Personal lines, property, and casualty basics
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Actual Cash Value (ACV) formula - CORRECT ANSWER - Replacement Cost (RC) -
depreciation
Damages that are Pacific to out-of-pocket expenses for medical miscellaneous, expensive and
lost wages - CORRECT ANSWER - Special damages
Damages that compensate the injured person for pain and suffering, mental anguish,
disfigurement, or other similar types of losses, highly subjective can amount to whatever a judge
or jury feels right - CORRECT ANSWER - General damages
Damages, which is a form of punishment for Xtreme, outrageous behavior, or gross negligence,
or willful intent - CORRECT ANSWER - Punitive damages
Insurance policy that provides coverage for multiple classes of property at one location or four
more than one classes of property at multiple locations - CORRECT ANSWER - Blanket
insurance
Method of Value, being a loss based upon the amount a willing buyer would pay to a willing
seller for the property prior to the loss - CORRECT ANSWER - Market value
The insured would incur a financial loss if property or a persons is damaged. The insured has a
__________ - CORRECT ANSWER - Insurable interest
Three elements of insurable risk are - CORRECT ANSWER - 1) Financial 2) Blood
(relative) 3) Business
, Refers to a situation that can only result in loss or no change - CORRECT ANSWER -
Pure risk
involves the opportunity for either loss or gain. - CORRECT ANSWER - Speculative risk
Conditions or situation that increase the probability of an insured loss occurring - CORRECT
ANSWER - Hazard
There are three types of hazards, which are - CORRECT ANSWER - 1.physical hazards
2.moral hazard 3.morale hazard
Hazards arising from the material structural or operational features of a risk apart from the
persons, owning or managing it - CORRECT ANSWER - Physical hazard
Hazard, referring to those applicants that may lie on an application for insurance, or in the past, I
have submitted fraudulent claims against the insurer - CORRECT ANSWER - Moral
hazards
Hazard refers to an increase in the hazard presented by a risk arising from the insured's
indifference or state of mind - CORRECT ANSWER - MORALE
The causes of loss insured against in an insurance policy - CORRECT ANSWER - peril
Reimbursement in the event of a loss, an insured or beneficiary is permitted to collect only to the
extent of the financial loss and is not allowed to gain financially - CORRECT ANSWER -
Indemnify to make whole again
An amount of insurance scheduled in a property policy, that is not subject to any coinsurance
requirement in the event of a covered loss - CORRECT ANSWER - Stated value
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Actual Cash Value (ACV) formula - CORRECT ANSWER - Replacement Cost (RC) -
depreciation
Damages that are Pacific to out-of-pocket expenses for medical miscellaneous, expensive and
lost wages - CORRECT ANSWER - Special damages
Damages that compensate the injured person for pain and suffering, mental anguish,
disfigurement, or other similar types of losses, highly subjective can amount to whatever a judge
or jury feels right - CORRECT ANSWER - General damages
Damages, which is a form of punishment for Xtreme, outrageous behavior, or gross negligence,
or willful intent - CORRECT ANSWER - Punitive damages
Insurance policy that provides coverage for multiple classes of property at one location or four
more than one classes of property at multiple locations - CORRECT ANSWER - Blanket
insurance
Method of Value, being a loss based upon the amount a willing buyer would pay to a willing
seller for the property prior to the loss - CORRECT ANSWER - Market value
The insured would incur a financial loss if property or a persons is damaged. The insured has a
__________ - CORRECT ANSWER - Insurable interest
Three elements of insurable risk are - CORRECT ANSWER - 1) Financial 2) Blood
(relative) 3) Business
, Refers to a situation that can only result in loss or no change - CORRECT ANSWER -
Pure risk
involves the opportunity for either loss or gain. - CORRECT ANSWER - Speculative risk
Conditions or situation that increase the probability of an insured loss occurring - CORRECT
ANSWER - Hazard
There are three types of hazards, which are - CORRECT ANSWER - 1.physical hazards
2.moral hazard 3.morale hazard
Hazards arising from the material structural or operational features of a risk apart from the
persons, owning or managing it - CORRECT ANSWER - Physical hazard
Hazard, referring to those applicants that may lie on an application for insurance, or in the past, I
have submitted fraudulent claims against the insurer - CORRECT ANSWER - Moral
hazards
Hazard refers to an increase in the hazard presented by a risk arising from the insured's
indifference or state of mind - CORRECT ANSWER - MORALE
The causes of loss insured against in an insurance policy - CORRECT ANSWER - peril
Reimbursement in the event of a loss, an insured or beneficiary is permitted to collect only to the
extent of the financial loss and is not allowed to gain financially - CORRECT ANSWER -
Indemnify to make whole again
An amount of insurance scheduled in a property policy, that is not subject to any coinsurance
requirement in the event of a covered loss - CORRECT ANSWER - Stated value
