USAA API REAL EXAM TEST PREP QUESTIONS WITH 100%
VERIFIED SOLUTIONS
What is insurance? - ANSWER The transfer of the possibility of a loss
(risk) to an insurance company, which in turn spreads the costs of
unexpected losses to many individuals.
Define risk. How many types of risks are there and what are they? -
ANSWER The uncertainty or chance of a loss occurring. There are 2 types
of risks (pure and speculative)
What is a peril? - ANSWER The cause of a possible loss insured against
in an insurance policy.
Define subrogation. - ANSWER The insurer's legal right to seek damages
from third parties, after it has reimbursed the insured for the loss.
Subrogation is based on the principle of indemnity by preventing the
insured from collecting on the loss twice: once from the insurer and a
second time from the party that caused the damage.
What is the difference between an accident an an occurrence? -
ANSWER Accidents are sudden, unplanned and unexpected events, not
under the control of the insured, resulting in injury or damage that is neither
expected nor intended.
Occurrence is a broader definition of loss than accident because it includes
those losses caused by continuous or repeated exposure to conditions
resulting in injury to persons or damage to property that is neither intended
nor expected.
How are indirect and direct loss related? - ANSWER indirect losses are
considered a result of direct loss. Such losses usually result from the time it
takes to repair or replace damaged property.
, Define the difference among burglary, theft, and robbery. - ANSWER
Burglary - a crime of forced entry into or out of the premises of another by a
person or persons w/felonious intent.
Robbery - the taking of property from the care and custody of a person by
one who has caused or threatened to cause that person bodily harm or
committed an obviously unlawful act witnessed by that person.
Theft - any act of stealing that encompasses both burglary and robbery.
What is the difference between vacancy and unoccupancy? - ANSWER
Vacancy refers to an insured structure in which no people have been living
or working, and no property has been stored for the period of time required
as stated in the policy. (usually 60 days)
Unoccupancy refers to an insured structure in which no people have been
living or working within the required period of time, but some property is
stored.
What type of insurance provides coverage for multiple classes of property
at one location? - ANSWER Blanket insurance is a single property
insurance policy that provides coverage for multiple classes of property at
one location, or for one or more classes of property at multiple locations.
Explain the ACV method of valuation. - ANSWER The ACV method of
valuation reinforces the principle of indemnity because it recognizes the
reduction of value of property as it ages and becomes subject to wear and
tear and obsolescence.
ACV= Replacement cost - Depreciation
When absolute liability is involved, does the injured party need to prove
negligence? - ANSWER An injured party does NOT need to prove
negligence if Absolute liability is involved.
If a product is unsafe, what kind of liability applies to the manufacturer? -
ANSWER Strict liability is commonly applied in product liability cases.
VERIFIED SOLUTIONS
What is insurance? - ANSWER The transfer of the possibility of a loss
(risk) to an insurance company, which in turn spreads the costs of
unexpected losses to many individuals.
Define risk. How many types of risks are there and what are they? -
ANSWER The uncertainty or chance of a loss occurring. There are 2 types
of risks (pure and speculative)
What is a peril? - ANSWER The cause of a possible loss insured against
in an insurance policy.
Define subrogation. - ANSWER The insurer's legal right to seek damages
from third parties, after it has reimbursed the insured for the loss.
Subrogation is based on the principle of indemnity by preventing the
insured from collecting on the loss twice: once from the insurer and a
second time from the party that caused the damage.
What is the difference between an accident an an occurrence? -
ANSWER Accidents are sudden, unplanned and unexpected events, not
under the control of the insured, resulting in injury or damage that is neither
expected nor intended.
Occurrence is a broader definition of loss than accident because it includes
those losses caused by continuous or repeated exposure to conditions
resulting in injury to persons or damage to property that is neither intended
nor expected.
How are indirect and direct loss related? - ANSWER indirect losses are
considered a result of direct loss. Such losses usually result from the time it
takes to repair or replace damaged property.
, Define the difference among burglary, theft, and robbery. - ANSWER
Burglary - a crime of forced entry into or out of the premises of another by a
person or persons w/felonious intent.
Robbery - the taking of property from the care and custody of a person by
one who has caused or threatened to cause that person bodily harm or
committed an obviously unlawful act witnessed by that person.
Theft - any act of stealing that encompasses both burglary and robbery.
What is the difference between vacancy and unoccupancy? - ANSWER
Vacancy refers to an insured structure in which no people have been living
or working, and no property has been stored for the period of time required
as stated in the policy. (usually 60 days)
Unoccupancy refers to an insured structure in which no people have been
living or working within the required period of time, but some property is
stored.
What type of insurance provides coverage for multiple classes of property
at one location? - ANSWER Blanket insurance is a single property
insurance policy that provides coverage for multiple classes of property at
one location, or for one or more classes of property at multiple locations.
Explain the ACV method of valuation. - ANSWER The ACV method of
valuation reinforces the principle of indemnity because it recognizes the
reduction of value of property as it ages and becomes subject to wear and
tear and obsolescence.
ACV= Replacement cost - Depreciation
When absolute liability is involved, does the injured party need to prove
negligence? - ANSWER An injured party does NOT need to prove
negligence if Absolute liability is involved.
If a product is unsafe, what kind of liability applies to the manufacturer? -
ANSWER Strict liability is commonly applied in product liability cases.
