Ohio Property and Casualty Exam with all Correct & 100%
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Graded A+
What do individuals use to transfer their risk of loss to a larger group? ✔Correct Answer-
Insurance
What are the four elements of an insurance contract? ✔Correct Answer-Agreement (Offer
and Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? ✔Correct Answer-Insurer
Insurance contracts are aleatory in nature. What does that mean? ✔Correct Answer-Unequal
values are exchanged between the parties to a contract.
What are the methods of managing risk? ✔Correct Answer-Avoidance, transfer, sharing,
retention, and reduction
In insurance contracts, when does acceptance usually occur? ✔Correct Answer-When the
insurer approves a prepaid application
Wagering on a sporting event is known as what type of risk? ✔Correct Answer-Speculative
A situation in which a person can experience only a loss and no gain presents what type of risk?
✔Correct Answer-Pure Risk
What type of insurer is formed under the laws of another state? ✔Correct Answer-Foreign
When would a misrepresentation on an insurance application be considered fraud? ✔Correct
Answer-When it is intentional and material
According to the Law of Agency, who represents the principal? ✔Correct Answer-Agent or
producer
What does indemnify mean in insurance? ✔Correct Answer-To restore an insured to the same
financial status as before a loss.
What is a warranty in an insurance contract? ✔Correct Answer-An absolutely true statement
upon which the validity of the policy depends.
,What is the term for the causes of loss insured against in an insurance policy? ✔Correct
Answer-Peril
What is a risk? ✔Correct Answer-Uncertainty of loss
If an insurer holds a Certificate of Authority, it is known as what type of insurer? ✔Correct
Answer-Authorized or Admitted
What is consideration in an insurance contract? ✔Correct Answer-Consideration is something
of value that each party gives to the other. Consideration on the part of the insurer is binding.
What is consideration on the part of the insurer? ✔Correct Answer-A promise to pay in the
event of a loss
A tornado that destroys a property would be an example of what? ✔Correct Answer-Peril
What does the term reasonable expectations mean in insurance? ✔Correct Answer-Certain
expectations for coverage that a reasonable person would have based on sources other than
just the policy language.
Conditions that increase the chance of loss are known as what? ✔Correct Answer-Hazards
What provision states that if a policy allows for greater benefits than the financial loss incurred,
the insured may be compensated only for the amount lost? ✔Correct Answer-Indemnity
What are the three types of hazards? ✔Correct Answer-Physical, moral, and morale
What document is required for an insurance company to transact insurance? ✔Correct
Answer-Certificate of Authority
What does the term unilateral contract mean? ✔Correct Answer-A unilateral contract is a
one-sided contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? ✔Correct Answer-When the insurance
application is submitted.
What are the three types of agent authority? ✔Correct Answer-Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers?
✔Correct Answer-Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? ✔Correct Answer-Apparent
, A policy that covers all causes of loss except for those specifically excluded is known as what
type of policy? ✔Correct Answer-Open Peril (or special) form
How are direct and indirect losses related? ✔Correct Answer-Direct losses can cause indirect
losses.
What is the difference between cancellation and nonrenewal? ✔Correct Answer-Cancellation
is the termination of an insurance policy by either party prior to the policy's expiration date.
Nonrenewal is the termination of a policy at its expiration date by not offering a continuation of
the existing policy.
What is the process that insurers use to determine whether a policy should be insured and on
what terms and conditions? ✔Correct Answer-Underwriting
In property insurance, when must insurable interest exist? ✔Correct Answer-At the time of
loss
If an insured peril was the proximate cause of loss, what type of loss is it? ✔Correct Answer-
Direct
What determines an insurer's responsibility for payment, as stated in an insurance policy?
✔Correct Answer-Limits of liability
In property insurance, what is actual cash value? ✔Correct Answer-Replacement cost at the
time of loss, minus depreciation
What type of limits of liability has the limits separately stated for different coverages?
✔Correct Answer-Split limits
What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a
single accident? ✔Correct Answer-Per Occurrence
An insured's business is damaged by a fire, and temporarily shut down for repairs. As a result,
the insured suffers loss of income. What type of loss is the loss of income? ✔Correct Answer-
Indirect or consequential
How is the coverage usually written for HO-8 forms? ✔Correct Answer-For the market value
of the property
What are the additional coverages available in Homeowners policies without additional
premiums? (name several) ✔Correct Answer-Debris removal, lawns/plants/shrubs, and trees,
removal, reasonable repairs, and fire department service charge
Verified Answers |Actual Complete Update |Already
Graded A+
What do individuals use to transfer their risk of loss to a larger group? ✔Correct Answer-
Insurance
What are the four elements of an insurance contract? ✔Correct Answer-Agreement (Offer
and Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? ✔Correct Answer-Insurer
Insurance contracts are aleatory in nature. What does that mean? ✔Correct Answer-Unequal
values are exchanged between the parties to a contract.
What are the methods of managing risk? ✔Correct Answer-Avoidance, transfer, sharing,
retention, and reduction
In insurance contracts, when does acceptance usually occur? ✔Correct Answer-When the
insurer approves a prepaid application
Wagering on a sporting event is known as what type of risk? ✔Correct Answer-Speculative
A situation in which a person can experience only a loss and no gain presents what type of risk?
✔Correct Answer-Pure Risk
What type of insurer is formed under the laws of another state? ✔Correct Answer-Foreign
When would a misrepresentation on an insurance application be considered fraud? ✔Correct
Answer-When it is intentional and material
According to the Law of Agency, who represents the principal? ✔Correct Answer-Agent or
producer
What does indemnify mean in insurance? ✔Correct Answer-To restore an insured to the same
financial status as before a loss.
What is a warranty in an insurance contract? ✔Correct Answer-An absolutely true statement
upon which the validity of the policy depends.
,What is the term for the causes of loss insured against in an insurance policy? ✔Correct
Answer-Peril
What is a risk? ✔Correct Answer-Uncertainty of loss
If an insurer holds a Certificate of Authority, it is known as what type of insurer? ✔Correct
Answer-Authorized or Admitted
What is consideration in an insurance contract? ✔Correct Answer-Consideration is something
of value that each party gives to the other. Consideration on the part of the insurer is binding.
What is consideration on the part of the insurer? ✔Correct Answer-A promise to pay in the
event of a loss
A tornado that destroys a property would be an example of what? ✔Correct Answer-Peril
What does the term reasonable expectations mean in insurance? ✔Correct Answer-Certain
expectations for coverage that a reasonable person would have based on sources other than
just the policy language.
Conditions that increase the chance of loss are known as what? ✔Correct Answer-Hazards
What provision states that if a policy allows for greater benefits than the financial loss incurred,
the insured may be compensated only for the amount lost? ✔Correct Answer-Indemnity
What are the three types of hazards? ✔Correct Answer-Physical, moral, and morale
What document is required for an insurance company to transact insurance? ✔Correct
Answer-Certificate of Authority
What does the term unilateral contract mean? ✔Correct Answer-A unilateral contract is a
one-sided contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? ✔Correct Answer-When the insurance
application is submitted.
What are the three types of agent authority? ✔Correct Answer-Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers?
✔Correct Answer-Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? ✔Correct Answer-Apparent
, A policy that covers all causes of loss except for those specifically excluded is known as what
type of policy? ✔Correct Answer-Open Peril (or special) form
How are direct and indirect losses related? ✔Correct Answer-Direct losses can cause indirect
losses.
What is the difference between cancellation and nonrenewal? ✔Correct Answer-Cancellation
is the termination of an insurance policy by either party prior to the policy's expiration date.
Nonrenewal is the termination of a policy at its expiration date by not offering a continuation of
the existing policy.
What is the process that insurers use to determine whether a policy should be insured and on
what terms and conditions? ✔Correct Answer-Underwriting
In property insurance, when must insurable interest exist? ✔Correct Answer-At the time of
loss
If an insured peril was the proximate cause of loss, what type of loss is it? ✔Correct Answer-
Direct
What determines an insurer's responsibility for payment, as stated in an insurance policy?
✔Correct Answer-Limits of liability
In property insurance, what is actual cash value? ✔Correct Answer-Replacement cost at the
time of loss, minus depreciation
What type of limits of liability has the limits separately stated for different coverages?
✔Correct Answer-Split limits
What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a
single accident? ✔Correct Answer-Per Occurrence
An insured's business is damaged by a fire, and temporarily shut down for repairs. As a result,
the insured suffers loss of income. What type of loss is the loss of income? ✔Correct Answer-
Indirect or consequential
How is the coverage usually written for HO-8 forms? ✔Correct Answer-For the market value
of the property
What are the additional coverages available in Homeowners policies without additional
premiums? (name several) ✔Correct Answer-Debris removal, lawns/plants/shrubs, and trees,
removal, reasonable repairs, and fire department service charge
