1
Property and Casualty Insurance Questions
with Answers (100% Correct Answers)
Under a dwelling policy, an insured tenant may use up to what percentage of
the Coverage C limit of insurance for a covered loss to improvements,
alterations, and additions made at the insured's expense to that part of the
described location occupied by the named insured? Answer: 10%
Which of the following residents in the insured's dwelling is eligible to receive
medical payments under Section II of a Homeowners Policy? Answer: A
residence employee
Coverage B of a dwelling policy will not apply to a detached garage if which of
the following is being stored? Answer: A helium tank used for the insured's
business
All the following injuries are covered under a Workers' Compensation policy,
except: Answer: An employee whose injury results from intoxication
In which section of the BOP would coverage for equipment breakdown be
found? Answer: Optional coverages
All of the following statements regarding property insurance terminology are
true, except: Answer: Proximate cause is a secondary cause of loss
Which of the following is true about the National Flood Insurance Program?
Answer: Property removed to protect it from flood is covered for 45 days at
other locations
What is the term for the first event in the unbroken chain of events, that
resulted in a loss? Answer: The Proximate Cause
The maximum liability assumed by the Property and Casualty Insurance
Guaranty Association with regard to an individual insured is no more than:
Answer: The amount of each claim, up to $300,000 per claim
,2
Which of the following is true concerning the Premium Audit condition of the
Commercial General Coverage Part to the Commercial Package Policy?
Answer: Premium audit determines what the earned premium will be at the
end of the policy period
All of the following are true about liability, except: Answer: Liability policies
pay costs incurred by an insured to sue negligent third parties
A property purchased 10 years ago for $100,000 has a replacement value today
of $200,000. It has depreciated 3% each year. What is today's actual cash
value? Answer: $140,000
Ocean marine hull insurance covers a vessel for: Answer: Physical damage
Which of the following vehicles would be excluded under the Personal Auto
Policy? Answer: A motorcycle
The Building and Personal Property Coverage Form does not cover which of
the following? Answer: Liability
Which of the following coverage forms covers the cost of replacing or
reproducing documents that are important for the continuation of business such
as books, files, and maps? Answer: Valuable Papers and Records Coverage
Form
Under Coverage C of the Special Dwelling Form, all of the following are
included, except: Answer: Pets belonging to the insured
Which of the following is not a valid reason to cancel a personal auto policy
after the first 60 days of coverage? Answer: Claims history
All of the following are excluded under the BOP, except: Answer: Increased
cost of construction
Under a Building and Personal Property Coverage Form, up to what percent of
a partial loss would be available for debris removal? Answer: 25%
, 3
Which statement is true of the Equipment Breakdown Protection Coverage
Form? Answer: It may be written as a coverage part of the Commercial
Package Policy
Which of the following is not covered under the Building and Personal
Property Coverage Form? Answer: Liability
What is the limit of insurance available under an HO-3 policy for a tree totally
damaged in a hail storm? Answer: 0%
The following statements regarding hazards are all correct, except: Answer: A
moral hazard arises from an attitude of indifference to loss
When an applicant intentionally fails to make a material fact known, it is
known as: Answer: Concealment
The shifting of risk of loss to another party is known as which of the following?
Answer: Risk transfer
An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a
flood destroying the wood flooring. The policy will pay: Answer: Zero
Proximate cause refers to: Answer: An unbroken chain of events leading to a
loss, that were initiated in a negligent act of wrongdoing
The standard policy structure for insurance policies includes all of the following
sections, except: Answer: Duties
Choose the true statement about the Basic Dwelling Form. Answer: The Basic
Form covers internal explosion
An entity who owns a fleet of trucks and hauls its own goods should purchase:
Answer: A Motor Truck Cargo Owners Form
Which of the following is true regarding the Business Auto Coverage Form?
Answer: The main distinction between a hired auto and a non-owned auto is
whether or not the auto is owned by an employee
Property and Casualty Insurance Questions
with Answers (100% Correct Answers)
Under a dwelling policy, an insured tenant may use up to what percentage of
the Coverage C limit of insurance for a covered loss to improvements,
alterations, and additions made at the insured's expense to that part of the
described location occupied by the named insured? Answer: 10%
Which of the following residents in the insured's dwelling is eligible to receive
medical payments under Section II of a Homeowners Policy? Answer: A
residence employee
Coverage B of a dwelling policy will not apply to a detached garage if which of
the following is being stored? Answer: A helium tank used for the insured's
business
All the following injuries are covered under a Workers' Compensation policy,
except: Answer: An employee whose injury results from intoxication
In which section of the BOP would coverage for equipment breakdown be
found? Answer: Optional coverages
All of the following statements regarding property insurance terminology are
true, except: Answer: Proximate cause is a secondary cause of loss
Which of the following is true about the National Flood Insurance Program?
Answer: Property removed to protect it from flood is covered for 45 days at
other locations
What is the term for the first event in the unbroken chain of events, that
resulted in a loss? Answer: The Proximate Cause
The maximum liability assumed by the Property and Casualty Insurance
Guaranty Association with regard to an individual insured is no more than:
Answer: The amount of each claim, up to $300,000 per claim
,2
Which of the following is true concerning the Premium Audit condition of the
Commercial General Coverage Part to the Commercial Package Policy?
Answer: Premium audit determines what the earned premium will be at the
end of the policy period
All of the following are true about liability, except: Answer: Liability policies
pay costs incurred by an insured to sue negligent third parties
A property purchased 10 years ago for $100,000 has a replacement value today
of $200,000. It has depreciated 3% each year. What is today's actual cash
value? Answer: $140,000
Ocean marine hull insurance covers a vessel for: Answer: Physical damage
Which of the following vehicles would be excluded under the Personal Auto
Policy? Answer: A motorcycle
The Building and Personal Property Coverage Form does not cover which of
the following? Answer: Liability
Which of the following coverage forms covers the cost of replacing or
reproducing documents that are important for the continuation of business such
as books, files, and maps? Answer: Valuable Papers and Records Coverage
Form
Under Coverage C of the Special Dwelling Form, all of the following are
included, except: Answer: Pets belonging to the insured
Which of the following is not a valid reason to cancel a personal auto policy
after the first 60 days of coverage? Answer: Claims history
All of the following are excluded under the BOP, except: Answer: Increased
cost of construction
Under a Building and Personal Property Coverage Form, up to what percent of
a partial loss would be available for debris removal? Answer: 25%
, 3
Which statement is true of the Equipment Breakdown Protection Coverage
Form? Answer: It may be written as a coverage part of the Commercial
Package Policy
Which of the following is not covered under the Building and Personal
Property Coverage Form? Answer: Liability
What is the limit of insurance available under an HO-3 policy for a tree totally
damaged in a hail storm? Answer: 0%
The following statements regarding hazards are all correct, except: Answer: A
moral hazard arises from an attitude of indifference to loss
When an applicant intentionally fails to make a material fact known, it is
known as: Answer: Concealment
The shifting of risk of loss to another party is known as which of the following?
Answer: Risk transfer
An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a
flood destroying the wood flooring. The policy will pay: Answer: Zero
Proximate cause refers to: Answer: An unbroken chain of events leading to a
loss, that were initiated in a negligent act of wrongdoing
The standard policy structure for insurance policies includes all of the following
sections, except: Answer: Duties
Choose the true statement about the Basic Dwelling Form. Answer: The Basic
Form covers internal explosion
An entity who owns a fleet of trucks and hauls its own goods should purchase:
Answer: A Motor Truck Cargo Owners Form
Which of the following is true regarding the Business Auto Coverage Form?
Answer: The main distinction between a hired auto and a non-owned auto is
whether or not the auto is owned by an employee
