Maryland Property and Casualty Insurance Practice Test

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