Property and Casualty Exam Licensing
Questions and Correct Answers Graded
A+ Guaranteed Verified by Experts
1. Bailee: An individual or organization who has taken into its care, custody, and/or control the
property of another for servicing, repair, or storage
2. Hazard: Something that increases the chance or likelihood of a loss occuring.
(physical or moral or morale)
3. Market Value: A property policy provision that changes the valuation method otherwise
applicable (ACV or RV) to a valuation method that allows reimbursement to the insured, according to
the price a willing buyer would pay for the property purches from a willing seller
4. Insurable Interest
(limit of liability): Specifies that the insurer will not be responsible for an amount which is
greater than the financial interest of an insured person or more that the limit of liability stated on the
Declarations Page
5. Actual Cash Value
(ACV): The policy pays for the cost to repair or replace the damaged property at the time of loss, less
,depreciation
6. Deductible: The amount of money which the insured party must pay before the insurance
company's own coverage plan begins.
7. Vacancy: A property that has neither occupants nor personal property is described as vacant.
8. Right of Salvage: The right of the insurer to take possession of damaged property after the
loss to the property has been paid. The salvage belongs to the insurer.
9. Inherent Vice: A condition or defect that exists within property itself that causes the property
to spoil, break, become defective, or destroy itself. Insurance policies typically exclude inherent vice.
Example: The quality of materials used in a painting allows the painting to fade or lose luster with time.
10. Aircraft Hull Insurance: Provides coverage on an open peril basis for physical loss
or damage to the
insured aircraft, on ground, or in flight.
In flight is from the moment it moves forward for takeott until it completes its landing run.
11. Motor Carrier Act of 1980: Department of Transportaion (DOT) requires:
-Motor carrier must carry an insurance policy of certain minimum limits, or
-Post a surety bond representing certain financial stability criteria when transporting passengers or cargo.
, 12. Contribution by Equal Shares: Under this concept, when 2 or more insurers'
policies cover at the same level (Primary or Excess), each insurer contributes an equal amount to
the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance,
whichever comes first.
Example: If there are 3 insurers participating, each would pay 33 1/3 percent of the loss; if 4 insurers
participating, each would pay 25 percent of the loss; or if 5 insurers participating, each would pay 20
percent of the loss.
13. Certified Act of Terrorism: Any act, certified jointly as terrorism by the Secretary of
Treasury, State and
Attorney General which is at least one of the following:
-Violent/dangerous to human life/property/infrastructure.
-Damaging within the U.S. or on U.S. air carrier/vessel/mission.
-Committed by persons on behalf of any foreign person/interest to coerce/influence the U.S.
civilian/government policy.
14. Nationwide Marine Definition: Wet insurance and Dry insurance are terms that
the Nationwide
Marine Definition uses in specifying risks that may be written under marine insurance. The National
Association of Insurance Commissioners adopted the Nationwide Marine Definition that defines 6 broad
classes of property that may be insured under marine contract
Questions and Correct Answers Graded
A+ Guaranteed Verified by Experts
1. Bailee: An individual or organization who has taken into its care, custody, and/or control the
property of another for servicing, repair, or storage
2. Hazard: Something that increases the chance or likelihood of a loss occuring.
(physical or moral or morale)
3. Market Value: A property policy provision that changes the valuation method otherwise
applicable (ACV or RV) to a valuation method that allows reimbursement to the insured, according to
the price a willing buyer would pay for the property purches from a willing seller
4. Insurable Interest
(limit of liability): Specifies that the insurer will not be responsible for an amount which is
greater than the financial interest of an insured person or more that the limit of liability stated on the
Declarations Page
5. Actual Cash Value
(ACV): The policy pays for the cost to repair or replace the damaged property at the time of loss, less
,depreciation
6. Deductible: The amount of money which the insured party must pay before the insurance
company's own coverage plan begins.
7. Vacancy: A property that has neither occupants nor personal property is described as vacant.
8. Right of Salvage: The right of the insurer to take possession of damaged property after the
loss to the property has been paid. The salvage belongs to the insurer.
9. Inherent Vice: A condition or defect that exists within property itself that causes the property
to spoil, break, become defective, or destroy itself. Insurance policies typically exclude inherent vice.
Example: The quality of materials used in a painting allows the painting to fade or lose luster with time.
10. Aircraft Hull Insurance: Provides coverage on an open peril basis for physical loss
or damage to the
insured aircraft, on ground, or in flight.
In flight is from the moment it moves forward for takeott until it completes its landing run.
11. Motor Carrier Act of 1980: Department of Transportaion (DOT) requires:
-Motor carrier must carry an insurance policy of certain minimum limits, or
-Post a surety bond representing certain financial stability criteria when transporting passengers or cargo.
, 12. Contribution by Equal Shares: Under this concept, when 2 or more insurers'
policies cover at the same level (Primary or Excess), each insurer contributes an equal amount to
the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance,
whichever comes first.
Example: If there are 3 insurers participating, each would pay 33 1/3 percent of the loss; if 4 insurers
participating, each would pay 25 percent of the loss; or if 5 insurers participating, each would pay 20
percent of the loss.
13. Certified Act of Terrorism: Any act, certified jointly as terrorism by the Secretary of
Treasury, State and
Attorney General which is at least one of the following:
-Violent/dangerous to human life/property/infrastructure.
-Damaging within the U.S. or on U.S. air carrier/vessel/mission.
-Committed by persons on behalf of any foreign person/interest to coerce/influence the U.S.
civilian/government policy.
14. Nationwide Marine Definition: Wet insurance and Dry insurance are terms that
the Nationwide
Marine Definition uses in specifying risks that may be written under marine insurance. The National
Association of Insurance Commissioners adopted the Nationwide Marine Definition that defines 6 broad
classes of property that may be insured under marine contract
