily glass windows. The fire damage to the glass is over $40,000. - CORRECT ANSWER Covered, No Special Limit Applies for Fire to Glass Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A vandal takes a bat to six panes of glass in the front window. The cost to replace each pane is $300. - CORRECT ANSWER Covered, No Special Limit Applies for Vandalism to Glass Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $25,000 fur coat is stolen. - CORRECT ANSWER Covered, and Special Limit Applies to Furs Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $2,000 diamond ring is stolen. - CORRECT ANSWER Covered, and Special Limit Applies to Jewelry Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $5,000 worth of lottery tickets were stolen from the insured. - CORRECT ANSWER Covered, and Special Limit Applies Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. The following transit exposures are covered in the Special Causes of Loss Form except for: - CORRECT ANSWER The insured's salesperson has $10,000 worth of samples in his truck. Both the truck and the samples are damaged in a collision. Under Business Income (And Extra Expense) Coverage Form CP 00 03 one of the requirements for a covered loss is that damage to property must occur at the premises described in the Declarations. - CORRECT ANSWER TRUE Time element forms typically pay on an actual loss sustained basis. - CORRECT ANSWER TRUE The insured may take up to two years to reopen after a loss. - CORRECT ANSWER FALSE Payments for time element losses stop at policy expiration. - CORRECT ANSWER FALSE Each of the following represents a common time element exposure except: - CORRECT ANSWER All of these are common time element exposures. Period Loss Paid Reason First 30 days $25,000 Second 30 days $70,000 Third 30 days $60,000 Fourth 30 days $40,000 Fifth 30 days $15,000 An insured has a business income limit of $150,000 with a Monthly Limit of Indemnity including a 1/3 monthly option. There has been a loss. Indicate what the company would pay in this loss. First 30 days loss is $25,000: - CORRECT ANSWER $25,000 Period Loss Paid Reason First 30 days $25,000 $25,000 1/3 of $150,000 Maximum Available ($50,000) Second 30 days $70,000 $50,000 1/3 of $150,000 Maximum Available ($50,000) Third 30 days $60,000 $50,000 1/3 of $150,000 Maximum Available ($50,000) Fourth 30 days $40,000 Fifth 30 days $15,000 An insured has a business income limit of $150,000 with a Monthly Limit of Indemnity including a 1/3 monthly option. There has been a loss. Indicate what the company would pay in this loss. Fourth 30 days, the loss is $40,000 - CORRECT ANSWER $25,000 For Business Income insurance, coverage begins after a waiting period. How many hours is the waiting period? - CORRECT ANSWER 72 Period Loss Paid Reason First 30 days $25,000 $25,000 1/3 of $150,000 Maximum Available ($50,000) Second 30 days $70,000 $50,000 1/3 of $150,000 Maximum Available ($50,000) Third 30 days $60,000 Fourth 30 days $40,000 Fifth 30 days $15,000 An insured has a business income limit of $150,000 with a Monthly Limit of Indemnity including a 1/3 monthly option. There has been a loss. Indicate what the company would pay in this loss. Third 30 days the loss is $60,000 - CORRECT ANSWER $50,000 Period Loss Paid Reason First 30 days $25,000 $25,000 1/3 of $150,000 Maximum Available ($50,000) Second 30 days $70,000 Third 30 days $60,000 Fourth 30 days $40,000 Fifth 30 days $15,000 An insured has a business income limit of $150,000 with a Monthly Limit of Indemnity including a 1/3 monthly option. There has been a loss. Indicate what the company would pay in this loss. Second 30 days, the loss is $70,000 - CORRECT ANSWER $50,000 The Maximum Period of Indemnity begins after a waiting period. Loss payments continue until the limit is exhausted, or for a certain number of days. For how many days is the loss covered with the Maximum Period of Indemnity option? - CORRECT ANSWER 120 Period Loss Paid Reason First 30 days $25,000 $25,000 1/3 of $150,000 Maximum Available ($50,000) Second 30 days $70,000 $50,000 1/3 of $150,000 Maximum Available ($50,000) Third 30 days $60,000 $50,000 1/3 of $150,000 Maximum Available ($50,000) Fourth 30 days $40,000 $25,000 $25,000 Remaining Limit Fifth 30 days $15,000 An insured has a business income limit of $150,000 with a Monthly Limit of Indemnity including a 1/3 monthly option. There has been a loss. Indicate what the company would pay in this loss. Fifth 30 days, the loss is $15,000 - CORRECT ANSWER $0 All of the following are methods of writing Business Income coverage without coinsurance except: - CORRECT ANSWER Extended Period of Indemnity An insured has an Extra Expense Coverage Form with the percentage options of 40%, 80%, and 100%. Explain how much extra expense would be paid in the loss situation. Loss #2: The limit of insurance is $500,000. The insured's "period of restoration" is 48 days. The loss amount is $325,000. How much extra expense will be paid? - CORRECT ANSWER $325,000 Match each type of dependent property to its definitions. Manufacturer - CORRECT ANSWER Produces products for delivery to your customers Match each type of dependent property to its definitions. Leader - CORRECT ANSWER Attracts customers to your business An insured has an Extra Expense Coverage Form with the percentage options of 40%, 80%, and 100%. Explain how much extra expense would be paid in the loss situation. Loss #3: The limit of insurance is $500,000. The insured's "period of restoration" is 75 days. The loss amount is $537,000. How much extra expense will be paid? - CORRECT ANSWER $500,000 An insured has an Extra Expense Coverage Form with the percentage options of 40%, 80%, and 100%. Explain how much extra expense would be paid in the loss situation. Loss #1: The limit of insurance is $200,000. The insured's "period of restoration" is 28 days and the loss amount is $120,000. How much extra expense will be paid? - CORRECT ANSWER $80,000 Match each type of dependent property to its definitions. Contributor - CORRECT ANSWER Delivers materials and services to your business Match each type of dependent property to its definitions. Recipient - CORRECT ANSWER Accepts or receives your products or services Which one of the following statements is correct? - CORRECT ANSWER The limits available for Extra Expense coverage is calculated as a percentage of the limit shown on the Extra Expense Coverage Declarations Page. Exposures addressed by the Inland Marine forms include all of the following except: & Money and Securities Most Inland Marine policies are written as "open peril" policies. - CORRECT ANSWER TRUE The majority of Inland Marine policies provide replacement cost coverage. - CORRECT ANSWER FALSE Earthquake and Flood can be covered perils on Inland Marine policies. - CORRECT ANSWER TRUE There is no coinsurance provision in Inland Marine policies. - CORRECT ANSWER FALSE All Inland Marine policies must be filed with the Departments of Insurance. - CORRECT ANSWER FALSE Inland Marine policies are limited to the described premises. - CORRECT ANSWER FALSE One of the advantages of commercial inland marine insurance is: - CORRECT ANSWER The ability to tailor the policy to better address the insureds exposures GrowCorp Plants has a policy with an 80% coinsurance requirement. At the time of the loss, the replacement cost of the building is $100,000. Their policy shows they are carrying a building limit of $60,000. If GrowCorp's covered loss to the building totals $40,000, how much of the loss will be paid? - CORRECT ANSWER $30,000 Each of the following is an Optional Coverage as found in the Building and Personal Property Coverage Form except: - CORRECT ANSWER Reporting Form The condition designed to preserve the rights and allows the mortgage holder to receive loss payment, even if the insured voids the policy, is titled: - CORRECT ANSWER Mortgageholders Clause A Common Policy Declarations Page includes all of the following except: - CORRECT ANSWER List of buildings to be insured Company XYZ manufactures bolts. Each person or organization below has an insurable interest in some of XYZs commercial property, except: - CORRECT ANSWER XYZ's metal supplier For a time element loss to be covered, several things must occur. Which of the following is not one of them? - CORRECT ANSWER The damage must occur within 5 miles of the described location. Becky has her advertising agency insured under an unendorsed Building and Personal Property Coverage Form using the Special Causes of Loss Form. A tornado uprooted several trees valued at $3,000. How will Beckys policy respond to replace the value of the uprooted trees? Ignore any coinsurance or deductible. - CORRECT ANSWER Not covered. Windstorm is not a covered cause of loss to trees. All of the following causes of loss are found in the Broad Causes of Loss Form except: - CORRECT ANSWER Earthquake As the first named insured on the policy, Henry has rights and responsibilities granted him by the policy. Which of the following is not one of those: - CORRECT ANSWER Conduct any business he chooses at described locations The types of property that can be written as an inland marine line of business are identified in the: - CORRECT ANSWER Nationwide Marine Definition Fred's Factory Warehouse has a Value Reporting Form with a $600,000 limit of liability written from January 1 to January 1. Freds makes all of their required reports of values on time. Their April report showed an inventory of $200,000 which understated an actual inventory of $400,000. On May 23, Freds had a fire loss of $150,000. Disregarding any deductible, how much would Freds insurer pay? - CORRECT ANSWER 75000 Barbara maintains a consistent level of inventory of wedding dresses all year except for the months of May through September when the inventory values double. Which one of the following is the best method of providing insurance coverage for the five month increase in the inventory values? - CORRECT ANSWER Peak Season Endorsement Which of the following statements best describes the Causes of Loss Special Form? - CORRECT ANSWER The Special Form is the broadest form and will pay for risks of direct physical loss unless the loss is either excluded or limited. Ted owns three warehouse buildings used in his manufacturing business and has them covered under a single limit of insurance. This is known as: - CORRECT ANSWER Blanket coverage Marys policy includes the Building and Personal Property Coverage Form. Assuming no other coverage applies elsewhere, which of the following would be covered under her Building and Personal Property Coverage Form? - CORRECT ANSWER Additions that are in the process of being completed All of the following are considered real property, except: - CORRECT ANSWER Delivery van used in business AMC Specialty Metals has an Extra Expense Coverage Form CP 00 50 attached to their policy with 40-80-100% shown on the Declarations Page at a $100,000 limit. They have a covered loss and incur $68,000 in Extra Expenses during the 20 days they needed to get back in business. How much can AMC collect under the Extra Expense Coverage Form for their loss? - CORRECT ANSWER $40,000 - AMC is limited to the percentage of the limit for the first 30 days. When the Building and Personal Property Coverage form does not provide coverage for loss or damage caused by vandalism, building glass breakage, or water damage, it is because of which policy condition? - CORRECT ANSWER Vacancy - when building has been vacant for more than 60 consecutive days before loss or damage occurs When asked about how to determine the appropriate limit of coverage for business income and extra expense, which of the following would not be considered: - CORRECT ANSWER Include the replacement value of all buildings combined. [Show More]

Last updated: 1 year ago

Preview 1 out of 21 pages