Question 1

Commercial insurance contracts covering the fire peril never explicitly define the term "fire."

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following statements is false?

Accepted Answer

A)  The motor truck cargo insurance protects the interest of the trucking companies. 
B)  Federal law requires trucks traveling across state lines to have at least $1.5 million in liability insurance. 
C)  The peril causing the largest amount of inland marine losses is theft. 
D)  Inland marine insurance developed because commerce in the U.S. moved inland. 
A)  The motor truck cargo insurance protects the interest of the trucking companies. 
B)  Federal law requires trucks traveling across state lines to have at least $1.5 million in liability insurance. 
C)  The peril causing the largest amount of inland marine losses is theft. 
D)  Inland marine insurance developed because commerce in the U.S. moved inland. B

Question 3

Which of the following is an example of intangible property?

Accepted Answer

A)  Custom-designed accounting software 
B)  Leased shopping center space that your business occupies 
C)  Custom-made cabinetry in a retail space 
D)  A limited edition automobile 
A)  Custom-designed accounting software 
B)  Leased shopping center space that your business occupies 
C)  Custom-made cabinetry in a retail space 
D)  A limited edition automobile A

Question 4

Which of the following is not a function of the Insurance Services Office (ISO)?

Accepted Answer

A)  Collecting loss data 
B)  Developing standard insurance policies 
C)  Coordinating prices between insurance companies 
D)  Providing public information about insurance 
A)  Collecting loss data 
B)  Developing standard insurance policies 
C)  Coordinating prices between insurance companies 
D)  Providing public information about insurance

Question 5

All the following are true about schedule rating except:

Accepted Answer

A)  used in rating some commercial buildings 
B)  analyzes each property individually 
C)  starts with a rate for a standard building in the same city as the building being rated 
D)  the rate is looked up based upon a few rating factors such as construction type and territory 
A)  used in rating some commercial buildings 
B)  analyzes each property individually 
C)  starts with a rate for a standard building in the same city as the building being rated 
D)  the rate is looked up based upon a few rating factors such as construction type and territory

Question 6

Which of the following is not a factor in the cost of aircraft insurance?

Accepted Answer

A)  Perils covered 
B)  Experience and training of the pilot 
C)  Type of cargo carried 
D)  Landing and hangar fees charged by local airports 
A)  Perils covered 
B)  Experience and training of the pilot 
C)  Type of cargo carried 
D)  Landing and hangar fees charged by local airports

Question 7

Inland marine policies typically cover all of the following classes of property except:

Accepted Answer

A)  valuable personal property 
B)  bridges 
C)  factory buildings 
D)  property designated for import 
A)  valuable personal property 
B)  bridges 
C)  factory buildings 
D)  property designated for import

Question 8

Reporting forms for inventory insurance require the insured:

Accepted Answer

A)  to purchase insurance equal to 100% of the inventory's value 
B)  to purchase insurance equal to 80% of the inventory's value 
C)  to report inventory values with scrupulous honesty 
D)  to have very stable inventory levels 
A)  to purchase insurance equal to 100% of the inventory's value 
B)  to purchase insurance equal to 80% of the inventory's value 
C)  to report inventory values with scrupulous honesty 
D)  to have very stable inventory levels

Question 9

Aviation insurers have some difficulty complying with the law of large numbers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not an indirect loss?

Accepted Answer

A)  Loss of income subsequent to a direct property loss 
B)  Continuing expenses incurred during a shutdown after a direct property loss 
C)  Extra expenses to keep a business operating after a direct property loss 
D)  Production machine is destroyed due to fire 
A)  Loss of income subsequent to a direct property loss 
B)  Continuing expenses incurred during a shutdown after a direct property loss 
C)  Extra expenses to keep a business operating after a direct property loss 
D)  Production machine is destroyed due to fire

Question 11

Amanda Miranda owns a soft drink manufacturing company that makes Fizzy Dizzy soda. She asks you to determine if she has any intangible property. Which of the following items would you tell her are intangibles?

Accepted Answer

A)  Secret formula for Fizzy Dizzy 
B)  Patented design of the Fizzy Dizzy bottle 
C)  Patented name of the product (Fizzy Dizzy) 
D)  All of the above 
A)  Secret formula for Fizzy Dizzy 
B)  Patented design of the Fizzy Dizzy bottle 
C)  Patented name of the product (Fizzy Dizzy) 
D)  All of the above

Question 12

Indirect loss coverage (business income insurance) will cover all the following except:

Accepted Answer

A)  lost profits 
B)  continuing expenses 
C)  income taxes on lost profits 
D)  extra expenses incurred to maintain operations after a loss 
A)  lost profits 
B)  continuing expenses 
C)  income taxes on lost profits 
D)  extra expenses incurred to maintain operations after a loss

Question 13

Which of the following is not a benefit of standard policies?

Accepted Answer

A)  Smaller insurers can offer cheaper insurance than larger companies for the same exposures. 
B)  Litigation should be reduced as policy meaning becomes understood. 
C)  Consumers are more likely to learn and understand the meaning of standard policies. 
D)  Data collection and rate computation is easier and more accurate. 
A)  Smaller insurers can offer cheaper insurance than larger companies for the same exposures. 
B)  Litigation should be reduced as policy meaning becomes understood. 
C)  Consumers are more likely to learn and understand the meaning of standard policies. 
D)  Data collection and rate computation is easier and more accurate.

Question 14

An aircraft owner would need all of the following coverages except:

Accepted Answer

A)  hull insurance 
B)  freight insurance 
C)  fire insurance 
D)  liability insurance 
A)  hull insurance 
B)  freight insurance 
C)  fire insurance 
D)  liability insurance

Question 15

Which of the following is not a rating factor in ocean marine insurance?

Accepted Answer

A)  Seaworthiness of the ship 
B)  Experience of the captain and crew 
C)  Route to be traveled 
D)  Experience of the cargo shippers 
A)  Seaworthiness of the ship 
B)  Experience of the captain and crew 
C)  Route to be traveled 
D)  Experience of the cargo shippers

Question 16

All the following are coverages available in an ocean marine policy except:

Accepted Answer

A)  freight 
B)  cargo 
C)  liability 
D)  wharf physical damage coverage 
A)  freight 
B)  cargo 
C)  liability 
D)  wharf physical damage coverage

Question 17

Identify the exposure that is not shared by aircraft and marine insurance policies.

Accepted Answer

A)  Cargo loss exposure 
B)  Legal liability exposure 
C)  Freight loss exposure 
D)  All of the above are similar in aircraft and marine coverage. 
A)  Cargo loss exposure 
B)  Legal liability exposure 
C)  Freight loss exposure 
D)  All of the above are similar in aircraft and marine coverage.

Question 18

Which of the following is not an example of a hostile fire?

Accepted Answer

A)  House burns down 
B)  Automobile is destroyed by arson 
C)  Fire in the fireplace destroys a valuable paper accidentally used to start the fire 
D)  Fire starts on a couch when a cigarette falls on it 
A)  House burns down 
B)  Automobile is destroyed by arson 
C)  Fire in the fireplace destroys a valuable paper accidentally used to start the fire 
D)  Fire starts on a couch when a cigarette falls on it

Question 19

What purpose do reporting forms serve in commercial property insurance contracts?

Accepted Answer

Reporting forms handle the problem of ov

Question 20

"Fire" means rapid combustion accompanied by heat, light or glow, when used in insurance terminology.

Accepted Answer

A) True 
 B)False

Exam 22: Commercial Property Insurance

Commercial insurance contracts covering the fire peril never explicitly define the term "fire."

Which of the following statements is false?

Which of the following is an example of intangible property?

Which of the following is not a function of the Insurance Services Office (ISO)?

All the following are true about schedule rating except:

Which of the following is not a factor in the cost of aircraft insurance?

Inland marine policies typically cover all of the following classes of property except:

Reporting forms for inventory insurance require the insured:

Aviation insurers have some difficulty complying with the law of large numbers.

Which of the following is not an indirect loss?

Amanda Miranda owns a soft drink manufacturing company that makes Fizzy Dizzy soda. She asks you to determine if she has any intangible property. Which of the following items would you tell her are intangibles?

Indirect loss coverage (business income insurance) will cover all the following except:

Which of the following is not a benefit of standard policies?

An aircraft owner would need all of the following coverages except:

Which of the following is not a rating factor in ocean marine insurance?

All the following are coverages available in an ocean marine policy except:

Identify the exposure that is not shared by aircraft and marine insurance policies.

Which of the following is not an example of a hostile fire?

What purpose do reporting forms serve in commercial property insurance contracts?

"Fire" means rapid combustion accompanied by heat, light or glow, when used in insurance terminology.

Introduction to Enterprise Risk Management and Insurance

Risk Identification

Risk Assessment and Pooling

Risk-Handling Techniques: Loss Control, Risk Transfer, and Loss Financing

Risk-Handling Techniques: Diversification and Hedging

Fundamentals of Insurance

Insurable Perils and Insuring Organizations

Insurance Functions

Insurance Markets: Economics and Issues

Insurance Regulation

Insurance Contracts

The Personal Auto Policy

Homeowners Insurance

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions and Options

Annuities

Health Insurance and Disability Income

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Commercial Liability Insurance

Filters