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Property and Casualty Insurance EXAM | COMPLETE
QUESTIONS AND ANSWERS | 2025 LATEST
UPDATED | ALREADY GRADED A+
Specific insurance - . . ANSWER ✓✓ This type of insurance
designates a particular item to be insured
Blanket insurance - . . ANSWER ✓✓ This type of insurance
covers more than one item of property at a single location or one
more items of property at multiple locations.
Speculative - . . ANSWER ✓✓ possibility of both gain and loss.
Not insurable.
Pure - . . ANSWER ✓✓ only the possibility of loss. Insurable.
What are the 5 methods of managing or handling risk? - . .
ANSWER ✓✓ avoid, control, retain, and transfer risk.
Hazard - . . ANSWER ✓✓ A condition or situation which
increases the chance for loss
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Physical Hazards - . . ANSWER ✓✓ a hazard that arises from the
condition, occupancy, or use of the property itself.
ex: skateboard left on the steps
Moral Hazards - . . ANSWER ✓✓ when an individual through
carelessness or by irresponsible actions can increase the
possibly for a loss.
ex: person who drives carelessly just because they know they
are insured.
Morale Hazards - . . ANSWER ✓✓ when a person might create a
loss situation on purpose just to collect from the insurance
company.
ex: Prearranged, faked theft of someone's old vehicle so they can
get an insurance payout to buy a new vehicle.
Replacement Cost - . . ANSWER ✓✓ The amount of money it
would take to replace a damaged or destroyed item with one of
like kind and quality AT THE TIME OF LOSS. No deduction for
depreciation.
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Actual Cash Value (ACV) - . . ANSWER ✓✓ Replacement Cost,
minus depreciation.
Pair and Set Clause - . . ANSWER ✓✓ Loss to one item of a pair
or set does not constitute loss to the entire pair or set.
Appraisal - . . ANSWER ✓✓ A method of resolving disputes
between insurers and insureds over the amount owed on a
covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be
paid
Subrogation - . . ANSWER ✓✓ An insurer's right to recover the
amount of its loss payment from the third party who is legally
responsible for the loss.
Arbitration - . . ANSWER ✓✓ this condition is similar to the
Appraisal Condition but it is not limited to disputes over the value
of the loss. It may also be used to resolve other areas of
disagreement between the insured and the insurance company.
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What does WC SHAVVER stand for? - . . ANSWER ✓✓ Windstorm,
Civil commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic
eruption, Explosion, Riot
What does BIG AFFECT stand for? - . . ANSWER ✓✓ Burglar
damage, Ice & snow weight, Glass breakage, Accidental
discharge, Falling objects, Freezing of pipes, Electrical damage,
Collapse, Tearing apart.
Insolvency - . . ANSWER ✓✓ A financial state that occurs if
liabilities are greater than assets.
Law of Agency - . . ANSWER ✓✓ Knowledge of the Agents is
Knowledge of the Principal (Insurance Company)
Principal - . . ANSWER ✓✓ Insurance Company
What is the ISO? - . . ANSWER ✓✓ Insurance Services Office
which is an organization established for the benefit of its
member insurance companies. This organization gathers
statistics, provides loss costs, drafts policy forms and coverage
provisions and conducts inspections for rate making purposes.
Coinsurance Clause - . . ANSWER ✓✓ Requires the insured to
carry a minimum specified amount (generally 80%) of the
Property and Casualty Insurance EXAM | COMPLETE
QUESTIONS AND ANSWERS | 2025 LATEST
UPDATED | ALREADY GRADED A+
Specific insurance - . . ANSWER ✓✓ This type of insurance
designates a particular item to be insured
Blanket insurance - . . ANSWER ✓✓ This type of insurance
covers more than one item of property at a single location or one
more items of property at multiple locations.
Speculative - . . ANSWER ✓✓ possibility of both gain and loss.
Not insurable.
Pure - . . ANSWER ✓✓ only the possibility of loss. Insurable.
What are the 5 methods of managing or handling risk? - . .
ANSWER ✓✓ avoid, control, retain, and transfer risk.
Hazard - . . ANSWER ✓✓ A condition or situation which
increases the chance for loss
,2|Page
Physical Hazards - . . ANSWER ✓✓ a hazard that arises from the
condition, occupancy, or use of the property itself.
ex: skateboard left on the steps
Moral Hazards - . . ANSWER ✓✓ when an individual through
carelessness or by irresponsible actions can increase the
possibly for a loss.
ex: person who drives carelessly just because they know they
are insured.
Morale Hazards - . . ANSWER ✓✓ when a person might create a
loss situation on purpose just to collect from the insurance
company.
ex: Prearranged, faked theft of someone's old vehicle so they can
get an insurance payout to buy a new vehicle.
Replacement Cost - . . ANSWER ✓✓ The amount of money it
would take to replace a damaged or destroyed item with one of
like kind and quality AT THE TIME OF LOSS. No deduction for
depreciation.
,3|Page
Actual Cash Value (ACV) - . . ANSWER ✓✓ Replacement Cost,
minus depreciation.
Pair and Set Clause - . . ANSWER ✓✓ Loss to one item of a pair
or set does not constitute loss to the entire pair or set.
Appraisal - . . ANSWER ✓✓ A method of resolving disputes
between insurers and insureds over the amount owed on a
covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be
paid
Subrogation - . . ANSWER ✓✓ An insurer's right to recover the
amount of its loss payment from the third party who is legally
responsible for the loss.
Arbitration - . . ANSWER ✓✓ this condition is similar to the
Appraisal Condition but it is not limited to disputes over the value
of the loss. It may also be used to resolve other areas of
disagreement between the insured and the insurance company.
, 4|Page
What does WC SHAVVER stand for? - . . ANSWER ✓✓ Windstorm,
Civil commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic
eruption, Explosion, Riot
What does BIG AFFECT stand for? - . . ANSWER ✓✓ Burglar
damage, Ice & snow weight, Glass breakage, Accidental
discharge, Falling objects, Freezing of pipes, Electrical damage,
Collapse, Tearing apart.
Insolvency - . . ANSWER ✓✓ A financial state that occurs if
liabilities are greater than assets.
Law of Agency - . . ANSWER ✓✓ Knowledge of the Agents is
Knowledge of the Principal (Insurance Company)
Principal - . . ANSWER ✓✓ Insurance Company
What is the ISO? - . . ANSWER ✓✓ Insurance Services Office
which is an organization established for the benefit of its
member insurance companies. This organization gathers
statistics, provides loss costs, drafts policy forms and coverage
provisions and conducts inspections for rate making purposes.
Coinsurance Clause - . . ANSWER ✓✓ Requires the insured to
carry a minimum specified amount (generally 80%) of the
