Pearson VUE: Casualty Insurance Practice Exam
1. C 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
2. B In insurance, which of the following terms refers to contin-
uous 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
3. D 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
4. D
, Pearson VUE: Casualty Insurance Practice Exam
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 organiza-
tions
C. a temporary agreement to pay a claim pending final
settlement
D. temporary short-term evidence of coverage
5. B Anything that increases the chance of loss is known as
a(n):
A. risk
B. hazard
C. direct loss
D. indirect loss
6. D The Fair Credit Reporting Act requires the:
A. insurance company to review the applicant's credit his-
tory prior to underwriting a policy
B. insurance producer to summarize a policy for the in-
sured
C. insurance producer to review the applicant's credit his-
tory prior to issuing a policy
D. insurance company to inform the applicant a credit
report may be obtained
7. C The limits of liability are found in which of the following
sections of a casualty policy?
, Pearson VUE: Casualty Insurance Practice Exam
A. Conditions
B. Insuring Agreement
C. Declarations
D. Definitions
8. B 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
9. D 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.
10. B Which of the following sections of an insurance policy
would explain the term "auto" ?
A. Declarations
1. C 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
2. B In insurance, which of the following terms refers to contin-
uous 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
3. D 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
4. D
, Pearson VUE: Casualty Insurance Practice Exam
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 organiza-
tions
C. a temporary agreement to pay a claim pending final
settlement
D. temporary short-term evidence of coverage
5. B Anything that increases the chance of loss is known as
a(n):
A. risk
B. hazard
C. direct loss
D. indirect loss
6. D The Fair Credit Reporting Act requires the:
A. insurance company to review the applicant's credit his-
tory prior to underwriting a policy
B. insurance producer to summarize a policy for the in-
sured
C. insurance producer to review the applicant's credit his-
tory prior to issuing a policy
D. insurance company to inform the applicant a credit
report may be obtained
7. C The limits of liability are found in which of the following
sections of a casualty policy?
, Pearson VUE: Casualty Insurance Practice Exam
A. Conditions
B. Insuring Agreement
C. Declarations
D. Definitions
8. B 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
9. D 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.
10. B Which of the following sections of an insurance policy
would explain the term "auto" ?
A. Declarations
