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Property and Casualty Insurance Mastery Exam A: 125 Correct Solutions, Exams of Insurance law

A series of questions and answers related to property and casualty insurance, covering various aspects of the field. It provides insights into key concepts, principles, and practices within the insurance industry, offering a valuable resource for students and professionals seeking to understand the fundamentals of property and casualty insurance.

Typology: Exams

2024/2025

Available from 03/03/2025

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Property and Casualty Insurance
Mastery Exam A 125 correct solutions.
Property and Casualty Insurance
Mastery Exam A 125 correct solutions.
An insured rents a car while on vacation in Canada and causes an accident. Is there coverage under his
personal auto policy? - ANSWER The loss is covered under an unendorsed personal auto policy.
Under the workers' compensation laws, which of the following would NOT be covered? - ANSWER
Heart-related illness resulting from hereditary causes
An insurance policy covers fire, will not cover nuclear contamination, and loss must be reported as soon
as possible. In this order, where are these facts found in the policy? - ANSWER Insuring agreement,
exclusions, and conditions
Which of the following principles holds that a person should not profit by collecting on insurance? -
ANSWER Principle of indemnity
Which of the following is NOT a benefit of workers' compensation insurance? - ANSWER Pain and
suffering
The building and personal property form covers all the following EXCEPT - ANSWER highway billboards
The personal auto policy's comprehensive physical damage coverage covers all of the following EXC -
ANSWER freezing
Who is responsible for controlling the content, form, and distribution of insurance policy
advertisements? - ANSWER The insurer
An automobile policy may be canceled for any of the following reasons EXCEPT - ANSWER being involved
in a hit-and-run accident for which the insured was not at fault
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Download Property and Casualty Insurance Mastery Exam A: 125 Correct Solutions and more Exams Insurance law in PDF only on Docsity!

Mastery Exam A 125 correct solutions.

Property and Casualty Insurance

Mastery Exam A 125 correct solutions.

An insured rents a car while on vacation in Canada and causes an accident. Is there coverage under his personal auto policy? - ANSWER The loss is covered under an unendorsed personal auto policy.

Under the workers' compensation laws, which of the following would NOT be covered? - ANSWER Heart-related illness resulting from hereditary causes

An insurance policy covers fire, will not cover nuclear contamination, and loss must be reported as soon as possible. In this order, where are these facts found in the policy? - ANSWER Insuring agreement, exclusions, and conditions

Which of the following principles holds that a person should not profit by collecting on insurance? - ANSWER Principle of indemnity

Which of the following is NOT a benefit of workers' compensation insurance? - ANSWER Pain and suffering

The building and personal property form covers all the following EXCEPT - ANSWER highway billboards

The personal auto policy's comprehensive physical damage coverage covers all of the following EXC - ANSWER freezing

Who is responsible for controlling the content, form, and distribution of insurance policy advertisements? - ANSWER The insurer

An automobile policy may be canceled for any of the following reasons EXCEPT - ANSWER being involved in a hit-and-run accident for which the insured was not at fault

Mastery Exam A 125 correct solutions.

The Terrorism Risk Insurance Act provides federal compensation for insured losses resulting from acts of terrorism. All of the following would qualify as acts of terrorism EXCEPT - ANSWER acts causing property damage and loss of life in foreign countries

Which of the following is NOT a commercial general liability exposure? - ANSWER Owned investment portfolio

Open peril coverage for both the dwelling and personal property is provided by the - ANSWER HO-

All of the following would be covered property by the CPP building and personal property form EXCEPT - ANSWER bailee property

An agent license is renewed by paying the applicable renewal fee and completing - ANSWER continuing education

In an insurance transaction, who does a licensed agent legally represent? - ANSWER Insurer

The listing of the perils covered under a policy is found in - ANSWER the insuring agreement

If a loss paid by a workers' compensation policy was caused by a negligent third party, the insurer retains the right to - ANSWER subrogate

The term unoccupied means - ANSWER the insured has gone on vacation

States give an insurer permission to transact insurance with a certificate of - ANSWER authority

Which of the following situations would most likely be covered by a commercial general liability (CGL) policy? - ANSWER A surfboard falls off a shelf and injures a shopper.

Which of the following is inland marine insurance? - ANSWER Commercial property floaters

Mastery Exam A 125 correct solutions.

The insured's property insurance policy has a deductible clause. This means tha - ANSWER the insured must pay a certain amount for each loss incurred under the policy

A piece of jewelry valued at $10,000 is stolen from the insured while at the mall. How much will an HO- policy pay for this loss? - ANSWER $1,

All of the following may be included in a commercial package policy (CPP) EXCEPT - ANSWER workers compensation

Why is a businessowners policy called a package policy? - ANSWER Insures property and negligence

The conditions section of an insurance policy - ANSWER describes the duties of the insured and insurance company

The insurance company that Alan represents has just been placed into rehabilitation, but Alan continues to tell his clients the company is "financially strong" and he uses an outdated financial rating to back up his claim. What unfair trade practice has Alan committed? - ANSWER False Financial Statements

Guaranty associations have been created for the purpose of - ANSWER protecting insureds in the event of a member insurance company's insolvency

The insured has run a red light and hits another car causing injury to the driver and damage to the car. The insured has what type of liability? - ANSWER Direct

All of the following are excluded from the liability portion of commercial auto coverage EXCEPT - ANSWER all expenses incurred by the insurer

Auto liability limits expressed as 25/50/15 mean the policy will cover - ANSWER $25,000 per person for bodily injury/$50,000 per accident for bodily injury/$15,000 per accident for property damage

Mastery Exam A 125 correct solutions.

If the insured has a policy that covers liability, where in the policy do you find the insurers duty to defend the insure - ANSWER Insuring agreement

Under the Valued Policy Law, the claim is payable - ANSWER at limits of liability

An HO-3 would cover loss from - ANSWER smoke

An errors and omissions policy could be issued to cover the following occupations EXCEPT - ANSWER veterinarians

A policy used to insure separate pieces of jewelry is called a - ANSWER personal articles floater

Which of the elements of a legal contract does an insurance premium represent? - ANSWER Consideration

Which of the following is NOT an example of insurable interest? - ANSWER A person's interest in property she anticipates her uncle will leave to her in his will

A business income policy covers all of the following EXCEPT - ANSWER non-continuing expenses

The business auto policy (BAP) uses symbols to denote the vehicles to which each of the policy's coverages applies. Which of these symbols allows coverage of all vehicles: owned, nonowned, and hired? - ANSWER Symbol 1

Using simple, layman's language while discussing insurance concepts, refraining from making inaccurate remarks about other agents or insurers, and placing customer interests above one's own are all examples of an agent's - ANSWER ethical conduct

Who are the 3 parties to a surety bond? - ANSWER Principal, obligee, and surety

Mastery Exam A 125 correct solutions.

Offering to split commissions with a new customer is an example of - ANSWER rebating

A person may NOT act as a producer/agent unless - ANSWER licensed by the Department of Insurance

When would misrepresentations in an application be a basis for denying a claim? - ANSWER Only if they were fraudulent

The State Guaranty Fund was established to protect all of the following EXCEPT - ANSWER insurance companies

Which part of the insurance contract specifies the risks the policy will not cover? - ANSWER Exclusions.

Which of the following terms describes an insurance company that has been organized outside the United States or its possessions? - ANSWER Alien

Which of the following could be eligible for a businessowners policy? - ANSWER Rest Easy Bed & Breakfast

What is the purpose of the conditions section of an insurance policy? - ANSWER List the obligations of the insured and the insurance company

All of the following are duties of the insured following a loss EXCEPT - ANSWER separate damaged from undamaged property

Which of the following statements is TRUE regarding policy cancellation? - ANSWER An insured can cancel a policy at any time.

Who may place insurance risks with unauthorized insurers? - ANSWER Surplus lines agents/brokers

Mastery Exam A 125 correct solutions.

The only newspaper in Clarksville was severely damaged by a tornado. The paper must be printed for several weeks at another printing facility in a distant town. Under which insurance coverage would that loss be covered? - ANSWER Extra expense

All of the following are basic parts of an insurance policy EXCEPT - ANSWER endorsements

Which of the following policy provisions allows the insured to immediately benefit from any changes to coverage made during the policy period that would broaden coverage? - ANSWER Liberalization

Which of the following is used to determine the disputed value of covered property? - ANSWER Appraisal

Which of the following property policy forms should be used when it is difficult to provide the insurance company with an accurate statement of values because of fluctuations in inventory from month to month? - ANSWER Reporting form

What is the meaning of actual cash value (ACV)? - ANSWER Replacement cost, minus depreciation

Which part of the insurance contract contains information about the effective date of coverage, deductible, premium, and location of the insured property? - ANSWER Declarations page

Lisa has a commercial general liability (CGL) policy for her bakery. She moves the bakery to a new location in another part of town. Which of the following statements about coverage at the new location is CORRECT? - ANSWER Coverage is automatic until the end of the policy term.

Ralph owns an antique pen and pencil set that is insured under a personal articles floater. The value of the set is $30,000. After the loss of the pen, the pencil is valued at $20,000. The insurance company will pay the maximum amount of - ANSWER $10,

In property insurance, an insurable interest - ANSWER must be present at the time the policy is written and also at the time of loss

Mastery Exam A 125 correct solutions.

The FAIR Plan was brought into being for all of the following purposes EXCEPT - ANSWER to cover dwellings that are in poor condition

The garage policy covers all of the following EXCEPT - ANSWER the insured's medical bills

After how many days is the insured penalized for a building being vacant at the time of loss? - ANSWER 60 days

Flood insurance covers all of the following EXCEPT - ANSWER underground leakage of pipes

Which of the following coverages is included in the homeowners policy but is not included in an unendorsed dwelling policy? - ANSWER Liability

Shoplifting would be classified under crime insurance as - ANSWER theft

Which of the following individuals is likely to have a valid workers' compensation claim? - ANSWER Employee injured while performing an operation for which he had not yet been trained

Monica owns a $150,000 home. She carries 2 insurance policies on it: Company A insures $100,000 and Company B insures $50,000. If she suffers a $9,000 covered loss to her home, how much will Company A pay under the policy? - ANSWER $6,

Which of the following would be considered special damages? - ANSWER Medical expenses

All of the following are elements of negligence EXCEPT - ANSWER must be intentional

The insured has an auto policy with liability limits of $30,000/$60,000/$10,000. He negligently runs off the road and causes $70,000 damage to an apartment building. How much will the policy pay? - ANSWER $10,

Mastery Exam A 125 correct solutions.

Which part of the dwelling property policy would cover lost rental revenue if the dwelling was being used as a rental property? - ANSWER Coverage D

The law of large numbers states that - ANSWER the larger the number of individual risks combined into one group, the more accurate the prediction of the amount of loss in any given period

The commercial package policy excludes - ANSWER ocean marine coverage

At all times, agents must uphold their fiduciary duty. The best example of this is - ANSWER promptly submitting an insured's premium to the home office

Which of the following is NOT considered an "occurrence" for insurance purposes? - ANSWER Wear and tear on an industrial machine

Replacement cost coverage on the dwelling forms may be written for - ANSWER Coverages A and B only

Under the Valued Policy Law, the claim is payable - ANSWER at full limit of liability

All of the following perils are covered under the Basic Commercial Property Causes of Loss form EXCEPT

  • ANSWER falling objects

Answers to questions by the insured on applications are called? - ANSWER Representations

Homeowners policies exclude losses from all of the following EXCEPT - ANSWER negligence

Which of the following commercial general liability (CGL) coverages would protect a policyholder for assumed liability under a construction contract to install water lines for a city? - ANSWER Contractual liability