Chapter 6 CPCU 520 Exam Questions and Answers Already Passed Latest Update 2025-2026
Which one of the following statements is correct with regard to the various users of claim
information? - Answers Individual underwriters are interested in claim information for the
specific accounts they have underwritten.
Which one of the following statements is true concerning claim information users? - Answers
Producers must have policyholder loss information to prepare renewal policies properly.
In the claim function, supporting the insurer's profit goal is accomplished through - Answers
Controlling expenses.
Which one of the following statements is correct regarding the claim function of an insurer? -
Answers The claim function helps insurers achieve underwriting profit through control of
expenses.
Most insurers give some producers the authority to pay claims up to a certain amount. In this
role, producers function much like - Answers An inside claim representative.
People who handle claims may be staff claim representatives, independent adjusters,
employees of third-party administrators, or - Answers Producers who sell policies to insureds.
People who handle claims fall into a number of categories. Those who handle claims, keep
claim records, and perform statistical analysis on behalf of self-insureds are called - Answers
Third-party administrators.
An employee of an insurance company who performs some or all of the insurer's claim-handling
activities is called - Answers A staff claim representative.
Which one of the following statements regarding authority levels is true - Answers Claim
information systems might allow different authority levels for different types of employees.
State insurance regulators conduct claim audits to ensure - Answers Understanding of reserving
practices.
Claim audits are a review of claim files to ensure that claims are being handled properly, and -
Answers Can be conducted by an individual other than an insurer's internal personnel.
Soon after a loss has been assigned and initial reserves have been established, a claim
representative contacts the insured or the insured's representative. Which one of the following
statements is correct with respect to that contact? - Answers Claim representatives must be
careful not to give the impression that a claim will be paid if potential grounds exist to deny the
claim.
An important aspect of acknowledging a claimant's liability claim, upon first contact, is -
Answers To try to obtain information on the nature and extent of the injury.
, Claim representatives are responsible for determining the cause of loss, liability, and the loss
amount. Which one of the following statements is correct with respect to this process? -
Answers The claim representative reviews all component parts of the policy and applies them to
the facts of the case.
The question "Is the location of the loss covered?" is a part of the framework for coverage
analysis because the location where the loss occurred must be within the policy's territorial
limits. The PAP includes which one of the following locations in the definition of policy territory?
- Answers Puerto Rico
Buddy's store is damaged in a fire. He suffers loss of his merchandise as well as loss of income
while he replenishes his stock. His direct loss is - Answers The loss of his merchandise and
damage to the store.
In handling a property claim under Special Form Coverage, a claim representative should gather
facts about the cause of loss and then - Answers Determine if the cause of loss is excluded in
the Special Form Coverage.
Antonia and Philip have their house insured with Durham Insurance under an HO-3 homeowner's
policy. Philip is the named insured and there is no mortgagee shown on the policy. During a
storm, a lightning strike results in a kitchen fire and high winds causes a tree to fall on the roof,
leaving a large hole. The homeowners make emergency repairs to protect against further
damage and report the loss to the insurer. The claim is assigned to Miguel who identifies the
policy and performs an initial review. After discussing the loss with Antonia and Philip, which
one of the following will Miguel most likely do? - Answers Determine whether lightning and
windstorm are covered causes of loss and whether any exclusions apply
Alexis has inherited a family cottage that she has insured with Millstone Insurance for $100,000.
One weekend while Alexis is at the cottage, a fire starts in the night. The cottage is a total loss.
Alexis calls her insurance agent who reports the claim to Millstone. The claim is assigned to
Victor, a property claim representative. After entering the information from the notice of loss
into Millstone's claim-processing system, which one of the following will Victor most likely do? -
Answers Set preliminary loss reserves
Riko is an automobile claim representative who has been assigned a claim submitted by John.
John owns a Honda Civic, which is insured in his name for liability, collision, and comprehensive
coverage on a Personal Auto Policy (PAP). He is the only named insured on the policy. John
lives with his parents and his sister, Carla. One Saturday, while John is asleep, Carla borrows his
car to run errands. Unfortunately she backs into the concrete base of a sign at the mall,
damaging the vehicle. Riko confirms that the Honda is the covered vehicle, that it is insured
against collision, and that the loss occurred during the policy period. Which one of the following
will she most likely determine next? - Answers Is Carla covered as a driver of the damaged
vehicle?
Which one of the following statements is correct with regard to the various users of claim
information? - Answers Individual underwriters are interested in claim information for the
specific accounts they have underwritten.
Which one of the following statements is true concerning claim information users? - Answers
Producers must have policyholder loss information to prepare renewal policies properly.
In the claim function, supporting the insurer's profit goal is accomplished through - Answers
Controlling expenses.
Which one of the following statements is correct regarding the claim function of an insurer? -
Answers The claim function helps insurers achieve underwriting profit through control of
expenses.
Most insurers give some producers the authority to pay claims up to a certain amount. In this
role, producers function much like - Answers An inside claim representative.
People who handle claims may be staff claim representatives, independent adjusters,
employees of third-party administrators, or - Answers Producers who sell policies to insureds.
People who handle claims fall into a number of categories. Those who handle claims, keep
claim records, and perform statistical analysis on behalf of self-insureds are called - Answers
Third-party administrators.
An employee of an insurance company who performs some or all of the insurer's claim-handling
activities is called - Answers A staff claim representative.
Which one of the following statements regarding authority levels is true - Answers Claim
information systems might allow different authority levels for different types of employees.
State insurance regulators conduct claim audits to ensure - Answers Understanding of reserving
practices.
Claim audits are a review of claim files to ensure that claims are being handled properly, and -
Answers Can be conducted by an individual other than an insurer's internal personnel.
Soon after a loss has been assigned and initial reserves have been established, a claim
representative contacts the insured or the insured's representative. Which one of the following
statements is correct with respect to that contact? - Answers Claim representatives must be
careful not to give the impression that a claim will be paid if potential grounds exist to deny the
claim.
An important aspect of acknowledging a claimant's liability claim, upon first contact, is -
Answers To try to obtain information on the nature and extent of the injury.
, Claim representatives are responsible for determining the cause of loss, liability, and the loss
amount. Which one of the following statements is correct with respect to this process? -
Answers The claim representative reviews all component parts of the policy and applies them to
the facts of the case.
The question "Is the location of the loss covered?" is a part of the framework for coverage
analysis because the location where the loss occurred must be within the policy's territorial
limits. The PAP includes which one of the following locations in the definition of policy territory?
- Answers Puerto Rico
Buddy's store is damaged in a fire. He suffers loss of his merchandise as well as loss of income
while he replenishes his stock. His direct loss is - Answers The loss of his merchandise and
damage to the store.
In handling a property claim under Special Form Coverage, a claim representative should gather
facts about the cause of loss and then - Answers Determine if the cause of loss is excluded in
the Special Form Coverage.
Antonia and Philip have their house insured with Durham Insurance under an HO-3 homeowner's
policy. Philip is the named insured and there is no mortgagee shown on the policy. During a
storm, a lightning strike results in a kitchen fire and high winds causes a tree to fall on the roof,
leaving a large hole. The homeowners make emergency repairs to protect against further
damage and report the loss to the insurer. The claim is assigned to Miguel who identifies the
policy and performs an initial review. After discussing the loss with Antonia and Philip, which
one of the following will Miguel most likely do? - Answers Determine whether lightning and
windstorm are covered causes of loss and whether any exclusions apply
Alexis has inherited a family cottage that she has insured with Millstone Insurance for $100,000.
One weekend while Alexis is at the cottage, a fire starts in the night. The cottage is a total loss.
Alexis calls her insurance agent who reports the claim to Millstone. The claim is assigned to
Victor, a property claim representative. After entering the information from the notice of loss
into Millstone's claim-processing system, which one of the following will Victor most likely do? -
Answers Set preliminary loss reserves
Riko is an automobile claim representative who has been assigned a claim submitted by John.
John owns a Honda Civic, which is insured in his name for liability, collision, and comprehensive
coverage on a Personal Auto Policy (PAP). He is the only named insured on the policy. John
lives with his parents and his sister, Carla. One Saturday, while John is asleep, Carla borrows his
car to run errands. Unfortunately she backs into the concrete base of a sign at the mall,
damaging the vehicle. Riko confirms that the Honda is the covered vehicle, that it is insured
against collision, and that the loss occurred during the policy period. Which one of the following
will she most likely determine next? - Answers Is Carla covered as a driver of the damaged
vehicle?
