Property and casualty insurance Exam Questions
and Answers Part one
$1 million - ANS-A trucking company owns a large fleet of trucks that transport oil across state
lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980,
what is the minimum amount of insurance the company must carry on vehicles that transport
oil?
$10,000 - ANS-What is the civil penalty for violating a cease and desist order of the
Commissioner?
$100,000. - ANS-Bob's home is insured for $100,000 under a dwelling policy. Yesterday his
home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting
another fire that completely destroyed the structure. Bob's policy will pay
$15,000/$30,000/$5,000. (comment -The Financial Responsibility Law requires minimum limits
of $15,000 of bodily injury liability for one person injured in an accident; $30,000 of bodily injury
liability for two or more people injured in a single accident; and $5,000 of liability for damage to
property of others in a single accident.) - ANS-In order to satisfy the Pennsylvania Motor Vehicle
Financial Responsibility Law, an auto liability policy issued for delivery in the state must have
bodily injury and property damage limits not less than
$2,500 - ANS-What is the limit for the forgery or alteration coverage in the businessowners
policy?
$20 per day; $600 maximum - ANS-Tom's Truck Service's vehicle is stolen. The policyholder
may obtain coverage for transportation expenses subject to which of the following limits?
$250,000. - ANS-The regular National Flood Insurance Program would insure an eligible
single-family dwelling for up to
$3,000 - ANS-In addition to income benefits, how much will a dependent survivor receive as a
funeral benefit for a deceased employee covered under Workers Compensation?
$30,000 - ANS-An insured's building has an actual cash value of $200,000, and he has insured
the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much
will the policy pay?
$5,000 - ANS-An insured has a special form dwelling policy written for $100,000 on a dwelling.
The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling,
,$15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will
the policy pay for the trees?
$5,000 - ANS-In the computer fraud crime coverage form, what limit is placed on each
occurrence of the loss of manuscripts, drawings, or records?
$5,000 - ANS-Under the commercial crime coverage inside the premises - robbery or safe
burglary of other property, what is the special per occurrence limit that applies to loss or damage
to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or
records?
$5,000. - ANS-A commercial property special form covers property in transit up to
$5,000. - ANS-A premium discount is the term that describes when an insured owes a total
standard premium greater than
$500 - ANS-How much coverage is provided under a homeowners policy for theft or
unauthorized use of a credit card?
$500. - ANS-The standard property deductible per occurrence on a commercial package policy
is
$6,000 would be paid under other-than-collision coverage. - ANS-An insured hits a deer and
crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be
covered?
$8,000 - ANS-If a property is covered by Company A for $20,000 and Company B covers the
same property for $40,000, how much will Company A pay on a $24,000 loss?
10 days - ANS-To avoid violations of unfair claims settlement regulations, insurers are required
to acknowledge the receipt of a claim within how many days?
10 days - ANS-Within the first 60 days of coverage under a dwelling policy, how much notice is
required for the cancellation of a policy?
10 years. - ANS-Any licensed person whose activities affect interstate commerce and who
knowingly makes false material statements related to the business of insurance may be
imprisoned for up to
18 - ANS-What is the minimum age for obtaining an insurance producer's license in this state?
1st limit - ANS-In the split limit coverage in personal auto policies, which limit indicates the
maximum amount the policy will pay for bodily injury per person?
, 3 years - ANS-Coverage for medical payments under a personal auto policy applies to
expenses following a covered accident that are incurred and services rendered within what
maximum time period?
3 years - ANS-Coverage J under farm coverage agrees to pay reasonable medical expenses,
regardless of fault, caused by an accident if the expenses are incurred and reported to the
insurer within how many years of the accident date?
30 - ANS-A producer licensed in Pennsylvania must notify the Insurance Department of any
change of address in his or her residence or business address within how many days?
30 - ANS-If an insurer terminates a producer's appointment, the Commissioner must be notified
within how many days?
30 days - ANS-How long is the waiting period after the application has been accepted before
flood coverage goes into effect?
30 days. - ANS-When a producer holding a certificate or a broker's license has a change in
his/her residence or business address, he/she must notify the Department of Insurance and any
company for which the producer holds an appointment within
5 years. - ANS-For the purpose of examination by the department, insurers must keep a record
of all financial files for at least
6 stories. - ANS-To be eligible for businessowners policy (BOP) coverage, an office building
CANNOT be higher than
60 days - ANS-According to the loss payment condition in HO policies, losses must be paid
within how many days of the insurer receiving proof of loss?
60 days. - ANS-Losses caused by vandalism and malicious mischief are excluded under a
homeowners policy if the dwelling had been vacant for more than
80% (note-Coverage F - Unscheduled Farm Personal Property insures all farm personal
property on a blanket basis. Coverage F is subject to an 80% coinsurance clause.
) - ANS-What is the required limit of insurance in the coinsurance clause for Coverage F -
Unscheduled Farm Personal Property?
80% of the property's replacement cost or more - ANS-An insured owns a building valued at
$400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much
should he insure the property for?
and Answers Part one
$1 million - ANS-A trucking company owns a large fleet of trucks that transport oil across state
lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980,
what is the minimum amount of insurance the company must carry on vehicles that transport
oil?
$10,000 - ANS-What is the civil penalty for violating a cease and desist order of the
Commissioner?
$100,000. - ANS-Bob's home is insured for $100,000 under a dwelling policy. Yesterday his
home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting
another fire that completely destroyed the structure. Bob's policy will pay
$15,000/$30,000/$5,000. (comment -The Financial Responsibility Law requires minimum limits
of $15,000 of bodily injury liability for one person injured in an accident; $30,000 of bodily injury
liability for two or more people injured in a single accident; and $5,000 of liability for damage to
property of others in a single accident.) - ANS-In order to satisfy the Pennsylvania Motor Vehicle
Financial Responsibility Law, an auto liability policy issued for delivery in the state must have
bodily injury and property damage limits not less than
$2,500 - ANS-What is the limit for the forgery or alteration coverage in the businessowners
policy?
$20 per day; $600 maximum - ANS-Tom's Truck Service's vehicle is stolen. The policyholder
may obtain coverage for transportation expenses subject to which of the following limits?
$250,000. - ANS-The regular National Flood Insurance Program would insure an eligible
single-family dwelling for up to
$3,000 - ANS-In addition to income benefits, how much will a dependent survivor receive as a
funeral benefit for a deceased employee covered under Workers Compensation?
$30,000 - ANS-An insured's building has an actual cash value of $200,000, and he has insured
the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much
will the policy pay?
$5,000 - ANS-An insured has a special form dwelling policy written for $100,000 on a dwelling.
The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling,
,$15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will
the policy pay for the trees?
$5,000 - ANS-In the computer fraud crime coverage form, what limit is placed on each
occurrence of the loss of manuscripts, drawings, or records?
$5,000 - ANS-Under the commercial crime coverage inside the premises - robbery or safe
burglary of other property, what is the special per occurrence limit that applies to loss or damage
to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or
records?
$5,000. - ANS-A commercial property special form covers property in transit up to
$5,000. - ANS-A premium discount is the term that describes when an insured owes a total
standard premium greater than
$500 - ANS-How much coverage is provided under a homeowners policy for theft or
unauthorized use of a credit card?
$500. - ANS-The standard property deductible per occurrence on a commercial package policy
is
$6,000 would be paid under other-than-collision coverage. - ANS-An insured hits a deer and
crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be
covered?
$8,000 - ANS-If a property is covered by Company A for $20,000 and Company B covers the
same property for $40,000, how much will Company A pay on a $24,000 loss?
10 days - ANS-To avoid violations of unfair claims settlement regulations, insurers are required
to acknowledge the receipt of a claim within how many days?
10 days - ANS-Within the first 60 days of coverage under a dwelling policy, how much notice is
required for the cancellation of a policy?
10 years. - ANS-Any licensed person whose activities affect interstate commerce and who
knowingly makes false material statements related to the business of insurance may be
imprisoned for up to
18 - ANS-What is the minimum age for obtaining an insurance producer's license in this state?
1st limit - ANS-In the split limit coverage in personal auto policies, which limit indicates the
maximum amount the policy will pay for bodily injury per person?
, 3 years - ANS-Coverage for medical payments under a personal auto policy applies to
expenses following a covered accident that are incurred and services rendered within what
maximum time period?
3 years - ANS-Coverage J under farm coverage agrees to pay reasonable medical expenses,
regardless of fault, caused by an accident if the expenses are incurred and reported to the
insurer within how many years of the accident date?
30 - ANS-A producer licensed in Pennsylvania must notify the Insurance Department of any
change of address in his or her residence or business address within how many days?
30 - ANS-If an insurer terminates a producer's appointment, the Commissioner must be notified
within how many days?
30 days - ANS-How long is the waiting period after the application has been accepted before
flood coverage goes into effect?
30 days. - ANS-When a producer holding a certificate or a broker's license has a change in
his/her residence or business address, he/she must notify the Department of Insurance and any
company for which the producer holds an appointment within
5 years. - ANS-For the purpose of examination by the department, insurers must keep a record
of all financial files for at least
6 stories. - ANS-To be eligible for businessowners policy (BOP) coverage, an office building
CANNOT be higher than
60 days - ANS-According to the loss payment condition in HO policies, losses must be paid
within how many days of the insurer receiving proof of loss?
60 days. - ANS-Losses caused by vandalism and malicious mischief are excluded under a
homeowners policy if the dwelling had been vacant for more than
80% (note-Coverage F - Unscheduled Farm Personal Property insures all farm personal
property on a blanket basis. Coverage F is subject to an 80% coinsurance clause.
) - ANS-What is the required limit of insurance in the coinsurance clause for Coverage F -
Unscheduled Farm Personal Property?
80% of the property's replacement cost or more - ANS-An insured owns a building valued at
$400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much
should he insure the property for?
