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Free Vermont Producer's Examination for Personal Lines Insurance Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Vermont Producer's Examination for Personal Lines Insurance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A Vermont resident applies for an individual producer license. What is the minimum statutory age?

    1. A. 17 years
    2. B. 18 years
    3. C. 19 years
    4. D. 21 years

    Answer: B

    Explanation: Section 4813f requires that the individual "is at least 18 years of age." The applicant therefore must be 18 or older.

    Reference: Vermont Laws — 8 V.S.A. § 4813f(a)(1)

  2. 2When can a false statement in an application bar recovery under a Vermont liability policy?

    1. A. Whenever any clerical error appears
    2. B. Only when intended to deceive or material to the risk or hazard
    3. C. Whenever the producer did not write the answer
    4. D. Only when discovered after a loss

    Answer: B

    Explanation: The falsity does not bar recovery unless it "was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed."

    Reference: Vermont Laws — 8 V.S.A. § 4205

  3. 3A Vermont insurer has agreed with a claimant on the amount of a property claim. Within what period must it mail payment?

    1. A. Five working days
    2. B. Ten working days
    3. C. Fifteen working days
    4. D. Thirty working days

    Answer: B

    Explanation: Regulation I-79-2 states, "After settlement has been agreed upon, insurer shall mail payment in amount agreed to claimant and/or loss payee within ten (10) business days." The agreed property claim must therefore be paid within ten business days.

    Reference: Code of VT Rules 79-2_clean_for_SoS — Regulation I-79-2, § 6.G

  4. 4May a Vermont dwelling property form contain a total mold exclusion?

    1. A. Yes, without limitation
    2. B. Yes, if the deductible is disclosed
    3. C. No, total exclusions are not allowed for dwelling property or personal liability
    4. D. No, but only during the first 60 days

    Answer: C

    Explanation: The Department states, "Total exclusions are not allowed on Homeowners or Dwelling Property/Personal Liability policies."

    Reference: Homeowner’s and Dwelling Property — Bulletin 141; Homeowners and Dwelling Mold

  5. 5What minimum aggregate all-damages sublimit must a Vermont personal-lines mold limitation provide for property coverage?

    1. A. $5,000
    2. B. $10,000
    3. C. $15,000
    4. D. $50,000

    Answer: B

    Explanation: Bulletin 141 requires "a minimum $10,000 aggregate all damages sub-limit for Property coverages."

    Reference: Author: — Bulletin 141, Personal Lines mold-limitation guidelines

  6. 6What are Vermont’s minimum bodily injury liability limits for a private passenger vehicle?

    1. A. $15,000 per person/$30,000 per accident
    2. B. $20,000 per person/$40,000 per accident
    3. C. $25,000 per person/$50,000 per accident
    4. D. $50,000 per person/$100,000 per accident

    Answer: C

    Explanation: Section 800 requires an automobile liability policy or bond "in the amounts of at least $25,000.00 for one person and $50,000.00 for two or more persons killed or injured."

    Reference: Vermont Laws — 23 V.S.A. § 800(a)

  7. 7A farmowners property mold-limitation endorsement is filed in Vermont. Which aggregate sublimit is the minimum?

    1. A. $10,000
    2. B. $15,000
    3. C. $25,000
    4. D. $50,000

    Answer: B

    Explanation: Bulletin 141 sets the minimum for "Commercial Property, including Businessowners Property and Farmowners Property" at "$15,000 aggregate."

    Reference: Author: — Bulletin 141, Commercial Lines farmowners mold-limitation guidelines

  8. 8A homeowner wants a separate policy that raises liability protection above the homeowners policy's available liability limits. Which option fits?

    1. A. A personal umbrella liability policy.
    2. B. A business pursuits liability endorsement.
    3. C. A personal injury liability endorsement.
    4. D. A watercraft liability endorsement.

    Answer: A

    Explanation: "liability insurance increases your liability coverage above the level available in a homeowners policy." Umbrella liability adds limits above the homeowners policy. The other real liability endorsements address particular liability exposures rather than general excess limits.

    Reference: NAIC, A Consumer's Guide to Home Insurance — Optional Coverages, personal umbrella

  9. 9A resident seeks an initial Vermont producer license and has no statutory exemption. Which examination requirement applies?

    1. A. Written examination
    2. B. Oral examination
    3. C. Written performance examination
    4. D. Practical examination

    Answer: A

    Explanation: Section 4813e states that the applicant "shall pass a written examination" unless exempt. The written examination is the applicable requirement.

    Reference: Vermont Laws — 8 V.S.A. § 4813e

  10. 10A fire directly destroys an insured dwelling. Which risk-management term describes the fire as the cause of the loss?

    1. A. Peril.
    2. B. Hazard.
    3. C. Exposure.
    4. D. Loss.

    Answer: A

    Explanation: "Peril is an insurance term for a specific risk or reason for a loss." The fire is the peril, the cause of loss. A hazard increases likelihood or severity, an exposure is property at risk, and loss is the resulting damage.

    Reference: NAIC, A Consumer's Guide to Home Insurance — Types of Homeowners Policies

Topics in this practice bank

These topics describe the available practice for Vermont Producer's Examination for Personal Lines Insurance. Review the examination outline and its sources for scope and allocation details.

  • Insurance Regulation
    • Licensing
    • Licensing / Process (4800; 4813f)
    • Licensing / Types of licensees (4791)
    • Licensing / Types of licensees (4791) / Resident (4800(3)(A))
    • Licensing / Types of licensees (4791) / Nonresident (4800(3)(B); 4813h)
    • Licensing / Maintenance and duration
    • Licensing / Maintenance and duration / Renewal and expiration (4798)
    • Licensing / Maintenance and duration / Address change (4800(3)(F))
    • Licensing / Maintenance and duration / Assumed business name (4813j)
    • Licensing / Maintenance and duration / Reporting of actions (4813o)
    • Licensing / Maintenance and duration / Continuing education requirements (4800a; Reg 2000-2 Sec 4)
    • Licensing / Disciplinary actions
    • Licensing / Disciplinary actions / Denial of license (4800(3)(E))
    • Licensing / Disciplinary actions / Cease and desist order (3661)
    • Licensing / Disciplinary actions / Suspension, revocation or nonrenewal (4804; 4806)
    • Licensing / Disciplinary actions / Penalties (3661(a)(2); 4804(d))
    • State regulation
    • State regulation / Commissioner's general duties and powers (4726; 4804)
    • State regulation / Company regulation
    • State regulation / Company regulation / Certificate of authority (3368)
    • State regulation / Company regulation / Unfair claim settlement practices (4724(9); Reg 79-2 Sec 1–7)
    • State regulation / Company regulation / Policy forms (3541)
    • State regulation / Company regulation / Examination of records (3565)
    • State regulation / Company regulation / Producer appointment (4798(d); 4813l)
    • State regulation / Company regulation / Termination of appointment (4798(d); 4813m)
    • State regulation / Producer regulation
    • State regulation / Producer regulation / Acting without a license (4793; 4813c)
    • State regulation / Producer regulation / Shared commissions (4796)
    • State regulation / Producer regulation / Trust accounts — anti-commingling (Reg 95-1; 4724(12))
    • State regulation / Producer regulation / Controlled business (4795)
    • State regulation / Producer regulation / Duties (4813c)
    • State regulation / Unfair trade practices (4724)
    • State regulation / Unfair trade practices (4724) / Misrepresentation (4724(1, 11, 13))
    • State regulation / Unfair trade practices (4724) / False advertising (4724(2))
    • State regulation / Unfair trade practices (4724) / Defamation (4724(3))
    • State regulation / Unfair trade practices (4724) / Boycott, coercion and intimidation (4724(4))
    • State regulation / Unfair trade practices (4724) / False financial statements and entries (4724(5))
    • State regulation / Unfair trade practices (4724) / Illegal inducement (4724(6))
    • State regulation / Unfair trade practices (4724) / Unfair discrimination (4724(7))
    • State regulation / Unfair trade practices (4724) / Rebating (4724(8))
    • State regulation / Unfair trade practices (4724) / Failure to maintain complaint record (4724(10))
    • State regulation / Unfair trade practices (4724) / Failure to act as fiduciary (4724(12); Reg 95-1)
    • State regulation / Unfair trade practices (4724) / Unsuitability (4724(16))
    • State regulation / Unfair trade practices (4724) / Nondisclosure of fees or charges (4724(14))
    • State regulation / Consumer privacy regulation (IH-2001-01)
    • Federal regulation
    • Federal regulation / Fair Credit Reporting Act (15 USC 1681–1681d)
    • Federal regulation / Fraud and false statements (18 USC 1033, 1034)
  • General Insurance
    • Concepts
    • Concepts / Risk management key terms
    • Concepts / Risk management key terms / Risk
    • Concepts / Risk management key terms / Exposure
    • Concepts / Risk management key terms / Hazard
    • Concepts / Risk management key terms / Peril
    • Concepts / Risk management key terms / Loss
    • Concepts / Methods of handling risk
    • Concepts / Methods of handling risk / Avoidance
    • Concepts / Methods of handling risk / Retention
    • Concepts / Methods of handling risk / Sharing
    • Concepts / Methods of handling risk / Reduction
    • Concepts / Methods of handling risk / Transfer
    • Concepts / Elements of insurable risks
    • Concepts / Adverse selection
    • Concepts / Law of large numbers
    • Concepts / Reinsurance
    • Insurers
    • Insurers / Types of insurers
    • Insurers / Types of insurers / Captive insurers
    • Insurers / Types of insurers / Stock companies
    • Insurers / Types of insurers / Mutual companies
    • Insurers / Types of insurers / Fraternal benefit societies
    • Insurers / Types of insurers / Lloyd's associations
    • Insurers / Types of insurers / Risk retention groups
    • Insurers / Private versus government insurers
    • Insurers / Admitted versus nonadmitted insurers
    • Insurers / Domestic, foreign and alien insurers
    • Insurers / Financial status (independent rating services)
    • Insurers / Marketing (distribution) systems
    • Producers and general rules of agency
    • Producers and general rules of agency / Insurer as principal
    • Producers and general rules of agency / Producer/insurer relationship
    • Producers and general rules of agency / Authority and powers of producers
    • Producers and general rules of agency / Authority and powers of producers / Express
    • Producers and general rules of agency / Authority and powers of producers / Implied
    • Producers and general rules of agency / Authority and powers of producers / Apparent
    • Contracts
    • Contracts / Elements of a legal contract
    • Contracts / Elements of a legal contract / Offer and acceptance
    • Contracts / Elements of a legal contract / Consideration
    • Contracts / Elements of a legal contract / Competent parties
    • Contracts / Elements of a legal contract / Legal purpose
    • Contracts / Distinct characteristics of an insurance contract
    • Contracts / Distinct characteristics of an insurance contract / Contract of adhesion
    • Contracts / Distinct characteristics of an insurance contract / Aleatory contract
    • Contracts / Distinct characteristics of an insurance contract / Personal contract
    • Contracts / Distinct characteristics of an insurance contract / Unilateral contract
    • Contracts / Legal interpretations affecting contracts
    • Contracts / Legal interpretations affecting contracts / Ambiguities in a contract of adhesion
    • Contracts / Legal interpretations affecting contracts / Reasonable expectations
    • Contracts / Legal interpretations affecting contracts / Indemnity
    • Contracts / Legal interpretations affecting contracts / Utmost good faith
    • Contracts / Legal interpretations affecting contracts / Representations/misrepresentations
    • Contracts / Legal interpretations affecting contracts / Warranties
    • Contracts / Legal interpretations affecting contracts / Concealment
    • Contracts / Legal interpretations affecting contracts / Fraud
    • Contracts / Legal interpretations affecting contracts / Waiver and estoppel
  • Property and Casualty Insurance Basics
    • Principles and concepts
    • Principles and concepts / Insurable interest
    • Principles and concepts / Underwriting
    • Principles and concepts / Underwriting / Function
    • Principles and concepts / Underwriting / Loss ratio
    • Principles and concepts / Rates
    • Principles and concepts / Rates / Types
    • Principles and concepts / Rates / Loss costs
    • Principles and concepts / Rates / Components
    • Principles and concepts / Hazards
    • Principles and concepts / Hazards / Physical
    • Principles and concepts / Hazards / Moral
    • Principles and concepts / Hazards / Morale
    • Principles and concepts / Negligence
    • Principles and concepts / Negligence / Elements of a negligent act
    • Principles and concepts / Negligence / Defenses against negligence
    • Principles and concepts / Damages
    • Principles and concepts / Damages / Compensatory — special versus general
    • Principles and concepts / Damages / Punitive
    • Principles and concepts / Absolute liability
    • Principles and concepts / Strict liability
    • Principles and concepts / Vicarious liability
    • Principles and concepts / Causes of loss (perils)
    • Principles and concepts / Named perils versus special (open) perils
    • Principles and concepts / Direct loss
    • Principles and concepts / Consequential or indirect loss
    • Principles and concepts / Blanket versus specific insurance
    • Principles and concepts / Basic types of construction
    • Principles and concepts / Loss valuation
    • Principles and concepts / Loss valuation / Actual cash value
    • Principles and concepts / Loss valuation / Replacement cost
    • Principles and concepts / Loss valuation / Functional replacement cost
    • Principles and concepts / Loss valuation / Market value
    • Principles and concepts / Loss valuation / Agreed value
    • Principles and concepts / Loss valuation / Stated amount
    • Principles and concepts / Loss valuation / Valued policy
    • Policy structure
    • Policy structure / Declarations
    • Policy structure / Definitions
    • Policy structure / Insuring agreement or clause
    • Policy structure / Additional/supplementary coverage
    • Policy structure / Conditions
    • Policy structure / Exclusions
    • Policy structure / Endorsements
    • Common policy provisions
    • Common policy provisions / Insureds — named, first named, additional
    • Common policy provisions / Policy period
    • Common policy provisions / Policy territory
    • Common policy provisions / Cancellation and nonrenewal
    • Common policy provisions / Deductibles
    • Common policy provisions / Other insurance
    • Common policy provisions / Other insurance / Nonconcurrency
    • Common policy provisions / Other insurance / Primary and excess
    • Common policy provisions / Other insurance / Pro rata
    • Common policy provisions / Limits of liability
    • Common policy provisions / Limits of liability / Per occurrence (accident)
    • Common policy provisions / Limits of liability / Per person
    • Common policy provisions / Limits of liability / Split
    • Common policy provisions / Limits of liability / Combined single
    • Common policy provisions / Restoration/nonreduction of limits
    • Common policy provisions / Coinsurance
    • Common policy provisions / Vacancy or unoccupancy
    • Common policy provisions / Named insured provisions
    • Common policy provisions / Named insured provisions / Duties after loss
    • Common policy provisions / Named insured provisions / Assignment
    • Common policy provisions / Named insured provisions / Abandonment
    • Common policy provisions / Insurer provisions
    • Common policy provisions / Insurer provisions / Liberalization
    • Common policy provisions / Insurer provisions / Subrogation
    • Common policy provisions / Insurer provisions / Salvage
    • Common policy provisions / Insurer provisions / Claim settlement options
    • Common policy provisions / Insurer provisions / Duty to defend
    • Common policy provisions / Third-party provisions
    • Common policy provisions / Third-party provisions / Standard mortgage clause
    • Common policy provisions / Third-party provisions / Loss payable clause
    • Common policy provisions / Third-party provisions / No benefit to Bailee
    • Vermont laws, regulations and required provisions
    • Vermont laws, regulations and required provisions / Vermont Property and Casualty Insurance Guaranty Association (3611–3626)
    • Vermont laws, regulations and required provisions / Renewal notice (3882)
    • Vermont laws, regulations and required provisions / Cancellation and nonrenewal (3879–3881; 3883)
    • Vermont laws, regulations and required provisions / Consent to rate (4688(f); Reg I-2010-03))
    • Vermont laws, regulations and required provisions / Loss payment (3868; Reg 79-2 Sec 6, 8)
    • Vermont laws, regulations and required provisions / Discrimination (3861)
    • Vermont laws, regulations and required provisions / Coinsurance (3961–3968)
    • Vermont laws, regulations and required provisions / Required provisions (4203)
  • Dwelling Policy
    • Characteristics and purpose
    • Coverage forms — Perils insured against
    • Coverage forms — Perils insured against / Basic
    • Coverage forms — Perils insured against / Broad
    • Coverage forms — Perils insured against / Special
    • Property coverages
    • Property coverages / Coverage A — Dwelling
    • Property coverages / Coverage B — Other structures
    • Property coverages / Coverage C — Personal property
    • Property coverages / Coverage D — Fair rental value
    • Property coverages / Coverage E — Additional living expense
    • Property coverages / Other coverages
    • General exclusions
    • Conditions
    • Selected endorsements
    • Selected endorsements / Special provisions — Vermont (DP 01 44)
    • Selected endorsements / Automatic increase in insurance (DP 04 11)
    • Selected endorsements / Broad theft coverage (DP 04 72)
    • Selected endorsements / Dwelling under construction (DP 11 43)
    • Personal liability supplement
  • Homeowners Policy
    • Coverage forms
    • Coverage forms / HO-2 through HO-6
    • Definitions
    • Section I — Property coverages
    • Section I — Property coverages / Coverage A — Dwelling
    • Section I — Property coverages / Coverage B — Other structures
    • Section I — Property coverages / Coverage C — Personal property
    • Section I — Property coverages / Coverage D — Loss of use
    • Section I — Property coverages / Additional coverages
    • Section II — Liability coverages
    • Section II — Liability coverages / Coverage E — Personal liability
    • Section II — Liability coverages / Coverage F — Medical payments to others
    • Section II — Liability coverages / Additional coverages
    • Perils insured against
    • Exclusions
    • Conditions
    • Selected endorsements
    • Selected endorsements / Special provisions — Vermont (HO 01 44)
    • Selected endorsements / Limited fungi, wet or dry rot, or bacteria coverage — Vermont (HO 04 02)
    • Selected endorsements / Permitted incidental occupancies (HO 04 42)
    • Selected endorsements / Earthquake (HO 04 54)
    • Selected endorsements / Scheduled personal property (HO 04 61)
    • Selected endorsements / Personal property replacement cost (HO 04 90)
    • Selected endorsements / Home day care — Vermont (HO 23 45)
    • Selected endorsements / Business pursuits (HO 24 71)
    • Selected endorsements / Watercraft (HO 24 75)
    • Selected endorsements / Personal injury (HO 24 82)
  • Auto Insurance
    • Laws
    • Laws / Vermont Motor Vehicle Financial Responsibility and Insurance Laws (Title 23 Sec 800–943)
    • Laws / Vermont Motor Vehicle Financial Responsibility and Insurance Laws (Title 23 Sec 800–943) / Required limits of liability (Title 23 Sec 801)
    • Laws / Vermont Motor Vehicle Financial Responsibility and Insurance Laws (Title 23 Sec 800–943) / Required proof of insurance (Bul 77)
    • Laws / Vermont Automobile Insurance Plan (4241–4246)
    • Laws / Vermont Automobile Insurance Plan (4241–4246) / Eligibility
    • Laws / Vermont Automobile Insurance Plan (4241–4246) / Liability limitations
    • Laws / Vermont Automobile Insurance Plan (4241–4246) / Physical damage coverage limitations
    • Laws / Uninsured/underinsured motorist (Title 23 Sec 941)
    • Laws / Uninsured/underinsured motorist (Title 23 Sec 941) / Definitions
    • Laws / Uninsured/underinsured motorist (Title 23 Sec 941) / Required limits of liability
    • Laws / Uninsured/underinsured motorist (Title 23 Sec 941) / Bodily injury
    • Laws / Uninsured/underinsured motorist (Title 23 Sec 941) / Property damage
    • Laws / Cancellation/nonrenewal
    • Laws / Cancellation/nonrenewal / Grounds (4223)
    • Laws / Cancellation/nonrenewal / Notice (4224–4226)
    • Laws / Cancellation/nonrenewal / Notice of eligibility in assigned risk plan (4227)
    • Laws / Binders (Title 23 Sec 942)
    • Laws / Surcharges (4671–4675)
    • Personal auto policy
    • Personal auto policy / Definitions
    • Personal auto policy / Liability coverage
    • Personal auto policy / Liability coverage / Bodily injury and property damage
    • Personal auto policy / Liability coverage / Supplementary payments
    • Personal auto policy / Liability coverage / Exclusions
    • Personal auto policy / Medical payments
    • Personal auto policy / Uninsured motorist/underinsured motorist coverage
    • Personal auto policy / Coverage for damage to your auto
    • Personal auto policy / Coverage for damage to your auto / Collision
    • Personal auto policy / Coverage for damage to your auto / Other than collision
    • Personal auto policy / Coverage for damage to your auto / Deductibles
    • Personal auto policy / Coverage for damage to your auto / Transportation expense
    • Personal auto policy / Coverage for damage to your auto / Exclusions
    • Personal auto policy / Duties after an accident or loss
    • Personal auto policy / General provisions
    • Personal auto policy / Selected endorsements
    • Personal auto policy / Selected endorsements / Amendment of policy provisions — Vermont (PP 01 72)
    • Personal auto policy / Selected endorsements / Towing and labor costs (PP 03 03)
    • Personal auto policy / Selected endorsements / Extended non-owned coverage (PP 03 06)
    • Personal auto policy / Selected endorsements / Miscellaneous type vehicle (PP 03 23)
    • Personal auto policy / Selected endorsements / Joint ownership coverage — Vermont (PP 03 80)
  • Farm Coverage
    • Farm property coverage forms
    • Farm property coverage forms / Coverage A — Dwellings
    • Farm property coverage forms / Coverage B — Other private structures
    • Farm property coverage forms / Coverage C — Household personal property
    • Farm property coverage forms / Coverage D — Loss of use
    • Farm property coverage forms / Coverage E — Scheduled farm personal property
    • Farm property coverage forms / Coverage F — Unscheduled farm personal property
    • Farm property coverage forms / Coverage G — Other farm structures
    • Farm property coverage forms / Mobile agricultural machinery and equipment coverage form
    • Farm property coverage forms / Livestock coverage form
    • Farm liability coverage forms
    • Farm liability coverage forms / Coverage H — Bodily injury and property damage liability
    • Farm liability coverage forms / Coverage I — Personal and advertising injury liability
    • Farm liability coverage forms / Coverage J — Medical payments
    • Cause of loss (basic, broad and special)
    • Exclusions
    • Other provisions
    • Other provisions / Additional coverages
    • Other provisions / Conditions
    • Other provisions / Definitions
    • Other provisions / Limits
  • Other Coverages and Options
    • Personal umbrella policy (DL 98 01)
    • National Flood Insurance Program
    • National Flood Insurance Program / "Write your own" versus government
    • National Flood Insurance Program / Eligibility
    • National Flood Insurance Program / Coverage
    • National Flood Insurance Program / Limits
    • National Flood Insurance Program / Deductibles
    • Other policies
    • Other policies / Boatowners

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