Maryland Property and Casualty Insurance Practice Test

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• A binder in Maryland will cease to exist in each of the following situations EXCEPT
• Which statement about renewal notices is false?
• An insurer in Maryland is going to begin using new rates for the largest corporation in Maryland. Which of the following statements apply to this situation?
• In Maryland, to sell flood insurance, a property and casualty insurer must participate in which program?
• Name an additional coverage commonly included in homeowners policies for debris removal.
• What is the license renewal period in this state?
• Which agency regulates P&C in Maryland and handles disciplinary actions?
• What is Additional Living Expenses (ALE) coverage?
• Which of the following would be considered false advertising?
• Public adjusters are compensated by which party?
• If an individual is unable to purchase auto liability insurance from private insurers, which entity may provide coverage?
• In a scenario with multiple employees filing suits for the same cause, the Employers Liability policy provides up to how much aggregate coverage?
• Circulating deceptive sales material to the public is an example of which Unfair Trade Practice?
• A broker requests a hearing with the Commissioner. Within how many days must the hearing be held?
• Which of the following is NOT required for license reinstatement?
• Surety agents must maintain records of bail bonds; these records must be available for inspection by the Commissioner for at least how long after termination of the surety liability?
• Collision coverage extends to rented passenger vehicles that have been rented for no more than how many days?
• Which items are typically included under a Scheduled Personal Property Endorsement?
• Loss assessment coverage in homeowners policies provides coverage for assessments charged by which entity?
• Why might a Fidelity or Crime coverage be included in a P&C exam?
• Which action best illustrates a producer's fiduciary duty regarding premiums?
• PIP (personal injury protection) provides coverage for injury to the named insured, resident relatives and
• An insurance advisor candidate must post a single security bond to qualify. How much must they post?
• Which of the following describes notice required for property policy cancellation or non-renewal?
• Who has the authority to inspect bail bond records kept by surety agents?
• Which of the following would NOT be considered a flood?
• Which action would authorize commingling of premiums with the agent's personal funds?
• Which of the following would be considered an insurance transaction EXCEPT?
• When is an appraisal clause used in property loss disputes?
• If private auto insurers will not issue coverage, which program provides auto liability coverage?
• Which statement about open-peril coverage is most accurate?
• How does the 80% coinsurance rule influence settlement for a dwelling?
• Which statement correctly defines 'competent parties' in an insurance contract?
• PIP coverage in Maryland includes protection for injuries to which group?
• In Maryland, the two-year continuing education requirement for license renewal is 24 hours. Which option lists the correct hours?
• Your property policy will be due for renewal soon. When should you expect to receive notice of renewal premium from your insurer?
• All of the following are true of renewal premium obligations EXCEPT
• The entity that pays covered claims and helps prevent financial losses to claimants and policyowners when an insurance company becomes insolvent is
• Surplus lines brokers must post a surety bond with which entity in Maryland at a minimum amount?
• How many continuing education hours must be completed in a two-year period for Maryland license renewal?
• A binder for property insurance is a temporary coverage document. How long can it remain in force in Maryland?
• Which agency issues Maryland insurance producer licenses?
• Which practices are prohibited by unfair claims practices regulations?
• What is the main difference between HO-3 and HO-2 policies?
• Which coverage pays defense costs in liability claims?
• An applicant for an insurance license has failed his written examination. How many days must he wait before we can take another examination?
• What is the maximum deductible on collision coverage for damage to the insured auto?
• What is a typical notice period for cancellation by the insurer due to nonpayment or other reasons?
• Which party is typically required to file a sworn proof of loss after a covered loss?
• Which entity pays covered claims and helps prevent financial losses to claimants and policyowners when an insurer becomes insolvent?
• An employer may satisfy workers' compensation insurance on their employees by all of the following methods, EXCEPT
• Fidelity or Crime coverage protects against losses due to what?
• Before a producer can receive authority to place business with MAIF, the following actions are required, EXCEPT which?
• What is the maximum deductible amount for collision coverage on an insured auto?
• What is a premium finance company?
• Actual Cash Value is best described as which of the following?
• What does medical payments coverage pay for?
• Advertising injury in liability policies typically covers?
• The Property and Casualty Guaranty Corporation covers claims within what amount range?
• An insurance producer is required to notify the Commissioner of any felony convictions within how many days of the conviction?
• First-party medical payments coverage in auto insurance pays for medical expenses of whom?
• Which of the following best describes supplementary payments in liability coverage?
• Which statement best describes a fiduciary duty held by a producer?
• Which entity pays claims and protects policyowners when an insurer fails?
• Illegal inducements EXCEPT
• Open-peril coverage for the dwelling means which of the following?
• If an insurer charges different premium rate and limits coverage for an applicant based on partial blindness, the insurer may be found guilty of?
• Which term best describes mutual waivers of licensing exams between states?
• What term describes the waiver of certain examination requirements when another state would waive those requirements for licensure in Maryland?
• What does the 'other insurance' provision do?
• In Maryland, how often must producer licenses be renewed?
• What does Section II (personal liability) of a homeowners policy cover?
• In a Maryland homeowners policy, Section B covers which type of property?
• Binders cease at the earliest of which of the following?
• Binder ceases at the earliest of which events?
• Replacement Cost Value pays for which outcome after a loss?
• A repair facility using after-market parts in the repair of a customer’s automobile without notifying the customer has engaged in which of the following?
• If a dwelling is insured for 60% of its replacement cost, how is the payout calculated?
• Which statement about Actual Cash Value (ACV) is true?
• Under Maryland law, charging different rates or limiting coverage based on partial blindness constitutes what?
• Which type of claim would be covered by the Maryland Property and Casualty Insurance Guaranty Corporation?
• Which statement best describes Replacement Cost Value (RCV) in a property policy?
• If an applicant fails the written insurance licensing examination, how many days must pass before the next allowed examination?
• In a Maryland homeowners policy, which sections cover the dwelling and other structures?
• In a DP-3 policy, which statement is true about coverage?
• What is a typical difference in loss settlement when RC is used for a dwelling under HO-3 compared to ACV?
• Which statement correctly defines a proof of loss and its timing?
• Surplus lines brokers are required to post a surety bond in Maryland in an amount of at least how much?
• Which statement about misrepresentation is correct?
• What does 'loss of use' coverage reimburse?
• Define subrogation in the context of property insurance.
• Which item is NOT required for license reinstatement?
• Which of the following is NOT a required qualification for a business entity under Maryland insurance rules?
• How does Actual Cash Value differ from Replacement Cost Value in a property policy?
• Which party does not play a role in nonrenewal?
• When an insurer desires to cancel or non-renew a property insurance policy, they must give advance written notice of how many days?
• In a policy with split limits for Employers Liability, the first limit refers to Injury by accident. Which option correctly reflects this statement?
• Which statement about transferring continuing education credits to the next reporting period is correct?
• Public adjusters' fees are typically paid by which party?
• In Maryland's Employers Liability with split limits, the first limit shown represents the maximum the insurer will pay for all claims for which of the following?
• Which statement about a Public Adjuster is correct?
• Willful violations of Maryland insurance laws are considered?
• For continuing education, how many hours of ethics are required?
• Loss assessment coverage specifically insures assessments charged by a homeowners association for which type of losses?
• Which is a common exclusion in standard homeowners policies?
• Public adjusters represent
• If a man receives a binder for property insurance today, what is the maximum amount of time that the binder could be effective?
• Which situation will NOT cause a binder to cease to exist?
• When a surety insurer terminates the appointment of a surety agent, who must be notified immediately?
• All of the following are true regarding rebates EXCEPT which statement?
• What happens if an insured materially misrepresents information on an application or claim?
• How often must the Maryland Commissioner examine domestic insurers?
• Who must approve rate changes for non-competitive types of insurance?
• How do misrepresentation and concealment affect policy validity?
• What is the one exception to the rule that forms must be submitted in duplicate?
• Which statement about auto medical benefits in Maryland is true?
• Which statement best describes Section II in a homeowners policy?
• Which of the following is NOT a required step when cancelling or nonrenewing lead liability insurance coverage?
• Binders can be issued for a period not to exceed
• After a client leaves the agent's office, the agent corrects the client's application but fails to inform the client. The client is involved in an accident two weeks later and the insurer uses the corrected form. This is
• What is the insurer's duty to defend in liability coverage?
• When a Maryland insurer changes rates for the largest corporation in the state, which statements could apply?
• The Maryland flood insurance program is administered through which arrangement?
• Which statement best describes how insurers handle cancellation and nonrenewal notices?
• When an insurer in Maryland begins using new rates for the largest corporation, which statements could apply?
• Actual Cash Value reflects depreciation in loss settlements when the policy uses ACV. Which statement is accurate?
• In Maryland, which individuals must be licensed to engage in insurance transactions?
• Under HO-3, personal property coverage is typically on what basis?
• Surplus lines brokers are required to post a surety bond with which entity?
• What is the purpose of a deductible in property insurance?
• A Maryland Life/Health licensee specializing in long-term care must complete continuing education of 24 hours every two years, including how many hours of long-term care and how many hours of ethics?
• How does a Scheduled Personal Property Endorsement affect coverage for valuables?
• An insurer or producer may NOT knowingly employ a fiduciary who has been convicted of a felony or crime of moral turpitude within how many years prior to the employment?
• If a policyholder has taken 5 more continuing education credit hours than he will need for this reporting period, how many of these hours can be transferred to the next reporting period?
• Which of the following best describes the unfair trade practice of defamation?
• Which of the following would be considered illegal inducements EXCEPT?
• Using after-market parts without informing the customer is considered what?
• At the time of loss, insurable interest requires which of the following?
• What is the minimum Maryland auto liability coverage for bodily injury per person, per accident, and property damage?
• Which statement correctly describes auto liability versus medical payments (MedPay) coverage?
• In policy terms, what does valuation of personal property consider?
• If an insurer nonrenews a property policy because of geographic risk, how many days before the nonrenewal must the Commissioner be notified?
• What endorsements allow you to add an additional insured or mortgagee as a party to the policy?
• What is the purpose of a mortgagee clause in a property policy?
• Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
• Which of the following best describes a Scheduled Personal Property Endorsement?
• If an insurer decides to nonrenew a policy, the insured must be notified by mail at least how many days in advance?
• What is coinsurance and how does it affect claim payments when coverage is below the required value?
• If a licensee intentionally violates the Insurance Code, what is the maximum monetary penalty?
• Which of the following would receive a commission from the sale of a policy?
• What is flood insurance and when is it typically required?
• In homeowners or property policies, earthquake endorsements are typically subject to what?
• What are the two common valuation methods used for property loss settlements?
• A repair facility used after-market parts in the repair of a customer's automobile, and did not notify the customer of this. Which statement is true?
• Which party typically earns a commission on an insurance policy sale?
• Which of the following is NOT required for Kristin to become a Maryland insurance producer?
• What is one key duty an insured must perform after a loss?
• What is an earthquake endorsement on a homeowners policy?
• All of the following would be eligible to apply for coverage in the Maryland Automobile Insurance Fund, EXCEPT:
• Open endorsement or 'open perils' endorsement expands coverage how?
• Which action demonstrates a producer attempting to obtain MAIF authority?
• Who bears the duty to mitigate damages after a loss?
• In auto insurance, what is first-party medical payments coverage?
• Which combination of elements is generally required to form a legally binding insurance contract?
• Which statement about rebates is true?
• The Employers Liability maximum for all claims?
• What is the purpose of Uninsured/Underinsured Motorist coverage?
• What does a builders risk endorsement cover?
• Which of the following is an example of a producer's fiduciary responsibilities?
• Failure to disclose the use of aftermarket parts in a repair could be considered what?
• Public adjusters represent which party in a claim?
• During a sales presentation, a producer intentionally makes a statement that may mislead the applicant. This describes which term?
• Which of the following is not typically covered under a standard homeowners policy without endorsements?
• Which statement about transferring continuing education credits to the next reporting period is correct?
• In Maryland, which entity administers the bond requirement for surplus lines brokers?
• What is the purpose of a Scheduled Personal Property Endorsement?
• In Maryland dwelling policies, which statement correctly describes DP-1, DP-2, and DP-3?
• The Property and Casualty Guaranty Corporation pays the full amount of any claim between $100 and $300,000 if the claim occurs within what period after insolvency?
• A cancellation notice for a workers' compensation policy must include which item?
• Which program backs flood insurance policies in the United States?
• How often does the Maryland Commissioner require domestic insurers to be examined?
• What term describes the mutual waiver of licensing requirements between states?
• Upon termination of a surety agent's appointment, which parties must be notified?
• What role does the Maryland Insurance Administration play in P&C regulation?
• All of the following are EXCLUDED by PIP coverage EXCEPT which scenario?
• Which authority can legally suspend an insurance license in Maryland?
• In a property loss claim, what is salvage?
• Which statement about auto liability coverage is true?
• Loss of use coverage may reimburse which of the following types of expenses?
• Who do public adjusters represent?
• J retake earliest March 15.
• Insurance companies in Maryland must submit forms to the Insurance Commissioner in duplicate. What is the one exception to this rule?
• In Maryland, all vehicle insurance policies must provide coverage for medical, hospital and disability benefits unless waived by whom?