PROPERTY AND CASUALTY EXAM QANDA
2026 STUDY SHEET QUESTIONS AND
SOLUTIONS GRADED A+
●● Blanket insurance.
Answer: This type of insurance covers more than one item of property at
a single location or one more items of property at multiple locations.
●● Speculative.
Answer: possibility of both gain and loss. Not insurable.
●● Pure.
Answer: only the possibility of loss. Insurable.
●● What are the 5 methods of managing or handling risk?.
Answer: avoid, control, retain, and transfer risk.
●● Hazard.
Answer: A condition or situation which increases the chance for loss
●● Physical Hazards.
,Answer: a hazard that arises from the condition, occupancy, or use of the
property itself.
ex: skateboard left on the steps
●● Moral Hazards.
Answer: when an individual through carelessness or by irresponsible
actions can increase the possibly for a loss.
ex: person who drives carelessly just because they know they are
insured.
●● Morale Hazards.
Answer: when a person might create a loss situation on purpose just to
collect from the insurance company.
ex: Prearranged, faked theft of someone's old vehicle so they can get an
insurance payout to buy a new vehicle.
●● Replacement Cost.
Answer: The amount of money it would take to replace a damaged or
destroyed item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
,●● Actual Cash Value (ACV).
Answer: Replacement Cost, minus depreciation.
●● Pair and Set Clause.
Answer: Loss to one item of a pair or set does not constitute loss to the
entire pair or set.
●● Appraisal.
Answer: A method of resolving disputes between insurers and insureds
over the amount owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
●● Subrogation.
Answer: An insurer's right to recover the amount of its loss payment
from the third party who is legally responsible for the loss.
●● Arbitration.
Answer: this condition is similar to the Appraisal Condition but it is not
limited to disputes over the value of the loss. It may also be used to
, resolve other areas of disagreement between the insured and the
insurance company.
●● What does WC SHAVVER stand for?.
Answer: Windstorm, Civil commotion, Smoke, Hail, Aircraft, Vehicles,
Volcanic eruption, Explosion, Riot
●● What does BIG AFFECT stand for?.
Answer: Burglar damage, Ice & snow weight, Glass breakage,
Accidental discharge, Falling objects, Freezing of pipes, Electrical
damage, Collapse, Tearing apart.
●● Insolvency.
Answer: A financial state that occurs if liabilities are greater than assets.
●● Law of Agency.
Answer: Knowledge of the Agents is Knowledge of the Principal
(Insurance Company)
●● Principal.
Answer: Insurance Company
●● What is the ISO?.
2026 STUDY SHEET QUESTIONS AND
SOLUTIONS GRADED A+
●● Blanket insurance.
Answer: This type of insurance covers more than one item of property at
a single location or one more items of property at multiple locations.
●● Speculative.
Answer: possibility of both gain and loss. Not insurable.
●● Pure.
Answer: only the possibility of loss. Insurable.
●● What are the 5 methods of managing or handling risk?.
Answer: avoid, control, retain, and transfer risk.
●● Hazard.
Answer: A condition or situation which increases the chance for loss
●● Physical Hazards.
,Answer: a hazard that arises from the condition, occupancy, or use of the
property itself.
ex: skateboard left on the steps
●● Moral Hazards.
Answer: when an individual through carelessness or by irresponsible
actions can increase the possibly for a loss.
ex: person who drives carelessly just because they know they are
insured.
●● Morale Hazards.
Answer: when a person might create a loss situation on purpose just to
collect from the insurance company.
ex: Prearranged, faked theft of someone's old vehicle so they can get an
insurance payout to buy a new vehicle.
●● Replacement Cost.
Answer: The amount of money it would take to replace a damaged or
destroyed item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
,●● Actual Cash Value (ACV).
Answer: Replacement Cost, minus depreciation.
●● Pair and Set Clause.
Answer: Loss to one item of a pair or set does not constitute loss to the
entire pair or set.
●● Appraisal.
Answer: A method of resolving disputes between insurers and insureds
over the amount owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
●● Subrogation.
Answer: An insurer's right to recover the amount of its loss payment
from the third party who is legally responsible for the loss.
●● Arbitration.
Answer: this condition is similar to the Appraisal Condition but it is not
limited to disputes over the value of the loss. It may also be used to
, resolve other areas of disagreement between the insured and the
insurance company.
●● What does WC SHAVVER stand for?.
Answer: Windstorm, Civil commotion, Smoke, Hail, Aircraft, Vehicles,
Volcanic eruption, Explosion, Riot
●● What does BIG AFFECT stand for?.
Answer: Burglar damage, Ice & snow weight, Glass breakage,
Accidental discharge, Falling objects, Freezing of pipes, Electrical
damage, Collapse, Tearing apart.
●● Insolvency.
Answer: A financial state that occurs if liabilities are greater than assets.
●● Law of Agency.
Answer: Knowledge of the Agents is Knowledge of the Principal
(Insurance Company)
●● Principal.
Answer: Insurance Company
●● What is the ISO?.
