Property and Casualty Insurance Exam 100% Verified
Questions & Answers
Q: Personal Property
Answer:
Contents refers to personal property, including items inside and outside the building. Personal property includes
transportable items like appliances, unattached outdoor items, and items on the land.
Q: Real Property
Answer:
Real property includes the building and its attached components, such as doors, windows, sinks, and toilets.
Q: Insurable Interest
Answer:
Interest someone has in a person or property that is subject to a financial loss if injured or damaged. Must exist at the time
of loss in P&C insurance.
Q: Elements of Insurable Interest
Answer:
There are 3 elements of insurable interest: Financial (Mortgage company and borrower), Blood (Family), Business
(Business partners over a company).
Q: Actual Cash Value
Answer:
Replacement cost less than depreciation (RC- Depreciation=Amount Paid). Reinforces the principal of indemnity.
Q: Replacement Cost
Answer:
What it cost to replace the property at today's price without depreciation. Contrary to the principal of indemnity.
Q: Functional Replacement Cost
Answer:
Replacing a property with a more modern and less expensive property.
Q: Market Value
Answer:
What a willing buyer is willing to pay a willing seller.
Q: Agreed Value
, Answer:
The amount agreed upon by the insured and insurer. Amount is stated in the policy.
Q: Stated Amount
Answer:
The amount the insurer says for a particular property. Amount is written in the policy.
Q: Proximate Cause of Loss
Answer:
A loss is covered only if a covered peril is the proximate cause. Proximate cause is the event initiating an unbroken chain
of events leading to the loss.
Q: Named Peril Policy
Answer:
A policy that specifies the perils covered. If it is not listed, it's not covered.
Q: Theft
Answer:
Taking of property.
Q: Burglary
Answer:
Taking of property using forced entry and exit.
Q: Robbery
Answer:
Taking of property using threatening tactics.
Q: Mysterious Disappearance
Answer:
Not knowing, when, where or how a property was taken. Not covered in most insurance policies.
Q: Vandalism
Answer:
Malicious damage to a building without theft.
Q: SOAR (Special, Open, All Risk)
Answer:
Covers everything except what is excluded.
Q: Negligence
Questions & Answers
Q: Personal Property
Answer:
Contents refers to personal property, including items inside and outside the building. Personal property includes
transportable items like appliances, unattached outdoor items, and items on the land.
Q: Real Property
Answer:
Real property includes the building and its attached components, such as doors, windows, sinks, and toilets.
Q: Insurable Interest
Answer:
Interest someone has in a person or property that is subject to a financial loss if injured or damaged. Must exist at the time
of loss in P&C insurance.
Q: Elements of Insurable Interest
Answer:
There are 3 elements of insurable interest: Financial (Mortgage company and borrower), Blood (Family), Business
(Business partners over a company).
Q: Actual Cash Value
Answer:
Replacement cost less than depreciation (RC- Depreciation=Amount Paid). Reinforces the principal of indemnity.
Q: Replacement Cost
Answer:
What it cost to replace the property at today's price without depreciation. Contrary to the principal of indemnity.
Q: Functional Replacement Cost
Answer:
Replacing a property with a more modern and less expensive property.
Q: Market Value
Answer:
What a willing buyer is willing to pay a willing seller.
Q: Agreed Value
, Answer:
The amount agreed upon by the insured and insurer. Amount is stated in the policy.
Q: Stated Amount
Answer:
The amount the insurer says for a particular property. Amount is written in the policy.
Q: Proximate Cause of Loss
Answer:
A loss is covered only if a covered peril is the proximate cause. Proximate cause is the event initiating an unbroken chain
of events leading to the loss.
Q: Named Peril Policy
Answer:
A policy that specifies the perils covered. If it is not listed, it's not covered.
Q: Theft
Answer:
Taking of property.
Q: Burglary
Answer:
Taking of property using forced entry and exit.
Q: Robbery
Answer:
Taking of property using threatening tactics.
Q: Mysterious Disappearance
Answer:
Not knowing, when, where or how a property was taken. Not covered in most insurance policies.
Q: Vandalism
Answer:
Malicious damage to a building without theft.
Q: SOAR (Special, Open, All Risk)
Answer:
Covers everything except what is excluded.
Q: Negligence
