Property and Casualty Insurance
Exam Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What does casualty insurance primarily cover?
✔✔ Legal liability for injuries or damage caused to others
What is an insurable interest?
✔✔ A financial stake in the property or person being insured
What does a deductible represent in an insurance policy?
✔✔ The amount the policyholder pays before insurance coverage applies
What is actual cash value?
✔✔ Replacement cost minus depreciation
What does replacement cost coverage provide?
✔✔ Payment to replace damaged property with new property of similar kind
What is a peril in insurance terms?
✔✔ A specific cause of loss
What is a hazard?
1
,✔✔ A condition that increases the likelihood of loss
What is underwriting?
✔✔ The process of evaluating risk and determining policy terms
What is a binder?
✔✔ Temporary proof of insurance coverage
What does subrogation mean?
✔✔ The insurer’s right to recover from a responsible third party
What is a named peril policy?
✔✔ A policy that covers only listed causes of loss
What is an open peril policy?
✔✔ A policy that covers all losses except those excluded
What does liability insurance protect against?
✔✔ Claims of bodily injury or property damage to others
What is a policy limit?
✔✔ The maximum amount an insurer will pay
2
,What is coinsurance in property insurance?
✔✔ A requirement to insure property to a certain percentage of value
What is a loss?
✔✔ A reduction in value due to damage or destruction
What is proximate cause?
✔✔ The primary cause of a loss
What does indemnity mean?
✔✔ Restoring the insured to financial position before loss
What is a declaration page?
✔✔ The summary of key policy information
What is an endorsement?
✔✔ A written change to an insurance policy
What is a cancellation?
✔✔ Termination of a policy before its expiration
3
, What is nonrenewal?
✔✔ Insurer’s decision not to continue coverage after expiration
What is a premium?
✔✔ The cost paid for insurance coverage
What is an adjuster?
✔✔ A person who investigates and settles claims
What is salvage?
✔✔ Remaining value of damaged property
What is betterment?
✔✔ An improvement that increases property value after loss
What is an exclusion?
✔✔ A loss that is not covered
What is a floater policy?
✔✔ Coverage for movable personal property
What is business interruption insurance?
4
Exam Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What does casualty insurance primarily cover?
✔✔ Legal liability for injuries or damage caused to others
What is an insurable interest?
✔✔ A financial stake in the property or person being insured
What does a deductible represent in an insurance policy?
✔✔ The amount the policyholder pays before insurance coverage applies
What is actual cash value?
✔✔ Replacement cost minus depreciation
What does replacement cost coverage provide?
✔✔ Payment to replace damaged property with new property of similar kind
What is a peril in insurance terms?
✔✔ A specific cause of loss
What is a hazard?
1
,✔✔ A condition that increases the likelihood of loss
What is underwriting?
✔✔ The process of evaluating risk and determining policy terms
What is a binder?
✔✔ Temporary proof of insurance coverage
What does subrogation mean?
✔✔ The insurer’s right to recover from a responsible third party
What is a named peril policy?
✔✔ A policy that covers only listed causes of loss
What is an open peril policy?
✔✔ A policy that covers all losses except those excluded
What does liability insurance protect against?
✔✔ Claims of bodily injury or property damage to others
What is a policy limit?
✔✔ The maximum amount an insurer will pay
2
,What is coinsurance in property insurance?
✔✔ A requirement to insure property to a certain percentage of value
What is a loss?
✔✔ A reduction in value due to damage or destruction
What is proximate cause?
✔✔ The primary cause of a loss
What does indemnity mean?
✔✔ Restoring the insured to financial position before loss
What is a declaration page?
✔✔ The summary of key policy information
What is an endorsement?
✔✔ A written change to an insurance policy
What is a cancellation?
✔✔ Termination of a policy before its expiration
3
, What is nonrenewal?
✔✔ Insurer’s decision not to continue coverage after expiration
What is a premium?
✔✔ The cost paid for insurance coverage
What is an adjuster?
✔✔ A person who investigates and settles claims
What is salvage?
✔✔ Remaining value of damaged property
What is betterment?
✔✔ An improvement that increases property value after loss
What is an exclusion?
✔✔ A loss that is not covered
What is a floater policy?
✔✔ Coverage for movable personal property
What is business interruption insurance?
4
