Download Property and Casualty Insurance Exam Q&A and more Exams Insurance law in PDF only on Docsity!
Property and Casualty Exam Questions
and Answers Rated A
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 ✔✔true
which of the following coverages does an open peril policy provide? ✔✔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 ✔✔7,
liquor liability ✔✔need for a dram shot, liquor, or package store
inherent vice or defect ✔✔iron rusting, milk going sour, rubber breaking down are all inherent vices
how is hitting an animal on the road covered? ✔✔other than collision otc
medicare supplement insurance ✔✔aka medical gap insurance. must include core benefits
ordinance or law ✔✔an endorsement for building code upgrades
loss sustained/discovery forms under crime coverage ✔✔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 ✔✔qualifying areas under the fair plan
stop loss provision ✔✔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
shortages of inventory ✔✔under crime insurance the employee dishonesty endorsement never covers
can the mortgagee still collect if the insured burns their house down ✔✔yes, the mortgage clause is a standard provision
otc covers ✔✔earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)
law of large numbers ✔✔the greater the number of insured the more accurately the prediction
where does a driver have coverage? ✔✔U.S. Canada and US possessions eg puerto rico, guam
gap insurance ✔✔pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease
eligibility/enrollment period ✔✔used in life and health group benefits without having to prove insurability
symbol 9 ✔✔non-owned autos
the lender on a home is called ✔✔mortgagee or mortgage holder
multiple employer trust ✔✔a legal entity of small biz owners grouped together to buy insurance
what percentage must vacant for a building to be called vacant? ✔✔70%
size limits for business owners policy ✔✔6 stories, 100,000 sq feet on offices, 25,000 sq feet and 3 million dollars gross sales for mercantile space (store)
Dp-1 covers ✔✔fire, lightning, and internal explosion
dp1, 2, 3 all dwelling forms cover? ✔✔loss of rental income
third party ✔✔the injured party. to whom liability insurance pays claims
Personal property ✔✔property that can move eg furniture, clothes, paintings, etc
why is yacht like ocean marine, even though yacht is a personal line? ✔✔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.
Medical Payments in boat owners insurance covers? ✔✔covers medical payments and injury for insured and others on a personal boat. does not cover business use or competitive racing.
Protection and Indemnity on Ocean Marine or Yacht ✔✔Liability and workers comp. portion of ocean marine or yacht policies.
code section 770 ✔✔when buying property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker
part of protection and indemnity ✔✔worker compensation in a yacht policy
elimination period ✔✔used in disability income health insurance. that time period benefits are not paid. also called the waiting period
do corporations have absolute liability? ✔✔Yes
What is embezzlement? ✔✔employee dishonesty, which is not covered by a crime policy unless an employee dishonesty form is attatched. (does not cover shortages of inventory).
Deductible ✔✔a specified amount of money that is paid by the insurer; pays money on the claim.
What has a single limit? ✔✔Property Damage
Substandard Risk ✔✔classification of risk that is more than the normal acceptable risk
The fair plan ✔✔Distributes the risk among companies
Commercial Package ✔✔Common Conditions, Common Dec, and two or more modules equal.
What is not considered transacting? ✔✔establishing a list of clients
What has a seperate aggregate limit under commercial general liability? ✔✔products completed
Full tail optional or exteneded coverage on claims made commecial general liability ✔✔unlimited duration for reporting costs extra
Comparative Negligence ✔✔You can file a claim, but damages are reduced based on that party's negligence
Contributory Negligence ✔✔a person cannot file or collect if he/she is at all negligent
Indemnify ✔✔to restore one to there previous financial condition that existed prior to the loss
Mexican Liability Endorsement ✔✔Excess liability for accidents within 25 miles of the U.S. Border (trips of 10 days or less)
Section 2 on Homeowners Policy ✔✔Liability and medical payments. paid to others only
selling price ✔✔market value
where are covered perils listed ✔✔Declarations page
Exclusions ✔✔things that arent covered
where are excluded perils listed? ✔✔exclusions are found in the cause of loss form
pure risk ✔✔chance of loss
any occupation ✔✔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? ✔✔1 million dollars
Minimum limits for low cost auto insurance ✔✔10/20/
what are special damages for? ✔✔time away from work is special. going to the doctor is special.
starr ✔✔share, transfer, avoid, retain, reduce (ways to manage risk)
who needs professional liability insurance? ✔✔doctors, architects, lawyers, and accountants
purpose of insurance ✔✔to transfer the risk
retroactive date ✔✔the first date an occurrence would be covered under a claim made commercial general liability policy
parking lots, dealerships, and repair garages need ✔✔garagekeepers
subrogate ✔✔the insured transfers the right to sue to the insurance company
how much coverage does a dwelling policy give for personal property away from the premises? ✔✔10%
Collision ✔✔colliding with another car, an object or upset (rolling)
peril is ✔✔the cause of loss
pure risk ✔✔the insured only has a chance of loss, never gain
dp1 ho 1 and ho 8 ✔✔basic
in a contract "you" indicates ✔✔the insured
would otc cover a laptop or briefcase stolen from my car? ✔✔personal property is usually not covered
disability income insurance ✔✔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
a, b, and c in a homeowners policy are? ✔✔a=dwelling, b=other structures, c=personal property
in a contract who is we? ✔✔the insurer
standard risk ✔✔classification of risk that is normal
risk ✔✔uncertainty of loss. a risk must be uncertain to be insurable
raising the deductible ✔✔lowers the premium because small claims are eliminated
is a building under constructin vacant? ✔✔no
repair, replace, acv ✔✔the amount a company pays on a damaged or stolen vehicle whatever is less
insurable interest ✔✔financial interest
a,b,c of commecial liability cgl are: ✔✔a-bodily injury and property damage, b-personal and advertising injury, c-medical payments
underwriter ✔✔a person whos job it is to assess risk and determine classification of the insured. (an agent is a field underwriter)
noncontributory benefits ✔✔a life or health insurance plan that an employer provides for employees in which the employee does not pay any part of the premium
minimum good driver discount ✔✔20%
a vehicle for hire, to transport people eg limo ✔✔livery
dwelling or homeowners which has broader coverage? ✔✔homeowners
acv ✔✔replacement cost-depreciation
pays excess liability amounts ✔✔umbrella after underlying policy or retention is paid. liability only; does not cover property
lowering the deductible ✔✔raises premium bcs small claims are covered
morbidity table ✔✔a table that shows the average number of sickeness's or accidents at various ages
experience rating ✔✔method used to determine rate based on insureds loss experience
will the cost of sandbaggin a home be covered? ✔✔yes the insured does not have to bear the cost
