Washington State Property and Casualty Insurance
Actual Exam Study Questions with Already Verified
A+ Answers | Latest Version
1. Assignment - ANSWER The transfer of a policy to another party. Often
done when commercial property is sold to a new owner.
2. Building & Personal Property (BPP) - ANSWER The commercial property
policy for larger businesses.
3. Business Income Policy - ANSWER A commercial policy covering the
indirect loss of income following a loss.
4. Cancellation - ANSWER Termination of a policy during the policy period.
5. Inherent Vice - ANSWER A loss caused by natural deterioration. Insurers
will not pay claims for inherent vice.
6. Extra Expense Policy - ANSWER Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
7. Business Income Policy - ANSWER A commercial policy covering the
indirect loss of income following a loss.
8. Comprehension Coverage - ANSWER Physical damage insurance that
covers all property losses except collision. Also known as "Other than
Collision."
,9. Concealment - ANSWER Intentionally hiding the truth or intentionally
telling only a partial truth.
10.Conditions Section - ANSWER The part of the policy containing the details
of the policy, including the duties of the Insured.
11.Consent to Settle Provision - ANSWER The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior
to any claim settlement.
12.Consideration - ANSWER Something of value given by each party in a
contract.
13.Declarations - ANSWER The "Dec Sheet" is the first page of the policy and
includes the "fill-in-the blanks" information obtained by the Producer,
including the names of the parties, the description of the covered property,
the policy's limit of liability, the duration of the policy, the amount of the
premium, and the amount of the deductible.
14.Deductible - ANSWER The amount of loss that the insured must pay before
the policy will begin to pay.
15.Direct Loss - ANSWER Damage to property from a covered peril. Property
policies typically cover Direct Losses and exclude Indirect Losses.
16.Stock Insurer - ANSWER An insurer owned by investors, as opposed to a
mutual insurer which is owned by the policy holders.
17.Uninsured Motor Vehicle - ANSWER A vehicle driven by one who has the
state required amount of liability insurance but who does not have adequate
insurance, or who is a hit and run driver.
,18.Unilateral Contract - ANSWER A contract which contains only one
promise. Insurance policies are unilateral because they contain the Insurer's
promise to pay a claim but do not contain a promise by the Insured to pay
future premiums.
19.Underwriting - ANSWER The process of selecting and classifying risks.
20.Casualty Insurance - ANSWER A broad term which includes all of the
policy types that may be sold with a Casualty License - in most states this
includes auto, liability, work comp, commercial crime, and surety bonds.
21.Claims Made Form - ANSWER A policy that pays according to the
coverage in effect in the year the claim is made rather than according to the
coverage in effect at the time of the loss. Professional Liability policies are
usually written on a Claims Made basis, while other Liability Policies are
written on an Occurrence Basis.
22.Coinsurance Clause - ANSWER The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the
Insurer will not fully cover a partial loss.
23.Commercial Package Policy (CPP) - ANSWER A bundling of commercial
policies
24.Competent Party - ANSWER A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of
majority (age 15 in most states).
, 25.Employers Liability - ANSWER The section of a Work Comp policy
covering the employer for claims made by the injured worker's family
members.
26.Fair Credit Reporting Act - ANSWER What an item would sell for in the
marketplace.
27.Fidelity Bond - ANSWER A contract sold by a Surety Producer to cover
employee theft.
28.Gramm-Leach-Bliley Act - ANSWER A federal law which protects
consumer privacy and which encourages the states to adopt uniform
licensing standards.
29.Hazzard - ANSWER Any factor that increases the likelihood that a peril
will occur.
30.Twisting - ANSWER Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any
insured to lapse, terminate, forfeit, surrender, retain or convert any insurance
policy.
31.Law of Large Numbers - ANSWER The maximum the policy will pay for
any one loss - this amount will be stated on the Declarations.
32.Medical Payments - ANSWER A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will
have a specified Limit of Liability for "med pay." Medical payments are
never made to the Insured.
Actual Exam Study Questions with Already Verified
A+ Answers | Latest Version
1. Assignment - ANSWER The transfer of a policy to another party. Often
done when commercial property is sold to a new owner.
2. Building & Personal Property (BPP) - ANSWER The commercial property
policy for larger businesses.
3. Business Income Policy - ANSWER A commercial policy covering the
indirect loss of income following a loss.
4. Cancellation - ANSWER Termination of a policy during the policy period.
5. Inherent Vice - ANSWER A loss caused by natural deterioration. Insurers
will not pay claims for inherent vice.
6. Extra Expense Policy - ANSWER Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
7. Business Income Policy - ANSWER A commercial policy covering the
indirect loss of income following a loss.
8. Comprehension Coverage - ANSWER Physical damage insurance that
covers all property losses except collision. Also known as "Other than
Collision."
,9. Concealment - ANSWER Intentionally hiding the truth or intentionally
telling only a partial truth.
10.Conditions Section - ANSWER The part of the policy containing the details
of the policy, including the duties of the Insured.
11.Consent to Settle Provision - ANSWER The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior
to any claim settlement.
12.Consideration - ANSWER Something of value given by each party in a
contract.
13.Declarations - ANSWER The "Dec Sheet" is the first page of the policy and
includes the "fill-in-the blanks" information obtained by the Producer,
including the names of the parties, the description of the covered property,
the policy's limit of liability, the duration of the policy, the amount of the
premium, and the amount of the deductible.
14.Deductible - ANSWER The amount of loss that the insured must pay before
the policy will begin to pay.
15.Direct Loss - ANSWER Damage to property from a covered peril. Property
policies typically cover Direct Losses and exclude Indirect Losses.
16.Stock Insurer - ANSWER An insurer owned by investors, as opposed to a
mutual insurer which is owned by the policy holders.
17.Uninsured Motor Vehicle - ANSWER A vehicle driven by one who has the
state required amount of liability insurance but who does not have adequate
insurance, or who is a hit and run driver.
,18.Unilateral Contract - ANSWER A contract which contains only one
promise. Insurance policies are unilateral because they contain the Insurer's
promise to pay a claim but do not contain a promise by the Insured to pay
future premiums.
19.Underwriting - ANSWER The process of selecting and classifying risks.
20.Casualty Insurance - ANSWER A broad term which includes all of the
policy types that may be sold with a Casualty License - in most states this
includes auto, liability, work comp, commercial crime, and surety bonds.
21.Claims Made Form - ANSWER A policy that pays according to the
coverage in effect in the year the claim is made rather than according to the
coverage in effect at the time of the loss. Professional Liability policies are
usually written on a Claims Made basis, while other Liability Policies are
written on an Occurrence Basis.
22.Coinsurance Clause - ANSWER The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the
Insurer will not fully cover a partial loss.
23.Commercial Package Policy (CPP) - ANSWER A bundling of commercial
policies
24.Competent Party - ANSWER A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of
majority (age 15 in most states).
, 25.Employers Liability - ANSWER The section of a Work Comp policy
covering the employer for claims made by the injured worker's family
members.
26.Fair Credit Reporting Act - ANSWER What an item would sell for in the
marketplace.
27.Fidelity Bond - ANSWER A contract sold by a Surety Producer to cover
employee theft.
28.Gramm-Leach-Bliley Act - ANSWER A federal law which protects
consumer privacy and which encourages the states to adopt uniform
licensing standards.
29.Hazzard - ANSWER Any factor that increases the likelihood that a peril
will occur.
30.Twisting - ANSWER Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any
insured to lapse, terminate, forfeit, surrender, retain or convert any insurance
policy.
31.Law of Large Numbers - ANSWER The maximum the policy will pay for
any one loss - this amount will be stated on the Declarations.
32.Medical Payments - ANSWER A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will
have a specified Limit of Liability for "med pay." Medical payments are
never made to the Insured.
