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Insurance Knowledge Quiz

Test your expertise in insurance with our comprehensive quiz designed for both aspiring professionals and seasoned experts. Challenge yourself with 50 thought-provoking questions covering various aspects of insurance policies, liability, and risk management.

Are you ready to enhance your understanding? Here’s what you can expect:

  • 50 diverse questions
  • Multiple choice format
  • Instant scoring and feedback
50 Questions12 MinutesCreated by LearningScout425
Insurance is a an appropriate device to:
Eliminate hazards
Transfer risk
Avoid liability
Prevent losses
Under the Homeowners HO-2 Policy, all of the following are covered EXCEPT:
Dwelling
Contents
Personal liability
Farm outbuildings
Under a Homeowners Policy, the insured location includes all of the following EXCEPT:
A cemetery plot
A secondary location used by the insured for a business
Vacant land on which the insured plans to build a house
A motel room in which the insured is residing temporarily
All of the following are included in the Liability section of the Businessowners Policy EXCEPT:
Declarations
Common policy conditions
Applicable endorsements
Causes of loss forms
Monetary damages awarded to an injured party must be based on all of the following elements EXCEPT:
Damages as the proximate result
Negligence
Available insurance
A legal duty owed
Who would be covered under the medical payments section of the Commercial General Liability Policy, if injured on the insured's premises?
A tenant of the named insured
The named insured
A customer of the named insured
An individual by the named insured
Which is an exclusion under Part Two of the Workers Compensation and Employers Liability Policy?
Care and loss of service
Consequential injury to a spouse of the injured worker
Actions brought against the insured in a capacity other than as an employer
Injury occurring to an employee who is permanently assigned to work outside of the State
Under a Homeowners Policy, the definition of an insured includes which one of the following?
An uncle who resides with the insured
A guest of the insured
A relative of the insured, visiting for the day
The insured's neighbor who comes to borrow an appliance
A social organization which is licensed to issue insurance ONLY to its members is an example of which type of insurer?
Fraternal
Mutual
Reciprocal
Stock
Endorsements to change the terms of a Businessowners Policy must be approved by the:
Insured
Insurer
Producer or agent
Claim adjuster
The liability section of the Garage Coverage Form includes all of the following EXCEPT:
Premises and operations liability
Products and completed operations liability
Automobile liability
Contractual liability
A group-owned insurer whose primary activity consists of assuming and spreading the liability risks of its members is the definition of:
Reinsurer
Risk retention group
Insurance purchasing group
Pure off-shore captive
An insurance contract drafted by the company and offered to the prospective insured for acceptance or rejection without negotiation is called a:
Personal contract
Unilateral contract
Contract of subrogation
Contract of adhesion
Which one of the following is usually true about Commercial Umbrella Liability Policies?
They are NOT standardized within the industry.
They limit protection to no more than $1,000,000 in coverage.
They are endorsements to general liability policies.
They are considered primary policies.
All of the following are common law defenses for negligent liability EXCEPT:
Contributory negligence
Intervening cause
Strict liabiltiy
Assumption of risk
A Basic Form Dwelling Policy provides:
Coverage on a named peril basis
Liability coverage for damage caused by the insured
Additional living expenses
Recovery on a replacement cost basis
Damages reduced in proportion to the amount of negligence that the insured party contributed to the injury is called:
Comparative negligence
Contributory negligence
Absolute negligence
General negligence
The Business Auto Coverage Form covers losses from all of the following under comprehensive coverage EXCEPT:
Fire
Vandlism
Theft
Freezing
An unendorsed liability insurance policy provides coverage for:
Criminal actions
Unintentional torts
Intentional torts
Moral obligations
The Homeowners Policy covers:
A detached garage used for a bike repair show
Lumber on the insured premises to be used to build a porch onto the dwelling
Summer home owned by the insured but not listed in the declarations
Lawnmowers used off premises in the insured's landscaping business
Which one of the following is a major section of a liability insurance policy?
Property covered
Perils
Loss payment
Conditions
Which one of the following is covered under the Liability Coverage of the Liability Coverage of the Business Auto Coverage Form?
Workers compensation
Expected injury
Pollution
Explosion
Changing conditions for an insurance policy currently in force required:
Authorization by a court
A mutual agreement of producer or agent and insurer
An endorsement or rider attached to policy
A notarized authorization by the Department of Insurance
Under the other structures coverage of the Broad Form Dwelling Policy, all of the following are true EXCEPT:
It provides a 10% extension of coverage.
It provides coverage for a tool shed.
It does not provide an additional amount of insurance.
It covers a private garage rented for storage of a car.
Under a Businessowners Coverage form, if an insured violates a policy condition, the insurer may:
A) Deny coverage for loss at the involved locations
B) Discontinue coverage without notice at all insured locations
C) Provide coverage at the involved location, subject to an additional premium
D) Provide coverage at the involved location for 10 days and then cancel the policy
Under the Commercial Package Policy (CPP), the Commercial Inland Marine Declarations Form contains information about which one of the following:
Loss payment
Conditions
Policy period
Other insurance
The National Flood Insurance Program (NFIP) is an example of a form of insurance regulated by the:
State government
Federal government
Property Insurance carriers
State Corporation Commission
All of the following are true about the limit of insurance in an unendorsed property insurance policy EXCEPT:
A) It can be increased by attaching an endorsement
B) The insured can expect additional limits automatically upon purchasing a second property
C) The insurer will normally not pay more than the stated limit
D) There are special limits of insurance on some types of property
The risk of financial loss that an individual faces illustrates the principle of:
Indemnity
Limit of recovery
Subrogation
Insurable interest
Theft is the taking of another's property:
While threatening bodily harm
While inflicting injury upon the owner
After forcible entry into the premises
Without the owner's consent
The Businessowners Policy covers loss of income:
Up to 10% of the policy limits
Up to 25% of the policy limits
Within 12 months following direct physical loss
Within 3 months following direct physical loss
A Federal Flood Insurance Policy covers which of the following?
Power tools stored in an attached garage
Furniture in a basement family room
Patio furniture on an open deck
Recreational vehicles parked in the driveway
Actual cash value (ACV) is generally accepted to mean:
Original purchase price of the property
Market value at the time of the loss
Cost to replace at the time of loss, plus appreciation
Cost to replace at the time of loss, less depreciation
In the Causes of Loss -- Basic Form of the Commercial Property Policy, the explosion coverage includes damage from:
Rupture of a pressure relief device
Sonic boom of an aircraft
Bursting of a building due to water expansion of its contents
Airborne volcanic blast
Which of the following is NOT used in determining the amount an insured can receive under the Personal Property Replacement Coverage Endorsement to a Homeowners Policy?
Full cost of repair at the time of loss
Depreciated market value
The Coverage C amount
Special limits stated in the policy
The policy period of a property policy is based on:
Eastern time
Standard time
Pacific time
Atlantic time
An insurer typically will grant its producers or agents the authority to:
Waive policy exclusions
Reject insurance ricks
Modify policy conditions
Select applicants
Which one of the following is eligible property for a Dwelling Policy?
A 4 family dwelling
A 6 family dwelling
A single family dwelling with the 3rd floor rented to 5 boarders.
A 2 family dwelling with the ground floor rented for a beauty parlor.
The Coverage A limit for a dwelling under construction is the:
ACV on date of completion
ACV at specified periods during construction
Average value during the period of construction
Replacement cost on the date of completion
The Employers Liability Insurance coverage which accompanies a Workers Compensation policy covers:
Punitive damages
Damages arising out of discrimination in hiring
Damages under the doctrine of dual capacity
Expenses of medical treatments for occupational diseases
A driver of a vehicle failed to stop for a red light and hit a light pole but did not hit a nearby vehicle. Which element of negligence is missing for legal action to be taken by the driver of the nearby vehicle?
Legal duty
Failure to meet the standard of care
Proximate cause
Actual damage
When an insurer unknowingly accepts two large cash payments from an illegal drug dealer to insure the drug operation and its employees, there is generally:
No contract
A quasi-contract
A contract of adhesion
An unenforceable contract
Medical payments to others under the Homeowners Policy will cover an accident that injures a:
Residence employee during the course of employment
Child living at home
Trespasser
Dependent child at college
A store employee discovers a large shortage while taking product inventory. Under an unendorsed Businessowners Policy, the loss:
Could be covered by an off-premises endorsement
Is covered if the store takes reasonable security precautions
Is covered under the additional coverages of the additional coverages section of the policy
Is excluded under the limitations section of the policy
To recover for a loss under the Standard Fire Policy, when must an insurable interest exist?
Only at the inception of the policy
At the time of loss
For at least six months before the loss
An insurable interest need not exist
All of the following may be covered by basic builders risk insurance EXCEPT:
An occupied building
Foundation of a building under construction
A building under construction
Building materials not yet part of the building
47) Under the Farm Policy, losses which qualify for payment on a replacement cost basis is limited to the actual cash value until:
The final loss report is submitted to the insurance company
A loss statement has been signed by the insured
The total damages exceed 80% of the limit of insurance
The actual repairs or replacement are completed
48) A licensed producer or agent may receive commission compensation for all of the following services EXCEPT:
Negotiation of any insurance contract
Procurement of an insurance contract
Acting as a consultant to provide insurance advice
Adjustment of claims arising from insurance contracts
If Policy A states that it will pay after payment by other applicable policies, Policy A is:
Excess
Primary
Pro rata
Reinsurance
If an insured with a Dwelling Policy has other coverage, which is true?
The proceeds are divided between the mortgagee and mortgagor according to their interest in the property
The proceeds are divided among all who have an insruable interest at the time of loss
Losses are payable in the same proportion that this insurance bears to the total amount of fire insurance
The amount of premium earned is prorated to the length of time the policy has been in force
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