MN PROPERTY & CASUALTY
INSURANCE, MN INSURANCE EXAM
PROPERTY & CASUALTY
COMPREHENSIVE QUESTIONS
ANSWERED 100% CORRECTLY
Declarations - Correct Answer ✔✔ Policy includes the identity and address of the name
insured, the policy term or period, the amount of insurance or limits of liability, the policy
premium, and any applicable deductibles. Will also include either a property description
or a schedule of coverage parts, and a list of any endorsements.
Conditions - Correct Answer ✔✔ Set provisions, rules of conduct, duties and obligations
for the parties. A number of common insurance conditions describe such things as the
policy period and territory. It also includes the insured's obligation to provide proof of
loss, how settlements are handles when other insurance is involved, and the right of
each party to cancel the policy.
Exclusions - Correct Answer ✔✔ May describe property, perils, hazards, or losses
arising from specific causes that are not covered by the policy.
Limitations - Correct Answer ✔✔ May eliminate or reduce coverage, but only under
certain circumstances or when specified conditions apply.
Abandonment - Correct Answer ✔✔ The insured cannot simply abandon the property to
the insurance company in exchange for the full-insured value.
Salvage - Correct Answer ✔✔ If the insurer pays a loss on behalf of the insured, the
insurer is entitled to the salvage to reduce the claim
Subrogation Clause - Correct Answer ✔✔ Used when the insurer has paid a covered
claim on the behalf of the insured that is caused by another party. The insurance
company is entitled to the insured's right of recovery from the negligent party. This is
sometimes called the "Transfer of Right of Recovery Against Other to Us"
Vacany - Correct Answer ✔✔ The building is void of contents and people. The building
is simply not being used. In most cases the insured can purchase Vacancy permit
coverage restored for an additional premium.
Unoccupancy - Correct Answer ✔✔ The premises are void of people.
, Named Peril - Correct Answer ✔✔ This form lists the specific perils to be covered in the
policy.
Open Peril - Correct Answer ✔✔ Does not list the perils but provides broader coverage.
Definition of the Insured - Correct Answer ✔✔ Those that have insurable interest in the
property who would suffer a financial loss if the property were damaged by an insured
peril can be considered an insured. In personal insurance, this can include family
members without listing their names on the declarations page of the policy. Additional
insureds such as a lien holder.
Insurable Interest - Correct Answer ✔✔ Before a person can obtain an insurance policy,
they must have this in the property being insured. A person is deemed to have this in
property when he has a lawful, substantial, economic interest in the preservation of the
property. The term "person" includes an individual, company, insurer, association,
organization, reciprocal, partnership, or any other legal entity.
Risk - Correct Answer ✔✔ Possibility that a loss might occur and is the reason that
people buy insurance.
Peril - Correct Answer ✔✔ Actual cause of a loss (fire, windstorm, hail)
Hazard - Correct Answer ✔✔ Any condition that increases the possibility of a loss
Moral Hazard - Correct Answer ✔✔ A condition of morals or habits that increases the
probability of a loss from peril.
Morale Hazard - Correct Answer ✔✔ Hazard arising out of an insured's indifference to
loss because of the existence of insurance.
Pure Risk - Correct Answer ✔✔ A situation where there is only the possibility of a loss.
Example would be catastrophic medical expenses, liability law suit, damage to property
by fire. This type of risk is insurable.
Speculative Risk - Correct Answer ✔✔ A situation where either profit or loss in possible.
Example would be betting on a horse race or investing in real estate. This type of risk in
not insurable.
Static Risk - Correct Answer ✔✔ These factors are historical factors that do no
frequently fluctuate. They result from "static" or "unchanging" environment. Example
would be an area that may only flood every 100 years. This type of risk is insurable.
Dynamic Risk - Correct Answer ✔✔ This is associated with chance. Example would be
a new and fatal virus spontaneously erupting into society. This is not insurable.
INSURANCE, MN INSURANCE EXAM
PROPERTY & CASUALTY
COMPREHENSIVE QUESTIONS
ANSWERED 100% CORRECTLY
Declarations - Correct Answer ✔✔ Policy includes the identity and address of the name
insured, the policy term or period, the amount of insurance or limits of liability, the policy
premium, and any applicable deductibles. Will also include either a property description
or a schedule of coverage parts, and a list of any endorsements.
Conditions - Correct Answer ✔✔ Set provisions, rules of conduct, duties and obligations
for the parties. A number of common insurance conditions describe such things as the
policy period and territory. It also includes the insured's obligation to provide proof of
loss, how settlements are handles when other insurance is involved, and the right of
each party to cancel the policy.
Exclusions - Correct Answer ✔✔ May describe property, perils, hazards, or losses
arising from specific causes that are not covered by the policy.
Limitations - Correct Answer ✔✔ May eliminate or reduce coverage, but only under
certain circumstances or when specified conditions apply.
Abandonment - Correct Answer ✔✔ The insured cannot simply abandon the property to
the insurance company in exchange for the full-insured value.
Salvage - Correct Answer ✔✔ If the insurer pays a loss on behalf of the insured, the
insurer is entitled to the salvage to reduce the claim
Subrogation Clause - Correct Answer ✔✔ Used when the insurer has paid a covered
claim on the behalf of the insured that is caused by another party. The insurance
company is entitled to the insured's right of recovery from the negligent party. This is
sometimes called the "Transfer of Right of Recovery Against Other to Us"
Vacany - Correct Answer ✔✔ The building is void of contents and people. The building
is simply not being used. In most cases the insured can purchase Vacancy permit
coverage restored for an additional premium.
Unoccupancy - Correct Answer ✔✔ The premises are void of people.
, Named Peril - Correct Answer ✔✔ This form lists the specific perils to be covered in the
policy.
Open Peril - Correct Answer ✔✔ Does not list the perils but provides broader coverage.
Definition of the Insured - Correct Answer ✔✔ Those that have insurable interest in the
property who would suffer a financial loss if the property were damaged by an insured
peril can be considered an insured. In personal insurance, this can include family
members without listing their names on the declarations page of the policy. Additional
insureds such as a lien holder.
Insurable Interest - Correct Answer ✔✔ Before a person can obtain an insurance policy,
they must have this in the property being insured. A person is deemed to have this in
property when he has a lawful, substantial, economic interest in the preservation of the
property. The term "person" includes an individual, company, insurer, association,
organization, reciprocal, partnership, or any other legal entity.
Risk - Correct Answer ✔✔ Possibility that a loss might occur and is the reason that
people buy insurance.
Peril - Correct Answer ✔✔ Actual cause of a loss (fire, windstorm, hail)
Hazard - Correct Answer ✔✔ Any condition that increases the possibility of a loss
Moral Hazard - Correct Answer ✔✔ A condition of morals or habits that increases the
probability of a loss from peril.
Morale Hazard - Correct Answer ✔✔ Hazard arising out of an insured's indifference to
loss because of the existence of insurance.
Pure Risk - Correct Answer ✔✔ A situation where there is only the possibility of a loss.
Example would be catastrophic medical expenses, liability law suit, damage to property
by fire. This type of risk is insurable.
Speculative Risk - Correct Answer ✔✔ A situation where either profit or loss in possible.
Example would be betting on a horse race or investing in real estate. This type of risk in
not insurable.
Static Risk - Correct Answer ✔✔ These factors are historical factors that do no
frequently fluctuate. They result from "static" or "unchanging" environment. Example
would be an area that may only flood every 100 years. This type of risk is insurable.
Dynamic Risk - Correct Answer ✔✔ This is associated with chance. Example would be
a new and fatal virus spontaneously erupting into society. This is not insurable.
