1 | Page
Insurance: Property & Casualty Questions
and Answers
Accident
Ans: A sudden and unexpected event which occurs at a specific time and
place.
Actual Cash Value (ACV)
Ans: The cost to replace an item of property at the time of loss, less an
allowance for depreciation. Often used to determine amount of
reimbursement for a loss.
Additional Living Expense
Ans: A coverage designed to reimburse the insured for an increase in
living expenses necessitated by loss to the dwelling. This indirect loss
must be the result of a direct loss by a covered peril.
Adhesion
Ans: A characteristic of insurance policies that means the contract is
prepared by the insurer and is non-negotiable or "one-sided".
Admitted Company
Ans: A company which meets the state insurance department's
standards and is authorized to do business in the state.
Agent
Ans: The state-licensed professional who represents the insurance
company in the sale and servicing of insurance. The direct link between
the insurance company and the policyholder.
Aggregate Limit
© 2025 All rights reserved
, 2 | Page
Ans: A type of policy limit found in liability policies which limits
coverage to a specified total amount for all losses occurring within the
policy period.
Aleatory
Ans: A characteristic of insurance contracts, meaning a contract in
which equal value is not given by both parties to the contract.
Alien Company
Ans: An insurance company incorporated in a country other than the
United States.
Allied Lines
Ans: Used to insure additional types of losses to property and sold in
conjunction with fire insurance.
All-Risk
Ans: A term used to indicate that property is covered against all perils
except those specifically excluded.
Apportionment
Ans: A method determining how much will be contributed by each
company toward a loss covered under more than one policy.
Appurtenant Structures
Ans: A structure belonging to the insured and associated with the
insured property. (another name for "other structures")
Appraisal Clause
Ans: A clause which provides a specific procedure when the insured and
the insurer are in disagreement regarding the amount of a loss.
Binder
© 2025 All rights reserved
, 3 | Page
Ans: An acknowledgment (or receipt), usually from the agent, that
insurance applied for is in force regardless of any premium settlement.
Blanket Position Bond
Ans: Fidelity bond which specifies a single limit of liability applicable to
each employee involved in a loss.
Bodily Injury
Ans: __________ coverage pays for injuries, sickness, disease, or required
care for death that the policyholder is found legally liable for.
Boiler and Machinery Policy
Ans: Insurance which covers the insured against loss (liability and
physical damage) arising out of the use of scheduled commercial
equipment.
Broker
Ans: An individual who represents the prospect, instead of the
insurance company, in the insurance transaction. Frequently involved in
the placement of very large or unusual risks.
Burglary
Ans: The unlawful taking of property by forced entry into the premises
while the premises is closed for business (must be visible evidence of
forced entry or exit).
Business Interruption Insurance
Ans: A Time-Element coverage which reimburses the insured for loss of
earnings due to the inability to operate caused by a covered peril.
Casualty Insurance
Ans: A broad category of coverage against loss of property, damage, or
other liabilities. Includes auto, liability, theft, elevator, glass, aviation,
boiler and machinery, worker's comp, bonds, and many other types of
insurance.
© 2025 All rights reserved
Insurance: Property & Casualty Questions
and Answers
Accident
Ans: A sudden and unexpected event which occurs at a specific time and
place.
Actual Cash Value (ACV)
Ans: The cost to replace an item of property at the time of loss, less an
allowance for depreciation. Often used to determine amount of
reimbursement for a loss.
Additional Living Expense
Ans: A coverage designed to reimburse the insured for an increase in
living expenses necessitated by loss to the dwelling. This indirect loss
must be the result of a direct loss by a covered peril.
Adhesion
Ans: A characteristic of insurance policies that means the contract is
prepared by the insurer and is non-negotiable or "one-sided".
Admitted Company
Ans: A company which meets the state insurance department's
standards and is authorized to do business in the state.
Agent
Ans: The state-licensed professional who represents the insurance
company in the sale and servicing of insurance. The direct link between
the insurance company and the policyholder.
Aggregate Limit
© 2025 All rights reserved
, 2 | Page
Ans: A type of policy limit found in liability policies which limits
coverage to a specified total amount for all losses occurring within the
policy period.
Aleatory
Ans: A characteristic of insurance contracts, meaning a contract in
which equal value is not given by both parties to the contract.
Alien Company
Ans: An insurance company incorporated in a country other than the
United States.
Allied Lines
Ans: Used to insure additional types of losses to property and sold in
conjunction with fire insurance.
All-Risk
Ans: A term used to indicate that property is covered against all perils
except those specifically excluded.
Apportionment
Ans: A method determining how much will be contributed by each
company toward a loss covered under more than one policy.
Appurtenant Structures
Ans: A structure belonging to the insured and associated with the
insured property. (another name for "other structures")
Appraisal Clause
Ans: A clause which provides a specific procedure when the insured and
the insurer are in disagreement regarding the amount of a loss.
Binder
© 2025 All rights reserved
, 3 | Page
Ans: An acknowledgment (or receipt), usually from the agent, that
insurance applied for is in force regardless of any premium settlement.
Blanket Position Bond
Ans: Fidelity bond which specifies a single limit of liability applicable to
each employee involved in a loss.
Bodily Injury
Ans: __________ coverage pays for injuries, sickness, disease, or required
care for death that the policyholder is found legally liable for.
Boiler and Machinery Policy
Ans: Insurance which covers the insured against loss (liability and
physical damage) arising out of the use of scheduled commercial
equipment.
Broker
Ans: An individual who represents the prospect, instead of the
insurance company, in the insurance transaction. Frequently involved in
the placement of very large or unusual risks.
Burglary
Ans: The unlawful taking of property by forced entry into the premises
while the premises is closed for business (must be visible evidence of
forced entry or exit).
Business Interruption Insurance
Ans: A Time-Element coverage which reimburses the insured for loss of
earnings due to the inability to operate caused by a covered peril.
Casualty Insurance
Ans: A broad category of coverage against loss of property, damage, or
other liabilities. Includes auto, liability, theft, elevator, glass, aviation,
boiler and machinery, worker's comp, bonds, and many other types of
insurance.
© 2025 All rights reserved
