WA PROPERTY AND CASUALTY
EXAM QUESTIONS AND
ANSWERS
Which of the following insurers are owned by stockholders who have the usual rights of
ownership, including the right of voting? - Answer- Stock
An insurer neglects to pay a legitimate claim that is covered under the terms of the
policy. Which of the following insurance principles has an insurer violated? - Answer-
Consideration
When doing business in this state, an insurance company that is formed under the laws
of another state is known as which type of insurer? - Answer- Foreign
Something of value exchanged between the insurer and the insured is considered an -
Answer- Consideration
An insureds 9 year old son threw a ball accidentally breaking a neighbor’s plate glass
window. The insured was found legally liable for the cost of replacing the window. This
is an example of - Answer- Vicarious liability
What are two types of compensatory damages? - Answer- Special and general
Which of the following is the correct formula for computing a loss ratio? - Answer-
(Incurred losses + loss adjusting expense) / earned premium = loss ratio
The transfer of an insured's right to seek damages from a negligent party to the insurer
is found in which of the following clauses? - Answer- Subrogation
The part of the insurance contract that describes the covered perils and the nature of
coverage of the contractual agreement between the insurer and the insured is called the
- Answer- Insuring agreement
The section of an insurance policy that details what perils are not insured against and
what persons are not insured is known as the - Answer- Exclusions
The part of a property policy that shows the amount of insurance, premium and policy
term is the - Answer- Declarations
,What insurance policy provision defines how the policy will respond if there is more than
one insurance policy written on the same risk? - Answer- Other insurance
When an insurance policy does not offer a continuation or replacement at its expiration
date it is considered a - Answer- Nonrenewal
The policy that pays first in the event of a covered loss is known as the - Answer-
Primary policy
Termination of an in force insurance policy prior to the expiration date shown in the
policy is known as - Answer- Cancelation
All of the following are found in the declarations section of a policy except the - Answer-
Exclusions
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 part of the occurrence? - Answer- Proximate cause
The part of the policy that sets forth the rules of conduct duties and obligations of the
parties is called the - Answer- Conditions
A deliberate act that causes harm to another person regardless of whether the harm is
intended is called a - Answer- Intentional tort
Which of these is defined as the max limit of coverage available under a liability policy
during a policy year, regardless of the number of claims that may be made or the
number of accidents that may occur? - Answer- Aggregate limit of liability
Which of the following policy provisions would auto broaden coverage under a policy
without requiring additional premium? - Answer- Liberalization
What type of liability would a person who owns a swimming pool have? - Answer-
Absolute
Which of the following would modify the original insurance contract by either adding or
removing coverage? - Answer- Endorsements
An insured carries a property policy on her home in the amount of $250,000. A bank is
shown as the mortgagor in the policy. Last month the insured made her final mortgage
payment, but did not remove the bank from the policy. In the event of a covered loss to
her home, how much will the bank receive? - Answer- Nothing
, Which part of an insurance policy covers claims-related expenses, reasonable
expenses incurred by an insured to protect damaged property from further loss, or
defense expenses? - Answer- Additional coverage
Which of the following would not be classified as personal property for insurance
purposes? - Answer- A house
An insured's home is mortgaged by the local bank. He is required to carry insurance on
the home showing the bank as the mortgagee. Which of the following is true if the home
is damaged by a covered peril? - Answer- Losses will be paid to the mortgagee and
mortgagor as their interest appears
Duties of the insurer found in property policy conditions include all of the following
except - Answer- Notify the insured in the event of financial difficulty
If a liability policy had split limits of 50/100/30, what is the maximum amount that would
be payable in the event of an injury to a single person? - Answer- $50,000
A policy that insures all property at multiple locations for a single amount is referred to
as - Answer- Blanket
What will happen if a house covered by a standard mortgage clause is a total loss? -
Answer- The insurer pays the mortgagee according to the mortgagee's interest in the
property
Which method of loss valuation is contrary to the basic concept of indemnity? - Answer-
Replacement cost
All of the following are conditions commonly found in the insurance policy except -
Answer- Insuring agreement
Losses caused by continuous or repeated exposure to conditions resulting in injury to
persons or damage to property that is neither intended nor expected is the definition of
which of the following terms? - Answer- Occurrence
In which of the following types of property valuation will the policy pay the full value as
specified on the policy schedule, regardless of the insured property's appreciation or
depreciation? - Answer- Agreed value
Insurable interest in the property covered by the policy must be proven - Answer- At the
time of loss
With regard to fire insurance premiums, structures with which of the following type of
construction would most likely have the most favorable premium rate for the peril of fire?
- Answer- Fire resistive
EXAM QUESTIONS AND
ANSWERS
Which of the following insurers are owned by stockholders who have the usual rights of
ownership, including the right of voting? - Answer- Stock
An insurer neglects to pay a legitimate claim that is covered under the terms of the
policy. Which of the following insurance principles has an insurer violated? - Answer-
Consideration
When doing business in this state, an insurance company that is formed under the laws
of another state is known as which type of insurer? - Answer- Foreign
Something of value exchanged between the insurer and the insured is considered an -
Answer- Consideration
An insureds 9 year old son threw a ball accidentally breaking a neighbor’s plate glass
window. The insured was found legally liable for the cost of replacing the window. This
is an example of - Answer- Vicarious liability
What are two types of compensatory damages? - Answer- Special and general
Which of the following is the correct formula for computing a loss ratio? - Answer-
(Incurred losses + loss adjusting expense) / earned premium = loss ratio
The transfer of an insured's right to seek damages from a negligent party to the insurer
is found in which of the following clauses? - Answer- Subrogation
The part of the insurance contract that describes the covered perils and the nature of
coverage of the contractual agreement between the insurer and the insured is called the
- Answer- Insuring agreement
The section of an insurance policy that details what perils are not insured against and
what persons are not insured is known as the - Answer- Exclusions
The part of a property policy that shows the amount of insurance, premium and policy
term is the - Answer- Declarations
,What insurance policy provision defines how the policy will respond if there is more than
one insurance policy written on the same risk? - Answer- Other insurance
When an insurance policy does not offer a continuation or replacement at its expiration
date it is considered a - Answer- Nonrenewal
The policy that pays first in the event of a covered loss is known as the - Answer-
Primary policy
Termination of an in force insurance policy prior to the expiration date shown in the
policy is known as - Answer- Cancelation
All of the following are found in the declarations section of a policy except the - Answer-
Exclusions
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 part of the occurrence? - Answer- Proximate cause
The part of the policy that sets forth the rules of conduct duties and obligations of the
parties is called the - Answer- Conditions
A deliberate act that causes harm to another person regardless of whether the harm is
intended is called a - Answer- Intentional tort
Which of these is defined as the max limit of coverage available under a liability policy
during a policy year, regardless of the number of claims that may be made or the
number of accidents that may occur? - Answer- Aggregate limit of liability
Which of the following policy provisions would auto broaden coverage under a policy
without requiring additional premium? - Answer- Liberalization
What type of liability would a person who owns a swimming pool have? - Answer-
Absolute
Which of the following would modify the original insurance contract by either adding or
removing coverage? - Answer- Endorsements
An insured carries a property policy on her home in the amount of $250,000. A bank is
shown as the mortgagor in the policy. Last month the insured made her final mortgage
payment, but did not remove the bank from the policy. In the event of a covered loss to
her home, how much will the bank receive? - Answer- Nothing
, Which part of an insurance policy covers claims-related expenses, reasonable
expenses incurred by an insured to protect damaged property from further loss, or
defense expenses? - Answer- Additional coverage
Which of the following would not be classified as personal property for insurance
purposes? - Answer- A house
An insured's home is mortgaged by the local bank. He is required to carry insurance on
the home showing the bank as the mortgagee. Which of the following is true if the home
is damaged by a covered peril? - Answer- Losses will be paid to the mortgagee and
mortgagor as their interest appears
Duties of the insurer found in property policy conditions include all of the following
except - Answer- Notify the insured in the event of financial difficulty
If a liability policy had split limits of 50/100/30, what is the maximum amount that would
be payable in the event of an injury to a single person? - Answer- $50,000
A policy that insures all property at multiple locations for a single amount is referred to
as - Answer- Blanket
What will happen if a house covered by a standard mortgage clause is a total loss? -
Answer- The insurer pays the mortgagee according to the mortgagee's interest in the
property
Which method of loss valuation is contrary to the basic concept of indemnity? - Answer-
Replacement cost
All of the following are conditions commonly found in the insurance policy except -
Answer- Insuring agreement
Losses caused by continuous or repeated exposure to conditions resulting in injury to
persons or damage to property that is neither intended nor expected is the definition of
which of the following terms? - Answer- Occurrence
In which of the following types of property valuation will the policy pay the full value as
specified on the policy schedule, regardless of the insured property's appreciation or
depreciation? - Answer- Agreed value
Insurable interest in the property covered by the policy must be proven - Answer- At the
time of loss
With regard to fire insurance premiums, structures with which of the following type of
construction would most likely have the most favorable premium rate for the peril of fire?
- Answer- Fire resistive
