FX-PROPERTY AND CASUALTY EXAM 2025 QUESTIONS AND ANSWERS
Law of Large Numbers - (ANSWER)The larger the number of people with a similar exposure to loss, the
more predictable actual losses will be.
Insurance - (ANSWER)Transfers the risk of loss from an individual or business entity to an insurance
company
The three elements of insurable risk are - (ANSWER)1) Financial 2) Blood (relative) 3) Business
Risk - (ANSWER)The uncertainty or chance of a loss occurring
Types of risks are - (ANSWER)1) Pure risk 2) Speculative risk
What type of risk does insurance cover? - (ANSWER)Pure risk
What is pure risk? - (ANSWER)It can only result in a loss or no change
What type of risk is not insurable? - (ANSWER)speculative risk
What is speculative risk? - (ANSWER)Opportunity for loss or gain. For example, gambling.
What is a peril? - (ANSWER)a specific cause of loss
What is a hazard? - (ANSWER)conditions or situations that increase the probability of a loss occurring
What is a loss? - (ANSWER)reduction, decrease or disappearance of value of the person or property
insured.
What is indemnity? - (ANSWER)provision in an insurance policy that states that in the event of loss, an
insured can only collect to the extent of the financial loss. The insured is not allowed to gain financially.
, FX-PROPERTY AND CASUALTY EXAM 2025 QUESTIONS AND ANSWERS
Subrogation - (ANSWER)insurer's legal right to seek damages from third parties after it has reimbursed
the insured.
Accident - (ANSWER)The sudden, unplanned and unexpected event not under the control of the insured.
Neither expected or intended.
Occurrence - (ANSWER)losses caused by continuous or repeated exposure to conditions neither
intended or expected.
Direct loss - (ANSWER)direct, physical damage to buildings and/or personal property
Indirect Loss (consequential) - (ANSWER)results of a direct loss
What is the most prevalent indirect loss for homeowners? - (ANSWER)Extra living expense that may be
incurred by the insured while the home is being repaired.
What is the primary type of indirect loss for commercial property? - (ANSWER)The loss of profits a
business may suffer from closing business while repaired.
General damages - (ANSWER)compensates an injured person for pain & suffering, mental anguish and
disfigurement
Open Peril - (ANSWER)ANY risk of loss not specifically excluded
Named Peril - (ANSWER)Specific covered perils. There is no coverage for unlisted perils
Special damages - (ANSWER)specific out-of-pocket expenses for medical, miscellaneous and loss of
wages
Law of Large Numbers - (ANSWER)The larger the number of people with a similar exposure to loss, the
more predictable actual losses will be.
Insurance - (ANSWER)Transfers the risk of loss from an individual or business entity to an insurance
company
The three elements of insurable risk are - (ANSWER)1) Financial 2) Blood (relative) 3) Business
Risk - (ANSWER)The uncertainty or chance of a loss occurring
Types of risks are - (ANSWER)1) Pure risk 2) Speculative risk
What type of risk does insurance cover? - (ANSWER)Pure risk
What is pure risk? - (ANSWER)It can only result in a loss or no change
What type of risk is not insurable? - (ANSWER)speculative risk
What is speculative risk? - (ANSWER)Opportunity for loss or gain. For example, gambling.
What is a peril? - (ANSWER)a specific cause of loss
What is a hazard? - (ANSWER)conditions or situations that increase the probability of a loss occurring
What is a loss? - (ANSWER)reduction, decrease or disappearance of value of the person or property
insured.
What is indemnity? - (ANSWER)provision in an insurance policy that states that in the event of loss, an
insured can only collect to the extent of the financial loss. The insured is not allowed to gain financially.
, FX-PROPERTY AND CASUALTY EXAM 2025 QUESTIONS AND ANSWERS
Subrogation - (ANSWER)insurer's legal right to seek damages from third parties after it has reimbursed
the insured.
Accident - (ANSWER)The sudden, unplanned and unexpected event not under the control of the insured.
Neither expected or intended.
Occurrence - (ANSWER)losses caused by continuous or repeated exposure to conditions neither
intended or expected.
Direct loss - (ANSWER)direct, physical damage to buildings and/or personal property
Indirect Loss (consequential) - (ANSWER)results of a direct loss
What is the most prevalent indirect loss for homeowners? - (ANSWER)Extra living expense that may be
incurred by the insured while the home is being repaired.
What is the primary type of indirect loss for commercial property? - (ANSWER)The loss of profits a
business may suffer from closing business while repaired.
General damages - (ANSWER)compensates an injured person for pain & suffering, mental anguish and
disfigurement
Open Peril - (ANSWER)ANY risk of loss not specifically excluded
Named Peril - (ANSWER)Specific covered perils. There is no coverage for unlisted perils
Special damages - (ANSWER)specific out-of-pocket expenses for medical, miscellaneous and loss of
wages
