PROPERTY AND CASUALTY
INSURANCE EXAM STUDY GUIDE
QUESTIONS WITH ANSWERS GRADED A
◉ HO-6 . Answer: Condominium Owners Policy - Is better in worth
than an HO-4
◉ HO-5 . Answer: comprehensive form; open peril coverage for
dwelling and other structures and personal property losses paid on
replacement for dwelling and ACV for contents
◉ HO-4 . Answer: Renters Policy-- coverage for personal property as
well as liability coverage
◉ HO-3 . Answer: Homeowners Insurance Coverage - it covers real and
personal property of homeowners, but is the most common and most
extensive protection
◉ HO-2 . Answer: broad form; broad coverage for dwelling and
personal property; covered perils similar to DP-1 (includes breakage of
glass and theft)
,◉ Minimum Insurance Limits for Auto Coverage . Answer:
$30,000/$60,000/$25,000
◉ loss . Answer: Unintentional decline in or dissapperance of value
◉ Risk . Answer: uncertainty or chance of a loss occuring
◉ Speculative Risk . Answer: uncertanty or chance of a loss occuring in
a situation that involvse the option for either LOSS OR GAIN
◉ Pure Risk . Answer: Refers to situations that can ONLY result in a
loss or no change....NO GAIN
◉ Indemnity . Answer: Compensation to insured that restores them to
same financial positation that they enjoyed prior to the loss
◉ Subrogation . Answer: Insure's legal right to seek damages from 3rd
party after it has reimbursed the insured for the loss
◉ Insurable Interest . Answer: Any interest an insured may have in
property that is a subject of insurance so that damage or destruction of
the property would cause the insured financial loss. - "You have to have
something worth loosing"
, ◉ Law of Large #'s . Answer: the # of people with simular exposure to
loss, makes it more predictable to figure out what the actual loss will be
◉ Peril . Answer: The cause of a possible loss
◉ Physical Hazards . Answer: Come from structural, material or
operational characteristics of a risk
◉ Morale Hazards . Answer: Comes from human carelessness or
indifference to potential losses - EX: forgetting to set your home alarm
knowing your home could get broken into
◉ Hazards . Answer: conditions or situations that increase the
probability of an insured loss occuring
◉ Moral Hazards . Answer: Insured's dishonesty or lying - EX: A
failing business owner might want to burn his building down in order to
collect from the insurance proceeds
◉ Legal Hazards . Answer: Comes from lawsuits which can result in
very large payouts - Potential of getting sued
◉ REinsurance . Answer: An insurance contract by primary insurer
from a 3rd party to transfer part of the liability to the 3rd party -
"Insurance for the insurance company"
INSURANCE EXAM STUDY GUIDE
QUESTIONS WITH ANSWERS GRADED A
◉ HO-6 . Answer: Condominium Owners Policy - Is better in worth
than an HO-4
◉ HO-5 . Answer: comprehensive form; open peril coverage for
dwelling and other structures and personal property losses paid on
replacement for dwelling and ACV for contents
◉ HO-4 . Answer: Renters Policy-- coverage for personal property as
well as liability coverage
◉ HO-3 . Answer: Homeowners Insurance Coverage - it covers real and
personal property of homeowners, but is the most common and most
extensive protection
◉ HO-2 . Answer: broad form; broad coverage for dwelling and
personal property; covered perils similar to DP-1 (includes breakage of
glass and theft)
,◉ Minimum Insurance Limits for Auto Coverage . Answer:
$30,000/$60,000/$25,000
◉ loss . Answer: Unintentional decline in or dissapperance of value
◉ Risk . Answer: uncertainty or chance of a loss occuring
◉ Speculative Risk . Answer: uncertanty or chance of a loss occuring in
a situation that involvse the option for either LOSS OR GAIN
◉ Pure Risk . Answer: Refers to situations that can ONLY result in a
loss or no change....NO GAIN
◉ Indemnity . Answer: Compensation to insured that restores them to
same financial positation that they enjoyed prior to the loss
◉ Subrogation . Answer: Insure's legal right to seek damages from 3rd
party after it has reimbursed the insured for the loss
◉ Insurable Interest . Answer: Any interest an insured may have in
property that is a subject of insurance so that damage or destruction of
the property would cause the insured financial loss. - "You have to have
something worth loosing"
, ◉ Law of Large #'s . Answer: the # of people with simular exposure to
loss, makes it more predictable to figure out what the actual loss will be
◉ Peril . Answer: The cause of a possible loss
◉ Physical Hazards . Answer: Come from structural, material or
operational characteristics of a risk
◉ Morale Hazards . Answer: Comes from human carelessness or
indifference to potential losses - EX: forgetting to set your home alarm
knowing your home could get broken into
◉ Hazards . Answer: conditions or situations that increase the
probability of an insured loss occuring
◉ Moral Hazards . Answer: Insured's dishonesty or lying - EX: A
failing business owner might want to burn his building down in order to
collect from the insurance proceeds
◉ Legal Hazards . Answer: Comes from lawsuits which can result in
very large payouts - Potential of getting sued
◉ REinsurance . Answer: An insurance contract by primary insurer
from a 3rd party to transfer part of the liability to the 3rd party -
"Insurance for the insurance company"
