Property & Casualty Insurance Exam Questions and Correct

Answers (Verified by Expert)

Property & Casualty Insurance Exam Questions and Correct

Answers (Verified by Expert)

In which of the following situations would off-premises coverage in a broad theft

endorsement of the insured's dwelling policy apply?

A) The insured's camera is stolen from his suitcase while he is on vacation

B) The insured's live-in maid's quarters are burglarized

C) The insured's china set is stolen from her home while she's traveling on business

D) The insured's vacuum cleaner is stolen from her apartment ✔✔ A) The insured's

camera is stolen from his suitcase while he is on vacation

In insurance contracts, when does acceptance usually occur? ✔✔ When the insurer

approves a prepaid application

What does the term reasonable expectations mean in insurance? ✔✔ Certain

expectations for coverage that a reasonable person would have based on sources other

than just the policy language

In forming an insurance contract, when does acceptance usually occur? ✔✔ When an

insurer's underwriter approves coverage

Subrogation ✔✔ The right of the insurer to seek out damages from a third party after it

has paid out for a loss

In property insurance, what is actual cash value? ✔✔ Replacement cost at the time of

loss, minus depreciation

A policy that covers all causes of loss except for those specifically excluded is known as

what type of policy? ✔✔ Open peril (or special) form

What sublimit in a liability policy puts a ceiling on the payment for all claims that arise

from a single accident? ✔✔ per occurrence

Which part of an insurance policy covers claims-related expenses, reasonable

expenses incurred by an insured to protect damaged property from further loss, or

defense expenses? ✔✔ Additional coverage

Duties of the insurer found in property policy conditions do not include what? ✔✔ Notify

the insured in the event of financial difficulty

According to the standard mortgage clause, who has the right to bring a suit in their own

name to recover damages, pay policy premiums, and submit a proof of loss? ✔✔

Mortgagee

What type of information would be found in a policy's insuring agreement?

A) Insurer's address

B) Renewal dates

C) Location of premises

D) Policy limits ✔✔ B) Renewal dates

The insuring agreement lists the parties to the contract, effective and renewal dates, the

description of coverage provided, and perils.

Location of premises, policy limits, supplemental representations, and insurer's name

and address can all be found in the Declarations

All of the following are conditions commonly found in the insurance policy EXCEPT

A) Subrogation

B) Appraisal

C) Insuring agreement

D) Cancellation and nonrenewal ✔✔ C) Insuring agreement

With regard to fire insurance premiums, structures with which type of construction would

most likely have a the most favorable premium rate for the peril of fire? ✔✔ Fireresistive

Which of the following is a mandatory part of an insurance policy that varies with each

individual policy?

A) Exclusions

B) Insuring agreement

C) Declarations

D) Conditions ✔✔ C) Declarations