Georgia Property & Casualty Insurance License, Practice Exams

A holder of a temporary license issued under Code Section 33-23-13(a) is authorized to do all of the following EXCEPT:

1. Sell, solicit, or negotiate new insurance accounts ✓
2. Receive and collect premiums
3. Negotiate renewal policies
4. Perform acts necessary to continue the particular insurance business

Why: O.C.G.A. § 33-23-13(d) authorizes negotiation of renewals, receipt and collection of premiums, and acts necessary to continuance, but expressly does NOT authorize the holder to sell, solicit, or negotiate new insurance accounts.

Vocational rehabilitation benefits under workers' compensation are intended to:

1. Reimburse the employer for the cost of recruiting and training a replacement worker
2. Pay for all of the medical treatment the injured worker receives during the recovery period
3. Permanently replace the worker's lost wages once statutory indemnity benefits are exhausted
4. Help an injured worker retrain or be re-educated to return to gainful employment ✓

Why: Vocational rehabilitation provides retraining, education, or job-placement assistance so an injured worker can return to suitable employment.

A peril is best described as:

1. A condition that increases the chance of loss
2. The reduction in value of property
3. The legal obligation to pay for a loss
4. The cause of a possible loss, such as fire or theft ✓

Why: A peril is the direct cause of a loss, such as fire, windstorm, or theft. A hazard increases the likelihood of a peril causing loss.

Under O.C.G.A. §33-24-45(o), an insured who believes a policy was canceled or nonrenewed in violation of the statute may request review by the Commissioner within what time after receiving the notice?

1. Within 60 days of receipt of the notice
2. Within 10 days of receipt of the notice
3. Within 15 days of receipt of the notice ✓
4. Within 30 days of receipt of the notice

Why: O.C.G.A. §33-24-45(o) requires the review request to be filed with the Commissioner within 15 days of receipt of a cancellation or nonrenewal notice; the policy remains in force during the review.

Under the NFIP, deductibles apply:

1. Only to contents coverage
2. Only after a federal disaster is declared
3. Only to building coverage
4. Separately to building and contents losses ✓

Why: The NFIP applies separate deductibles to building and to contents losses arising from the same flood event.

A Georgia driver is stopped and cannot show proof of insurance, and the vehicle in fact has no coverage. Under O.C.G.A. §40-6-10(b), the offense is classified as and punishable by:

1. A civil infraction carrying an administrative penalty of not more than $150 and no possibility of jail
2. A felony punishable by imprisonment of not less than one nor more than three years
3. A traffic violation that adds six points to the driver's record but carries neither a fine nor jail time
4. A misdemeanor, fine of not less than $200 nor more than $1,000, imprisonment up to 12 months, or both ✓

Why: O.C.G.A. §40-6-10(b) makes knowingly operating (or authorizing operation of) a vehicle without effective insurance a misdemeanor, punishable by a $200–$1,000 fine, up to 12 months, or both.

A products liability claim alleges a manufactured part injured a user three years after sale. This is covered under the CGL as:

1. Premises and operations, because the part injured the user away from the insured's premises
2. Damage to premises rented to the insured, subject to the fire damage sublimit
3. Coverage B, because selling a defective part is an advertising injury offense
4. Products and completed operations, subject to that separate aggregate ✓

Why: Injury from a sold product is a products liability claim subject to the Products-Completed Operations Aggregate.

Under § 33-6-4(b)(8)(A)(iv)(I), refusing to insure an individual or charging a different rate for the same coverage because of that individual's race, color, or national or ethnic origin is treated as what?

1. A permissible underwriting distinction if actuarially supported
2. An unfair and deceptive act constituting unfair discrimination ✓
3. A misdemeanor only
4. Lawful so long as it is disclosed in writing

Why: O.C.G.A. § 33-6-4(b)(8)(A)(iv)(I) treats refusing to insure or charging a different rate for the same coverage because of race, color, or national or ethnic origin as an unfair and deceptive act constituting unfair discrimination.

A Businessowners Policy (BOP) is best described as:

1. A package policy combining property and liability for small to medium businesses ✓
2. A monoline liability policy sold separately from any property coverage the insured buys
3. A policy available only to large manufacturers with multiple plant locations nationwide
4. An ocean marine form covering cargo shipped internationally by vessel and aircraft

Why: A BOP is a prepackaged policy combining property and liability coverage designed for eligible small and medium-sized businesses.

Under O.C.G.A. §33-34-4, an owner of a motor vehicle required to be registered in Georgia (who is not a self-insurer) must carry liability coverage equivalent to what?

1. The security required under Chapter 9 of Title 40, the Motor Vehicle Safety Responsibility Act ✓
2. Property damage liability only; bodily injury liability is optional for a private passenger auto
3. Coverage equal to the actual cash value of the insured motor vehicle required to be registered
4. Twice the minimum limits whenever the vehicle is subject to a lien

Why: O.C.G.A. §33-34-4 requires the owner to maintain liability insurance equivalent to the security required for bodily injury and property damage under Chapter 9 of Title 40 before operating or authorizing operation of the vehicle.

A tangible condition such as icy steps or faulty wiring is an example of a:

1. Moral hazard
2. Morale hazard
3. Physical hazard ✓
4. Speculative hazard

Why: A physical hazard is a tangible characteristic of property, persons, or operations that increases the chance of loss.

The Peak Season endorsement is most useful for an insured whose:

1. Personal property (inventory) increases significantly during certain periods ✓
2. Automobile fleet expands each summer to handle additional delivery routes and drivers
3. Liability exposure drops in the winter months when the seasonal operation is closed
4. Building value stays constant year after year and needs no adjustment at renewal

Why: Peak Season provides additional limits on business personal property during seasonal periods of higher inventory, such as a retailer before the holidays.

If an insured carries 100/300 UM limits and is hit by a driver with 25/50 liability limits, underinsured motorists coverage may provide additional recovery of up to:

1. Nothing at all, because the at-fault driver carried liability limits that met the state minimum
2. The difference between the UM/UIM limit and the at-fault driver's coverage, per policy terms ✓
3. The full $300,000 per accident, paid on top of whatever the at-fault driver's insurer already paid
4. Only $25,000, because UIM recovery is capped at the at-fault driver's per-person liability limit

Why: UIM allows the insured to recover the gap between their UIM limit and the underinsured driver's limits, subject to how the state/policy coordinates the limits.

Injuries to civilian federal government employees (such as a postal or federal agency worker) are covered under:

1. FELA, since the employer is federal
2. The Defense Base Act, for postal routes
3. The Federal Employees' Compensation Act (FECA) ✓
4. The LHWCA, for federal facilities

Why: FECA provides workers' compensation benefits to civilian employees of the federal government for job-related injuries and illnesses.

The FAIR Plan functions as Georgia's 'insurer of last resort,' meaning it is intended for applicants who:

1. Prefer the lower premiums the plan charges than the voluntary market
2. Are otherwise unable to obtain basic property insurance in the voluntary market ✓
3. Have gone at least five years without filing a property claim
4. Own commercial high-rise buildings above standard limits

Why: The FAIR Plan (Fair Access to Insurance Requirements) under Chapter 33 exists to assure access to basic property insurance for those who cannot obtain it in the voluntary market.

Under Georgia law, does § 33-23-35 require an agent to maintain a separate bank deposit for each principal's funds?

1. No, provided the funds held for each principal are reasonably ascertainable from the agent's books and records ✓
2. No, and an agent may deposit premium funds in a personal account so long as the full amount is repaid within 30 days
3. Yes, whenever the agent holds funds for more than five principals during the same calendar year a separate account is required
4. Yes, a separate bank account must be maintained for each principal and reconciled with that principal every month

Why: O.C.G.A. § 33-23-35(b) provides that nothing in the section requires a separate bank deposit for each principal's funds, so long as the funds held for each principal are reasonably ascertainable from the agent's books of accounts and records.

For a limited subagent application, the Commissioner requires a certificate from the sponsoring agent. That certificate must address all of the following EXCEPT:

1. The applicant's projected annual premium production target ✓
2. The sponsoring agent's satisfaction that the applicant is trustworthy and qualified
3. The applicant's character, including criminal background
4. The applicant's residence and experience

Why: O.C.G.A. § 33-23-8(c) requires the sponsoring agent's certificate to address character (including criminal background), identity, residence, experience, instruction as to kinds of insurance, and the sponsor's satisfaction that the applicant is trustworthy and qualified; it does not require a premium-production target.

The Special Causes of Loss form is best characterized as:

1. An open-perils (all-risk) form covering risks of direct physical loss unless excluded ✓
2. A form that excludes theft, so a separate crime coverage part must be purchased for stolen stock
3. A named-peril form covering only fire and lightning, with all other causes added by endorsement
4. A liability form protecting the insured against third-party claims arising from the premises

Why: The Special form is open-perils: it covers risk of direct physical loss unless specifically excluded or limited, shifting the burden of proof to the insurer.

Under § 33-6-33, an act listed in § 33-6-34 rises to the level of an improper claims settlement practice only if it is committed in which manner?

1. Flagrantly in conscious disregard of the title, or with such frequency as to indicate a general business practice ✓
2. Only when the insurer's conduct forces the insured to sue and a judgment on the claim is entered against the insurer
3. On even a single occasion involving any insured, without regard to whether the insurer has ever acted that way before
4. Only when the insured proves more than $10,000 in actual damages caused by the insurer's handling of the claim file

Why: O.C.G.A. § 33-6-33 provides that a 33-6-34 act is an improper claims settlement practice only if committed flagrantly in conscious disregard of the title, or with such frequency as to indicate a general business practice.

Under §33-36-3, a 'covered claim' must arise out of a policy of which kind of insurance issued by an insurer that becomes insolvent?

1. Life or annuity insurance
2. Surety or fidelity bonds
3. Property or casualty insurance ✓
4. Title insurance

Why: §33-36-3(4)(A) defines a covered claim as one arising out of a property or casualty insurance policy of an insolvent insurer authorized in Georgia.

Under the standard fire policy, coverage is suspended while the hazard is increased by any means within the insured's knowledge or control. This provision addresses:

1. Nonpayment of premium during the term, which suspends coverage whatever the increased hazard or the insured's control, until the premium is paid
2. Concealment of prior claims
3. Increased hazard / control of the insured ✓
4. Vacancy of the dwelling beyond 60 days

Why: The standard fire policy suspends coverage while the hazard is increased by any means within the control or knowledge of the insured.

Under §33-24-44(c)(3), an insurer or agent that fails to return unearned premium as required must pay the insured a penalty equal to what, plus interest?

1. 25 percent of the amount of the return of unearned premium ✓
2. 50 percent of the full annual premium charged for the policy
3. A flat $500 for each policy
4. 18 percent of the return of unearned premium

Why: §33-24-44(c)(3) imposes a penalty of 25 percent of the unearned-premium return, plus 18 percent annual interest, capped at 50 percent of the refund due.

A deductible in a property policy is the portion of a loss that:

1. The insurer pays first, then bills the insured
2. Is recovered from salvage sale proceeds
3. The insured retains/pays before the insurer pays ✓
4. Is added to the annual premium at renewal

Why: A deductible is the amount the insured must absorb on a covered loss before insurance benefits apply.

An injured worker recovers WC benefits, then sues and recovers from a negligent third party who caused the injury. The WC insurer typically has what right regarding that recovery?

1. The right to rescind the employer's policy back to inception and bill the employer for benefits paid
2. A right of subrogation/lien to recover benefits it paid ✓
3. A duty to double the benefits already paid
4. No interest in the recovery, because the exclusive remedy rule bars the insurer from sharing in a tort settlement

Why: The WC insurer generally has subrogation (lien) rights against a third-party recovery, allowing it to be reimbursed for benefits paid out of the worker's recovery.

In commercial auto, motor carrier or trucking risks often need cargo coverage because the BACF/Motor Carrier liability form:

1. Pays the carrier's cargo liability claims under physical damage coverage once the trailer's deductible has been satisfied
2. Does not cover the carrier's liability for damage to the property (cargo) being hauled ✓
3. Covers cargo only for theft occurring while the tractor-trailer is parked at a secured terminal
4. Automatically covers cargo up to the liability limit shown in the declarations for each shipment

Why: Auto liability and physical damage forms cover the vehicle and third-party injury/damage, not the freight; motor truck cargo insurance is needed for hauled goods.

Insurance that covers a single, identified item for a specific amount is called:

1. Blanket insurance over multiple items
2. Pro rata insurance shared among carriers
3. Specific (scheduled) insurance ✓
4. Aggregate insurance

Why: Specific/scheduled insurance lists individual items, each with its own assigned limit of coverage.

Private crop-hail insurance is distinguished from federal MPCI in that crop-hail:

1. Covers every natural peril capable of reducing a crop yield, including drought and excess moisture
2. Covers only the farm dwelling and its contents
3. Is administered by FEMA alongside the National Flood Insurance Program for agricultural producers
4. Is a private, narrowly focused policy covering primarily hail (and often fire) damage to crops ✓

Why: Crop-hail is sold by private insurers and typically covers hail (often with fire) on a per-acre basis, separate from the broad federal MPCI program.

Under §33-24-46(b), a 'claim against a policy' that could bear on nonrenewal does NOT include:

1. A demand for payment of policy proceeds by the insured
2. A settled property loss payment
3. A mere report of loss or a question relating to coverage ✓
4. A third party's demand for proceeds

Why: §33-24-46(b)(1) provides that a report of loss or a question about coverage does not independently establish a claim against the policy.

Which body adjudicates workers' compensation claims and administers the Act in Georgia?

1. The Office of Insurance and Safety Fire Commissioner
2. The State Board of Workers' Compensation ✓
3. The Superior Court of the county of injury
4. The Georgia Department of Labor

Why: The State Board of Workers' Compensation administers the Act and adjudicates claims; the statutes repeatedly assign these functions to 'the board.'

An insured believes her insurer committed an unfair claims settlement practice and wants to sue the insurer directly under Article 2. Under O.C.G.A. § 33-6-37, what is the result?

1. The article entitles her to attorney's fees and costs if she prevails
2. She may recover treble damages under the article
3. She must obtain the Commissioner's written consent before filing suit
4. The article does not create or imply a private cause of action for its violation ✓

Why: O.C.G.A. § 33-6-37 provides that the article does not create or imply a private cause of action for its violation.

A statement made by an applicant on an insurance application that is believed to be true to the best of the applicant's knowledge is a:

1. Waiver
2. Representation ✓
3. Concealment
4. Warranty

Why: A representation is a statement believed to be true to the best of one's knowledge; it need not be absolutely true, only true in material respects.

Under the PAP, the limit of liability for Part A applies:

1. Separately to each claim with no per-accident cap, so every claimant injured in one collision may collect the full stated limit
2. As the most paid regardless of the number of insureds, claims, vehicles, or persons involved (per the limits shown) ✓
3. Per insured separately, so two insureds riding in one auto double the limit available for that accident
4. Doubled when two or more vehicles are listed on the same declarations page

Why: The Part A limit of liability is the most the insurer will pay for one accident regardless of the number of insureds, claims, vehicles, or persons (subject to split/CSL terms).

Saying that a property insurance contract is personal means that it:

1. Can only be sold to individuals in their own names, and never to a partnership, corporation or other business entity
2. Covers only personal property such as furniture and clothing, and never the dwelling or other real property
3. Must be signed in person by the named insured before the coverage can attach
4. Insures a person, not the property itself, and generally cannot be transferred without the insurer's consent ✓

Why: A personal contract insures the individual against loss, not the property; it cannot be assigned to another party without the insurer's consent.

The Protective Safeguards endorsement on a BOP or commercial property policy generally:

1. Adds coverage for flood and surface water damage at premises located within a designated special flood hazard area
2. Requires the insured to maintain specified protective systems (e.g., sprinklers) as a condition of coverage ✓
3. Reduces the property deductible to zero for any loss at a location protected by an automatic sprinkler system
4. Increases the building limit automatically each year to keep pace with construction costs

Why: Protective Safeguards conditions coverage on the insured maintaining specified systems such as automatic sprinklers or alarms; failure to maintain them can suspend coverage.

Pure risk differs from speculative risk in that pure risk involves:

1. Only the chance of loss or no loss ✓
2. Voluntary participation for reward
3. Guaranteed profit
4. Both loss and gain possibilities

Why: Pure risk presents only the possibility of loss or no loss, with no opportunity for gain, making it the only insurable type of risk.

Under O.C.G.A. §33-7-11(c), for an uninsured motorist claim in which the owner/operator is unknown, the insured must report the accident as required by which statute?

1. O.C.G.A. §40-6-273 ✓
2. O.C.G.A. §40-9-2
3. O.C.G.A. §33-24-44
4. O.C.G.A. §33-34-4

Why: O.C.G.A. §33-7-11(c) requires that, where the owner or operator is unknown, the insured report the accident as required by Code Section 40-6-273 in order to recover under the UM endorsement.

A false statement of a material fact on an application that, if known, would have changed the insurer's underwriting decision is a:

1. Warranty
2. Representation
3. Misrepresentation ✓
4. Estoppel

Why: A misrepresentation is a false statement; if it is material it can void the contract.

An employer headquartered in one state sends a crew temporarily into another state not listed on the policy. Which Part of the policy is designed to provide coverage in states not listed in Part One?

1. Part Two — Employers Liability
2. Part Three — Other States Insurance ✓
3. Part One — Workers Compensation
4. Part Four — Your Duties If Injury Occurs

Why: Part Three (Other States Insurance) extends coverage to operations in states listed in the Part Three item, providing benefits if the insured incurs WC obligations in a state not shown in Part One.

A large, financially strong corporation chooses to retain its own workers' compensation risk and pay benefits directly, with state approval. This arrangement is called:

1. Experience rating
2. Monopolistic funding
3. Assigned risk
4. Self-insurance ✓

Why: Qualified self-insurance allows financially sound employers, with state approval and security/bonding, to pay WC benefits directly rather than buying a policy.

Under § 33-6-6(b), the Commissioner may require persons engaged in the business of insurance to file reports organized in which manner, where appropriate, to detect unfair practices?

1. By postal zip Code ✓
2. By policy issue date
3. By agent commission level
4. By federal tax identification number

Why: O.C.G.A. § 33-6-6(b) permits the Commissioner to require persons in the business of insurance to file reports by postal ZIP Code, where appropriate, to detect unfair practices.

Under §33-24-46(d)(1), notice of nonrenewal of a residential property policy must be mailed or delivered to the named insured not less than how many days before the nonrenewal is effective?

1. 20 days
2. 10 days
3. 45 days
4. 30 days ✓

Why: §33-24-46(d)(1) requires not less than 30 days' written notice of nonrenewal (or a longer contractual/statutory period).

Under §33-24-44(c)(3), the combined penalty and interest for failing to return unearned premium may not exceed:

1. Twice the unearned premium, payable as a forfeiture to the Commissioner
2. 18 percent per annum interest, with no cap
3. 50 percent of the amount of the refund due ✓
4. 25 percent of the refund due

Why: §33-24-44(c)(3) caps the total penalty and interest at 50 percent of the refund due.

Under §33-24-46(e), when a residential property policy is canceled other than for nonpayment, or is nonrenewed, the insurer must notify the insured of possible eligibility for what?

1. The Georgia Insurers Insolvency Pool and its claim filing deadline
2. The Georgia Fair Access to Insurance Requirements (FAIR) Plan ✓
3. The federal flood program administered by FEMA
4. The Georgia Automobile Insurance Plan, which assigns applicants to insurers

Why: §33-24-46(e) requires notifying the insured of possible eligibility for the Georgia FAIR Plan, including its contact address.

The Information Page of the Workers Compensation policy is most analogous to which component of other commercial policies?

1. The endorsement schedule
2. The declarations page ✓
3. The exclusions section
4. The conditions section

Why: The Information Page functions like a declarations page, showing the insured, policy period, listed states, classifications, premium basis, and limits for Part Two.

Georgia's default form of underinsured motorist coverage under O.C.G.A. §33-7-11(b)(1)(D)(ii)(I) is best described as:

1. Coverage available only when the at-fault vehicle has zero liability insurance
2. 'Add-on' (excess) coverage that pays on top of the at-fault driver's liability limits ✓
3. 'Reduction' coverage where UM limits are reduced by the at-fault driver's limits
4. Coverage that duplicates the at-fault driver's bodily injury payment

Why: Since 2008, O.C.G.A. §33-7-11(b)(1)(D)(ii)(I) makes the default UM/UIM form 'add-on' (excess): the insured's UM applies in addition to (excess of) the available liability coverage, subject to a total-recovery cap of all economic and noneconomic losses.

Under O.C.G.A. §33-24-45(c)(1), when a monthly-pay insured is being canceled for nonpayment, the cancellation notice may be included with the bill provided the bill is mailed at least how many days before the due date?

1. 5 days
2. 30 days
3. 10 days ✓
4. 15 days

Why: O.C.G.A. §33-24-45(c)(1) allows a nonpayment cancellation notice to a monthly-pay insured to be included with the bill, provided the bill is mailed to the insured at least ten days prior to the due date.

A dockworker loading and unloading ships, injured while working on the pier and over navigable waters, is most likely covered by:

1. The Jones Act, since anyone whose work is performed over navigable water qualifies as a seaman
2. FELA, which Congress extended to cover cargo handling at any interstate terminal
3. The Black Lung Benefits Act, for dust in ship holds
4. The Longshore and Harbor Workers' Compensation Act (LHWCA) ✓

Why: The LHWCA provides no-fault workers' compensation benefits to longshore, harbor, and maritime workers (such as those loading/unloading vessels) who are not seamen.

TPD income benefits under O.C.G.A. §34-9-262 are payable for a period not exceeding:

1. 225 weeks from the date of injury
2. 400 weeks from the date of injury
3. 350 weeks from the date of injury ✓
4. 300 weeks from the date of injury

Why: O.C.G.A. §34-9-262 limits TPD benefits to a period not exceeding 350 weeks from the date of injury.

An insured who leaves a car unlocked with keys inside because insurance will cover it demonstrates:

1. A legal hazard
2. A morale hazard ✓
3. A physical hazard
4. A moral hazard

Why: A morale hazard arises from carelessness or indifference to loss because insurance exists, increasing the likelihood of loss.

Under § 33-6-4(b)(14), what must printed advertising material disclose regarding the calculation of medical benefits?

1. That the policy is guaranteed renewable to age 65 at the premium rates then in effect for the class
2. That benefits for a preexisting condition are subject to a waiting period of 30 days after issue
3. That premiums may be increased on a class basis after 45 days' written notice to the policyholder
4. That medical benefits are calculated on the basis of usual, customary, and reasonable charges ✓

Why: O.C.G.A. § 33-6-4(b)(14) requires printed advertising material to disclose that medical benefits are calculated on the basis of usual, customary, and reasonable charges.

The Fair Credit Reporting Act (FCRA) primarily regulates:

1. The collection, use, and disclosure of consumer report information ✓
2. How FEMA sets and subsidizes flood premiums inside mapped Special Flood Hazard Areas
3. Federal premium subsidies paid to crop insurers under the Federal Crop Insurance Act
4. The federal reinsurance backstop for certified acts of terrorism

Why: The FCRA governs how consumer reporting agencies collect, share, and use consumer credit and report information, and the rights of consumers regarding that information.

Under O.C.G.A. §34-9-18, the board may assess a civil penalty for a violation of the security-of-compensation requirement (§34-9-121) in what range?

1. Not less than $500 nor more than $5,000 per violation ✓
2. A flat $250 per violation
3. Not less than $100 nor more than $1,000 per violation
4. Not less than $10,000 nor more than $50,000 per violation

Why: O.C.G.A. §34-9-18(c) authorizes a civil penalty of not less than $500 nor more than $5,000 per violation for violating §34-9-121 or §34-9-126(a), in addition to other assessments.

A building constructed with exterior walls of brick or masonry but with a combustible (wood) roof is generally classified as:

1. Joisted masonry (masonry) ✓
2. Frame construction
3. Fire-resistive construction
4. Modified fire-resistive

Why: Joisted masonry has masonry exterior walls but combustible floors or roof, making it more fire-resistant than frame but less than fire-resistive.

Under O.C.G.A. §33-7-11(a)(3), does mandatory UM coverage apply to umbrella or excess liability policies?

1. No; the required coverage excludes umbrella or excess policies unless affirmatively provided for in the policy or by endorsement ✓
2. Yes; an umbrella policy must carry uninsured motorist limits matching its liability limits unless the insured rejects them in writing
3. No; umbrella and excess policies are exempt and may never provide UM coverage
4. Yes, but only for property damage claims, not for bodily injury

Why: O.C.G.A. §33-7-11(a)(3) states the required UM coverage excludes umbrella or excess liability policies unless affirmatively provided for in such policies or in a policy endorsement.

The standard CGL excludes liability for professional services. An architect, accountant, or doctor would address this gap with:

1. Raising the CGL general aggregate to $4 million at renewal
2. Professional Liability / Errors & Omissions coverage ✓
3. An umbrella following form over the CGL
4. Coverage C medical payments with a higher per-person limit

Why: Professional services are excluded under the CGL and must be insured with a Professional Liability/E&O policy.

An experience modification factor (mod) below 1.00 (e.g., 0.85) indicates that an employer:

1. Has worse-than-average loss experience and pays a debit (surcharge)
2. Has better-than-average loss experience and receives a credit (discount) ✓
3. Is exempt from audit
4. Must purchase coverage from the assigned-risk pool

Why: A mod below 1.00 is a credit mod, reflecting better-than-expected losses and reducing premium; a mod above 1.00 is a debit mod that increases premium.

After receiving a notice of appointment, the Commissioner must verify the agent's eligibility for appointment within a reasonable time not to exceed:

1. 20 days
2. 30 days ✓
3. 10 days
4. 45 days

Why: O.C.G.A. § 33-23-16(g)(1)(B) requires the Commissioner to verify eligibility within a reasonable time, not to exceed 30 days, and to notify the insurer within five days if the agent is ineligible.

Because the standard policy's Part One does not apply in monopolistic fund states (where coverage comes from the state fund), what does the policy still commonly provide for those states via endorsement?

1. Part One statutory benefits for those states
2. Vocational rehabilitation and retraining benefits
3. Stop Gap / Employers Liability coverage ✓
4. Other States Insurance listing the monopolistic states

Why: In monopolistic states, the state fund provides statutory benefits but not employers liability; a stop gap (Employers Liability) endorsement fills that gap.

Civil Authority coverage under a Business Income form provides for loss when:

1. The insured voluntarily closes the premises for a remodeling project and loses income during the shutdown
2. A government order prohibits access to the premises due to a covered cause of loss to nearby property ✓
3. Employees walk off the job in a strike and the plant cannot operate
4. A competitor opens a store nearby and sales fall sharply

Why: Civil Authority extends Business Income/Extra Expense when access to the insured premises is prohibited by a civil authority because of a covered cause of loss to property in the vicinity.

If the Commissioner determines that an agent is ineligible for appointment, the Commissioner must notify the insurer within:

1. Five days of such determination ✓
2. Thirty days of such determination
3. Ten days of such determination
4. Fifteen days of such determination

Why: O.C.G.A. § 33-23-16(g)(1)(B) provides that if the agent is determined ineligible for appointment, the Commissioner shall notify the insurer within five days of such determination.

A loss in which the property is completely destroyed or damaged beyond economical repair is a:

1. Partial loss
2. Consequential loss
3. Total loss ✓
4. Salvage loss

Why: A total loss occurs when property is entirely destroyed or so damaged that repair is not economically feasible.

Flood damage to a home is covered under a standard Homeowners policy:

1. Only under the HO-8 modified form, which reaches flood because losses there settle at functional repair cost
2. Always, since water damage of any origin falls within the open-peril wording of the dwelling coverage
3. Only under Coverage F, which responds to flood damage once a federal disaster is declared for the county
4. Never; flood is excluded and covered through the NFIP or a separate flood policy ✓

Why: Flood is a standard exclusion in Homeowners policies; it must be insured separately, typically through the National Flood Insurance Program.

With auto liability split limits of 50/100/25, the maximum paid for bodily injury to any one person in an accident is:

1. $100,000
2. $50,000 ✓
3. $175,000
4. $25,000

Why: The first number (50) is the per-person bodily injury limit: $50,000.

Under O.C.G.A. §40-3-36(a)(4)(C)(i), if an insurer cannot obtain the certificate of title within how many days after the owner accepts a total loss claim, it may apply to the department for a salvage certificate of title?

1. 10 days
2. 30 days ✓
3. 90 days
4. 60 days

Why: O.C.G.A. §40-3-36(a)(4)(C)(i) allows the insurer (or authorized agent) to apply for a salvage certificate of title if it is unable to obtain the certificate within 30 days after the owner's acceptance of the total loss claim, upon showing settlement and two verifiable communications with the owner.

Intentional injury caused by an insured is treated under Section II how?

1. Covered under Coverage F only
2. Fully covered
3. Excluded ✓
4. Covered under Coverage D

Why: Bodily injury or property damage expected or intended by the insured is excluded under Section II liability coverage.

Which CGL limit is the most that will be paid for the sum of all damages because of bodily injury and property damage arising out of any one occurrence?

1. Each Occurrence Limit ✓
2. Products-Completed Operations Aggregate
3. Personal and Advertising Injury Limit
4. General Aggregate Limit

Why: The Each Occurrence Limit caps total BI and PD damages (plus medical payments) for a single occurrence.

A boatowners or yacht policy typically combines which two coverage parts?

1. Life insurance on the vessel's owner and health coverage for the crew aboard
2. Crop coverage for waterfront acreage and flood coverage for the dock
3. Workers compensation for the crew and a surety bond guaranteeing the marina's slip fees
4. Hull (physical damage) and protection & indemnity (liability) ✓

Why: Yacht and boatowners policies pair hull coverage for physical damage to the vessel with protection and indemnity (liability) coverage.

The suit-limitation clause of the standard fire policy requires that any legal action on the policy be commenced within how long after inception of the loss?

1. Two years
2. Four years
3. Six months
4. Twelve months ✓

Why: The standard fire policy's suit clause bars any action unless commenced within 12 months after inception of the loss.

If an insured meets or exceeds the coinsurance requirement, the coinsurance penalty:

1. Reduces the limit by the shortfall
2. Does not apply; the loss is paid in full up to the limit ✓
3. Still applies, cutting the payment by the coinsurance percentage carried
4. Doubles the deductible on the loss

Why: When the insured carries at least the required amount, there is no penalty and covered losses are paid up to the limit (less deductible).

An insurer wishing to comply with GLBA must provide its initial privacy notice to a customer:

1. Only when the policy is cancelled or nonrenewed, along with the final notice
2. Only after the customer files a first claim under the policy
3. At the time the customer relationship is established (and annually thereafter, as applicable) ✓
4. Only when the customer asks in writing to see the insurer's information-sharing practices

Why: GLBA requires delivery of a privacy notice when the customer relationship is established and, historically, an annual notice describing information-sharing practices.

Under § 33-6-4(b)(14.1), engaging in dishonest, unfair, or deceptive practices in the marketing or sale of insurance to which group is specifically prohibited?

1. Senior citizens who are 65 years of age or older
2. First-time homebuyers financing through the FHA
3. Service members of the armed forces of the United States ✓
4. Public school teachers and other state employees

Why: O.C.G.A. § 33-6-4(b)(14.1) prohibits dishonest, unfair, or deceptive practices in the marketing or sale of insurance to service members of the armed forces of the United States.

Which Part of the Workers Compensation and Employers Liability Policy sets out the insured's responsibilities, such as notifying the insurer promptly of an injury and cooperating in the investigation?

1. Part Four ✓
2. Part One
3. Part Three
4. Part Two

Why: Part Four — Your Duties If Injury Occurs lists the insured's obligations, including prompt notice, providing information, and cooperating with the insurer.

A 'no benefit to the bailee' clause means:

1. The bailee must pay the deductible before the insurer will release payment for the property
2. The bailee takes title to whatever salvage remains after the insurer has settled the loss
3. The bailee automatically becomes an additional insured while the property is in its custody
4. Insurance proceeds will not benefit anyone holding the property for storage or repair ✓

Why: The no-benefit-to-bailee clause prevents a party temporarily holding the insured's property (a bailee) from benefiting from the insurance.

Under the Business Auto Coverage Form, an employee operating a covered owned auto on company business is:

1. An insured only if a manager or officer named in the declarations
2. Covered only for physical damage losses
3. Never an insured; only the named insured entity is
4. An insured while using a covered auto with permission ✓

Why: Employees and other permissive users are insureds while operating a covered (owned/hired) auto within the scope of permission.

Under PAP Part E, after a theft of the covered auto, the insured must additionally:

1. Promptly notify the police ✓
2. Wait 30 days before any action
3. Pay the deductible to the police
4. Repair the vehicle first

Why: For a theft loss, the insured has a specific duty to promptly notify the police in addition to notifying the insurer.

Builders Risk coverage is designed to insure:

1. Loss of rents only
2. A completed and occupied office tower
3. A structure during the course of construction ✓
4. Tools owned by a contractor at home

Why: Builders Risk insures buildings or structures while under construction, including materials and supplies intended to become part of the structure.

Which best describes "hired autos" in commercial auto?

1. Autos the named insured leases, hires, rents, or borrows for business use ✓
2. Employees' own personal autos driven on company errands and reimbursed by the mile
3. Autos the named insured holds title to and garages at its premises
4. Customer vehicles left at a repair shop, which the shop hires out while they wait

Why: Hired autos are vehicles the insured leases, hires, rents, or borrows, addressed by Symbol 8 for liability.