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VU Quiz Results: Because You Want to Know


Author: Chris Boggs

Two weeks ago, we invited our readers to take part in the VU's first ever survey/quiz. Nearly 250 of our readers took part. Although we have published quizzes before, but we have never compiled and reported the results – until now.

Before we reveal the results, let's review the questions and answers. We have provided an explanation of the correct answer in case you didn't choose the correct answer. 

1.  Which of the following is not a specific exclusion in Coverage A of the commercial general liability (CGL) policy?

  • Liquor liability
  • Pollution
  • Intentional acts
  • War​

Correct answer: C. Intentional acts – There is no “intentional acts" exclusion in the CGL (and there never has been). Exclusion “a." is the Expected or Intended Injury Exclusion, but it does not exclude an intentional ACT unless the act is Expected or Intended to cause an injury. Exclusion “c." is Liquor Liability; exclusion “f." is Pollution; and exclusion “i." is War.

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2. The unendorsed BAC
does not extend liability protection to employees using their personal autos on company business. The named insured (the “You") is covered but the employee is not. Can this exclusion be remedied to extend protection to the employee?

  • No. This is an absolute exclusion because the employee's personal auto policy is intended to cover such an exposure
  • Attachment of the Drive Other Car endorsement
  • Attachment of the Employees as Insureds endorsement
  • Attachment of the Employee Hired Autos endorsement

Correct answer: C. Attachment of the Employees as Insureds endorsement. Drive Other Car coverage (CA 99 10) is generally attached when the insured driver does not have any personally-owned autos and/or a separate personal auto policy (PAP). The Employee Hired Auto endorsement (CA 20 54) is attached to extend protection when an employee rents a car in his/her personal name for company business.

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3. In the commercial property policy, the deductible is:

  • Subtracted from the amount of the loss, even if the amount of the loss exceeds the limit of coverage.
  • Subtracted from the amount of the loss up to the limit of coverage; then subtracted from the limit of coverage.
  • Subtracted only when the loss exceeds $10,000.
  • Subtracted only when the coinsurance condition applies.

Correct answer: A. Subtracted from the amount of the loss, even if the amount of the loss exceeds the limit of coverage. The Building and Personal Property Coverage form (CP 00 10) reads:

D. Deductible

In any one occurrence of loss or damage (hereinafter referred to as loss), we will first reduce the amount of loss if required by the Coinsurance Condition or the Agreed Value Optional Coverage. If the adjusted amount of loss is less than or equal to the Deductible, we will not pay for that loss. If the adjusted amount of loss exceeds the Deductible, we will then subtract the Deductible from the adjusted amount of loss and will pay the resulting amount or the Limit of Insurance, whichever is less.

As per the highlighted wording, the deductible is subtracted from the amount of loss and the carrier will pay that amount OR the limit of coverage – whichever is less. The deductible is subtracted from the total loss, not the limit is coverage.

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4. Which coverage form can the tenant use to insure against the financial consequences resulting from the loss of a favorable lease following a major property loss? 

  • Loss of Rents Coverage Form
  • Increased Operational Expense Coverage Form
  • Leasehold Interest Coverage Form
  • Loss of Lease Coverage

Correct answer: C. Leasehold Interest Coverage Form. None of the other listed forms exist in the ISO world.

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5. Your insured owns a home with a replacement cost value of $200,000. Next to the dwelling is a detached 2 story, 3-car garage with a replacement cost value of $75,000. To ensure that the detached garage is fully covered should a loss occur, your insured… 

  • Doesn't need to do anything because the Homeowners policy extends the necessary coverage to other structures
  • Must purchase a separate policy specifically for the detached garage
  • Must endorse the Homeowners policy to increase the amount of coverage extended from the standard Homeowners policy
  • Can't do anything

Correct answer: C. Must endorse the Homeowners policy to increase the amount of coverage extended from the standard Homeowners policy – Remember, Coverage B (Other Structures) is limited to 10% of Coverage A. If the value of other structures is greater than this limit, the policy must be endorsed using the HO 04 48. In the question, the insured has only $20,000 available for the detached garage if no endorsement is attached. 

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6. A Personal Auto Policy can be written in all of the following situations except: 

  • The named insured does NOT own an automobile
  • Non-resident relatives jointly own a vehicle
  • The personal auto is owned by a trust where the grantor is a husband and wife
  • Unrelated, non-resident individuals who jointly own a vehicle

Correct answer: D. Non-resident individuals who are not related jointly own a vehicle – Unrelated, non-resident individuals cannot both be named on the same personal auto policy according to ISO rules. The PAP can be written to cover: 1) PPAs owned individually or jointly by a husband and wife who are residents of the same household; 2) PPAs owned jointly by two or more individuals other than a husband and wife if they are residents of the same household or non-resident relatives (limitation found in the Joint Ownership (PP 03 34 or state-specific) endorsement); 3) Motorcycles, motor homes, golf carts, snowmobiles using the Miscellaneous Type Vehicles Endorsement; 4) Named individuals who do not own a vehicle (the Named Non-Owner endorsement is used); and 5) PPAs, motorcycles, motor homes, golf carts, snowmobiles owned by a trust where the grantor is an individual or a husband and wife.

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7. Experience modification factors (x-mods, experience mods, etc.) are calculated to allow for differentiation among the insureds within a specific class code. Essentially, experience mods allow for the customization of the insured's rate based on loss experience. Medical only claims (IJ code 6) may be reduced by 70%, lessening the effect of these claims on the final experience mod, in states that apply the “ERA" rule. What does “ERA" mean? 

  • Earned Run Average
  • Equal Rights Amendment
  • Experience Rating Adjustment
  • Expense Rate Alteration

Correct answer: C. Experience Rating Adjustment – A majority of states apply the ERA to medical only claims. The only states NOT applying ERA are: California, Colorado, Delaware, Massachusetts, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Texas, Washington, and Wyoming. The remaining states apply ERA to the experience mod calculation.

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8. Workers' compensation premiums are most commonly based on payroll (remuneration). Which of the following is not included as auditable remuneration? 

  • Wages/salaries
  • Tips and other gratuities
  • Commissions
  • Pay for time not worked

Correct answer: B. Tips and other gratuities – NCCI specifically excludes from auditable remuneration: 1) Tips and other gratuities; 2) Payments by the employer to group insurance or pension plans; 3) Special rewards for individual invention or discovery; 4) Severance pay; 5) Pay for those on active military duty; 6) Employee discounts; 7) Expense reimbursements – unless they cannot be substantiated; 8) Money for meals for overtime work; 9) Work uniform allowance; 10) Sick pay made by a third party (i.e.: Aflac); and 11) Employer-provided perks (i.e.: company car; incentive vacations; memberships).

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Participant Statistics

With the correct answers in mind, let's move on to the results. But before revealing how our quiz takers did, let's take a look at a couple pieces of data about our 249 respondents.

Age Ranges:

18 – 22 (Gen Z):                                            None participated
23 – 38 (Millennial Generation):               4.4 percent
39 – 54 (Gen X):                                           22.1 percent
55 – 73 (Baby Boomers):                            65.1 percent
74+ (Silent Generation):                             8.4 percent

Number of Years Insurance Experience:

0 – 5:                   4 percent           
6 – 10:                 2 percent
11 – 15:               4 percent
16 – 20:               6 percent
21 – 30:               19 percent
31 – 40:               33 percent
41 – 50:               25 percent
50+:                     7 percent

Average years of experience of our respondents is 34 years. Our longest serving respondent has 64 years insurance experience. Wow! That is awesome!!

The Results

Now, the results you have been waiting for. How well did the group fare on the quiz questions? Well, you don't have to wonder any longer.

Question 1: Which of the following is not a specific exclusion in Coverage A of the commercial general liability (CGL) policy? (C. Intentional Acts

  • Overall Results: 22.5 percent got the question correct
    • Millennials:                      18 percent correct
    • Gen X:                                16 percent correct
    • Baby Boomers:                26 percent correct
    • Silent Generation:          14 percent correct
  • The most common answer given: Liquor Liability (43%)


Question 2
: The unendorsed BAC does not extend liability protection to employees using their personal autos on company business. The named insured (the “You") is covered but the employee is not. Can this exclusion be remedied to extend protection to the employee? (C. Attachment of the Employees as Insureds endorsement) 

  • Overall Results: 65.5 percent got the question correct
    • Millennials:                      45 percent correct
    • Gen X:                                69 percent correct
    • Baby Boomers:                68 percent correct
    • Silent Generation:          43 percent correct


Question 3: In the commercial property policy, the deductible is: (A. Subtracted from the amount of the loss, even if the amount of the loss exceeds the limit of coverage) 

  • Overall Results: 64 percent got the question correct
    • Millennials:                      55 percent correct
    • Gen X:                                58 percent correct
    • Baby Boomers:                65 percent correct
    • Silent Generation:          76 percent correct


Question 4
: Which coverage form can the tenant use to insure against the financial consequences resulting from the loss of a favorable lease following a major property loss? (C. Leasehold Interest Coverage Form) 

  • Overall Results: 61.4 percent got the question correct
    • Millennials:                      55 percent correct
    • Gen X:                                60 percent correct
    • Baby Boomers:                62 percent correct
    • Silent Generation:          62 percent correct


Question 5
: Your insured owns a home with a replacement cost value of $200,000. Next to the dwelling is a detached 2 story, 3-car garage with a replacement cost value of $75,000. To ensure that the detached garage is fully covered should a loss occur, your insured…(C. Must endorse the Homeowners policy to increase the amount of coverage extended from the standard Homeowners policy) 

  • Overall Results: 95 percent got the question correct
    • Millennials:                      82 percent correct
    • Gen X:                                95 percent correct
    • Baby Boomers:                96 percent correct
    • Silent Generation:          95 percent correct


Question 6
: A Personal Auto Policy can be written in all of the following situations except: (D. Unrelated, non-resident individuals who jointly own a vehicle) 

  • Overall Results: 57 percent got the question correct
    • Millennials:                      64 percent correct
    • Gen X:                                53 percent correct
    • Baby Boomers:                56 percent correct
    • Silent Generation:          71 percent correct


Question 7
: Experience modification factors (x-mods, experience mods, etc.) are calculated to allow for differentiation among the insureds within a specific class code. Essentially, experience mods allow for the customization of the insured's rate based on loss experience. Medical only claims (IJ code 6) may be reduced by 70%, lessening the effect of these claims on the final experience mod, in states that apply the “ERA" rule. What does “ERA" mean? (C. Experience Rating Adjustment) 

  • Overall Results: 95 percent got the question correct
    • Millennials:                      91 percent correct
    • Gen X:                                93 percent correct
    • Baby Boomers:                96 percent correct
    • Silent Generation:          95 percent correct


Question 8
: Workers' compensation premiums are most commonly based on payroll (remuneration). Which of the following is not included as auditable remuneration? (B. Tips and other gratuities) 

  • Overall Results: 35 percent got the question correct
    • Millennials:                      82 percent correct
    • Gen X:                                42 percent correct
    • Baby Boomers:                33 percent correct
    • Silent Generation:          14 percent correct
  • The most common answer given: Pay for time not worked (58%). An example of pay for time not worked includes getting paid for an eight hour day even if the person only works seven hours per day.

Last Updated:  April 12, 2019

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