Pearson VUE: Casualty Insurance Practice Exam
Questions Answered Correctly
1: What is the primary purpose of casualty insurance?--- correct answer ---
The primary purpose of casualty insurance is to provide coverage against
legal liability for losses caused by injury to other people or damage to the
property of others.
2: Define liability insurance. --- correct answer ---
Liability insurance is a type of insurance that provides protection to the
insured against claims resulting from injuries and damage to other people
or property.
3: What does negligence mean in the context of casualty insurance?---
correct answer ---
In casualty insurance, negligence refers to the failure to exercise the care
that a reasonably prudent person would exercise in like circumstances,
resulting in harm or damage to another party.
4: What is a premium in insurance terms?--- correct answer ---
A premium is the amount of money an insured pays to an insurance
company for coverage under a policy.
,5: Explain the term policyholder. --- correct answer ---
A policyholder is an individual or entity that owns an insurance policy and
is entitled to the coverage provided by that policy.
6: What is an endorsement in an insurance policy?--- correct answer ---
An endorsement is an amendment or addition to an existing insurance
policy that changes the terms or scope of the original policy.
7: Describe the concept of risk management. --- correct answer ---
Risk management is the process of identifying, assessing, and prioritizing
risks followed by coordinated efforts to minimize, monitor, and control the
probability or impact of unfortunate events.
8: What is the difference between occurrence and claims-made policies?---
correct answer --- An occurrence policy covers claims arising out of
incidents that occur during the policy period, regardless of when the claim
is filed. A claims-made policy
covers claims made during the policy period, regardless of when the
incident occurred.
9: Define deductible in an insurance policy. --- correct answer ---
A deductible is the amount of money that the insured must pay out-of-
pocket before the insurance company pays for any covered losses.
, 10: What is bodily injury liability coverage?--- correct answer ---
Bodily injury liability coverage is a component of auto insurance that pays
for injuries the policyholder causes to other people in an accident.
11: Explain property damage liability coverage. --- correct answer ---
Property damage liability coverage pays for damage the policyholder causes
to someone elses property in an accident.
12: What is the purpose of uninsured motorist coverage?--- correct answer --
-
Uninsured motorist coverage provides protection for the policyholder if they
are involved in an accident with a driver who does not have insurance.
13: Describe underinsured motorist coverage. --- correct answer ---
Underinsured motorist coverage protects the policyholder when they are
involved in an accident with a driver whose insurance is insufficient to
cover the damages.
14: What is a claim in the context of insurance?--- correct answer ---
A claim is a formal request made by a policyholder to an insurance company
for payment of a loss covered by the insurance policy.
Questions Answered Correctly
1: What is the primary purpose of casualty insurance?--- correct answer ---
The primary purpose of casualty insurance is to provide coverage against
legal liability for losses caused by injury to other people or damage to the
property of others.
2: Define liability insurance. --- correct answer ---
Liability insurance is a type of insurance that provides protection to the
insured against claims resulting from injuries and damage to other people
or property.
3: What does negligence mean in the context of casualty insurance?---
correct answer ---
In casualty insurance, negligence refers to the failure to exercise the care
that a reasonably prudent person would exercise in like circumstances,
resulting in harm or damage to another party.
4: What is a premium in insurance terms?--- correct answer ---
A premium is the amount of money an insured pays to an insurance
company for coverage under a policy.
,5: Explain the term policyholder. --- correct answer ---
A policyholder is an individual or entity that owns an insurance policy and
is entitled to the coverage provided by that policy.
6: What is an endorsement in an insurance policy?--- correct answer ---
An endorsement is an amendment or addition to an existing insurance
policy that changes the terms or scope of the original policy.
7: Describe the concept of risk management. --- correct answer ---
Risk management is the process of identifying, assessing, and prioritizing
risks followed by coordinated efforts to minimize, monitor, and control the
probability or impact of unfortunate events.
8: What is the difference between occurrence and claims-made policies?---
correct answer --- An occurrence policy covers claims arising out of
incidents that occur during the policy period, regardless of when the claim
is filed. A claims-made policy
covers claims made during the policy period, regardless of when the
incident occurred.
9: Define deductible in an insurance policy. --- correct answer ---
A deductible is the amount of money that the insured must pay out-of-
pocket before the insurance company pays for any covered losses.
, 10: What is bodily injury liability coverage?--- correct answer ---
Bodily injury liability coverage is a component of auto insurance that pays
for injuries the policyholder causes to other people in an accident.
11: Explain property damage liability coverage. --- correct answer ---
Property damage liability coverage pays for damage the policyholder causes
to someone elses property in an accident.
12: What is the purpose of uninsured motorist coverage?--- correct answer --
-
Uninsured motorist coverage provides protection for the policyholder if they
are involved in an accident with a driver who does not have insurance.
13: Describe underinsured motorist coverage. --- correct answer ---
Underinsured motorist coverage protects the policyholder when they are
involved in an accident with a driver whose insurance is insufficient to
cover the damages.
14: What is a claim in the context of insurance?--- correct answer ---
A claim is a formal request made by a policyholder to an insurance company
for payment of a loss covered by the insurance policy.
