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PROPERTY AND CASUALTY EXAM
QUESTIONS & CORRECT ANSWERS | LATEST UPDATE
ALREADY GRADED A+
"Whats the penalty for not carrying the amount required in a coinsurance clause? - CORRECT
ANSWER you become a coinsurer and pay a portion of the loss"
"Consequential loss - CORRECT ANSWER a consequence of a direct loss eg. a store loses
business income after a fire."
"personnel loss - CORRECT ANSWER loss of an employee"
"endorsement - CORRECT ANSWER written agreement attached to a policy to add or subtract
insurance coverages"
"broad form of coverage for personal property of a condo owner - CORRECT ANSWER h06"
"physical hazard - CORRECT ANSWER disctinct characteristics arising from material,
structural, or operational features that increase a chance for loss ie being next to a nuclear power plant"
"vicarious liability - CORRECT ANSWER someone not directly involved but still held
responsible. an employer has vicarious liability for employees"
"symbol 4 - CORRECT ANSWER owned autos, other than private passenger vehicles"
"yacht is personal line but is structured like? - CORRECT ANSWER ocean marine"
"blanket insurance - CORRECT ANSWER used with large groups where the members change
frequently and are not individually names. eg schools, campgrounds, churches"
"group insurance - CORRECT ANSWER life or health insurance provided for large numbers of
people who have something in common, such as the same employer"
"broker - CORRECT ANSWER a person who represents the client in transaction: property and
casualty only"
"h02,46 - CORRECT ANSWER broad forms also dp2 and mobile home policies"
"replacement cost - CORRECT ANSWER the cost to replace without deduction for
depreciation. not what someone paid for it"
"liquor liability - CORRECT ANSWER need for a dram shot, liquor, or package store"
"inherent vice or defect - CORRECT ANSWER iron rusting, milk going sour, rubber breaking
down are all inherent vices"
"how is hitting an animal on the road covered? - CORRECT ANSWER other than collision otc"
"medicare supplement insurance - CORRECT ANSWER aka medical gap insurance. must
include core benefits"
"ordinance or law - CORRECT ANSWER an endorsement for building code upgrades"
"loss sustained/discovery forms under crime coverage - CORRECT ANSWER loss is for later
than the policy period. discovery is for before the policy (loss is later, discovery before)"
"designated brush fire or civil unrest areas - CORRECT ANSWER qualifying areas under the fair
plan"
"stop loss provision - CORRECT ANSWER used in health insurance to limit the maximum
amount of money the insured would have to pay out of pocket on a health claim in any particular claim"
"what is excluded under commercial general liability? - CORRECT ANSWER pollution-with the
exception of fuel spilled during normal operations. Pollution is normally covered under cpp or builders risk"
"what is the midi-tail on claims made? - CORRECT ANSWER provides 5 years coverage for
something reported during minitail"
"speculative risk - CORRECT ANSWER chance for loss or gain"
"commercial package - CORRECT ANSWER modular policy"
"Occupational disability income contract - CORRECT ANSWER a disability income policy that
will pay benefits whether on or off the job."
"Guaranteed renewable insurance contract - CORRECT ANSWER a life or health insurance
policy that cannot be changed except for the rate."
"does the fair plan cover vandalism and mischief - CORRECT ANSWER yes, during civil unrest
( riots) you will need it."
"Misc Vehicle - CORRECT ANSWER Motorcycle atvs (not autos, not mobile equiptment)"
"Open Peril - CORRECT ANSWER all perils except those specifically excluded."
"do corporations have absolute liability? - CORRECT ANSWER Yes"
"What is embezzlement? - CORRECT ANSWER employee dishonesty, which is not covered by a
crime policy unless an employee dishonesty form is attatched. (does not cover shortages of inventory)."
"Deductible - CORRECT ANSWER a specified amount of money that is paid by the insurer; pays
money on the claim."
"What has a single limit? - CORRECT ANSWER Property Damage"
"Substandard Risk - CORRECT ANSWER classification of risk that is more than the normal
acceptable risk"
"The fair plan - CORRECT ANSWER Distributes the risk among companies"
"Commercial Package - CORRECT ANSWER Common Conditions, Common Dec, and two or
more modules equal."
"What is not considered transacting? - CORRECT ANSWER establishing a list of clients"
"What has a seperate aggregate limit under commercial general liability? - CORRECT ANSWER
products completed"
"Section 2 on Homeowners Policy - CORRECT ANSWER Liability and medical payments. paid to
others only"
"selling price - CORRECT ANSWER market value"
"where are covered perils listed - CORRECT ANSWER Declarations page"
"Exclusions - CORRECT ANSWER things that arent covered"
"where are excluded perils listed? - CORRECT ANSWER exclusions are found in the cause of
loss form"
"Tort - CORRECT ANSWER a wrongful act other than breach of contract or a crime"
"Non-admitted Insurer - CORRECT ANSWER an insurer that is not licensed to business in a
particular state. (a surplus lines broker works with non-admitted carriers)" "number of days to notify an insurer to add collision to a new car replacing a a car that only had
liability? - CORRECT ANSWER 4 days"
"pure risk - CORRECT ANSWER chance of loss"
"any occupation - CORRECT ANSWER definition for being totally disabled in a disability income
policy. person cannot perform any occupation he/she is qualified"
"for what amount can a binder be written for? - CORRECT ANSWER 1 million dollars"
"Minimum limits for low cost auto insurance - CORRECT ANSWER 10/20/3"
"what are special damages for? - CORRECT ANSWER time away from work is special. going to
the doctor is special."
"starr - CORRECT ANSWER share, transfer, avoid, retain, reduce (ways to manage risk)"
"who needs professional liability insurance? - CORRECT ANSWER doctors, architects, lawyers,
and accountants"
"in a contract who is we? - CORRECT ANSWER the insurer"
"standard risk - CORRECT ANSWER classification of risk that is normal"
"risk - CORRECT ANSWER uncertainty of loss. a risk must be uncertain to be insurable"
"raising the deductible - CORRECT ANSWER lowers the premium because small claims are
eliminated"
"is a building under constructin vacant? - CORRECT ANSWER no"
"repair, replace, acv - CORRECT ANSWER the amount a company pays on a damaged or stolen
vehicle whatever is less"
"insurable interest - CORRECT ANSWER financial interest"
"minimum good driver discount - CORRECT ANSWER 20%"
"a vehicle for hire, to transport people eg limo - CORRECT ANSWER livery"
"dwelling or homeowners which has broader coverage? - CORRECT ANSWER homeowners"
"acv - CORRECT ANSWER replacement cost-depreciation"
"pays excess liability amounts - CORRECT ANSWER umbrella after underlying policy or
retention is paid. liability only; does not cover property"
"lowering the deductible - CORRECT ANSWER raises premium bcs small claims are covered"
"morbidity table - CORRECT ANSWER a table that shows the average number of sickeness's or
accidents at various ages"
"experience rating - CORRECT ANSWER method used to determine rate based on insureds
loss experience"
"is an object falling from an airplane covered? - CORRECT ANSWER under extended
coverages"
"will the cost of sandbaggin a home be covered? - CORRECT ANSWER yes the insured does not
have to bear the cost" “the one basic characteristic of any type of insurance is that the insured is returned to the same
status that existed prior to the loss, but without a chance for gain or profit - CORRECT
ANSWER true"
"which of the following coverages does an open peril policy provide? - CORRECT ANSWER
perils other than those specifically named as being excluded" "determine the actual cash value in the following situation: original price of office equiptment when purchased 8 years ago- 9,000. depreciated amount at time of fire-5,000 current
replacement cost 12,000 - CORRECT ANSWER 7,000"
"shortages of inventory - CORRECT ANSWER under crime insurance the employee dishonesty
endorsement never covers"
"can the mortgagee still collect if the insured burns their house down - CORRECT ANSWER yes,
the mortgage clause is a standard provision"
"otc covers - CORRECT ANSWER earthquake, flood, hail, theft, hitting an animal, gunshots (no
collision or upset)"
"law of large numbers - CORRECT ANSWER the greater the number of insured the more
accurately the prediction"
"where does a driver have coverage? - CORRECT ANSWER U.S. Canada and US possessions eg
puerto rico, guam"
"Personal property - CORRECT ANSWER property that can move eg furniture, clothes,
paintings, etc"
"why is yacht like ocean marine, even though yacht is a personal line? - CORRECT ANSWER the
structure of the policy is the same; hull covers damage to the vessel. P and C covers liability and workers comp. A yacht policy can be used for organized racing while ocean marine cannot."
"boat coverage is strucured like? - CORRECT ANSWER Auto insurance"
"NFIP (flood insurance) is only found where? - CORRECT ANSWER participating communities,
areas designated on a flood map"
"where does the insurer make promises? - CORRECT ANSWER insuring clause. aka insuring
agreement"
"which NFIP coverage pays more to the insured, the standard or emergency? - CORRECT
ANSWER Standard"
"would otc cover a laptop or briefcase stolen from my car? - CORRECT ANSWER personal
property is usually not covered"
"disability income insurance - CORRECT ANSWER type of health insurance that pays a monthly
income to the insured if he/she is sick or injured and cannot work. Pays partial portion"
"cargo insurance covers - CORRECT ANSWER merchandise being shipped"
"what is the mini-tail on claims made commercial general liability? - CORRECT ANSWER
automatically gives 60 days to report a claim after the policy period"
"a,b,c of commecial liability cgl are: - CORRECT ANSWER a-bodily injury and property damage,
b-personal and advertising injury, c-medical payments"
"underwriter - CORRECT ANSWER a person whos job it is to assess risk and determine
classification of the insured. (an agent is a field underwriter)"
"noncontributory benefits - CORRECT ANSWER a life or health insurance plan that an
employer provides for employees in which the employee does not pay any part of the premium"
