Property and casualty insurance Exam
Questions and Answers Part one
Updated.
Which of the following are the authorities that an agent can hold? - Answer Express and
implied
Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight?
- Answer Permanent partial disability
Who is NOT considered an employee in an commercial general liability (CGL) policy? - Answer
Temporary worker
The major portion of the premium of an equipment breakdown policy pays? - Answer For
inspections and examinations
An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision
of his insurance policy, how , much should he insure the property for? - Answer 80% of the
property's replacement cost or more
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
contained in his or her report, the reporting agency must - Answer Respond to the
consumer's complaint.
All of the following are found in the declarations section of a policy EXCEPT the - Answer
Exclusions.
The cost of restoring farm records is an additional coverage offered under a farm policy. How
much will the policy pay to restore the records? - Answer Up to $2,000
All of the following could be considered rebates if offered to an insured in the sale of insurance
EXCEPT - Answer Dividends from a mutual insurer.
Which of the following may be covered by electronic data processing coverage form under an
inland marine policy? - Answer a) Computer hardware that is specifically scheduled.
,c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
The party to a surety or fidelity bond who promises to fulfill the obligation is the - Answer
Principal
The transfer of money from inside a banking premises to a person other than a messenger
outside those premises or to a place outside those premises is covered under which commercial
crime coverage? - Answer Computer fraud
Which of the following would NOT be covered under the liability section of a personal auto
policy? - Answer Bodily injury is caused by the insured's negligence while driving a three-
wheel all-terrain vehicle.
When a producer holding a certificate or a broker's license has a change in his/her residence or
business address, he/she must notify the Department of Insurance and any company for which
the producer holds an appointment within - Answer 30 days.
What will happen if a house covered by a standard mortgage clause is a total loss? - Answer
The insurer pays the mortgagee according to the mortgagee's interest in the property.
What is the civil penalty for violating a cease and desist order of the Commissioner? - Answer
$10,000
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the
following EXCEPT - Answer Business liability.
If a property is covered by Company A for $20,000 and Company B covers the same property for
$40,000, how much will Company A pay on a $24,000 loss? - Answer $8,000
The risk management technique that is used to prevent a specific loss by not exposing oneself
to that activity is called - Answer Avoidance.
In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will
be paid by - Answer The insurer.
, A common exclusion found under physical damage to your auto includes - Answer
Mechanical breakdown.
Which of the following is true regarding a risk retention group? - Answer It is a liability
insurance company owned by its members.
Which of the following best describes a misrepresentation? - Answer Issuing sales material
with exaggerated statements about policy benefits
A builder's risk form is most often written as which of the following? - Answer Completed
value form
An insured has a liability policy that sets the amount for all claims that arise from a single
incident at $50,000. Which type of limit of liability does this insured's policy have? - Answer
Per occurrence
Which of the following is an example of a protective safeguard in a businessowners policy? -
Answer Automatic sprinkler system
If a licensee wants to transact insurance under a different name than that listed on his or her
producer's license, which of the following must occur? - Answer The change must be
reported to the Commissioner.
If more than one person has an insurable interest in the property covered under a dwelling
policy, - Answer The insurer will be liable for only the insured's interest in the damaged
property.
Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered
$20,000 damage from a fire. Today the home was struck by lightning, starting another fire that
completely destroyed the structure. Bob's policy will pay - Answer $100,000.
An automobile that is owned by a nontraditional household, not consisting of a husband and
wife, may be insured under a personal auto policy if - Answer A joint ownership coverage
endorsement is added.
Questions and Answers Part one
Updated.
Which of the following are the authorities that an agent can hold? - Answer Express and
implied
Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight?
- Answer Permanent partial disability
Who is NOT considered an employee in an commercial general liability (CGL) policy? - Answer
Temporary worker
The major portion of the premium of an equipment breakdown policy pays? - Answer For
inspections and examinations
An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision
of his insurance policy, how , much should he insure the property for? - Answer 80% of the
property's replacement cost or more
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
contained in his or her report, the reporting agency must - Answer Respond to the
consumer's complaint.
All of the following are found in the declarations section of a policy EXCEPT the - Answer
Exclusions.
The cost of restoring farm records is an additional coverage offered under a farm policy. How
much will the policy pay to restore the records? - Answer Up to $2,000
All of the following could be considered rebates if offered to an insured in the sale of insurance
EXCEPT - Answer Dividends from a mutual insurer.
Which of the following may be covered by electronic data processing coverage form under an
inland marine policy? - Answer a) Computer hardware that is specifically scheduled.
,c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
The party to a surety or fidelity bond who promises to fulfill the obligation is the - Answer
Principal
The transfer of money from inside a banking premises to a person other than a messenger
outside those premises or to a place outside those premises is covered under which commercial
crime coverage? - Answer Computer fraud
Which of the following would NOT be covered under the liability section of a personal auto
policy? - Answer Bodily injury is caused by the insured's negligence while driving a three-
wheel all-terrain vehicle.
When a producer holding a certificate or a broker's license has a change in his/her residence or
business address, he/she must notify the Department of Insurance and any company for which
the producer holds an appointment within - Answer 30 days.
What will happen if a house covered by a standard mortgage clause is a total loss? - Answer
The insurer pays the mortgagee according to the mortgagee's interest in the property.
What is the civil penalty for violating a cease and desist order of the Commissioner? - Answer
$10,000
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the
following EXCEPT - Answer Business liability.
If a property is covered by Company A for $20,000 and Company B covers the same property for
$40,000, how much will Company A pay on a $24,000 loss? - Answer $8,000
The risk management technique that is used to prevent a specific loss by not exposing oneself
to that activity is called - Answer Avoidance.
In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will
be paid by - Answer The insurer.
, A common exclusion found under physical damage to your auto includes - Answer
Mechanical breakdown.
Which of the following is true regarding a risk retention group? - Answer It is a liability
insurance company owned by its members.
Which of the following best describes a misrepresentation? - Answer Issuing sales material
with exaggerated statements about policy benefits
A builder's risk form is most often written as which of the following? - Answer Completed
value form
An insured has a liability policy that sets the amount for all claims that arise from a single
incident at $50,000. Which type of limit of liability does this insured's policy have? - Answer
Per occurrence
Which of the following is an example of a protective safeguard in a businessowners policy? -
Answer Automatic sprinkler system
If a licensee wants to transact insurance under a different name than that listed on his or her
producer's license, which of the following must occur? - Answer The change must be
reported to the Commissioner.
If more than one person has an insurable interest in the property covered under a dwelling
policy, - Answer The insurer will be liable for only the insured's interest in the damaged
property.
Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered
$20,000 damage from a fire. Today the home was struck by lightning, starting another fire that
completely destroyed the structure. Bob's policy will pay - Answer $100,000.
An automobile that is owned by a nontraditional household, not consisting of a husband and
wife, may be insured under a personal auto policy if - Answer A joint ownership coverage
endorsement is added.
