Pearson VUE: Casualty Insurance Practice Exam Questions and Answers

Pearson VUE: Casualty Insurance Practice Exam Questions and Answers An insured may cancel a Personal Auto Policy by taking which of the following actions? A. Paying the insurance company any past due premiums B. Waiting until the policy expiration date C. Giving written notice to the insurance company D. Informing the producer by telephone - Answer- C In insurance, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor intended? A. An accident B. An occurrence C. An event D. A condition - Answer- B Which of the following vehicles is considered a temporary substitute auto under a Personal Auto policy? A. A neighbor's pickup truck borrowed by an insured to run an errand B. An auto purchased by an insured to replace a previously owned vehicle C. An auto rented by an insured when the insured is on vacation D. An auto rented by an insured when the insured's car is in a garage for repairs - Answer- D An insurance binder is best described as: A. a large bound volume of rules, rates, and forms B. a rate manual supplied by one of the rating organizations C. a temporary agreement to pay a claim pending final settlement D. temporary short-term evidence of coverage - Answer- D Anything that increases the chance of loss is known as a(n): A. risk B. hazard C. direct loss D. indirect loss - Answer- B The Fair Credit Reporting Act requires the: A. insurance company to review the applicant's credit history prior to underwriting a policy B. insurance producer to summarize a policy for the insured C. insurance producer to review the applicant's credit history prior to issuing a policy D. insurance company to inform the applicant a credit report may be obtained - Answer- D The limits of liability are found in which of the following sections of a casualty policy? A. Conditions B. Insuring Agreement C. Declarations D. Definitions - Answer- C A policyholder would expect to find which of the following information in the Insuring Agreement section of an auto policy? A. Bodily Injury limits of liability B. The insurance company's promise to pay on the behalf of the insured C. Exclusions regarding certain uses of the auto D. The obligations of the insured in the event of a loss - Answer- B Products Liability coverage would insure damages that arise from which of the following situations? A. A manufacturer is required to recall a defective product. B. A contractor installs inferior-grade siding on a building. C. A customer receives an electrical shock from a curling iron during an in-store demonstration. D. A bicycle rider is injured when a wheel malfunctions. - Answer- D