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Casualty Insurance Basics Questions with Detailed
Verified Answers
Using an air-cooled engine, a proposed insured has developed a new, experimental
aircraft. If the inventor applies for liability insurance, what rating type will the insurer
most likely use?
Ans: Judgement
Which rating method provides an insurer with that portion of a rate that does not
include provisions of expenses (other than adjusting expense) or profit and is based on
historical aggregate loss and loss adjustment expenses projected through development
to their ultimate value and through trending to a future point in time?
Ans: Loss costs rating
Rates that are established based on the similarities of the risk with other risks are
known as
Ans: Manual rates
Which of the following is NOT an element of negligence?
A. Duty
B. Breach
C. Unbroken chain
D. Libel
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Ans: D
There are four essential elements of negligence: duty, breach, injury, and unbroken
chain.
What fundamental principle in property insurance holds that when there is an
unbroken connection between an occurrence and damage that grows out of the
occurrence, then the resultant damage is all a part of the occurrence?
Ans: Proximate cause
An insured is driving above the posted speed limit. As he rounds a curve, he crashes
into an illegally parked car. This is an example of
Ans: Contributory negligence
Which of the following describes contributory negligence?
A. Negligence is appointed between both parties in an accident
B. The voluntary assumption exposure to risk
C. Any degree of negligence by the injured party may bar recovery
D. The time period in which a claim must be filed.
Ans: C
All of the following statements describe the concept of strict liability EXCEPT:
A. It is imposed regardless of fault
B. It is applied in product liability cases
C. It is imposed on defendants engaged in hazardous activities
D. Claimants may need to provide proof that a product defect caused an injury
© Get it right 2025 Getaway - Stuvia US All rights reserved
Casualty Insurance Basics Questions with Detailed
Verified Answers
Using an air-cooled engine, a proposed insured has developed a new, experimental
aircraft. If the inventor applies for liability insurance, what rating type will the insurer
most likely use?
Ans: Judgement
Which rating method provides an insurer with that portion of a rate that does not
include provisions of expenses (other than adjusting expense) or profit and is based on
historical aggregate loss and loss adjustment expenses projected through development
to their ultimate value and through trending to a future point in time?
Ans: Loss costs rating
Rates that are established based on the similarities of the risk with other risks are
known as
Ans: Manual rates
Which of the following is NOT an element of negligence?
A. Duty
B. Breach
C. Unbroken chain
D. Libel
© Get it right 2025 Getaway - Stuvia US All rights reserved
, Click here for more: Scholars nexus
Ans: D
There are four essential elements of negligence: duty, breach, injury, and unbroken
chain.
What fundamental principle in property insurance holds that when there is an
unbroken connection between an occurrence and damage that grows out of the
occurrence, then the resultant damage is all a part of the occurrence?
Ans: Proximate cause
An insured is driving above the posted speed limit. As he rounds a curve, he crashes
into an illegally parked car. This is an example of
Ans: Contributory negligence
Which of the following describes contributory negligence?
A. Negligence is appointed between both parties in an accident
B. The voluntary assumption exposure to risk
C. Any degree of negligence by the injured party may bar recovery
D. The time period in which a claim must be filed.
Ans: C
All of the following statements describe the concept of strict liability EXCEPT:
A. It is imposed regardless of fault
B. It is applied in product liability cases
C. It is imposed on defendants engaged in hazardous activities
D. Claimants may need to provide proof that a product defect caused an injury
© Get it right 2025 Getaway - Stuvia US All rights reserved
