Property/Casualty Illinois for State Exam
Questions And Answers Latest |Update|
Verified Answers
market value - CORRECT ANSWER-valuing a loss based upon the amount a willing
buyer would pay to a willing seller for the property prior to the loss; considers the land
and location rather than the cost of rebuilding the structure itself (rarely used)
agreed value - CORRECT ANSWER-provision agreed upon by the insurer and insured
as to the amount of insurance that represents a fair valuation for the property at the time
the insurance is written and suspends coinsurance (items whose value does not
fluctuate much)
stated value - CORRECT ANSWER-An amount of insurance scheduled in a property
policy that is not subject to any coinsurance requirements in the event of a covered loss
3 types of liability - CORRECT ANSWER-1. Absolute - if you aren't protecting others
from it (absolutely something will go wrong; swiming pool)
2. Strict - deals with product liability; manufacturers/sellers of a product makes an
implied warranty that a product is safe; business is liable for defective products
3. Vicarious- responsible for others' actions; transfer liability to someone with a greater
ability to pay (dog unleashed; children throw party)
per occurrence vs per person - CORRECT ANSWER-per occurrence puts a ceiling on
the payment for all claims that arise from a single accident/occurrence
per person put a limit on the amount of payment available for bodily injury for a single
person
aggregate limit - CORRECT ANSWER-maximum amount an insurer will pay for all
covered losses during the covered policy period
What are the 2 types of risk? - CORRECT ANSWER-Pure and Speculative
What is the difference between pure and speculative risk? - CORRECT ANSWER-only
pure risk is insurable since it can only result in a loss or no change
speculative risk is not insurable since it can result in a loss or gain (like gambling)
, What are the 3 types of hazards? - CORRECT ANSWER-1) Physical - hazards arising
from the material, structural, or operational features
2) Moral - refers to applicants that may lie on their application
3) Morale - increase the hazard presented by a risk arising from the insured's
indifference to loss because of the existence of insurance (combustible material near a
furnace)
peril - CORRECT ANSWER-causes of loss
hazards - CORRECT ANSWER-conditions/circumstances that increase the probability
of an insured loss occurring
there are 3 types
direct loss - CORRECT ANSWER-direct physical damage to buildings/personal property
*this includes proximate cause: chain of events resulting from a covered peril
indirect loss/consequential losses - CORRECT ANSWER-losses considered a result of
direct loss; this usually results from when repairs begin so it could be additional living
expenses for homeowners or loss of profits for businesses
named peril - CORRECT ANSWER-lists of specific perils; no coverage for unlisted
perils
open perils (all risk) - CORRECT ANSWER-insures against any risk of loss that is not
excluded
Explain the difference between vacancy and unoccupied - CORRECT ANSWER-
vacancy refers to a property that has no people or personal property in it for 60 days
unoccupied refers to a property that has no people in it but there is personal property in
it
3 elements of insurable risk - CORRECT ANSWER-1. Financial (a monetary interest)
2. Blood (a relative)
3. Business (a business partner)
indemnity - CORRECT ANSWER-to reimburse or make whole; permitted to collect only
to the extent of financial loss (cannot gain)
ISO (Insurance Services Office) - CORRECT ANSWER-ISO creates standardized
property and casualty insurance policies that are approved by states and used as a
standard policy for insurers.
Questions And Answers Latest |Update|
Verified Answers
market value - CORRECT ANSWER-valuing a loss based upon the amount a willing
buyer would pay to a willing seller for the property prior to the loss; considers the land
and location rather than the cost of rebuilding the structure itself (rarely used)
agreed value - CORRECT ANSWER-provision agreed upon by the insurer and insured
as to the amount of insurance that represents a fair valuation for the property at the time
the insurance is written and suspends coinsurance (items whose value does not
fluctuate much)
stated value - CORRECT ANSWER-An amount of insurance scheduled in a property
policy that is not subject to any coinsurance requirements in the event of a covered loss
3 types of liability - CORRECT ANSWER-1. Absolute - if you aren't protecting others
from it (absolutely something will go wrong; swiming pool)
2. Strict - deals with product liability; manufacturers/sellers of a product makes an
implied warranty that a product is safe; business is liable for defective products
3. Vicarious- responsible for others' actions; transfer liability to someone with a greater
ability to pay (dog unleashed; children throw party)
per occurrence vs per person - CORRECT ANSWER-per occurrence puts a ceiling on
the payment for all claims that arise from a single accident/occurrence
per person put a limit on the amount of payment available for bodily injury for a single
person
aggregate limit - CORRECT ANSWER-maximum amount an insurer will pay for all
covered losses during the covered policy period
What are the 2 types of risk? - CORRECT ANSWER-Pure and Speculative
What is the difference between pure and speculative risk? - CORRECT ANSWER-only
pure risk is insurable since it can only result in a loss or no change
speculative risk is not insurable since it can result in a loss or gain (like gambling)
, What are the 3 types of hazards? - CORRECT ANSWER-1) Physical - hazards arising
from the material, structural, or operational features
2) Moral - refers to applicants that may lie on their application
3) Morale - increase the hazard presented by a risk arising from the insured's
indifference to loss because of the existence of insurance (combustible material near a
furnace)
peril - CORRECT ANSWER-causes of loss
hazards - CORRECT ANSWER-conditions/circumstances that increase the probability
of an insured loss occurring
there are 3 types
direct loss - CORRECT ANSWER-direct physical damage to buildings/personal property
*this includes proximate cause: chain of events resulting from a covered peril
indirect loss/consequential losses - CORRECT ANSWER-losses considered a result of
direct loss; this usually results from when repairs begin so it could be additional living
expenses for homeowners or loss of profits for businesses
named peril - CORRECT ANSWER-lists of specific perils; no coverage for unlisted
perils
open perils (all risk) - CORRECT ANSWER-insures against any risk of loss that is not
excluded
Explain the difference between vacancy and unoccupied - CORRECT ANSWER-
vacancy refers to a property that has no people or personal property in it for 60 days
unoccupied refers to a property that has no people in it but there is personal property in
it
3 elements of insurable risk - CORRECT ANSWER-1. Financial (a monetary interest)
2. Blood (a relative)
3. Business (a business partner)
indemnity - CORRECT ANSWER-to reimburse or make whole; permitted to collect only
to the extent of financial loss (cannot gain)
ISO (Insurance Services Office) - CORRECT ANSWER-ISO creates standardized
property and casualty insurance policies that are approved by states and used as a
standard policy for insurers.
