PROPERTY AND CASUALTY INSURANCE
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Updated 2026 Questions and Answers
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,Which method of loss valuation is contrary to the basic Replacement cost
concept of indemnity?
An insured owns several buildings, each at a different location Specific
and insured on a separate policy. What type of coverage does
the insured have?
The policy provision found in property insurance policies that Subrogation
prevents the insured from collecting twice for the same loss is
called
Losses caused by continuous or repeated exposure to Occurrence
conditions resulting in injury persons or damage to property
that is neither intended nor expected is the definition of which
of the following terms?
An insured relocated to another state for work. However, she Unoccupied
still owns and insures a house in this state, but has had no one
living in it for 3 months. She is also storing some of furniture
and clothes in the house. From an insurance standpoint, the
insured's house is considered
An insured's roof cost $4,000 when installed 5 years ago. It $5,000
has been damaged by hail and must be replaced. The new
roof will cost $6,000 at today's prices. If the roof has been
depreciating at $200 per year and the insured's policy is
written on the actual cash value(ACV), how much will the
policy pay toward the insured's new roof?
An insured carries a property policy on her home in the Nothing
amount of $250,000. A bank is shown as the mortgagor in the
policy. Last month the insured made her final mortgage
payment, but did not remove the bank from the policy. In the
event of a covered loss to her home, how much will the bank
receive?
What type of damages may be awarded by the court to create Punitive
disincentives that discourage behavior that is deemed highly
undesirable by society?
,A tornado that destroys property would be an example of A Peril
which of the following?
The insured's house is located one mile from the county's new Market Value
landfill and across the road from the entrance of a rock quarry.
It would cost $150,000 to rebuild the house if something
happened to it, but when the insured tried to sell it, the best
offer he received was $80,000. The insurance company will
insure the house for only $80,000. What method of valuation is
used to insure this property?
An insured is applying for a casualty insurance policy. One of Deposit premium audit
the conditions of the policy allows the insurance company to
inspect the insured's books at the end of the policy term to
make sure sufficient premium has been collected for the
exposure she plans to insure. Which condition is part of the
insured's policy?
All of the following statements concerning coinsurance are The coinsurance formula will also be applied to total losses.
true EXCEPT
A situation in which a person can only lose or have no change Pure risk
represents
A policy condition that stipulates how the amount of damaged Appraisal
or lost property will be determined if the insured and the
principal do not agree is known as
An insured has a liability policy that sets the amount for all Per occurrence
claims that arise from a single incident at $50,000. Which type
of limit of liability does this insured's policy have?
Which of the following is NOT an element of negligence? Libel
-duty, breach, and unbroken chain are
Insurable interest in the property covered in a policy must be At time of loss
proven
, A building is insured, but no one has lived or worked in it for 10 Vacant
years. The building is completely empty of any furniture or
personal belongings. From an insurance standpoint, the
building is considered
For the purpose of insurance, risk is defined as The uncertainty or chance of loss
Which law is the foundation of the statistical prediction of loss Law of large numbers
upon which rates for insurance are calculated?
The legal process that gives the insurer, after payment of a Subrogation
loss, the right to seek recovery from a third party that was
responsible for the loss is known as
What is a Certificate of Insurance? A written document showing the types and amounts of insurance that have been issued
to the insured
A $100,000 house insured on a policy with an 80% coinsurance $30,000
requirement has a fire that caused $40,000 of damage; the - For the total amount of a partial loss to be paid, a house must be insured for at least
owner has a policy with $60,000 coverage. How much can the 80% of its value on the date of loss. In this case, because the house is insured for only
owner collect for his loss? $60,000 (75% of the minimum requirement), the policy will pay only 75% of the loss, or
$30,000.
An insured stated on her application for life insurance that she Material misrepresentation
had never had a heart attack, when in fact she had a series of
minor heart attacks last year for which she sought medical
attention. Which of the following will explain the reason a
death benefit claim is denied?
All of the following are conditions commonly found in the Insuring agreement
insurance policy EXCEPT -subrogation, appraisal, cancellation and nonrenewal are all found
Duties of the insurer found in property policy conditions -Notify the insured in the event of financial difficulty
include all of the following EXCEPT
All of the following are considered parts of the policy Provisions
structure EXCEPT -conditions, exclusions, and insuring clause are found
EXAM GUIDE AND PREP |
COMPREHENSIVE STUDY GUIDE, PRACTICE
QUESTIONS AND CORRECT ANSWERS
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Which method of loss valuation is contrary to the basic Replacement cost
concept of indemnity?
An insured owns several buildings, each at a different location Specific
and insured on a separate policy. What type of coverage does
the insured have?
The policy provision found in property insurance policies that Subrogation
prevents the insured from collecting twice for the same loss is
called
Losses caused by continuous or repeated exposure to Occurrence
conditions resulting in injury persons or damage to property
that is neither intended nor expected is the definition of which
of the following terms?
An insured relocated to another state for work. However, she Unoccupied
still owns and insures a house in this state, but has had no one
living in it for 3 months. She is also storing some of furniture
and clothes in the house. From an insurance standpoint, the
insured's house is considered
An insured's roof cost $4,000 when installed 5 years ago. It $5,000
has been damaged by hail and must be replaced. The new
roof will cost $6,000 at today's prices. If the roof has been
depreciating at $200 per year and the insured's policy is
written on the actual cash value(ACV), how much will the
policy pay toward the insured's new roof?
An insured carries a property policy on her home in the Nothing
amount of $250,000. A bank is shown as the mortgagor in the
policy. Last month the insured made her final mortgage
payment, but did not remove the bank from the policy. In the
event of a covered loss to her home, how much will the bank
receive?
What type of damages may be awarded by the court to create Punitive
disincentives that discourage behavior that is deemed highly
undesirable by society?
,A tornado that destroys property would be an example of A Peril
which of the following?
The insured's house is located one mile from the county's new Market Value
landfill and across the road from the entrance of a rock quarry.
It would cost $150,000 to rebuild the house if something
happened to it, but when the insured tried to sell it, the best
offer he received was $80,000. The insurance company will
insure the house for only $80,000. What method of valuation is
used to insure this property?
An insured is applying for a casualty insurance policy. One of Deposit premium audit
the conditions of the policy allows the insurance company to
inspect the insured's books at the end of the policy term to
make sure sufficient premium has been collected for the
exposure she plans to insure. Which condition is part of the
insured's policy?
All of the following statements concerning coinsurance are The coinsurance formula will also be applied to total losses.
true EXCEPT
A situation in which a person can only lose or have no change Pure risk
represents
A policy condition that stipulates how the amount of damaged Appraisal
or lost property will be determined if the insured and the
principal do not agree is known as
An insured has a liability policy that sets the amount for all Per occurrence
claims that arise from a single incident at $50,000. Which type
of limit of liability does this insured's policy have?
Which of the following is NOT an element of negligence? Libel
-duty, breach, and unbroken chain are
Insurable interest in the property covered in a policy must be At time of loss
proven
, A building is insured, but no one has lived or worked in it for 10 Vacant
years. The building is completely empty of any furniture or
personal belongings. From an insurance standpoint, the
building is considered
For the purpose of insurance, risk is defined as The uncertainty or chance of loss
Which law is the foundation of the statistical prediction of loss Law of large numbers
upon which rates for insurance are calculated?
The legal process that gives the insurer, after payment of a Subrogation
loss, the right to seek recovery from a third party that was
responsible for the loss is known as
What is a Certificate of Insurance? A written document showing the types and amounts of insurance that have been issued
to the insured
A $100,000 house insured on a policy with an 80% coinsurance $30,000
requirement has a fire that caused $40,000 of damage; the - For the total amount of a partial loss to be paid, a house must be insured for at least
owner has a policy with $60,000 coverage. How much can the 80% of its value on the date of loss. In this case, because the house is insured for only
owner collect for his loss? $60,000 (75% of the minimum requirement), the policy will pay only 75% of the loss, or
$30,000.
An insured stated on her application for life insurance that she Material misrepresentation
had never had a heart attack, when in fact she had a series of
minor heart attacks last year for which she sought medical
attention. Which of the following will explain the reason a
death benefit claim is denied?
All of the following are conditions commonly found in the Insuring agreement
insurance policy EXCEPT -subrogation, appraisal, cancellation and nonrenewal are all found
Duties of the insurer found in property policy conditions -Notify the insured in the event of financial difficulty
include all of the following EXCEPT
All of the following are considered parts of the policy Provisions
structure EXCEPT -conditions, exclusions, and insuring clause are found
