COLORADO PROPERTY & CASUALTY
QUESTIONS WITH ALL CORRECT & VERIFIED
ANSWERS
If a producer misrepresents a part of a policy, will the Insurer cover a claim made for the
misrepresentation? Correct answer-Yes, if an agent mistakenly says something untrue about a
policy, the company WILL cover the loss b/c the agent legally represents the insurer. The insurer may
seek reimbursement from Agent for their error.
When must a certificate of Authority be renewed each year in the State of Colorado? Correct
answer-June 30th
Estoppel Correct answer-Prevents a party from enforcing a right that it voluntarily waived by its
past conduct.
Captive Insurance Company Correct answer-Formed to cover the risks of the parent organization
that owns it. Sophisticated form of Self-Insurance.
Indemnity Correct answer-When a loss victim is financially restored to the amount of the loss.
How long must disclosures be kept on record? Correct answer-Disclosures must be kept on record
for 3 years.
Legal Contract Correct answer-Legal contract is formed when application is completed, sent with
premium to the insurer, and accepted by the insurer.
What producer is exempt from CO continuing education courses? Correct answer-A Title Insurance
Producer.
What source of funds are used during prosecution of alleged Insurance Fraud? Correct answer-
During prosecution of alleged Insurance fraud, the source of funds is from fees collected from
entities regulated by the Division.
What is the time limit to pay or reject claims in Colorado? Correct answer-Insurers must reject or
pay claims within 60 days.
Are Averse Economic Conditions a cause for revision of a policy upon renewal? Correct answer-
Adverse economic conditions will NOT cause an insurer to revise a standard policy form at renewal.
Licensee vs Invitee Correct answer-Licensee would be a Door to Door salesman. A Delivery person
is an invitee.
Proximate Causation Correct answer-Proximate Causation is where a plaintiff must prove that the
defendants action set in motion a chain of events that could've reasonably been anticipated to lead
to the damage suffered.
Strict Liability Correct answer-Strict Liability holds people responsible even if they haven't been
careless/negligent. But because they broke the law or ignored clear signs for specific behavior.
, Contributory Negligence Correct answer-Contributory Negligence considers the plaintiffs conduct
as a cause of their own injury, and bars them from any recovery. (Ex. a pedestrian walking when they
don't have the right of way, red flashing light, and get hit by a car legally moving through the green
light.)
Is damage caused by flood a covered peril under a Home property insurance policy? Correct
answer-No, damage caused by flood is excluded under a property insurance policy's water damage
exclusion.
Compensatory Damages Correct answer-Special and General damages
Policy Reduction Coverage Correct answer-Policy reduction coverage occurs when a property is
vacant for 60 days.
Negligence Correct answer-Negligence is the failure to use the degree of reasonable care, without
intent to injure.
Territory Provision of a casualty policy Correct answer-Territory Provision of a casualty policy
indicates where coverage would apply if a loss occurs.
If an Insurer fails to meet the requirement before an existing policy expires... Correct answer-the
insurer must renew the policy to the same terms, conditions, and premium for an identical policy
period.
No Benefit to Bailee Correct answer-No Benefit to Bailee provision makes it clear that no coverage
is provided if it benefits a bailee.
Morale Hazards Correct answer-Morale Hazards arise from a state of mind, attitude, or
indifference to loss.
Abandonment Provision Correct answer-An Abandonment Provision in property policies specifies
that the insured cannot walk away from damaged property and turn it over to the insurer. The
insurer ISN'T required to accept any property that an insured has abandoned.
Loss of Income by a business Correct answer-The loss of income sustained by a business while
repairing damage to its facility is an indirect loss resulting from damage.
Proximate cause of loss Correct answer-Proximate cause of loss is the cause that sets in motion an
unbroken chain of events leading to the loss.
Adverse Selection Correct answer-Adverse selection is a condition that results when the only
people interested in specific insurance are those most likely to have claims. (Ex. People who buy
Earthquake coverage in CA, or Flood Insurance in hurricane areas.)
How often must a credit score be updated with an insured. Correct answer-Insurance / Credit
Score must be updated every 36 months.
What 3 general classes of legal wrongs are there? Correct answer-Legal Liability arises from 3
general classes of legal wrongs: Crime, Tort, and Breach of Contract.
QUESTIONS WITH ALL CORRECT & VERIFIED
ANSWERS
If a producer misrepresents a part of a policy, will the Insurer cover a claim made for the
misrepresentation? Correct answer-Yes, if an agent mistakenly says something untrue about a
policy, the company WILL cover the loss b/c the agent legally represents the insurer. The insurer may
seek reimbursement from Agent for their error.
When must a certificate of Authority be renewed each year in the State of Colorado? Correct
answer-June 30th
Estoppel Correct answer-Prevents a party from enforcing a right that it voluntarily waived by its
past conduct.
Captive Insurance Company Correct answer-Formed to cover the risks of the parent organization
that owns it. Sophisticated form of Self-Insurance.
Indemnity Correct answer-When a loss victim is financially restored to the amount of the loss.
How long must disclosures be kept on record? Correct answer-Disclosures must be kept on record
for 3 years.
Legal Contract Correct answer-Legal contract is formed when application is completed, sent with
premium to the insurer, and accepted by the insurer.
What producer is exempt from CO continuing education courses? Correct answer-A Title Insurance
Producer.
What source of funds are used during prosecution of alleged Insurance Fraud? Correct answer-
During prosecution of alleged Insurance fraud, the source of funds is from fees collected from
entities regulated by the Division.
What is the time limit to pay or reject claims in Colorado? Correct answer-Insurers must reject or
pay claims within 60 days.
Are Averse Economic Conditions a cause for revision of a policy upon renewal? Correct answer-
Adverse economic conditions will NOT cause an insurer to revise a standard policy form at renewal.
Licensee vs Invitee Correct answer-Licensee would be a Door to Door salesman. A Delivery person
is an invitee.
Proximate Causation Correct answer-Proximate Causation is where a plaintiff must prove that the
defendants action set in motion a chain of events that could've reasonably been anticipated to lead
to the damage suffered.
Strict Liability Correct answer-Strict Liability holds people responsible even if they haven't been
careless/negligent. But because they broke the law or ignored clear signs for specific behavior.
, Contributory Negligence Correct answer-Contributory Negligence considers the plaintiffs conduct
as a cause of their own injury, and bars them from any recovery. (Ex. a pedestrian walking when they
don't have the right of way, red flashing light, and get hit by a car legally moving through the green
light.)
Is damage caused by flood a covered peril under a Home property insurance policy? Correct
answer-No, damage caused by flood is excluded under a property insurance policy's water damage
exclusion.
Compensatory Damages Correct answer-Special and General damages
Policy Reduction Coverage Correct answer-Policy reduction coverage occurs when a property is
vacant for 60 days.
Negligence Correct answer-Negligence is the failure to use the degree of reasonable care, without
intent to injure.
Territory Provision of a casualty policy Correct answer-Territory Provision of a casualty policy
indicates where coverage would apply if a loss occurs.
If an Insurer fails to meet the requirement before an existing policy expires... Correct answer-the
insurer must renew the policy to the same terms, conditions, and premium for an identical policy
period.
No Benefit to Bailee Correct answer-No Benefit to Bailee provision makes it clear that no coverage
is provided if it benefits a bailee.
Morale Hazards Correct answer-Morale Hazards arise from a state of mind, attitude, or
indifference to loss.
Abandonment Provision Correct answer-An Abandonment Provision in property policies specifies
that the insured cannot walk away from damaged property and turn it over to the insurer. The
insurer ISN'T required to accept any property that an insured has abandoned.
Loss of Income by a business Correct answer-The loss of income sustained by a business while
repairing damage to its facility is an indirect loss resulting from damage.
Proximate cause of loss Correct answer-Proximate cause of loss is the cause that sets in motion an
unbroken chain of events leading to the loss.
Adverse Selection Correct answer-Adverse selection is a condition that results when the only
people interested in specific insurance are those most likely to have claims. (Ex. People who buy
Earthquake coverage in CA, or Flood Insurance in hurricane areas.)
How often must a credit score be updated with an insured. Correct answer-Insurance / Credit
Score must be updated every 36 months.
What 3 general classes of legal wrongs are there? Correct answer-Legal Liability arises from 3
general classes of legal wrongs: Crime, Tort, and Breach of Contract.
