PROPERTY AND CASUALTY PRACTICE EXAM PREP QUESTIONS AND ANSWERS 2024

A morale hazard Arises through an individual's carelessness or irresponsible actions They do not tell the agent that their son, Who lost his drivers license due to drunk driving, uses one of their cars on a regular basis to drive to work. The company found out about their son after he had an accident, and they denied the claim. What legal concept can be cited as the reason for claim denial? Concealment Which of the following would be covered under the building coverage and the building and personal property coverage form? Fixtures Which of the following forms is used to insure private passenger and commercial auto exposures? Business Auto Coverage Form Businessowners Policy (BOP) Provides a prepackaged policy of property and liability coverages for certain types of small businesses Of the four coverages provided under section 1 of the homeowners policy, which one provides coverage against loss of use, an indirect loss? Coverage D Which of the following is covered under a businessowners policy? A small business Who of the following would be considered an Insured for liability coverage under the personal auto policy? The named insured's son, Who lives with the insured, while driving a neighbors car with permission Which of the following types of benefits is generally not provided by a state's workers' compensation law? Pain and suffering Which of the following is NOT covered in the inland marine sign coverage form? A sign that breaks during installation Each of the following kinds of property may be covered under a building and personal property coverage form EXCEPT: Autos for sale Which of the following would NOT generally be included in the supplementary payments portion of a liability policy? Damage to property owned by the insured Which commercial property coverage form covers damage to the property of others in the insured's care, custody, or control, but only if the insured is legally liable? Legal liability coverage form Under the Commercial General Liability policy, a separate Aggregate Limit applies to The products - completed operations Coverage for sums an employer becomes legally obligated to pay under common law as a result of a work related injury to an employee is provided by Part two- Employers liability section of the Workers Comp policy Which of the following losses would be covered by a flood policy? Heavy rains cause a lake to overflow and flood the basement and first floor of a house In a liability loss, the person to whom the insured caused damage is referred to as The third-party The purpose of a binder is to provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires The purpose of insurance is to Transfer risk from a person, business, or organization to an insurance company that agrees to pay for losses in exchange for a premium. Additional living expense coverage that is included under the broad and special dwelling forms protects the insured against extra living costs incurred when the home becomes uninhabitable due to damage by a peril insured against What is a common name for Part D of the personal auto policy? Physical Damage Coverage An insurance agent who needs liability coverage for her professional liability exposure can obtain it by purchasing errors and omissions insurance The type of insurance company in which the policyholder is considered an owner and also shares in the profits, is A mutual company Special (open) peril coverage for both the dwelling and personal property is provided by The HO-5 The party to a surety bond who promises to do or not do a specific thing is The principal Under the business auto coverage form, the insured's liability arising from which of the following situations would be covered? Bodily injury resulting from loading or unloading a covered auto A hardware store is insured under a business income coverage form with the basic causes of loss form. Which of the following perils would NOT be covered? Damage from the weight of ice, sleet, or snow Statements made on an application that are guaranteed to be true are warranties Which of the following is an available coverage option under the equipment breakdown protection coverage form? Utility interruption Assume the following items were stolen from the insured's home. Which one of these losses would it be fully covered under Coverage C of the homeowners policy, assuming the loss was for the full value of the property described A $2,000 laptop computer the insured uses for her in-home accounting business The physical damage section of the personal auto policy excludes mechanical breakdown Insurance arising out of rendering or failing to render services of a professional nature that was developed for physicians, surgeons, dentists, lawyers, insurance agents, directors, and accountants is known as Professional liability insurance Which one of the following lists all the required elements for establishing a charge of negligence? legal duty owed, breach of legal duty owed, proximate cause, damages Crime insurance that is written on a loss sustained form covers losses discovered either during the policy period or up to one year after policy expires Furniture that is destroyed when a building burns down is an example of what kind of loss? direct Which of the following broad perils is covered by the HO-2 and HO-3? Sudden and accidental rupture of a heating system The insured has a Personal Auto policy with all cars insured by one company. He sells one of the cars and buys a new one to replace it. Must the insured take any action for the Liability portion of his current policy to apply to the replacement vehicle? No, the insured does not have to do anything; liability coverage for a replacement vehicle is automatic