CPCU 553 Test Questions with All Correct Answers
"Due and confined to" - Answer-for Wear & Tear / Freezing / Breakdown / Road Damage. Will not covered damaged item, but may cover ensuring loss (fire, etc)
/."Personal Injury Protection" - Answer-included on an auto policy with no-fault insur...
"Due and confined to" - Answer-for Wear & Tear / Freezing / Breakdown / Road
Damage. Will not covered damaged item, but may cover ensuring loss (fire, etc)
/."Personal Injury Protection" - Answer-included on an auto policy with no-fault
insurance. Covers victim on first party basis regardless of fault
/.80% Replacement Cost - Answer-For buildings and dwellings, must carry a limit of at
least 80% of replacement cost. If dont will only pay (limit / 80% replacement limit) * loss
/.Add-on No Fault Plan - Answer-Offers PIP but does not place any restriction on right to
sue negligent party; optional
/.Automatic Increase Rider - Answer-inflation increase each year
/.Automobile Insurance Plan - Answer-assigned risk plan; most states have to insure
high risk drivers on proportional basis. Must prove cannot obtain auto insurance within
60 days
/.Boatowners Yacht warranties - Answer-1) Pleasure Use 2) Seaworthiness 3) Lay-Up
Period 4) Navigational Limits
/.Bonds & Maturity Date - Answer-subject to fixed maturity date, can sell before but
subject to current market conditoins / interest rate
/.Business liabilty carveback - Answer-Make less than $2K; Daycare without
compensation; occasional rental
/.Choice No Fault Plan - Answer-can choose Add-On (more $$) or Modified
/.Compulsory Insurance Laws - Answer-Require to hold minimum level of insurance
before registering vehicle; prior to accident
/.Conditionally Renewable - Answer-can non renew or change terms
/.Consumer Directed Healthcare Plan - Answer-Has a health savings plan must use
first, then high deductible. No SIR for preventative care
/.Cost of Living Adjustment Rider - Answer-automatically adjust payable monthly
benefits after time, usually by %
, /.Damage to Property of Others - Answer-Additional coverage on HO-3; $1K regardless
of fault
/.Damage to your auto: Electronic Equipmemt - Answer-Covers permanently installed
equipment for $1K
/.Damage to your auto: Limit - Answer-lower of ACV or Repair; insurer can decide to
reimburse, repair or replace
/.Damage to your auto: Trailers - Answer-Must be listed on the dec page; new trailers
covered for 14 days
/.Defined Benefit 401K - Answer-2-500 employees; defined portion and automatic enroll
in 4% employee contribution
/.Difference in Conditions (DIC) Policy - Answer-Provided by private inusrers; risk of
direct loss but exclude covered by FAIR plans (for broader coverage for people who
purchase FAIR plans)
/.DP-3 Debris Removal - Answer-Inside limit; will not remove trees. In HO-3, outside
limit and includes trees
/.DP-3 Fair Rental Value and Additional Living Expense - Answer-Separated coverage;
both 20% of Coverage A (under HO-3 one 30% limit)
/.DP-3 Main Differences - Answer-No theft for personal property; No liability coverage or
medical expense coverage; no automatic limits; 10% of coverage C additional limit for
tenant improvements; 10% for worldwide property
/.Earthquake Endorsement SIR - Answer-5% of Coverage A; at least $500
/.Emergency Program Family Limits - Answer-$35K Home ; $10K Content
/.ESOP - Answer-profit sharing but not dependent on profit; cash or stock up to 25% of
income.
/.Exclusive Provider Organization - Answer-exclusive network; providers only receive
payment from insurer for services provided, negoitated rates / service; insured pays
insurer
/.Fair Access to Insurance Requirement examples - Answer-urban areas susceptible to
riot; brush areas; windstorm risk
/.Financial Responsibility Laws - Answer-Required to show proof after accident; failure
to do so results in license suspensions
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