Exam Fx Property Questions With Complete Solutions

What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident? correct answer: Per occurrence In reference to insurable interest, which of the following is NOT an element of insurable risk? correct answer: Personal Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT correct answer: Pollution Once a binder is issued, it can last no longer than correct answer: 90 days Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions? correct answer: Limits of liability Which statement best describes agreement as it relates to insurance contracts? correct answer: One party accepts the exact terms of the other party's offer Which of the following perils is NOT covered the DP-2? correct answer: Damage to pets, birds, or fish How does insurance distribute the financial consequences of individual losses? correct answer: It transfers the risk to all persons insured Restoring an insured financially after a claim is known as correct answer: Indemnity Which of the following statements is true regarding advertising that the Insurance Guaranty Association would ensure payment of benefits in the event of insurer insolvency? correct answer: It is an unfair trade practice to mention the Association in advertisements. Loss valuation is best described as the process of correct answer: Determining the premium charged and the amount of insurance required on a specific property Which of the following would be covered under a building and personal property coverage form? correct answer: Outdoor sign Homeland Housing Corp holds a mortgage on a property that John and Carol Thomas purchased. John and Carol have a Homeowners policy with Home Protection Insurance which has a mortgagee clause naming Homeland as a loss payee. If John and Carol suffer a fire to their home correct answer: The Thomases and Homeland will be considered co-claimants and receive loss reimbursement from Home Protection Insurance An applicant for property insurance owns a building in which combustible materials are carelessly stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a correct answer: Morale hazard