EXAMFX PROPERTY AND CASUALTY
EXAM QUESTIONS AND ANSWERS
GRADED A+ 2025/2026
Workers Compensation - ANS Benefits required by state law to be paid to an employee by an
employer in the case of injury, disability, or death as the result of an on-the-job hazard.
Warranty - ANS A material stipulation in the policy that if breached may void coverage.
Waiver - ANS The voluntary abandonment of a known or legal right or advantage.
Waiting Period - ANS Time between the beginning of a disability and the start of disability
insurance benefits.
Vicarious Liability - ANS A type of liability in which one person is responsible for the acts of
another. For example, employers may be vicariously liable for the actions of their employees,
and parents may be held responsible for negligent acts of their children.
Valued Policy - ANS A policy used when it is difficult to establish the actual cash value of
insured property after a loss occurs because of its rarity or uniqueness. A valued policy provides
for payment of the full policy amount in the event of a total loss without regard to actual value
or depreciation.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Vacant - ANS A property that has no contents, furnishings, or occupants.
Upmost Good Faith - ANS The fair and equal bargaining by both parties in forming the
contract, where the applicant must make full disclosure of risk to the company, and the
insurance company must be fair in underwriting the risk.
Unoccupied - ANS A property that has contents or furnishings in it, but is not being used or
lived in.
Unintentional Tort - ANS The result of acting without proper care, generally referred to as
negligence.
Uninsured Motorist Coverage - ANS Coverage that allows the named insured, resident
relative(s) and passengers in a covered auto to collect sums another driver would be legally
liable to pay for bodily injury resulting from an auto accident, providing the accident was caused
by an uninsured motorist, a hit-and-run driver or a driver whose insurance company is
insolvent.
Underinsured Motorist Coverage - ANS Coverage in an automobile insurance policy under
which the insurer will pay costs up to specified limits for bodily injury, if the liable driver's policy
limits are exhausted and he/she cannot pay the full amount for which he or she is liable.
Unilateral Contract - ANS A contract that legally binds only one party to contractual
obligations after the premium is paid.
Underwriting - ANS The process of reviewing, accepting or rejecting applications for
insurance.
Underwriter - ANS A person who evaluates and classifies risks to accept or reject them on
behalf of the insurer.
Unauthorized Insurer - ANS An insurance company that has not applied, or has applied and
been denied a Certificate of Authority.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Umbrella Liability Coverage - ANS Coverage that provides extra protection against liability,
and excess amount of insurance above the primary policy.
Twisting - ANS A form of misrepresentation in which an agent persuades an insured/owner to
cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
Transfer - ANS A basic principle of insurance under which the risk of financial loss is assigned
to another party.
Tort - ANS A wrongful act or the violation of someone's rights that leads to legal liability. Torts
are classified as intentional or unilateral (referred to as negligence).
Third-Party Provisions - ANS Insurance provisions that address the rights of someone other
than the policyowner to have a secured financial interest in the insured property.
Theft - ANS Any act of stealing or removing property from its rightful owner. Theft
encompasses both burglary and robbery.
Surplus Lines - ANS Insurance for which there is no readily available, admitted market.
Surety Bond - ANS A guarantee that debts and obligations will be carried out, and the
benefits will be paid for losses caused by nonperformance.
Superintendent (Commissioner, Director) - ANS The head of the state department of
insurance.
Subrogation - ANS The acquisition by an insurer of an insured's rights against any third party
for indemnification of loss or other payment, to the extent that the insurer pays the loss.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Strict Liability - ANS A liability that refers to damages caused by defective products even
though the manufacturer's fault or negligence cannot be proven.
Stock Companies - ANS Companies owned by the stockholders whose investments provide
the capital necessary to establish and operate the insurance company.
Statute Law - ANS The written law as enacted by a legislative body (i.e. the laws of the state),
which generally takes precedence in cases where both common law and statute law apply.
Stated Amount - ANS An amount of insurance scheduled in a property policy which is not
subject to any coinsurance requirements in the event of a covered loss.
Split - ANS Separately stated limits of liability for different coverage, which may be stated on
a per person, per occurrence, per policy period basis, or can be divided between bodily injury
and property damage.
Speculative Risk - ANS The uncertainty or chance of a loss occurring in a situation that
involves the opportunity for either loss or gain.
Specific Insurance - ANS A property insurance policy that covers a specific kind or unit of
property for a specific amount of insurance.
Sharing - ANS A method of dealing with risk for a group of individual persons or businesses
with the same or similar exposure to loss who share the losses that occur within that group.
Severability of Interests - ANS A provision that insurance applies separately to each insured in
a policy, treating each individual as the only insured.
Settlement - ANS The process by which an agreement is reached and a claim is reached and a
claim is resolved in liability insurance.
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
EXAM QUESTIONS AND ANSWERS
GRADED A+ 2025/2026
Workers Compensation - ANS Benefits required by state law to be paid to an employee by an
employer in the case of injury, disability, or death as the result of an on-the-job hazard.
Warranty - ANS A material stipulation in the policy that if breached may void coverage.
Waiver - ANS The voluntary abandonment of a known or legal right or advantage.
Waiting Period - ANS Time between the beginning of a disability and the start of disability
insurance benefits.
Vicarious Liability - ANS A type of liability in which one person is responsible for the acts of
another. For example, employers may be vicariously liable for the actions of their employees,
and parents may be held responsible for negligent acts of their children.
Valued Policy - ANS A policy used when it is difficult to establish the actual cash value of
insured property after a loss occurs because of its rarity or uniqueness. A valued policy provides
for payment of the full policy amount in the event of a total loss without regard to actual value
or depreciation.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Vacant - ANS A property that has no contents, furnishings, or occupants.
Upmost Good Faith - ANS The fair and equal bargaining by both parties in forming the
contract, where the applicant must make full disclosure of risk to the company, and the
insurance company must be fair in underwriting the risk.
Unoccupied - ANS A property that has contents or furnishings in it, but is not being used or
lived in.
Unintentional Tort - ANS The result of acting without proper care, generally referred to as
negligence.
Uninsured Motorist Coverage - ANS Coverage that allows the named insured, resident
relative(s) and passengers in a covered auto to collect sums another driver would be legally
liable to pay for bodily injury resulting from an auto accident, providing the accident was caused
by an uninsured motorist, a hit-and-run driver or a driver whose insurance company is
insolvent.
Underinsured Motorist Coverage - ANS Coverage in an automobile insurance policy under
which the insurer will pay costs up to specified limits for bodily injury, if the liable driver's policy
limits are exhausted and he/she cannot pay the full amount for which he or she is liable.
Unilateral Contract - ANS A contract that legally binds only one party to contractual
obligations after the premium is paid.
Underwriting - ANS The process of reviewing, accepting or rejecting applications for
insurance.
Underwriter - ANS A person who evaluates and classifies risks to accept or reject them on
behalf of the insurer.
Unauthorized Insurer - ANS An insurance company that has not applied, or has applied and
been denied a Certificate of Authority.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Umbrella Liability Coverage - ANS Coverage that provides extra protection against liability,
and excess amount of insurance above the primary policy.
Twisting - ANS A form of misrepresentation in which an agent persuades an insured/owner to
cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
Transfer - ANS A basic principle of insurance under which the risk of financial loss is assigned
to another party.
Tort - ANS A wrongful act or the violation of someone's rights that leads to legal liability. Torts
are classified as intentional or unilateral (referred to as negligence).
Third-Party Provisions - ANS Insurance provisions that address the rights of someone other
than the policyowner to have a secured financial interest in the insured property.
Theft - ANS Any act of stealing or removing property from its rightful owner. Theft
encompasses both burglary and robbery.
Surplus Lines - ANS Insurance for which there is no readily available, admitted market.
Surety Bond - ANS A guarantee that debts and obligations will be carried out, and the
benefits will be paid for losses caused by nonperformance.
Superintendent (Commissioner, Director) - ANS The head of the state department of
insurance.
Subrogation - ANS The acquisition by an insurer of an insured's rights against any third party
for indemnification of loss or other payment, to the extent that the insurer pays the loss.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Strict Liability - ANS A liability that refers to damages caused by defective products even
though the manufacturer's fault or negligence cannot be proven.
Stock Companies - ANS Companies owned by the stockholders whose investments provide
the capital necessary to establish and operate the insurance company.
Statute Law - ANS The written law as enacted by a legislative body (i.e. the laws of the state),
which generally takes precedence in cases where both common law and statute law apply.
Stated Amount - ANS An amount of insurance scheduled in a property policy which is not
subject to any coinsurance requirements in the event of a covered loss.
Split - ANS Separately stated limits of liability for different coverage, which may be stated on
a per person, per occurrence, per policy period basis, or can be divided between bodily injury
and property damage.
Speculative Risk - ANS The uncertainty or chance of a loss occurring in a situation that
involves the opportunity for either loss or gain.
Specific Insurance - ANS A property insurance policy that covers a specific kind or unit of
property for a specific amount of insurance.
Sharing - ANS A method of dealing with risk for a group of individual persons or businesses
with the same or similar exposure to loss who share the losses that occur within that group.
Severability of Interests - ANS A provision that insurance applies separately to each insured in
a policy, treating each individual as the only insured.
Settlement - ANS The process by which an agreement is reached and a claim is reached and a
claim is resolved in liability insurance.
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
