TN PROPERTY AND CASUALTY EXAM
QUESTIONS & UPDATED PASSED
ANSWERS RATED 100% CORRECT
Insurance - Correct Answer ✔✔ Social device used for transferring risk from individuals or
business to an insurance company
Law of Large Numbers - Correct Answer ✔✔ The larger the group the less uncertainty
Insurable Interest - Correct Answer ✔✔ must have a legitimate interest in the property/subject
that is to be insured
risk - Correct Answer ✔✔ Uncertainty or chance of possible loss
Property risk are called - Correct Answer ✔✔ perils
Casualty risk are called - Correct Answer ✔✔ Liability and Accident Losses
What kind of risk are insurable - Correct Answer ✔✔ Pure risk
What are speculative risk? - Correct Answer ✔✔ provide the chance of a gain and are NOT
insurable. Example: gambing
Hazard - Correct Answer ✔✔ Anything that would increase the likelihood that a loss might
occur or increase the seriousness of the loss
What are the three types of Hazards - Correct Answer ✔✔ 1) Physical
2)Moral
3)Morale
Physical Hazard - Correct Answer ✔✔ Structural, material or proximity to
Moral Hazard - Correct Answer ✔✔ Has to do with the insureds habits (dishonest)
Morale Hazards - Correct Answer ✔✔ The insureds carelessness
Peril - Correct Answer ✔✔ Cause of a possible loss
What are examples of a peril - Correct Answer ✔✔ Flood
Fire
Accident
,Explosion
Loss - Correct Answer ✔✔ Decrease in value, Property, quality of life or liability owed
What are the two types of losses - Correct Answer ✔✔ Direct
indirect
Direct Loss - Correct Answer ✔✔ Actual Physical damage to the property
Indirect loss- - Correct Answer ✔✔ Loss resulting from a peril but not directly
Actual Cash Value (ACV) - Correct Answer ✔✔ Replacement cost (cost new)-less depreciation
Replacement Cost - Correct Answer ✔✔ Cost new ( no deduction for deprication)
Market Value - Correct Answer ✔✔ What it can be sold for at the time of loss
Stated Value - Correct Answer ✔✔ Value that meets coinsurance value
Salvage value - Correct Answer ✔✔ Insurer takes damaged property after payment for a total
loss and sells it to reduce their loss
Proximate Clause - Correct Answer ✔✔ Resulting cause of loss or damage. The unbroken chain
of cause and edict between the occurrence of an insured peril or a negligent act resulting in
injury or damage
Decuctible - Correct Answer ✔✔ The dollar amount that must be paid by the insured before any
benefits are payable by the insurer.
Standard Deductible for Homeowners - Correct Answer ✔✔ $250
Standard Deductible for commercial Property - Correct Answer ✔✔ $250
What are the 4 reasons for a deductible - Correct Answer ✔✔ 1) To keep premiums affordable
and reduce small claims
2) To increase profits of company
3) To make premiums excessive
4) increase the number insured
indemnity - Correct Answer ✔✔ Restores the insured to the position enjoyed prior to a loss
Limits of Liability - Correct Answer ✔✔ The maximum the insurer will pay on a claim
Coinsurance - Correct Answer ✔✔ Offers the insured a reduced rate if they keep a certain
amount of insurance
,What is the minimum amount an insured must carry? - Correct Answer ✔✔ 80%
How is a insured paid? - Correct Answer ✔✔ Insurance carried/insurance required x Amount of
loss= The amount the insurer will pay - Deductible
Pair and Set Clause - Correct Answer ✔✔ When insured the items are worth more as a set, if an
item of the set is damaged or destroyed the insurance company has the option of finding a
replacement, repairing the item or paying the difference difference in the value of the set
before and after the loss
Extensions of coverage: - Correct Answer ✔✔ No charge to the insured (11 total)
Removal Coverage dp - Correct Answer ✔✔ property moved fringe premises to protect it from a
covered peril.
5 days-basic
30 days Broad/special
*direct loss to the moved property from any clause is covered
Other Structures dp - Correct Answer ✔✔ May use up to 10% of coverage A
Basic Form- payment will reduce coverage remaining on the dwelling by the amount paid
Does not affect the broad or special
Debris Removal: dp - Correct Answer ✔✔ Covers all reasonable expenses for removal of debris
from coverage property
*amounts paid would be considered additional to the policy limits
Improvements, Alterations and Additions dp - Correct Answer ✔✔ (when insured is a tenant)
May apply to 10% of coverage C limit on the basic DP form, payment would reduce the limit left
on broad/special- it would not reduce the limit
Personal Property covered anywhere in the world dp - Correct Answer ✔✔ Would pay up to
10% of coverage C limit.
Payment would reduce the limits of coverage c for all forms
BASIC DP is: - Correct Answer ✔✔ Rental Valie
What includes rental value and additional living expenses - Correct Answer ✔✔ Broad and
Special DPS
, Cost of repairs to protect property from further damage dp - Correct Answer ✔✔ Payment of all
reasonable cost would limit the coverage paid
How much is paid if the Fire Department is called to protect the covered property dp - Correct
Answer ✔✔ $500- but not paid if the property is located in the city, municipality or district
furnishing the service
no deductible applies
What is covered on broad/special dp only? - Correct Answer ✔✔ - Trees,lawns,shrubs and
plants
-Collapse of building
- Glass breakage
Trees, lawns and shrubs- - Correct Answer ✔✔ will pay the maximum of $500 per tree shrub or
plant
Will only pay up to 5% of coverage A
Collapsed Building dp - Correct Answer ✔✔ All direct losses by covered perils including:
collapse from hidden insect damage, the weight of contents, rain on the roof, collapse during
construction
Glass breakage dp - Correct Answer ✔✔ Only covered on broad and special DP
Additional Coverages found on homeowners policy form - Correct Answer ✔✔ removal
coverage
debris removal
cost of repairs to protect from further damage
Call for Fire Department
Trees, Lawns, Shrubs or plants
Collapse of Building
credit card or fund transfer
Loss of Assessment coverage
Landlords furnishing
Building Additions and Alterations ( HO-4 ONLY)
QUESTIONS & UPDATED PASSED
ANSWERS RATED 100% CORRECT
Insurance - Correct Answer ✔✔ Social device used for transferring risk from individuals or
business to an insurance company
Law of Large Numbers - Correct Answer ✔✔ The larger the group the less uncertainty
Insurable Interest - Correct Answer ✔✔ must have a legitimate interest in the property/subject
that is to be insured
risk - Correct Answer ✔✔ Uncertainty or chance of possible loss
Property risk are called - Correct Answer ✔✔ perils
Casualty risk are called - Correct Answer ✔✔ Liability and Accident Losses
What kind of risk are insurable - Correct Answer ✔✔ Pure risk
What are speculative risk? - Correct Answer ✔✔ provide the chance of a gain and are NOT
insurable. Example: gambing
Hazard - Correct Answer ✔✔ Anything that would increase the likelihood that a loss might
occur or increase the seriousness of the loss
What are the three types of Hazards - Correct Answer ✔✔ 1) Physical
2)Moral
3)Morale
Physical Hazard - Correct Answer ✔✔ Structural, material or proximity to
Moral Hazard - Correct Answer ✔✔ Has to do with the insureds habits (dishonest)
Morale Hazards - Correct Answer ✔✔ The insureds carelessness
Peril - Correct Answer ✔✔ Cause of a possible loss
What are examples of a peril - Correct Answer ✔✔ Flood
Fire
Accident
,Explosion
Loss - Correct Answer ✔✔ Decrease in value, Property, quality of life or liability owed
What are the two types of losses - Correct Answer ✔✔ Direct
indirect
Direct Loss - Correct Answer ✔✔ Actual Physical damage to the property
Indirect loss- - Correct Answer ✔✔ Loss resulting from a peril but not directly
Actual Cash Value (ACV) - Correct Answer ✔✔ Replacement cost (cost new)-less depreciation
Replacement Cost - Correct Answer ✔✔ Cost new ( no deduction for deprication)
Market Value - Correct Answer ✔✔ What it can be sold for at the time of loss
Stated Value - Correct Answer ✔✔ Value that meets coinsurance value
Salvage value - Correct Answer ✔✔ Insurer takes damaged property after payment for a total
loss and sells it to reduce their loss
Proximate Clause - Correct Answer ✔✔ Resulting cause of loss or damage. The unbroken chain
of cause and edict between the occurrence of an insured peril or a negligent act resulting in
injury or damage
Decuctible - Correct Answer ✔✔ The dollar amount that must be paid by the insured before any
benefits are payable by the insurer.
Standard Deductible for Homeowners - Correct Answer ✔✔ $250
Standard Deductible for commercial Property - Correct Answer ✔✔ $250
What are the 4 reasons for a deductible - Correct Answer ✔✔ 1) To keep premiums affordable
and reduce small claims
2) To increase profits of company
3) To make premiums excessive
4) increase the number insured
indemnity - Correct Answer ✔✔ Restores the insured to the position enjoyed prior to a loss
Limits of Liability - Correct Answer ✔✔ The maximum the insurer will pay on a claim
Coinsurance - Correct Answer ✔✔ Offers the insured a reduced rate if they keep a certain
amount of insurance
,What is the minimum amount an insured must carry? - Correct Answer ✔✔ 80%
How is a insured paid? - Correct Answer ✔✔ Insurance carried/insurance required x Amount of
loss= The amount the insurer will pay - Deductible
Pair and Set Clause - Correct Answer ✔✔ When insured the items are worth more as a set, if an
item of the set is damaged or destroyed the insurance company has the option of finding a
replacement, repairing the item or paying the difference difference in the value of the set
before and after the loss
Extensions of coverage: - Correct Answer ✔✔ No charge to the insured (11 total)
Removal Coverage dp - Correct Answer ✔✔ property moved fringe premises to protect it from a
covered peril.
5 days-basic
30 days Broad/special
*direct loss to the moved property from any clause is covered
Other Structures dp - Correct Answer ✔✔ May use up to 10% of coverage A
Basic Form- payment will reduce coverage remaining on the dwelling by the amount paid
Does not affect the broad or special
Debris Removal: dp - Correct Answer ✔✔ Covers all reasonable expenses for removal of debris
from coverage property
*amounts paid would be considered additional to the policy limits
Improvements, Alterations and Additions dp - Correct Answer ✔✔ (when insured is a tenant)
May apply to 10% of coverage C limit on the basic DP form, payment would reduce the limit left
on broad/special- it would not reduce the limit
Personal Property covered anywhere in the world dp - Correct Answer ✔✔ Would pay up to
10% of coverage C limit.
Payment would reduce the limits of coverage c for all forms
BASIC DP is: - Correct Answer ✔✔ Rental Valie
What includes rental value and additional living expenses - Correct Answer ✔✔ Broad and
Special DPS
, Cost of repairs to protect property from further damage dp - Correct Answer ✔✔ Payment of all
reasonable cost would limit the coverage paid
How much is paid if the Fire Department is called to protect the covered property dp - Correct
Answer ✔✔ $500- but not paid if the property is located in the city, municipality or district
furnishing the service
no deductible applies
What is covered on broad/special dp only? - Correct Answer ✔✔ - Trees,lawns,shrubs and
plants
-Collapse of building
- Glass breakage
Trees, lawns and shrubs- - Correct Answer ✔✔ will pay the maximum of $500 per tree shrub or
plant
Will only pay up to 5% of coverage A
Collapsed Building dp - Correct Answer ✔✔ All direct losses by covered perils including:
collapse from hidden insect damage, the weight of contents, rain on the roof, collapse during
construction
Glass breakage dp - Correct Answer ✔✔ Only covered on broad and special DP
Additional Coverages found on homeowners policy form - Correct Answer ✔✔ removal
coverage
debris removal
cost of repairs to protect from further damage
Call for Fire Department
Trees, Lawns, Shrubs or plants
Collapse of Building
credit card or fund transfer
Loss of Assessment coverage
Landlords furnishing
Building Additions and Alterations ( HO-4 ONLY)
