PROPERTY AND CASUALTY INSURANCE
ACTUAL EXAM 2025 WITH REAL
QUESTIONS AND VERIFIED CORRECT
ANSWERS | ALREADY GRADED A+ |
GUARANTEED PASS | PROPERTY AND
CASUALTY INSURANCE MIDTERM AND
FINAL LATEST VERSION
The other insurance provision that limits the liability of the insurer to a portion of
the loss no greater than the amount the insurer bears to all the insurance covering
the property is called - ANSWER- Pro rata liability
Under the professional liability loss settlement provision, what must an insurer do
before offering to pay a claimant to settle a claim? - ANSWER- Get the insured's
consent
In terms of parties to a contract, which of the following does NOT describe a
competent party? - ANSWER- The person must have at least completed secondary
education
When would a misrepresentation on the insurance application be considered fraud?
- ANSWER- If it is intentional and material
,An insured intentionally did not disclose a material fact on an application for
insurance. This would be considered - ANSWER- Concealment
The ABC Corporation has $100,000 of coverage on its building through insurance
Company A, and $50,000 of identical coverage on the same building through
insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss
occurs and the pro rata method is used, how much will each insurer pay? -
ANSWER- Company A will pay $16,000 and Company B will pay $8,000
( Each policy pays its pro rata share of the loss based upon each policy's share of
the total amount of coverage.)
A person who is not named as an insured on the declarations page of a policy but is
protected by the policy is known as the - ANSWER- Additional insured
What insurance policy provision defines how the policy will respond if there is
more than one insurance policy written on the same risk? - ANSWER- Other
insurance
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
When a disagreement occurs as to how to settle a loss in a "fender bender" between
two cars, what procedure is followed? - ANSWER- Arbitration through the court
-arbitration is a low-cost alternative to a full-blown lawsuit
Which of the following clauses establishes the procedure for determining the
amount of a loss when the insurer and the insured cannot agree on the value of
property or amount of loss? - ANSWER- Appraisal clause
,The policy conditions define - ANSWER- How parties to the contract must act
following a loss
The pro rata liability clause is designed to protect the principle of - ANSWER-
Indemnity
In return for a premium, an insurance company must - ANSWER- Be fair in
underwriting and pay covered losses
Elements for a contract: - ANSWER- 1) Agreement - offer and acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Payment for medical expenses, loss of wages, funeral expenses, or the cost to
repair or replace damaged property are known as what type of compensatory
damages? - ANSWER- Special
Which method of loss valuation is contrary to the basic concept of indemnity? -
ANSWER- Replacement cost
An insured owns several buildings, each at a different location and insured on a
separate policy. What type of coverage does the insured have? - ANSWER-
Specific
, The policy provision found in property insurance policies that prevent the insured
from collecting twice for the same loss is called - ANSWER- Subrogation
Losses caused by continuous or repeated exposure to conditions resulting in injury
persons or damage to property that is neither intended nor expected is the
definition of which of the following terms? - ANSWER- Occurrence
An insured relocated to another state for work. However, she still owns and insures
a house in this state, but has had no one living in it for 3 months. She is also storing
some of furniture and clothes in the house. From an insurance standpoint, the
insured's house is considered - ANSWER- Unoccupied
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and the insured's policy is written on
the actual cash value(ACV), how much will the policy pay toward the insured's
new roof? - ANSWER- $5,000
An insured carries a property policy on her home in the amount of $250,000. A
bank is shown as the mortgagor in the policy. Last month the insured made her
final mortgage payment, but did not remove the bank from the policy. In the event
of a covered loss to her home, how much will the bank receive? - ANSWER-
Nothing
What type of damages may be awarded by the court to create disincentives that
discourage behavior that is deemed highly undesirable by society? - ANSWER-
Punitive
A tornado that destroys property would be an example of which of the following? -
ANSWER- A Peril
ACTUAL EXAM 2025 WITH REAL
QUESTIONS AND VERIFIED CORRECT
ANSWERS | ALREADY GRADED A+ |
GUARANTEED PASS | PROPERTY AND
CASUALTY INSURANCE MIDTERM AND
FINAL LATEST VERSION
The other insurance provision that limits the liability of the insurer to a portion of
the loss no greater than the amount the insurer bears to all the insurance covering
the property is called - ANSWER- Pro rata liability
Under the professional liability loss settlement provision, what must an insurer do
before offering to pay a claimant to settle a claim? - ANSWER- Get the insured's
consent
In terms of parties to a contract, which of the following does NOT describe a
competent party? - ANSWER- The person must have at least completed secondary
education
When would a misrepresentation on the insurance application be considered fraud?
- ANSWER- If it is intentional and material
,An insured intentionally did not disclose a material fact on an application for
insurance. This would be considered - ANSWER- Concealment
The ABC Corporation has $100,000 of coverage on its building through insurance
Company A, and $50,000 of identical coverage on the same building through
insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss
occurs and the pro rata method is used, how much will each insurer pay? -
ANSWER- Company A will pay $16,000 and Company B will pay $8,000
( Each policy pays its pro rata share of the loss based upon each policy's share of
the total amount of coverage.)
A person who is not named as an insured on the declarations page of a policy but is
protected by the policy is known as the - ANSWER- Additional insured
What insurance policy provision defines how the policy will respond if there is
more than one insurance policy written on the same risk? - ANSWER- Other
insurance
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
When a disagreement occurs as to how to settle a loss in a "fender bender" between
two cars, what procedure is followed? - ANSWER- Arbitration through the court
-arbitration is a low-cost alternative to a full-blown lawsuit
Which of the following clauses establishes the procedure for determining the
amount of a loss when the insurer and the insured cannot agree on the value of
property or amount of loss? - ANSWER- Appraisal clause
,The policy conditions define - ANSWER- How parties to the contract must act
following a loss
The pro rata liability clause is designed to protect the principle of - ANSWER-
Indemnity
In return for a premium, an insurance company must - ANSWER- Be fair in
underwriting and pay covered losses
Elements for a contract: - ANSWER- 1) Agreement - offer and acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Payment for medical expenses, loss of wages, funeral expenses, or the cost to
repair or replace damaged property are known as what type of compensatory
damages? - ANSWER- Special
Which method of loss valuation is contrary to the basic concept of indemnity? -
ANSWER- Replacement cost
An insured owns several buildings, each at a different location and insured on a
separate policy. What type of coverage does the insured have? - ANSWER-
Specific
, The policy provision found in property insurance policies that prevent the insured
from collecting twice for the same loss is called - ANSWER- Subrogation
Losses caused by continuous or repeated exposure to conditions resulting in injury
persons or damage to property that is neither intended nor expected is the
definition of which of the following terms? - ANSWER- Occurrence
An insured relocated to another state for work. However, she still owns and insures
a house in this state, but has had no one living in it for 3 months. She is also storing
some of furniture and clothes in the house. From an insurance standpoint, the
insured's house is considered - ANSWER- Unoccupied
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and the insured's policy is written on
the actual cash value(ACV), how much will the policy pay toward the insured's
new roof? - ANSWER- $5,000
An insured carries a property policy on her home in the amount of $250,000. A
bank is shown as the mortgagor in the policy. Last month the insured made her
final mortgage payment, but did not remove the bank from the policy. In the event
of a covered loss to her home, how much will the bank receive? - ANSWER-
Nothing
What type of damages may be awarded by the court to create disincentives that
discourage behavior that is deemed highly undesirable by society? - ANSWER-
Punitive
A tornado that destroys property would be an example of which of the following? -
ANSWER- A Peril
