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COMPREHENSIVE PROPERTY & CASUALTY
EXAM PREP, PRACTICE QUESTIONS,
CORRECT ANSWERS AND STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,What is a hazard? A condition that increases the chance or severity of a loss.
What is a physical hazard? A tangible condition that increases loss, such as faulty wiring or icy steps.
What is a moral hazard? Dishonesty or character defects that increase the likelihood of intentional loss.
What is a morale hazard? Carelessness or indifference to loss because insurance exists.
What is legal hazard? A condition arising from laws or court decisions that increases the frequency or severity
of loss.
What is indemnity? Restoring an insured financially to approximately the position held before a covered loss,
without allowing profit.
What is insurable interest? A financial or other lawful interest in preserving the insured person or property from loss.
When must insurable interest exist in property insurance? At the time of loss.
What is subrogation? The insurer's right, after paying a loss, to recover from the responsible third party.
What is contribution? The sharing of a covered loss among insurers that cover the same interest and loss.
What is proximate cause? The dominant cause that sets an unbroken chain of events in motion and produces a loss.
What is an occurrence? An accident, including continuous or repeated exposure to substantially the same
harmful conditions.
What is negligence? Failure to use the degree of care a reasonably prudent person would use under similar
circumstances.
What four elements establish negligence? Duty, breach of duty, causation, and damages.
What are compensatory damages? Damages intended to compensate an injured party for actual loss.
What are special damages? Measurable economic losses, such as medical expenses, lost wages, and property
damage.
, What are general damages? Non-economic losses, such as pain and suffering, emotional distress, and disfigurement.
What are punitive damages? Damages intended to punish especially wrongful conduct and deter similar conduct.
What is strict liability? Liability imposed without requiring proof of negligence, often for abnormally dangerous
activities or defective products.
What is vicarious liability? Liability imposed on one party for another person's acts, such as an employer for an
employee acting within the scope of employment.
What is an insurer? The insurance company that assumes risk and issues the policy.
What is an insured? A person or organization protected by an insurance policy.
What is a policy limit? The maximum amount an insurer will pay, subject to the policy's terms.
What is a deductible? The portion of a covered loss the insured must absorb before the insurer pays.
What is a binder? Temporary evidence of insurance pending issuance of the policy.
What is a representation? A statement believed to be true to the best of the applicant's knowledge.
What is a warranty in insurance? A statement or promise that must be strictly true or performed as required.
What is concealment? Intentional failure to disclose a material fact.
What is material misrepresentation? A false statement that would influence an insurer's underwriting or pricing decision.
What is waiver? The voluntary relinquishment of a known right.
What is estoppel? A legal bar preventing a party from asserting a right after its conduct caused another to
reasonably rely to their detriment.
What is an adhesion contract? A contract drafted by one party; ambiguities are generally interpreted against the drafter.
COMPREHENSIVE PROPERTY & CASUALTY
EXAM PREP, PRACTICE QUESTIONS,
CORRECT ANSWERS AND STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,What is a hazard? A condition that increases the chance or severity of a loss.
What is a physical hazard? A tangible condition that increases loss, such as faulty wiring or icy steps.
What is a moral hazard? Dishonesty or character defects that increase the likelihood of intentional loss.
What is a morale hazard? Carelessness or indifference to loss because insurance exists.
What is legal hazard? A condition arising from laws or court decisions that increases the frequency or severity
of loss.
What is indemnity? Restoring an insured financially to approximately the position held before a covered loss,
without allowing profit.
What is insurable interest? A financial or other lawful interest in preserving the insured person or property from loss.
When must insurable interest exist in property insurance? At the time of loss.
What is subrogation? The insurer's right, after paying a loss, to recover from the responsible third party.
What is contribution? The sharing of a covered loss among insurers that cover the same interest and loss.
What is proximate cause? The dominant cause that sets an unbroken chain of events in motion and produces a loss.
What is an occurrence? An accident, including continuous or repeated exposure to substantially the same
harmful conditions.
What is negligence? Failure to use the degree of care a reasonably prudent person would use under similar
circumstances.
What four elements establish negligence? Duty, breach of duty, causation, and damages.
What are compensatory damages? Damages intended to compensate an injured party for actual loss.
What are special damages? Measurable economic losses, such as medical expenses, lost wages, and property
damage.
, What are general damages? Non-economic losses, such as pain and suffering, emotional distress, and disfigurement.
What are punitive damages? Damages intended to punish especially wrongful conduct and deter similar conduct.
What is strict liability? Liability imposed without requiring proof of negligence, often for abnormally dangerous
activities or defective products.
What is vicarious liability? Liability imposed on one party for another person's acts, such as an employer for an
employee acting within the scope of employment.
What is an insurer? The insurance company that assumes risk and issues the policy.
What is an insured? A person or organization protected by an insurance policy.
What is a policy limit? The maximum amount an insurer will pay, subject to the policy's terms.
What is a deductible? The portion of a covered loss the insured must absorb before the insurer pays.
What is a binder? Temporary evidence of insurance pending issuance of the policy.
What is a representation? A statement believed to be true to the best of the applicant's knowledge.
What is a warranty in insurance? A statement or promise that must be strictly true or performed as required.
What is concealment? Intentional failure to disclose a material fact.
What is material misrepresentation? A false statement that would influence an insurer's underwriting or pricing decision.
What is waiver? The voluntary relinquishment of a known right.
What is estoppel? A legal bar preventing a party from asserting a right after its conduct caused another to
reasonably rely to their detriment.
What is an adhesion contract? A contract drafted by one party; ambiguities are generally interpreted against the drafter.
