Virginia Property and Casualty Insurance Exam
Questions with 100% Correct Answers
What acronym is useful in recalling the Broad Form Coverage Perils? - Answer-B.B.
BICE-GOLF
What is the maximum percentage per loss for a tree, shrub or plant? - Answer-5% of the
amount coverage on the dwelling
When does a deductible apply to the Fire department Service Charge? - Answer-???
What is an example property covered under Coverage A? - Answer-a lawn mower
Under Coverage B, when is a garage used for private storage covered? - Answer-when
it is rented to someone other than the occupant of the main dwelling
With Coverage D & E, if civil authority prohibits the use of the property, the payment
may be limited to what period? - Answer-2 weeks
Rental Value and Additional Living Expense coverage allows up to what percent of
Coverage A to be used for the loss of both fair rental value and additional living
expenses? - Answer-20%
How much will the Fire Department Service Charge pay for the Fire Department to
respond to a fire at an insured's premises? - Answer-$500.00
What boats are not excluded from coverage? - Answer-rowboats and canoes
How many days of a written notice are required to cancel a policy for nonpayment? -
Answer-10 days
What must a standardized Homeowner Insurance Package Policy include? - Answer-
must include coverage for property under Section 1 and personal liability under section
2
What forms are contained in Section 1? (Home Owners Policy) - Answer-Property
What are Homeowner's coverage forms? - Answer-different levels of protection ???
Why are there 6 Homeowner coverage forms? - Answer-1. HO-2 Broad Form
, 2. HO-3 Special Form
3. HO-4 Contents Broad Form
4. HO-5 Comprehensive Form
5. HO-6 Condominium Unit Owners
6. HO-8 Modified Coverage Form
What type of Hazard takes place if the replacement value is written for more than the
purchase price of a home? - Answer-Moral Hazard
What is the main purpose of HO-2, HO-3 and HO-5 forms? - Answer-the main
requirement is that an owner must occupy their dwelling. Office or professional
occupancy is permitted as long a s there are no retail sales or 2 people or less work at
one time.
What kind of perils is covered under the HO-2 Broad Form? - Answer-limited named
perils
What form is often called the Renter's Policy? - Answer-HO-4 (Contents Broad Form)
What coverage is called the Comprehensive Form? - Answer-HO-5
What is based on the principle of Risk Transfer - Answer-Spreading the results of a
financial loss among many persons, so the cost to any one person is small
What kind of risk has an outcome that is uncertain? - Answer-Speculative Risk
What is the reason for a claim? - Answer-A loss is the reason a claim against an
insurance company.
What is the measure of a loss? - Answer-Exposure Units
Name three types of hazards. - Answer-1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
What is a cause of a loss? - Answer-Perils are the causes of possible loss
What is the common way to transfer risk? - Answer-The most common method of risk
transfer is when a homeowner purchases insurance on their home..
Define adverse selection. - Answer-Insuring risks more prone to losses than an average
risk.
What is the theory of probability that is the basis for insurance? - Answer-The Law of
Large Numbers
Questions with 100% Correct Answers
What acronym is useful in recalling the Broad Form Coverage Perils? - Answer-B.B.
BICE-GOLF
What is the maximum percentage per loss for a tree, shrub or plant? - Answer-5% of the
amount coverage on the dwelling
When does a deductible apply to the Fire department Service Charge? - Answer-???
What is an example property covered under Coverage A? - Answer-a lawn mower
Under Coverage B, when is a garage used for private storage covered? - Answer-when
it is rented to someone other than the occupant of the main dwelling
With Coverage D & E, if civil authority prohibits the use of the property, the payment
may be limited to what period? - Answer-2 weeks
Rental Value and Additional Living Expense coverage allows up to what percent of
Coverage A to be used for the loss of both fair rental value and additional living
expenses? - Answer-20%
How much will the Fire Department Service Charge pay for the Fire Department to
respond to a fire at an insured's premises? - Answer-$500.00
What boats are not excluded from coverage? - Answer-rowboats and canoes
How many days of a written notice are required to cancel a policy for nonpayment? -
Answer-10 days
What must a standardized Homeowner Insurance Package Policy include? - Answer-
must include coverage for property under Section 1 and personal liability under section
2
What forms are contained in Section 1? (Home Owners Policy) - Answer-Property
What are Homeowner's coverage forms? - Answer-different levels of protection ???
Why are there 6 Homeowner coverage forms? - Answer-1. HO-2 Broad Form
, 2. HO-3 Special Form
3. HO-4 Contents Broad Form
4. HO-5 Comprehensive Form
5. HO-6 Condominium Unit Owners
6. HO-8 Modified Coverage Form
What type of Hazard takes place if the replacement value is written for more than the
purchase price of a home? - Answer-Moral Hazard
What is the main purpose of HO-2, HO-3 and HO-5 forms? - Answer-the main
requirement is that an owner must occupy their dwelling. Office or professional
occupancy is permitted as long a s there are no retail sales or 2 people or less work at
one time.
What kind of perils is covered under the HO-2 Broad Form? - Answer-limited named
perils
What form is often called the Renter's Policy? - Answer-HO-4 (Contents Broad Form)
What coverage is called the Comprehensive Form? - Answer-HO-5
What is based on the principle of Risk Transfer - Answer-Spreading the results of a
financial loss among many persons, so the cost to any one person is small
What kind of risk has an outcome that is uncertain? - Answer-Speculative Risk
What is the reason for a claim? - Answer-A loss is the reason a claim against an
insurance company.
What is the measure of a loss? - Answer-Exposure Units
Name three types of hazards. - Answer-1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
What is a cause of a loss? - Answer-Perils are the causes of possible loss
What is the common way to transfer risk? - Answer-The most common method of risk
transfer is when a homeowner purchases insurance on their home..
Define adverse selection. - Answer-Insuring risks more prone to losses than an average
risk.
What is the theory of probability that is the basis for insurance? - Answer-The Law of
Large Numbers
