Property and Casualty Insurance Exam 100% Verified
Questions & Answers
Q: |Latest 2025
Parts of a Policy: DICE
Answer:
Declarations - Who, what, where, when, how much
Q: Insuring agreement
Answer:
Summarizes covered risks, additional and supplementary coverages, and the insurer's responsibility to indemnify against
losses
Q: Conditions
Answer:
Lists the insured's responsibilities both at the time of the app. and the time of the loss
Q: Exclusions & endorsements
The five contractual requirements
Answer:
1) Offer and Acceptance, 2) Mutual Agreement, 3) Valuable Consideration, 4) Legal Subject or Purpose, and 5)
Competent parties.
Q: What are the 3 types of hazards?
Answer:
1) Physical - hazards arising from the material, structural, or operational features
Q: Moral
Answer:
refers to applicants that may lie on their application
Q: Morale
Answer:
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)
Q: Which of the following insurers often offer insurance coverage for situations where standard insurers will not offer
coverage because of particularly high risk or loss potential?
Answer:
Federal or state government
,Q: Peril
Answer:
The cause of a possible loss, such as fire, windstorm, theft, explosion, or riot, that is covered in an insurance policy.
Q: 2 types of peril:
Named Peril Policy is a policy that only provides insurance for perils that are specifically listed or named in the policy.
Open-Perils Policy is a policy that provides insurance for all perils except those specifically excluded in the policy.
Many states require a producer to maintain a in which to deposit any cash they receive for an insurance policy premium
before tr
Answer:
mitting the money to the insurer.
Q: Cash received for premiums must be kept separate from personal or other business accounts. To facilitate this, many
states require agents to maintain a if the agent holds premium money for any length of time before giving it to the insurer.
This would be particularly important if the agent needs to deposit the cash into an account and forward a check to the
insurer.
This is a financial responsibility for the insurance agent.
Answer:
PFTA (Premium Fund Trust Account)
Q: Governmental Insurance
Answer:
Covers certain types of insurance with high risks, that private insurers cannot or will not insure
Q: e.g. Social Security, Medicare, flood insurance and federal crop and crime insurance.
Syndicate Insurers (Lloyd's Association)
Answer:
Organizations that provide a place to meet and exchange information on risks and in which the members are individually
and wholly liable for risks. Lloyd's of London is an example of a syndicate insurer.
Q: BJI is a surplus lines insurer offering coverage to bungee jumpers. When MITU Insurance decides it wants to offer a
similar coverage policy, charging a premium that is three times that of BJI's, and BJI must subsequently stop offering
coverage, what type of insurer is MITU?
Answer:
If BJI must stop offering coverage for bungee jumpers as a result of MITU Insurance's decision, MITU is an admitted
insurer and BJI is a surplus or excess lines insurer.
Q: Membership in a fraternal benefit society could include which of the following?
Answer:
A group that operates on a lodge system.
Q: Characteristics of a fraternal benefit society include membership based on religious, ethnic, or national lines, noted
primarily for their social and charitable functions.
, Appointed by an insurer to represent the company by selling and servicing policies on its behalf; representing only one
company, or mainly one company with a possible option to place non-competing lines with other insurers.
Answer:
Exclusive Agent
Q: Admitted Insurer
Answer:
An insurer authorized by a state's insurance department to transact business in that state.
Q: No coverage is available under any circumstances without:
Answer:
Payment of initial premium
Q: Estoppel
Answer:
The idea that once a fact has been admitted to be true by a previous action it can no longer be denied to be true
Q: Waiver of Rights
Answer:
The intentional relinquishment of a known right. The insured would need to sign a form if they are relinquishing their
rights in a policy or claim settlement.
Q: Valuable Consideration
Answer:
Requires that both parties must exchange something of value. The insured pays the premium, and the insurer issues the
policy with the promise to pay claims.
Q: Fiduciary
Answer:
An individual who holds a position of public trust and confidence is defined as a fiduciary. It is crucial that an insurance
agent be not only honest with their clients but also with the company they represent.
Q: Mode of Premium Rates
Answer:
The frequency and method of premium payment is called the premium payment mode. This can be annual, semi-annual,
quarterly, monthly, or monthly bank check plan. The premium payment modes with the best persistency (the policy stays
on the book longest) are the annual and bank check plan modes.
Q: Fraternal Insurers
Answer:
Fraternal Insurers are based on religious, ethnic, or national lines, and are noted primarily for social and charitable
functions. They have no capital stock and are not for profit. They have a representative government and provide benefits
Questions & Answers
Q: |Latest 2025
Parts of a Policy: DICE
Answer:
Declarations - Who, what, where, when, how much
Q: Insuring agreement
Answer:
Summarizes covered risks, additional and supplementary coverages, and the insurer's responsibility to indemnify against
losses
Q: Conditions
Answer:
Lists the insured's responsibilities both at the time of the app. and the time of the loss
Q: Exclusions & endorsements
The five contractual requirements
Answer:
1) Offer and Acceptance, 2) Mutual Agreement, 3) Valuable Consideration, 4) Legal Subject or Purpose, and 5)
Competent parties.
Q: What are the 3 types of hazards?
Answer:
1) Physical - hazards arising from the material, structural, or operational features
Q: Moral
Answer:
refers to applicants that may lie on their application
Q: Morale
Answer:
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)
Q: Which of the following insurers often offer insurance coverage for situations where standard insurers will not offer
coverage because of particularly high risk or loss potential?
Answer:
Federal or state government
,Q: Peril
Answer:
The cause of a possible loss, such as fire, windstorm, theft, explosion, or riot, that is covered in an insurance policy.
Q: 2 types of peril:
Named Peril Policy is a policy that only provides insurance for perils that are specifically listed or named in the policy.
Open-Perils Policy is a policy that provides insurance for all perils except those specifically excluded in the policy.
Many states require a producer to maintain a in which to deposit any cash they receive for an insurance policy premium
before tr
Answer:
mitting the money to the insurer.
Q: Cash received for premiums must be kept separate from personal or other business accounts. To facilitate this, many
states require agents to maintain a if the agent holds premium money for any length of time before giving it to the insurer.
This would be particularly important if the agent needs to deposit the cash into an account and forward a check to the
insurer.
This is a financial responsibility for the insurance agent.
Answer:
PFTA (Premium Fund Trust Account)
Q: Governmental Insurance
Answer:
Covers certain types of insurance with high risks, that private insurers cannot or will not insure
Q: e.g. Social Security, Medicare, flood insurance and federal crop and crime insurance.
Syndicate Insurers (Lloyd's Association)
Answer:
Organizations that provide a place to meet and exchange information on risks and in which the members are individually
and wholly liable for risks. Lloyd's of London is an example of a syndicate insurer.
Q: BJI is a surplus lines insurer offering coverage to bungee jumpers. When MITU Insurance decides it wants to offer a
similar coverage policy, charging a premium that is three times that of BJI's, and BJI must subsequently stop offering
coverage, what type of insurer is MITU?
Answer:
If BJI must stop offering coverage for bungee jumpers as a result of MITU Insurance's decision, MITU is an admitted
insurer and BJI is a surplus or excess lines insurer.
Q: Membership in a fraternal benefit society could include which of the following?
Answer:
A group that operates on a lodge system.
Q: Characteristics of a fraternal benefit society include membership based on religious, ethnic, or national lines, noted
primarily for their social and charitable functions.
, Appointed by an insurer to represent the company by selling and servicing policies on its behalf; representing only one
company, or mainly one company with a possible option to place non-competing lines with other insurers.
Answer:
Exclusive Agent
Q: Admitted Insurer
Answer:
An insurer authorized by a state's insurance department to transact business in that state.
Q: No coverage is available under any circumstances without:
Answer:
Payment of initial premium
Q: Estoppel
Answer:
The idea that once a fact has been admitted to be true by a previous action it can no longer be denied to be true
Q: Waiver of Rights
Answer:
The intentional relinquishment of a known right. The insured would need to sign a form if they are relinquishing their
rights in a policy or claim settlement.
Q: Valuable Consideration
Answer:
Requires that both parties must exchange something of value. The insured pays the premium, and the insurer issues the
policy with the promise to pay claims.
Q: Fiduciary
Answer:
An individual who holds a position of public trust and confidence is defined as a fiduciary. It is crucial that an insurance
agent be not only honest with their clients but also with the company they represent.
Q: Mode of Premium Rates
Answer:
The frequency and method of premium payment is called the premium payment mode. This can be annual, semi-annual,
quarterly, monthly, or monthly bank check plan. The premium payment modes with the best persistency (the policy stays
on the book longest) are the annual and bank check plan modes.
Q: Fraternal Insurers
Answer:
Fraternal Insurers are based on religious, ethnic, or national lines, and are noted primarily for social and charitable
functions. They have no capital stock and are not for profit. They have a representative government and provide benefits
