COMMERCIAL CASUALTY 2026 FINAL PAPER
COMPLETE QUESTIONS AND ANSWERS FULL
SOLUTION
◉ What is the civil penalty for violating a cease and desist order of
the Commissioner?
Answer: $10,000
◉ The Business Pursuits endorsement under Section II of a
homeowners policy will cover all of the following EXCEPT
Answer: Business liability.
◉ If a property is covered by Company A for $20,000 and Company
B covers the same property for $40,000, how much will Company A
pay on a $24,000 loss?
Answer: $8,000
◉ The risk management technique that is used to prevent a specific
loss by not exposing oneself to that activity is called
Answer: Avoidance.
◉ In a farm policy, any cost incurred by the insurer for the
investigation or defense of a claim will be paid by
,Answer: The insurer.
◉ Which of the following entities must approve all continuing
education courses in this state?
Answer: The Commissioner
◉ An applicant knowingly fails to communicate information that
would help an underwriter make a sound decision regarding
coverage. This is an example of
Answer: Concealment
◉ A common exclusion found under physical damage to your auto
includes
Answer: Mechanical breakdown.
◉ Which of the following is true regarding a risk retention group?
Answer: It is a liability insurance company owned by its members.
◉ Which of the following best describes a misrepresentation?
Answer: Issuing sales material with exaggerated statements about
policy benefits
,◉ A builder's risk form is most often written as which of the
following?
Answer: Completed value form
◉ An insured has a liability policy that sets the amount for all claims
that arise from a single incident at $50,000. Which type of limit of
liability does this insured's policy have?
Answer: Per occurrence
◉ Which of the following is an example of a protective safeguard in a
businessowners policy?
Answer: Automatic sprinkler system
◉ If a licensee wants to transact insurance under a different name
than that listed on his or her producer's license, which of the
following must occur?
Answer: The change must be reported to the Commissioner.
◉ If more than one person has an insurable interest in the property
covered under a dwelling policy,
Answer: The insurer will be liable for only the insured's interest in
the damaged property.
, ◉ Bob's home is insured for $100,000 under a dwelling policy.
Yesterday his home suffered $20,000 damage from a fire. Today the
home was struck by lightning, starting another fire that completely
destroyed the structure. Bob's policy will pay
Answer: $100,000.
◉ An automobile that is owned by a nontraditional household, not
consisting of a husband and wife, may be insured under a personal
auto policy if
Answer: A joint ownership coverage endorsement is added.
◉ Which of the following is defined as a covered cause of loss in
businessowners property coverage?
Answer: Leakage from fire-extinguishing equipment
◉ The insured's mother-in-law broke her leg falling down the front
steps of the insured's premises. The insured's homeowners medical
payments coverage will
Answer: Apply to injuries of any guests or visitors.
◉ All of the following are exclusions under farm property coverage
EXCEPT
Answer: Loss of use.
COMPLETE QUESTIONS AND ANSWERS FULL
SOLUTION
◉ What is the civil penalty for violating a cease and desist order of
the Commissioner?
Answer: $10,000
◉ The Business Pursuits endorsement under Section II of a
homeowners policy will cover all of the following EXCEPT
Answer: Business liability.
◉ If a property is covered by Company A for $20,000 and Company
B covers the same property for $40,000, how much will Company A
pay on a $24,000 loss?
Answer: $8,000
◉ The risk management technique that is used to prevent a specific
loss by not exposing oneself to that activity is called
Answer: Avoidance.
◉ In a farm policy, any cost incurred by the insurer for the
investigation or defense of a claim will be paid by
,Answer: The insurer.
◉ Which of the following entities must approve all continuing
education courses in this state?
Answer: The Commissioner
◉ An applicant knowingly fails to communicate information that
would help an underwriter make a sound decision regarding
coverage. This is an example of
Answer: Concealment
◉ A common exclusion found under physical damage to your auto
includes
Answer: Mechanical breakdown.
◉ Which of the following is true regarding a risk retention group?
Answer: It is a liability insurance company owned by its members.
◉ Which of the following best describes a misrepresentation?
Answer: Issuing sales material with exaggerated statements about
policy benefits
,◉ A builder's risk form is most often written as which of the
following?
Answer: Completed value form
◉ An insured has a liability policy that sets the amount for all claims
that arise from a single incident at $50,000. Which type of limit of
liability does this insured's policy have?
Answer: Per occurrence
◉ Which of the following is an example of a protective safeguard in a
businessowners policy?
Answer: Automatic sprinkler system
◉ If a licensee wants to transact insurance under a different name
than that listed on his or her producer's license, which of the
following must occur?
Answer: The change must be reported to the Commissioner.
◉ If more than one person has an insurable interest in the property
covered under a dwelling policy,
Answer: The insurer will be liable for only the insured's interest in
the damaged property.
, ◉ Bob's home is insured for $100,000 under a dwelling policy.
Yesterday his home suffered $20,000 damage from a fire. Today the
home was struck by lightning, starting another fire that completely
destroyed the structure. Bob's policy will pay
Answer: $100,000.
◉ An automobile that is owned by a nontraditional household, not
consisting of a husband and wife, may be insured under a personal
auto policy if
Answer: A joint ownership coverage endorsement is added.
◉ Which of the following is defined as a covered cause of loss in
businessowners property coverage?
Answer: Leakage from fire-extinguishing equipment
◉ The insured's mother-in-law broke her leg falling down the front
steps of the insured's premises. The insured's homeowners medical
payments coverage will
Answer: Apply to injuries of any guests or visitors.
◉ All of the following are exclusions under farm property coverage
EXCEPT
Answer: Loss of use.
