PROPERTY AND CASUALTY INSURANCE
LICENSE EXAM 2025 WITH REAL
QUESTIONS AND CORRECT ANSWERS |
ALREADY GRADED A+ | GUARANTEED A+ |
PROPERTY AND CASUALTY INSURANCE
LICENSE LATEST VERSION FINAL
What method of dealing with risk is applied when insurance is purchased? -
ANSWER- Transfer
What method do insurers use to protect themselves against catastrophic losses? -
ANSWER- reinsurance
a policy that covers all causes of loss except for those specifically excluded is
known as what type of policy - ANSWER- open peril or special
what determines an insurer's responsibility for payment on a claim under an
insurance policy - ANSWER- limits of liability
what sublimity in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident - ANSWER- per-occurrence
what is the name for the limits of liability that are stated separately for different
coverages - ANSWER- split limits
,if an insured peril was the proximate cause of loss, what type of loss is it -
ANSWER- direct
which method of loss valuation is contrary to the principle of indemnity -
ANSWER- replacement cost
what term defines an exact, direct, and uninterrupted cause of loss - ANSWER-
proximate cause
How is the actual cash value of a property calculated? - ANSWER- current
replacement cost minus depreciation
if a manufactured product is unsafe, what type of liability applies to the
manufacturer - ANSWER- strict liability
what are the two types of compensatory damages - ANSWER- general and special
what is a binder - ANSWER- a temporary insurance contract that goes in effect
prior to the policy issue
how does an endorsement affect an insurance contract - ANSWER- it modifies the
contracts original terms
what type of policy insures all property at multiple locations for a single amount -
ANSWER- blanket policy
,what is a deductible in an insurance policy - ANSWER- A specified dollar amount
that the insured must pay before the insurer will pay the policy benefits
complete the coinsurance formula: (insurance carried/insurance required) x loss
amount - ANSWER- loss payment
conditions that increase the chance of a loss are known as what - ANSWER-
hazards
a situation in which a person can only experience a loss and no gain presents what
kind of risk - ANSWER- pure risk
what are the five characteristics of an ideally insurable risk - ANSWER- - due to
chance
- definite and measurable
- statistically predictable
- not catastrophic
- coverage can't be mandatory
What law is the foundation of the statistical prediction of loss upon which rates for
insurance are calculated? - ANSWER- law of large numbers
whom does an insurance agent represent - ANSWER- the insurance company
what is the name of the process that insurance companies use to determine whether
a risk is insurable - ANSWER- underwriting
, When would a misrepresentation on an insurance application be considered fraud?
- ANSWER- when it is intentional and material
What is the fee a policy owner pays an insurance company to receive coverage? -
ANSWER- premium
in insurance terms, a tornado destroys an insured property would be considered
what - ANSWER- peril
What law protects consumers from the circulation of inaccurate or obsolete
information? - ANSWER- The Fair Credit Reporting Act
What are the four elements of an insurance contract? - ANSWER- - agreement
- consideration
- competent parties
- legal purpose
in insurance, when is the offer usually made on a contract - ANSWER- when the
insurance application is submitted
what is the difference between cancellation and nonrenewal - ANSWER-
cancellation is the termination of an insurance policy by either the insured or
insurer prior to the policy's expiration date. nonrenewal is the termination of a
policy by the insurer at its expiration date
when must insurable interest exist in a property insurance policy - ANSWER- at
the time of loss
LICENSE EXAM 2025 WITH REAL
QUESTIONS AND CORRECT ANSWERS |
ALREADY GRADED A+ | GUARANTEED A+ |
PROPERTY AND CASUALTY INSURANCE
LICENSE LATEST VERSION FINAL
What method of dealing with risk is applied when insurance is purchased? -
ANSWER- Transfer
What method do insurers use to protect themselves against catastrophic losses? -
ANSWER- reinsurance
a policy that covers all causes of loss except for those specifically excluded is
known as what type of policy - ANSWER- open peril or special
what determines an insurer's responsibility for payment on a claim under an
insurance policy - ANSWER- limits of liability
what sublimity in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident - ANSWER- per-occurrence
what is the name for the limits of liability that are stated separately for different
coverages - ANSWER- split limits
,if an insured peril was the proximate cause of loss, what type of loss is it -
ANSWER- direct
which method of loss valuation is contrary to the principle of indemnity -
ANSWER- replacement cost
what term defines an exact, direct, and uninterrupted cause of loss - ANSWER-
proximate cause
How is the actual cash value of a property calculated? - ANSWER- current
replacement cost minus depreciation
if a manufactured product is unsafe, what type of liability applies to the
manufacturer - ANSWER- strict liability
what are the two types of compensatory damages - ANSWER- general and special
what is a binder - ANSWER- a temporary insurance contract that goes in effect
prior to the policy issue
how does an endorsement affect an insurance contract - ANSWER- it modifies the
contracts original terms
what type of policy insures all property at multiple locations for a single amount -
ANSWER- blanket policy
,what is a deductible in an insurance policy - ANSWER- A specified dollar amount
that the insured must pay before the insurer will pay the policy benefits
complete the coinsurance formula: (insurance carried/insurance required) x loss
amount - ANSWER- loss payment
conditions that increase the chance of a loss are known as what - ANSWER-
hazards
a situation in which a person can only experience a loss and no gain presents what
kind of risk - ANSWER- pure risk
what are the five characteristics of an ideally insurable risk - ANSWER- - due to
chance
- definite and measurable
- statistically predictable
- not catastrophic
- coverage can't be mandatory
What law is the foundation of the statistical prediction of loss upon which rates for
insurance are calculated? - ANSWER- law of large numbers
whom does an insurance agent represent - ANSWER- the insurance company
what is the name of the process that insurance companies use to determine whether
a risk is insurable - ANSWER- underwriting
, When would a misrepresentation on an insurance application be considered fraud?
- ANSWER- when it is intentional and material
What is the fee a policy owner pays an insurance company to receive coverage? -
ANSWER- premium
in insurance terms, a tornado destroys an insured property would be considered
what - ANSWER- peril
What law protects consumers from the circulation of inaccurate or obsolete
information? - ANSWER- The Fair Credit Reporting Act
What are the four elements of an insurance contract? - ANSWER- - agreement
- consideration
- competent parties
- legal purpose
in insurance, when is the offer usually made on a contract - ANSWER- when the
insurance application is submitted
what is the difference between cancellation and nonrenewal - ANSWER-
cancellation is the termination of an insurance policy by either the insured or
insurer prior to the policy's expiration date. nonrenewal is the termination of a
policy by the insurer at its expiration date
when must insurable interest exist in a property insurance policy - ANSWER- at
the time of loss
