Property/Casualty Illinois for
State Exam questions and
answers.
ISO (Insurance Services Office) - n
Ans ✔✔
ISO creates standardized property and casualty insurance policies
that are approved by states and used as a standard policy for
insurers.
-they can be modified to comply with state regulations
-may be modified to a degree for insurance companies to create
their own policy form
Qs
define insurance - n
Ans ✔✔
Insurance transfers the risk of loss from an individual or business
entity to an insurance company, which in turn spreads the costs
of unexpected losses to many individuals
Qs
define risk - n
Ans ✔✔
uncertainty concerning the occurrence of a loss
,Qs
What are the 2 types of risk? - n
Ans ✔✔
Pure and Speculative
Qs
What is the difference between pure and speculative risk? - n
Ans ✔✔
only pure risk is insurable since it can only result in a loss or no
change
speculative risk is not insurable since it can result in a loss or gain
(like gambling)
Qs
What are the 3 types of hazards? - n
Ans ✔✔
1) Physical - hazards arising from the material, structural, or
operational features
2) Moral - refers to applicants that may lie on their application
3) Morale - 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)
,Qs
peril - n
Ans ✔✔
causes of loss
Qs
hazards - n
Ans ✔✔
conditions/circumstances that increase the probability of an
insured loss occurring
there are 3 types
Qs
direct loss - n
Ans ✔✔
direct physical damage to buildings/personal property
*this includes proximate cause: chain of events resulting from a
covered peril
Qs
indirect loss/consequential losses - n
Ans ✔✔
, losses considered a result of direct loss; this usually results from
when repairs begin so it could be additional living expenses for
homeowners or loss of profits for businesses
Qs
named peril - n
Ans ✔✔
lists of specific perils; no coverage for unlisted perils
Qs
open perils (all risk) - n
Ans ✔✔
insures against any risk of loss that is not excluded
Qs
Explain the difference between vacancy and unoccupied - n
Ans ✔✔
vacancy refers to a property that has no people or personal
property in it for 60 days
unoccupied refers to a property that has no people in it but there
is personal property in it
Qs
3 elements of insurable risk - n
Ans ✔✔
State Exam questions and
answers.
ISO (Insurance Services Office) - n
Ans ✔✔
ISO creates standardized property and casualty insurance policies
that are approved by states and used as a standard policy for
insurers.
-they can be modified to comply with state regulations
-may be modified to a degree for insurance companies to create
their own policy form
Qs
define insurance - n
Ans ✔✔
Insurance transfers the risk of loss from an individual or business
entity to an insurance company, which in turn spreads the costs
of unexpected losses to many individuals
Qs
define risk - n
Ans ✔✔
uncertainty concerning the occurrence of a loss
,Qs
What are the 2 types of risk? - n
Ans ✔✔
Pure and Speculative
Qs
What is the difference between pure and speculative risk? - n
Ans ✔✔
only pure risk is insurable since it can only result in a loss or no
change
speculative risk is not insurable since it can result in a loss or gain
(like gambling)
Qs
What are the 3 types of hazards? - n
Ans ✔✔
1) Physical - hazards arising from the material, structural, or
operational features
2) Moral - refers to applicants that may lie on their application
3) Morale - 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)
,Qs
peril - n
Ans ✔✔
causes of loss
Qs
hazards - n
Ans ✔✔
conditions/circumstances that increase the probability of an
insured loss occurring
there are 3 types
Qs
direct loss - n
Ans ✔✔
direct physical damage to buildings/personal property
*this includes proximate cause: chain of events resulting from a
covered peril
Qs
indirect loss/consequential losses - n
Ans ✔✔
, losses considered a result of direct loss; this usually results from
when repairs begin so it could be additional living expenses for
homeowners or loss of profits for businesses
Qs
named peril - n
Ans ✔✔
lists of specific perils; no coverage for unlisted perils
Qs
open perils (all risk) - n
Ans ✔✔
insures against any risk of loss that is not excluded
Qs
Explain the difference between vacancy and unoccupied - n
Ans ✔✔
vacancy refers to a property that has no people or personal
property in it for 60 days
unoccupied refers to a property that has no people in it but there
is personal property in it
Qs
3 elements of insurable risk - n
Ans ✔✔
