Associate in General Insurance Examination

1.Maya Chen pays a premium so that a fire at her bakery will not have to be paid entirely from her own cash. What is the main job of that insurance?

2.Which situation is a pure risk that property insurance is meant to address?

3.Luis Ortega wants a policy on a sports bet that could pay him if his team wins. Why is that bet not a standard insurable property risk?

4.Lightning strikes a barn and ignites the hay inside. In insurance language, what is the lightning?

5.A restaurant keeps oily rags in a pile beside the furnace. What is that storage practice?

6.An applicant hides a prior theft claim so the quoted premium stays low. Which hazard is that behavior?

7.A driver leaves the car unlocked with the keys in the ignition, saying the insurer will pay if it is stolen. Which hazard is this?

8.A delivery van is sent out with badly worn brake pads. How should those pads be classified?

9.After a covered kitchen fire, the insurer pays to restore Priya Shah's cabinets to their condition just before the fire and declines an upgrade. Which principle supports that result?

10.For a property claim to be payable, when must the insured have an insurable interest in the damaged property?

11.Owen Blake sold his boat and transferred the title last month. A storm sinks the boat today, and Owen still holds an old hull policy in his own name. Why is his claim weak?

12.A sofa would cost $2,000 to replace new, and depreciation is $800. The policy pays actual cash value and has no deductible. What is the actual cash value?

13.A covered roof can be replaced for $12,000 with material of like kind. The policy pays replacement cost, and the deductible is ignored for this question. What does that settlement use?

14.A camera has a replacement cost of $900 and depreciation of $200. The policy pays actual cash value, and the deductible is $0. What is payable?

15.A covered furniture loss is $5,000. The deductible is $500, and the limit is high enough to cover the remainder. How much should the insurer pay?

16.Nadia Brooks asks why her homeowners policy shows a $1,000 deductible on the dwelling. What is the usual role of that deductible?

17.River water enters Elena Vasquez's house during a flood and ruins the floors. She has a standard homeowners policy and no flood policy. What is the usual result?

18.An earthquake cracks the foundation of a dwelling. The only property policy is a standard homeowners policy with no earthquake addition. What is the usual result?

19.A supply pipe inside Jordan Hale's wall suddenly bursts, and the water damages the drywall. No river or surface flood is involved. How should this be distinguished from flood?

20.Sam Okonkwo owns and lives in his house and buys a standard HO-3. Which description of that form is accurate?

21.Riley Nguyen rents an apartment and wants coverage for furniture, not for the building. Which form matches that need?

22.On an HO-3, a listed contents peril damages a sofa. No exclusion applies. Which statement is accurate?

23.A named-perils form lists fire but not earthquake. A fire damages covered property, and no exclusion applies. When does that form cover a loss?

24.An open-perils property form is sometimes nicknamed all-risk. Which losses does that nickname still leave subject to the form?

25.A covered fire on an HO-3 damages both the house Elena owns and the clothing inside it. Which interests can that homeowners policy address?

26.A covered fire makes Caleb Moss's house unfit to live in. His homeowners policy includes additional living expense. What can that coverage pay?

27.A detached garage on a residence premises is damaged by a peril the homeowners policy covers. How is that garage usually treated?

28.A guest trips on a loose step at Amina Yusuf's insured home and is hurt. The homeowners policy includes personal liability. What can that coverage pay?

29.A guest is hurt at an insured residence, and the homeowners policy includes medical payments. No one has filed a negligence suit. What can that coverage do?

30.A named-perils contents form lists theft. A burglar steals a covered television, and no exclusion applies. What is the property-coverage result?

31.Hector Alvarez causes a crash that injures another driver. His personal auto policy includes liability coverage. Whom does that liability coverage primarily pay?

32.Which damage to an insured auto is a collision loss?

33.Which loss belongs under comprehensive, also called other than collision, rather than under collision?

34.A deer runs into the side of Grace Kim's moving car and damages the door. Which coverage applies to that door?

35.Thieves steal a covered auto from Theo Marin's driveway. Which auto coverage applies to the loss of the vehicle?

36.A stone flung up from the road cracks the windshield, and there is no other impact. Which coverage is the usual fit for that glass?

37.A personal auto policy shows split liability limits of 100/300/50. What does the 100 mean?

38.Under auto split limits of 100/300/50, what does the middle figure, 300, mean?

39.Limits are 100/300/50. The insured is liable for $40,000 of damage to a neighbor's fence and for no bodily injury. What property damage limit applies?

40.Limits are 100/300/50. Two injured people have bodily injury damages of $120,000 and $80,000. The insured is fully liable. How much bodily injury liability is payable in total?

41.Limits are 100/300/50. One person has $150,000 of bodily injury damages, and no one else is hurt. The insured is liable. How much bodily injury liability is payable?

42.Limits are 100/300/50. The insured is liable for $70,000 of damage to another car and for no injuries. How much property damage liability is payable?

43.Collision damage to the insured's car is $3,000, and the collision deductible is $1,000. The car is worth more than the repair. How much does collision pay?

44.Hail damage to a covered auto is $2,500, and the comprehensive deductible is $500. How much does comprehensive pay?

45.Lila Bernstein caused a crash that bent her own bumper. She has auto liability and no collision coverage. What will liability pay for her bumper?

46.On a commercial general liability policy, what does Coverage A insure?

47.A retailer is sued over a false advertisement that disparages another store's goods. Which commercial general liability coverage fits that claim?

48.A customer is slightly injured in a store aisle. The business wants a small medical bill paid without a lawsuit about negligence. Which coverage is designed for that bill?

49.A contractor accidentally cuts a client's water line and is liable for the resulting damage to the client's basement. Which coverage responds to that liability?

50.A shopper is injured by a falling store display and sues the store for bodily injury damages. Which commercial general liability coverage matches that suit?

51.A covered employee is hurt while doing assigned work. The injury is compensable under workers compensation. What must the employee prove about the employer's negligence?

52.For a covered work injury, which benefits does workers compensation generally provide?

53.A customer, not an employee, slips in a store and is hurt. Which statement is accurate?

54.A fire after closing damages a store, and no employee is injured. The owner asks whether workers compensation will rebuild the store. What is the right answer?

55.June Pell asks what a life insurance policy principally pays. Which answer is right?

56.Andre Wallace buys life insurance that lasts for a stated number of years and is not built around cash value. Which description fits that policy?

57.Sofia Rossi wants life insurance that stays in force for her lifetime and accumulates cash value. Which policy fits?

58.Nina Patel wants death protection for the next 20 years while her children are young. She does not want a policy built to accumulate cash value. Which choice fits?

59.Ben Carter wants a policy that pays his covered hospital and doctor bills. Which line does that?

60.Which statement belongs in an introduction to health coverage?

61.Before issuing a policy on a warehouse, an insurer reviews the construction, the hazards, and the price. What is that function called?

62.After a covered storm damages Imani Brooks's roof, she asks her insurer to pay. What is that request?

63.An insurer has written many large building policies and buys coverage from a second insurer to share that load. What is the coverage the first insurer buys?

64.In the usual insurance relationship, whom does an agent represent when selling a policy?

65.A business hires a broker to search several insurers and place liability coverage. Whom does the broker represent in that placement?

66.Which act is a misrepresentation on an application for property insurance?

67.An applicant knows of a serious fire at the same site last year and deliberately says nothing when asked about prior losses. What is that silence?

68.Why does an insurer ask an applicant to answer the application honestly?

69.An agent with binding authority tells Omar Farouk that coverage is in force tonight until the policy is issued. What is that temporary evidence called?

70.An insurer can estimate losses for a large group of similar cars better than for one driver. Which idea explains that?

71.A company drops a product line that creates an unacceptable chance of serious injury. Which risk-management technique is that?

72.A warehouse adds brighter lights and nonslip floors to reduce falls. Which technique is that?

73.A shop decides to pay any property loss under $1,000 from its own funds and to insure losses above that. Paying the small losses itself is which technique?

74.A landlord buys a property policy so the insurer, not the landlord, bears the financial cost of a covered fire. Which technique is the purchase?

75.A fire burns the inventory on a retailer's shelves. The destroyed goods themselves are which kind of loss?

76.After a covered fire, a shop stays closed for repairs and loses net income. That lost income is which kind of loss?

77.A manufacturer adds business income coverage to its commercial property policy. What does that coverage address after a covered direct loss shuts the plant?

78.A visitor says a store was negligent. Which set of elements does that kind of claim generally require?

79.A grocer invites customers into the store. What duty does the grocer generally owe those customers regarding the premises?

80.A plaintiff proves a store breached a duty and that the breach occurred, but proves no injury, no property damage, and no other loss. What is missing?

81.An insurer pays its insured for a fire started by a negligent neighbor, then seeks payment from that neighbor. What is that recovery right called?

82.Why does subrogation support the principle of indemnity?

83.An insurer charges $2 per $100 of insurance. The amount of insurance is $200,000. What is the premium before taxes or fees?

84.A covered building loss is $90,000. The building limit is $75,000, and the deductible is $0. How much can the policy pay?

85.A covered loss is $10,000, the deductible is $1,000, and the limit is $50,000. How much is payable?

86.A covered loss is $300, and the deductible is $500. How much does the insurer pay?

87.A building is worth $100,000 and the policy requires 80 percent coinsurance. The insured carries $80,000. A covered loss is $20,000 with a $0 deductible. How much is payable?

88.A building is worth $100,000, and 80 percent coinsurance requires $80,000 of insurance. The insured carries $40,000. A covered loss is $20,000 with a $0 deductible. How much does the coinsurance formula pay?

89.Which part of a policy usually shows the named insured, the policy period, the limits, and the premium?

90.Which part of a policy contains the insurer's basic promise to pay covered losses?

91.A homeowners policy states that flood is not covered. What is that policy provision doing?

92.A property policy requires the insured to give prompt notice of a loss. What is that requirement?

93.An insurer and an insured agree in writing to add an optional coverage to a policy that is already in force. What is that written change called?

94.An insurer ends a policy in the middle of the policy period, as the policy allows. What is that action?

95.A house insured as an occupied home is left without people and without furnishings for a long time. Why do many property policies restrict coverage in that situation?

96.Which pairing fairly introduces personal lines and commercial lines?

97.A small shop wants one policy that combines its building and contents coverage with general liability. Which description fits that package?

98.A grocery owns its building and the food on the shelves. On a commercial property policy, how is that food stock usually classified?

99.A jeweler needs coverage for a ring that travels to shows and does not stay at one counter. Which line is the traditional home for that movable property?

100.After the limits of primary auto and homeowners liability are used up, what can a personal umbrella policy provide?

101.An insured driver is hurt by an at-fault motorist who has no auto liability insurance. Which personal auto coverage is designed for the insured's bodily injury?

102.A liability policy is written on an occurrence basis. Which injuries is it arranged to cover, subject to its terms?

103.A liability policy is written on a claims-made basis. Which event generally triggers it, subject to the policy?

104.A landowner asks a contractor for proof of liability insurance, and the contractor provides a certificate of insurance. What is that certificate?

105.A building owner requires a tenant's liability policy to include the owner for claims arising out of the tenant's operations. If an endorsement does that, what is the owner called?

106.In one year an insurer has $600,000 of incurred losses and $1,000,000 of earned premium. What is the loss ratio?

107.An insurer's loss ratio is 60 percent and its expense ratio is 30 percent. What is the combined ratio?

108.An insurer offers one price for auto insurance, and the drivers most likely to crash are the ones who buy it. What problem is that?