Georgia Property and Casualty Insurance
Exam Questions and Verified Answers
Question 1
Actual Cash Value (ACV)
Correct Answer
Cost to replace property with new property of like kind and quality less
depreciation.
Question 2
DP Coverage D - Fair Rental Value
Correct Answer
Fair Rental Value applies if property under Coverage A, B, or C becomes damaged or
destroyed by a peril covered in the policy.
20% of coverage A
Question 3
Loss settlement
Correct Answer
When a claim is filed under a professional liability policy, the insurer can only settle
the claim by offering to pay the claimant with the consent of the insured.
Question 4
Installation floater
Correct Answer
Unfiled form that covers a contractor's interest in building supplies or fixtures that
the contractor has been hired to install.
Page 1 of 128
,Question 5
Hazards
Correct Answer
Conditions or situations that increase the probability of an insured loss occurring.
Question 6
HO Section I - Property conditions
Correct Answer
1. Insured duties after a loss
2. Loss settlement - ACV for personal property and buildings not insured to 80%
value. Replacement cost if at least 80% value.
3. Appraisal
4. Other insurance
5. Loss payment - within 60 days
6. mortgage holders clause - gets 10 more days notice of cancellation.
7. volcanic eruption - 72 hour window
8. loss payable clause -
Question 7
Nonowned auto
Correct Answer
any private passenger auto, pickup, van, or trailer operated by or in the custody of
the named insured or a family member, but that are not titled by or furnished for
the regular use of the insured. Autos leased, hired, rented, or borrowed from
employees are considered nonowned automobiles
Question 8
Crime Policy
Correct Answer
1, commercial entities
2. government entities
For each section the insured can select a form that has different coverage triggers,
discovery form or a loss sustained form. These trigger differences have some
similarities to the general liability form - occurrence and claims-made.
Page 2 of 128
,Question 9
participating policies
Correct Answer
In some states, insurance companies or state workers compensation funds are
allowed to write participating policies (also referred to as safety groups). This means
the insured is eligible for dividends (partial premium refund) if the experience
during the policy term falls within guidelines established by the insurer at the
inception of the policy term. Dividends are not guaranteed. To be eligible for
participation, the insured must meet the associated underwriting requirements for
participation.
Question 10
Business auto limits of insurance
Correct Answer
The physical damage limit of insurance is the lesser of
The actual cash value of the covered auto at the time of the loss; or
The cost of repairing or replacing the damaged or stolen property with other similar
property.
Max of $1000 for permanently installed electronic equipment.
Question 11
HO-6 Condominium Unit Owners Form
Correct Answer
The HO-6 is very similar to the HO-4, except it includes a small amount of coverage
for the dwelling unit, which is the interior space owned by the insured.
Page 3 of 128
, Question 12
Commercial policy structure
Correct Answer
1. policy cover
2. common policy declarations
3. interline endorsements (eliminate redundancy)
4. Lines of insurance declarations page
5. Lines of insurance coverage forms
6. line of insurance conditions
7. causes of loss form
8. endorsements
Question 13
business personal property of others coverage
Correct Answer
covers the personal property of others that is in the care, custody, or control of the
insured, if located in the described structure, or within 100' of the building.
Question 14
Terrorism Risk Insurance Act (TRIA)
Correct Answer
Requires insurance companies to offer terrorism insurance to their commercial
policyholders. Feds will pay 80% of the loss.
Question 15
Punitive damages
Correct Answer
A third class of compensatory damages. It is a form of punishment for extreme
outrageous behavior, gross negligence or willful intent.
Page 4 of 128
Exam Questions and Verified Answers
Question 1
Actual Cash Value (ACV)
Correct Answer
Cost to replace property with new property of like kind and quality less
depreciation.
Question 2
DP Coverage D - Fair Rental Value
Correct Answer
Fair Rental Value applies if property under Coverage A, B, or C becomes damaged or
destroyed by a peril covered in the policy.
20% of coverage A
Question 3
Loss settlement
Correct Answer
When a claim is filed under a professional liability policy, the insurer can only settle
the claim by offering to pay the claimant with the consent of the insured.
Question 4
Installation floater
Correct Answer
Unfiled form that covers a contractor's interest in building supplies or fixtures that
the contractor has been hired to install.
Page 1 of 128
,Question 5
Hazards
Correct Answer
Conditions or situations that increase the probability of an insured loss occurring.
Question 6
HO Section I - Property conditions
Correct Answer
1. Insured duties after a loss
2. Loss settlement - ACV for personal property and buildings not insured to 80%
value. Replacement cost if at least 80% value.
3. Appraisal
4. Other insurance
5. Loss payment - within 60 days
6. mortgage holders clause - gets 10 more days notice of cancellation.
7. volcanic eruption - 72 hour window
8. loss payable clause -
Question 7
Nonowned auto
Correct Answer
any private passenger auto, pickup, van, or trailer operated by or in the custody of
the named insured or a family member, but that are not titled by or furnished for
the regular use of the insured. Autos leased, hired, rented, or borrowed from
employees are considered nonowned automobiles
Question 8
Crime Policy
Correct Answer
1, commercial entities
2. government entities
For each section the insured can select a form that has different coverage triggers,
discovery form or a loss sustained form. These trigger differences have some
similarities to the general liability form - occurrence and claims-made.
Page 2 of 128
,Question 9
participating policies
Correct Answer
In some states, insurance companies or state workers compensation funds are
allowed to write participating policies (also referred to as safety groups). This means
the insured is eligible for dividends (partial premium refund) if the experience
during the policy term falls within guidelines established by the insurer at the
inception of the policy term. Dividends are not guaranteed. To be eligible for
participation, the insured must meet the associated underwriting requirements for
participation.
Question 10
Business auto limits of insurance
Correct Answer
The physical damage limit of insurance is the lesser of
The actual cash value of the covered auto at the time of the loss; or
The cost of repairing or replacing the damaged or stolen property with other similar
property.
Max of $1000 for permanently installed electronic equipment.
Question 11
HO-6 Condominium Unit Owners Form
Correct Answer
The HO-6 is very similar to the HO-4, except it includes a small amount of coverage
for the dwelling unit, which is the interior space owned by the insured.
Page 3 of 128
, Question 12
Commercial policy structure
Correct Answer
1. policy cover
2. common policy declarations
3. interline endorsements (eliminate redundancy)
4. Lines of insurance declarations page
5. Lines of insurance coverage forms
6. line of insurance conditions
7. causes of loss form
8. endorsements
Question 13
business personal property of others coverage
Correct Answer
covers the personal property of others that is in the care, custody, or control of the
insured, if located in the described structure, or within 100' of the building.
Question 14
Terrorism Risk Insurance Act (TRIA)
Correct Answer
Requires insurance companies to offer terrorism insurance to their commercial
policyholders. Feds will pay 80% of the loss.
Question 15
Punitive damages
Correct Answer
A third class of compensatory damages. It is a form of punishment for extreme
outrageous behavior, gross negligence or willful intent.
Page 4 of 128
