PNC Exam Extra Review Questions &
answers (A+ rated)
What is an umbrella policy? - correct answer ✔✔ Extra liability insurance coverage that goes
beyond the limits of the insured's home, auto or watercraft insurance. It provides an additional
layer of security to those who are at risk for being sued for damages to other people's property
or injuries caused to others in an accident. It also protects against libel, vandalism, slander and
invasion of privacy. An umbrella insurance policy is very helpful when the insurance owner is
sued and the dollar limit of the original policy has been exhausted. The added coverage
provided by liability insurance is most useful to individuals who own a lot of assets or very
expensive assets and are at significant risk for being sued.
Aggregate Excess liability - correct answer ✔✔ An insurance policy that limits the amount that a
policyholder has to pay out over a specific time period. Aggregate excess insurance is designed
to protect policyholders that experience an unusually high level of claims that is considered
unexpected. Aggregate excess insurance provides payment for total losses that occur over a
period of time, and is not limited to a per occurrence basis.
Consideration - correct answer ✔✔ Consideration is the concept of legal value in connection
with contracts. It is anything of value promised to another when making a contract. It can take
the form of money, physical objects, services, promised actions, abstinence from a future
action, and much more. Consideration to create a legally enforceable contract entails a
bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor.
Under the notion of "pre-existing duties", if either the promisor or the promisee already had a
legal obligation to render such payment, it cannot be seen as consideration in the legal sense.
Supplementary payments - correct answer ✔✔ Supplementary payments are limited to the
coverages that provide liability and defense protection. The expenses described here are the
sole responsibility of the insurance company, have no limit, and are paid in addition to the
policy limits.
1. Legal Fees: Since the company is obligated to defend the insured, these expenses can be high,
including legal fees, investigations, expert witnesses and court costs.
, 2. Release of Attachment Bonds: The company is not obligated to provide these bonds, only pay
for them, to enable the insured to get the attachment on his equipment or other property
"released" by the court.
3. Reasonable Expenses: If an insured is asked to participate in the defense of a claim, the
company will pay all direct expenses incurred. If the insured can show a loss of earnings, he can
collect up to $250 a day. This latter benefit is not an automatic payment. Taking a day of leave to
be in court is not considered a loss of earnings for a salaried individual.
4. Court Costs: When an insured is on the losing end of a lawsuit, the insured may be required
to pay court costs as part of the judgment. Those costs are covered by this supplementary
coverage. However, the insured may also be required to pay the opposing party's attorney's
fees. These costs are not covered by this supplementary coverage; they would be covered as
part of the liability coverage and therefore subject to the limit of liability.
Fair Credit Reporting Act - correct answer ✔✔ •Know whats in your file.
•Free file disclosure once per year from each of the major credit bureaus.
•Ask for your credit score (there may be a fee).
•Verify accuracy of report when required for employment purposes.
•Notification if your file has been used against you.
•Dispute and correct information that is incomplete or inaccurate.
•Remove outdated, negative information (seven-years old or 10 years in the case of
bankruptcy).
Scheduled Perils - correct answer ✔✔ Scheduled Personal Property (SPP) is handled as a
"floater" to your home insurance policy, and assigns specific value amounts to prized items like
artwork, jewelry, expensive handbags, designer clothing and furs (You will need to hire a
professional appraiser to assign a value to the items). A common misconception is that your
homeowner's insurance policy will take care of these items in the event that you have a fire, are
a victim of theft or other disaster which destroys the valuable contents in your home. While
that is true, the replacement limits covered under a standard policy are typically much lower
than the value of the property that was lost or damaged. For example, a wedding ring lost in a
answers (A+ rated)
What is an umbrella policy? - correct answer ✔✔ Extra liability insurance coverage that goes
beyond the limits of the insured's home, auto or watercraft insurance. It provides an additional
layer of security to those who are at risk for being sued for damages to other people's property
or injuries caused to others in an accident. It also protects against libel, vandalism, slander and
invasion of privacy. An umbrella insurance policy is very helpful when the insurance owner is
sued and the dollar limit of the original policy has been exhausted. The added coverage
provided by liability insurance is most useful to individuals who own a lot of assets or very
expensive assets and are at significant risk for being sued.
Aggregate Excess liability - correct answer ✔✔ An insurance policy that limits the amount that a
policyholder has to pay out over a specific time period. Aggregate excess insurance is designed
to protect policyholders that experience an unusually high level of claims that is considered
unexpected. Aggregate excess insurance provides payment for total losses that occur over a
period of time, and is not limited to a per occurrence basis.
Consideration - correct answer ✔✔ Consideration is the concept of legal value in connection
with contracts. It is anything of value promised to another when making a contract. It can take
the form of money, physical objects, services, promised actions, abstinence from a future
action, and much more. Consideration to create a legally enforceable contract entails a
bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor.
Under the notion of "pre-existing duties", if either the promisor or the promisee already had a
legal obligation to render such payment, it cannot be seen as consideration in the legal sense.
Supplementary payments - correct answer ✔✔ Supplementary payments are limited to the
coverages that provide liability and defense protection. The expenses described here are the
sole responsibility of the insurance company, have no limit, and are paid in addition to the
policy limits.
1. Legal Fees: Since the company is obligated to defend the insured, these expenses can be high,
including legal fees, investigations, expert witnesses and court costs.
, 2. Release of Attachment Bonds: The company is not obligated to provide these bonds, only pay
for them, to enable the insured to get the attachment on his equipment or other property
"released" by the court.
3. Reasonable Expenses: If an insured is asked to participate in the defense of a claim, the
company will pay all direct expenses incurred. If the insured can show a loss of earnings, he can
collect up to $250 a day. This latter benefit is not an automatic payment. Taking a day of leave to
be in court is not considered a loss of earnings for a salaried individual.
4. Court Costs: When an insured is on the losing end of a lawsuit, the insured may be required
to pay court costs as part of the judgment. Those costs are covered by this supplementary
coverage. However, the insured may also be required to pay the opposing party's attorney's
fees. These costs are not covered by this supplementary coverage; they would be covered as
part of the liability coverage and therefore subject to the limit of liability.
Fair Credit Reporting Act - correct answer ✔✔ •Know whats in your file.
•Free file disclosure once per year from each of the major credit bureaus.
•Ask for your credit score (there may be a fee).
•Verify accuracy of report when required for employment purposes.
•Notification if your file has been used against you.
•Dispute and correct information that is incomplete or inaccurate.
•Remove outdated, negative information (seven-years old or 10 years in the case of
bankruptcy).
Scheduled Perils - correct answer ✔✔ Scheduled Personal Property (SPP) is handled as a
"floater" to your home insurance policy, and assigns specific value amounts to prized items like
artwork, jewelry, expensive handbags, designer clothing and furs (You will need to hire a
professional appraiser to assign a value to the items). A common misconception is that your
homeowner's insurance policy will take care of these items in the event that you have a fire, are
a victim of theft or other disaster which destroys the valuable contents in your home. While
that is true, the replacement limits covered under a standard policy are typically much lower
than the value of the property that was lost or damaged. For example, a wedding ring lost in a
