Arkansas Property & Casualty Practice Exam Questions

and Answers (with verified solutions) 2023

Arkansas Property & Casualty Practice Exam Questions

and Answers (with verified solutions) 2023

A primary obligation of an insurance company is to: - correct answer ✅Pay

the claims covered under the policy.

Which of the following is not a reaction to risk? - correct answer

✅Accumulating Risk.

Which of the following describes a hazard? - correct answer ✅An increase

in the possibility that a loss may occur.

Which of the following best meets the test of the "Principle of Indemnity"? -

correct answer ✅Requiring the policyholder to carry insurance to value.

The principle of indemnity is designed to avoid: - correct answer

✅Overpayment of a claim

Which of the following losses would not be covered on an "all-risk" crop

insurance policy? - correct answer ✅Flood

Arkansas Property & Casualty Practice Exam Questions

and Answers (with verified solutions) 2023

The Fair Plan offers what kind of coverage for individuals and businesses in

high hazard areas? - correct answer ✅Crime Insurance

An agent who collects premiums and converts those premiums to his own

personal use is guilty of: - correct answer ✅Embezzlement

Which of the following terms describes what is subtracted from a claim

payment to the insured? - correct answer ✅Deductible

Oral discussion prior to the development of a written contract can not be

used to extend the terms of the final document. This because of the: -

correct answer ✅Parol Evidence rule

To be licensed by more than one insurance company: - correct answer ✅The

agent must be appointed by each company.

The basic difference between the DP-1 and the DP-3 is: - correct answer

✅The covered perils

Arkansas Property & Casualty Practice Exam Questions

and Answers (with verified solutions) 2023

Which of the following has the unlimited right to cancel an insurance policy?

- correct answer ✅The client

The main difference between a claims made liability coverage and an

occurence for liability coverage is: - correct answer ✅The trigger

What is used to change an insurance policy from its original wording? -

correct answer ✅Endorsement

An insured hires someone to burn his home. The insurance company can

prove this fact. All of the following are true except: - correct answer ✅A

claim by the mortgagee can be denied.

A certificate of authority is not required for transacting: - correct answer

✅Surplus Lines Insurance

An umbrella liability policy has a form of deductible called: - correct answer

✅Retained Limit