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Insurance Property and Casualty
Questions and Answers (100% Correct
Answers) Already Graded A+
All of the following are perils covered under the broad form
dwelling policy EXCEPT—Ans: a) Lightning.
b) Collapse.
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c) Theft. **
d) Fire.
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Theft is not a peril named in the policy.
An additional loss that results from a direct loss of property is called
a/an—Ans: a) Indirect loss. ***
b) Proximate loss.
c) Liability loss.
d) Punitive loss.
Direct losses come about because of perils named in the policy.
Indirect losses, also known as consequential losses, come about as
a result of a direct loss.
The at-fault driver in an insured's auto crash had the state required
minimums for auto liability coverage, but not enough to pay for all
the damage done to the insured. This driver is—Ans: a)
Considered underinsured. ***
b) Not liable for the damages in excess of his limits.
c) Required to post a bond for the amount of damages above his
limits.
, 2
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d) Considered uninsured.
An underinsured driver has at least the minimums required by law
but not enough to cover the damages caused someone else.
Underinsured motorist is an optional coverage that can be added
to an auto policy.
In an auto policy, the medical payments coverage is similar to—
Ans: a) Accident insurance, because it pays medical expenses
regardless of fault. ****
b) Bodily injury coverage, because it provides legal protection if
the insured causes injuries to others.
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c) Bodily injury coverage, because it pays the insured's doctor bills.
d) Accident insurance, because it has the same limits.
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Medical payments will pay for accidental bodily injury of an
insured, regardless of fault or auto. It will pay medical expense of
others occupying the insured auto.
A beauty parlor burns to the ground. What type of loss is this to the
owner?—Ans: a) Consequential
b) Specific
c) Consecutive
d) Direct *****
Damage caused by a peril that is insured against is classified as
direct loss.
The ABC Corporation has $100,000 of coverage on its building
through insurance Company A, and $50,000 of identical coverage
on the same building through insurance Company B. Assuming
coinsurance is not an issue, when a $24,000 loss occurs, how much
will each insurer pay?—Ans: a) Company A will pay $20,000;
Company B will pay $4,000
, 3
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b) Company A will pay $12,000; Company B will pay $12,000
c) Company A will pay $24,000; Company B will pay $0
d) Company A will pay $16,000; Company B will pay $8,000 ****
Each policy pays its pro rata share of the loss based upon each
policy's share of the total amount of coverage.
The insured has violated the contract without the knowledge of
the mortgage holder. After a loss—Ans: a) Both the insured and
mortgage holder will be paid.
b) The pro rata liability clause applies.
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c) The insured cannot collect but the mortgage holder will still be
paid.
d) Neither the insured nor the mortgage holder will be paid.
Guru01 - Stuvia
Mortgagees have insurable interest in the property for which they
loaned the money for purchase. Therefore, they will still be paid
their interest in the loss even though the insured does not get paid
because they violated the contract.
The section of an insurance policy that details what perils are not
insured against and what persons are not insured is known as
the—Ans: a) Conditions.
b) Exclusions. ****
c) Declarations.
d) Endorsements.
The exclusions section of an insurance policy details what perils
are not insured against and what persons are not insured.
An insurer publishes intimidating brochures that portray the
insurer's competition as financially and professionally unstable.
Which of the following best describes this act?—Ans: a) Legal,
, 4
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provided that the other insurers are paid royalties for the usage of
their names
b) Illegal under any circumstances ****
c) Legal, provided that the information can be verified
d) Illegal until endorsed by the Guaranty Association
When a company criticizes the financial situation of another
company, with the intention of injuring that company, it has
committed an illegal trade practice called "defamation."
To insure coin collections, stamp collections, and other items that
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would be difficult to appraise after a loss, it is best to insure with—
Ans: a) ACV coverage.
b) Stated amount insurance.*****
c) Completed value form.
Guru01 - Stuvia
d) Replacement cost coverage.
The insured and insurer agree the policyholder has the property,
what it is worth, and insure it for an agreed value.
Legal liability is when a person is considered liable for damages
according to—Ans: a) The injured party.
b) The law.****
c) The insured.
d) The insurance company.
Legal Liability is when a person is liable for injuries or damages to
another based on negligence, as according to the law.
Which of the following is NOT true of National Flood Insurance?—
Ans: a) Emergency program limits are available to communities
immediately.
For Expert help and assignment solutions, +254707240657
Insurance Property and Casualty
Questions and Answers (100% Correct
Answers) Already Graded A+
All of the following are perils covered under the broad form
dwelling policy EXCEPT—Ans: a) Lightning.
b) Collapse.
© 2025 Assignment Expert
c) Theft. **
d) Fire.
Guru01 - Stuvia
Theft is not a peril named in the policy.
An additional loss that results from a direct loss of property is called
a/an—Ans: a) Indirect loss. ***
b) Proximate loss.
c) Liability loss.
d) Punitive loss.
Direct losses come about because of perils named in the policy.
Indirect losses, also known as consequential losses, come about as
a result of a direct loss.
The at-fault driver in an insured's auto crash had the state required
minimums for auto liability coverage, but not enough to pay for all
the damage done to the insured. This driver is—Ans: a)
Considered underinsured. ***
b) Not liable for the damages in excess of his limits.
c) Required to post a bond for the amount of damages above his
limits.
, 2
For Expert help and assignment solutions, +254707240657
d) Considered uninsured.
An underinsured driver has at least the minimums required by law
but not enough to cover the damages caused someone else.
Underinsured motorist is an optional coverage that can be added
to an auto policy.
In an auto policy, the medical payments coverage is similar to—
Ans: a) Accident insurance, because it pays medical expenses
regardless of fault. ****
b) Bodily injury coverage, because it provides legal protection if
the insured causes injuries to others.
© 2025 Assignment Expert
c) Bodily injury coverage, because it pays the insured's doctor bills.
d) Accident insurance, because it has the same limits.
Guru01 - Stuvia
Medical payments will pay for accidental bodily injury of an
insured, regardless of fault or auto. It will pay medical expense of
others occupying the insured auto.
A beauty parlor burns to the ground. What type of loss is this to the
owner?—Ans: a) Consequential
b) Specific
c) Consecutive
d) Direct *****
Damage caused by a peril that is insured against is classified as
direct loss.
The ABC Corporation has $100,000 of coverage on its building
through insurance Company A, and $50,000 of identical coverage
on the same building through insurance Company B. Assuming
coinsurance is not an issue, when a $24,000 loss occurs, how much
will each insurer pay?—Ans: a) Company A will pay $20,000;
Company B will pay $4,000
, 3
For Expert help and assignment solutions, +254707240657
b) Company A will pay $12,000; Company B will pay $12,000
c) Company A will pay $24,000; Company B will pay $0
d) Company A will pay $16,000; Company B will pay $8,000 ****
Each policy pays its pro rata share of the loss based upon each
policy's share of the total amount of coverage.
The insured has violated the contract without the knowledge of
the mortgage holder. After a loss—Ans: a) Both the insured and
mortgage holder will be paid.
b) The pro rata liability clause applies.
© 2025 Assignment Expert
c) The insured cannot collect but the mortgage holder will still be
paid.
d) Neither the insured nor the mortgage holder will be paid.
Guru01 - Stuvia
Mortgagees have insurable interest in the property for which they
loaned the money for purchase. Therefore, they will still be paid
their interest in the loss even though the insured does not get paid
because they violated the contract.
The section of an insurance policy that details what perils are not
insured against and what persons are not insured is known as
the—Ans: a) Conditions.
b) Exclusions. ****
c) Declarations.
d) Endorsements.
The exclusions section of an insurance policy details what perils
are not insured against and what persons are not insured.
An insurer publishes intimidating brochures that portray the
insurer's competition as financially and professionally unstable.
Which of the following best describes this act?—Ans: a) Legal,
, 4
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provided that the other insurers are paid royalties for the usage of
their names
b) Illegal under any circumstances ****
c) Legal, provided that the information can be verified
d) Illegal until endorsed by the Guaranty Association
When a company criticizes the financial situation of another
company, with the intention of injuring that company, it has
committed an illegal trade practice called "defamation."
To insure coin collections, stamp collections, and other items that
© 2025 Assignment Expert
would be difficult to appraise after a loss, it is best to insure with—
Ans: a) ACV coverage.
b) Stated amount insurance.*****
c) Completed value form.
Guru01 - Stuvia
d) Replacement cost coverage.
The insured and insurer agree the policyholder has the property,
what it is worth, and insure it for an agreed value.
Legal liability is when a person is considered liable for damages
according to—Ans: a) The injured party.
b) The law.****
c) The insured.
d) The insurance company.
Legal Liability is when a person is liable for injuries or damages to
another based on negligence, as according to the law.
Which of the following is NOT true of National Flood Insurance?—
Ans: a) Emergency program limits are available to communities
immediately.
