Kentucky Property and Casualty Insurance License
Test 2025 With 200 Exam Prep Questions And
Correct Verified Answers/ Property And Casualty
Exam 2025 Kentucky Qs And As(Brand New!)
An insurance license issued by the Kentucky Department of Insurance must
include all of the following EXCEPT
Name and address of the appointing insurer.
Why do most insurance policies covering buildings and their contents exclude
earthquake coverage?
-A severe earthquake can damage many insured properties at the same time.
-It is difficult to tell when an earthquake occurs.
-Earthquake coverage should be obtained through the National Earthquake
Insurance Program.
-Earthquake damage is a form of expected wear and tear.
A severe earthquake can damage many insured properties at the same time.
For an insurer to pay a property insurance claim, when must the policyholder have
an insurable interest exist in the insured property?
-At the time of the loss
-Any time during the past year
-When the insurance was purchased
-When the claim is submitted
At the time of the loss
Morton was restocking the merchandise in Discount Store at 1 a.m. when an alarm
went off. Morton rushed to the back room and discovered that the normally locked
exit door was open, and a carton of valuable merchandise was missing. Using
appropriate insurance terminology, what did Morton call the police to report?
Burglary
Gina was the only employee in OK Convenience Store at 3 a.m. when a gunman
entered the store and made her give him all the money in the cash register. The
pg. 1
,gunman left, and Gina was not injured. Using appropriate insurance terminology,
what did Gina then report to the police?
Robbery
Which one of the following perils is least likely to be covered under a property
insurance policy that covers buildings and contents against the basic causes of
loss?
-fire
-explosion
-falling objects
-lightning
Falling Objects
Twenty years ago, Eldon bought a one-acre lot at a good location for $20,000 and
paid a contractor $100,000 to build a house on it. Somebody recently offered to
buy the house from Eldon for $400,000. Building the same house on that lot today
would cost $250,000. What is the current replacement cost value of Eldon's house?
250,000
Most property insurance policies on buildings and personal property used by a
business cover explosions but exclude coverage for losses covered by a boiler
explosion. Why do they have this exclusion?
-Boiler inspections make insurance unnecessary.
-Boiler explosion losses are not insurable.
-Boiler explosion losses are best handled with an equipment breakdown policy.
-Boilers cannot explode.
Boiler explosion losses are best handled with an equipment breakdown policy.
Corinne purchased her home with a 10 percent down payment and a 90 percent
mortgage from Sidney Bank. Why does Sidney Bank have an insurable interest in
Corinne's house?
-The mortgage documents Corinne signed make the bank a -coinsured.
-The bank faces the possibility of a loss if Corinne's house is damaged or
destroyed.
-Corinne cannot afford to make mortgage payments on her own.
-The mortgage holder (bank) is responsible for paying insurance premiums on a
mortgaged house.
pg. 2
,The bank faces the possibility of a loss if Corinne's house is damaged or destroyed.
Elias's store is covered by a property insurance policy that provides named-perils
coverage. When Elias enters the store on Monday morning, he discovers that much
of the merchandise was damaged over the weekend, and he submits a property
insurance claim. Which of the following statements correctly describes the burden
of proof with respect to this claim?
-The insurer must pay the claim unless the insurer can prove that an exclusion in
Elias's policy applies to this loss.
-Elias needs only to prove that the property was damaged; he does not need to
show what caused the damage.
-Elias has the burden of proving that the damage was caused by a covered peril.
-Elias must be able to prove that a difference in conditions existed before and after
the loss.
Elias has the burden of proving that the damage was caused by a covered peril.
The roof of Robbie's home was badly damaged by hail and had to be replaced.
Fortunately, Robbie's insurance covered losses caused by hail. In this situation, hail
is a(n):
-hazard
-risk
-exposure
-peril
Peril
Rory's parents offered to buy him a new car to take to college, but Rory turned
them down because he was afraid the car would be stolen or damaged if he parked
it on campus. In deciding not to own a car, what risk management technique did
Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention
Risk Avoidance
Maureen is an insurance agent who represents an insurance company. Under the
common-law rules of agency, what is the insurance company she represents?
-a captive
pg. 3
, -a principal
-a broker
-a factor
A Principal
When applying for a businessowners insurance policy, Brandy did not mention the
hazardous and illegal activity that goes on in the backroom of her shop because she
realized no insurer that knew about it would insure her business. What is Brandy's
failure to disclose this activity considered?
-concealment
-misrepresentation
-a waiver
-estoppel
Concealment
By purchasing an insurance policy, a person manages risk by
-retaining it
-avoiding it
-transferring it
-controlling it
Transferring it
Because the Bender Insurance Company insures a large number of similar
convenience stores against fire:
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy than if it insured only a
few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss control.
Bender can predict its losses with much more accuracy than if it insured only a few
stores.
RST Insurance Company sells auto insurance only through the Internet. What type
of marketing system does RST use?
-direct response marketing
-insurance brokers
pg. 4
Test 2025 With 200 Exam Prep Questions And
Correct Verified Answers/ Property And Casualty
Exam 2025 Kentucky Qs And As(Brand New!)
An insurance license issued by the Kentucky Department of Insurance must
include all of the following EXCEPT
Name and address of the appointing insurer.
Why do most insurance policies covering buildings and their contents exclude
earthquake coverage?
-A severe earthquake can damage many insured properties at the same time.
-It is difficult to tell when an earthquake occurs.
-Earthquake coverage should be obtained through the National Earthquake
Insurance Program.
-Earthquake damage is a form of expected wear and tear.
A severe earthquake can damage many insured properties at the same time.
For an insurer to pay a property insurance claim, when must the policyholder have
an insurable interest exist in the insured property?
-At the time of the loss
-Any time during the past year
-When the insurance was purchased
-When the claim is submitted
At the time of the loss
Morton was restocking the merchandise in Discount Store at 1 a.m. when an alarm
went off. Morton rushed to the back room and discovered that the normally locked
exit door was open, and a carton of valuable merchandise was missing. Using
appropriate insurance terminology, what did Morton call the police to report?
Burglary
Gina was the only employee in OK Convenience Store at 3 a.m. when a gunman
entered the store and made her give him all the money in the cash register. The
pg. 1
,gunman left, and Gina was not injured. Using appropriate insurance terminology,
what did Gina then report to the police?
Robbery
Which one of the following perils is least likely to be covered under a property
insurance policy that covers buildings and contents against the basic causes of
loss?
-fire
-explosion
-falling objects
-lightning
Falling Objects
Twenty years ago, Eldon bought a one-acre lot at a good location for $20,000 and
paid a contractor $100,000 to build a house on it. Somebody recently offered to
buy the house from Eldon for $400,000. Building the same house on that lot today
would cost $250,000. What is the current replacement cost value of Eldon's house?
250,000
Most property insurance policies on buildings and personal property used by a
business cover explosions but exclude coverage for losses covered by a boiler
explosion. Why do they have this exclusion?
-Boiler inspections make insurance unnecessary.
-Boiler explosion losses are not insurable.
-Boiler explosion losses are best handled with an equipment breakdown policy.
-Boilers cannot explode.
Boiler explosion losses are best handled with an equipment breakdown policy.
Corinne purchased her home with a 10 percent down payment and a 90 percent
mortgage from Sidney Bank. Why does Sidney Bank have an insurable interest in
Corinne's house?
-The mortgage documents Corinne signed make the bank a -coinsured.
-The bank faces the possibility of a loss if Corinne's house is damaged or
destroyed.
-Corinne cannot afford to make mortgage payments on her own.
-The mortgage holder (bank) is responsible for paying insurance premiums on a
mortgaged house.
pg. 2
,The bank faces the possibility of a loss if Corinne's house is damaged or destroyed.
Elias's store is covered by a property insurance policy that provides named-perils
coverage. When Elias enters the store on Monday morning, he discovers that much
of the merchandise was damaged over the weekend, and he submits a property
insurance claim. Which of the following statements correctly describes the burden
of proof with respect to this claim?
-The insurer must pay the claim unless the insurer can prove that an exclusion in
Elias's policy applies to this loss.
-Elias needs only to prove that the property was damaged; he does not need to
show what caused the damage.
-Elias has the burden of proving that the damage was caused by a covered peril.
-Elias must be able to prove that a difference in conditions existed before and after
the loss.
Elias has the burden of proving that the damage was caused by a covered peril.
The roof of Robbie's home was badly damaged by hail and had to be replaced.
Fortunately, Robbie's insurance covered losses caused by hail. In this situation, hail
is a(n):
-hazard
-risk
-exposure
-peril
Peril
Rory's parents offered to buy him a new car to take to college, but Rory turned
them down because he was afraid the car would be stolen or damaged if he parked
it on campus. In deciding not to own a car, what risk management technique did
Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention
Risk Avoidance
Maureen is an insurance agent who represents an insurance company. Under the
common-law rules of agency, what is the insurance company she represents?
-a captive
pg. 3
, -a principal
-a broker
-a factor
A Principal
When applying for a businessowners insurance policy, Brandy did not mention the
hazardous and illegal activity that goes on in the backroom of her shop because she
realized no insurer that knew about it would insure her business. What is Brandy's
failure to disclose this activity considered?
-concealment
-misrepresentation
-a waiver
-estoppel
Concealment
By purchasing an insurance policy, a person manages risk by
-retaining it
-avoiding it
-transferring it
-controlling it
Transferring it
Because the Bender Insurance Company insures a large number of similar
convenience stores against fire:
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy than if it insured only a
few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss control.
Bender can predict its losses with much more accuracy than if it insured only a few
stores.
RST Insurance Company sells auto insurance only through the Internet. What type
of marketing system does RST use?
-direct response marketing
-insurance brokers
pg. 4
