Property And Casualty Insurance EXAM
Questions And Answers
Specific binsurance b- bcorrect banswers✔✔This btype bof binsurance bdesignates ba
bparticular bitem bto bbe binsured
Blanket binsurance b- bcorrect banswers✔✔This btype bof binsurance bcovers bmore bthan
bone bitem bof bproperty bat ba bsingle blocation bor bone bmore bitems bof bproperty bat
bmultiple blocations.
Speculative b- bcorrect banswers✔✔possibility bof bboth bgain band bloss. bNot binsurable.
Pure b- bcorrect banswers✔✔only bthe bpossibility bof bloss. bInsurable.
What bare bthe b5 bmethods bof bmanaging bor bhandling brisk? b- bcorrect
banswers✔✔avoid, bcontrol, bretain, band btransfer brisk.
Hazard b- bcorrect banswers✔✔A bcondition bor bsituation bwhich bincreases bthe bchance
bfor bloss
Physical bHazards b- bcorrect banswers✔✔a bhazard bthat barises bfrom bthe bcondition,
boccupancy, bor buse bof bthe bproperty bitself. b
ex: bskateboard bleft bon bthe bsteps
Moral bHazards b- bcorrect banswers✔✔when ban bindividual bthrough bcarelessness bor
bby birresponsible bactions bcan bincrease bthe bpossibly bfor ba bloss. b
ex: bperson bwho bdrives bcarelessly bjust bbecause bthey bknow bthey bare binsured.
Morale bHazards b- bcorrect banswers✔✔when ba bperson bmight bcreate ba bloss
bsituation bon bpurpose bjust bto bcollect bfrom bthe binsurance bcompany. b
ex: bPrearranged, bfaked btheft bof bsomeone's bold bvehicle bso bthey bcan bget ban
binsurance bpayout bto bbuy ba bnew bvehicle.
Replacement bCost b- bcorrect banswers✔✔The bamount bof bmoney bit bwould btake bto
breplace ba bdamaged bor bdestroyed bitem bwith bone bof blike bkind band bquality bAT bTHE
bTIME bOF bLOSS. bNo bdeduction bfor bdepreciation.
,Actual bCash bValue b(ACV) b- bcorrect banswers✔✔Replacement bCost, bminus
bdepreciation.
Pair band bSet bClause b- bcorrect banswers✔✔Loss bto bone bitem bof ba bpair bor bset
bdoes bnot bconstitute bloss bto bthe bentire bpair bor bset.
Appraisal b- bcorrect banswers✔✔A bmethod bof bresolving bdisputes bbetween binsurers
band binsureds bover bthe bamount bowed bon ba bcovered bloss.
-both bparties bselect ban bappraiser
-the btwo bappraisers bselect ban bumpire
-if bthe bappraisers bdo bnot bagree, bthe bumpire bis bconsulted
-the bamount bagreed bon bby b2 bout bof b3 bis bthe bamount bthat bwill bbe bpaid
Subrogation b- bcorrect banswers✔✔An binsurer's bright bto brecover bthe bamount bof bits
bloss bpayment bfrom bthe bthird bparty bwho bis blegally bresponsible bfor bthe bloss.
Arbitration b- bcorrect banswers✔✔this bcondition bis bsimilar bto bthe bAppraisal bCondition
bbut bit bis bnot blimited bto bdisputes bover bthe bvalue bof bthe bloss. bIt bmay balso bbe bused
bto bresolve bother bareas bof bdisagreement bbetween bthe binsured band bthe binsurance
bcompany.
What bdoes bWC bSHAVVER bstand bfor? b- bcorrect banswers✔✔Windstorm, bCivil
bcommotion, bSmoke, bHail, bAircraft, bVehicles, bVolcanic beruption, bExplosion, bRiot
What bdoes bBIG bAFFECT bstand bfor? b- bcorrect banswers✔✔Burglar bdamage, bIce b&
bsnow bweight, bGlass bbreakage, bAccidental bdischarge, bFalling bobjects, bFreezing bof
bpipes, bElectrical bdamage, bCollapse, bTearing bapart.
Insolvency b- bcorrect banswers✔✔A bfinancial bstate bthat boccurs bif bliabilities bare
bgreater bthan bassets.
Law bof bAgency b- bcorrect banswers✔✔Knowledge bof bthe bAgents bis bKnowledge bof
bthe bPrincipal b(Insurance bCompany)
Principal b- bcorrect banswers✔✔Insurance bCompany
What bis bthe bISO? b- bcorrect banswers✔✔Insurance bServices bOffice bwhich bis ban
borganization bestablished bfor bthe bbenefit bof bits bmember binsurance bcompanies. bThis
borganization bgathers bstatistics, bprovides bloss bcosts, bdrafts bpolicy bforms band
bcoverage bprovisions band bconducts binspections bfor brate bmaking bpurposes.
Coinsurance bClause b- bcorrect banswers✔✔Requires bthe binsured bto bcarry ba
bminimum bspecified bamount b(generally b80%) bof bthe breplacement bcost bvalue bof bthe
binsured bproperty bin border bfor bpartial blosses bto bbe bpaid bin bfull.
,Estoppel b- bcorrect banswers✔✔A blegal bbar bto bchanging bor bdenying ba bfact bbecause
bof bone's bown bprevious bactions bor bwords bto bthe bcontrary.
ex: bIf ban binsurance bcompany brepresentative bintentionally bor bunintentionally bgives
bthe bimpression bthat ba bspecific bfact bexists bwhen bit bdoes bnot band ba bclient brelies
bon bthat bimpression band bis bdamaged ba bresult.
Binder b- bcorrect banswers✔✔A btemporary bcontract bof binsurance, boral bor bwritten,
boffered bby ban binsurer bpending bissuance bof bthe bpolicy. bUsually bwritten bfor ba
bperiod bof b30-60 bdays band bremains bin bforce bfor bthat bperiod bor buntil ba bpermanent
bpolicy bis beither bissued bor bdenied bby bthe binsurer.
Warranty b- bcorrect banswers✔✔A bprovision bin ba bpolicy bthat bpledges bthat ba
bcondition bdoes bexist bor bwill bexist bat bsome btime bin bthe bfuture.
Deposit bPremium b- bcorrect banswers✔✔Tentative bcharge bmade bat bthe bbeginning bof
bcertain bpolicies band breinsurance bagreements bto bbe badjusted bwhen bthe bactual
bearned bcharge bhas bbeen blater bdetermined.
Audit b- bcorrect banswers✔✔Verification bof bbooks bor baccounts bto bdetermine btheir
baccuracy.
Occurrence b- bcorrect banswers✔✔An baccident, bincluding bcontinuous bor brepeated
bexposure bto bthe bsame bharmful bconditions, bwhich bresult bin bbodily binjury bor
bproperty bdamage.
Special bDamages b- bcorrect banswers✔✔type bof bcompensatory bdamages bthat
breimburse bthe binjured bpart bfor bdirect band bspecific bexpenses binvolved bin bthe bloss.
bSuch bas bmedical bexpenses, bfuneral bexpenses band bloss bwages.
General bDamages b- bcorrect banswers✔✔type bof bcompensatory bdamages bthat
breimburse bthe binjured bparty bfor bsuch bthings bas bpain band bsuffering band
bdisfigurement.
Punitive bDamages b- bcorrect banswers✔✔type bof bdamages bintended bto bpunish bthe
bdefendant band bmake ban bexample bout bof bher bto bdiscourage bothers bfrom bbehaving
bthe bsame bway.
Proximate bCause b- bcorrect banswers✔✔An bact, bthrough ban buniterrupted bchain bof
bevents, bthat bcan bbe bdetermined bto bbe bthe bimmediate bor bactual bcause bof ba bloss.
4 belements bof bnegligence b- bcorrect banswers✔✔1. bThe bexistence bof ba bDUTY bto
bact bin ba bcertain bway
2. bA bFAILURE bto blive bup bto bthis bduty
3. bAn bactual bINJURY bmust boccur
, 4. bThe bfailure bin bduty bmust bbe bthe bPROXIMATE bCAUSE bof bthe binjury.
Negligence b- bcorrect banswers✔✔An bunreasonable bor bprudent bact, bA bthoughtless
bor bcareless bact bor bone bcommitted bout bof bignorance. bIt bmay bbe ba bnon-act bor
bomission, bbut bit bis bNEVER ban bintentional bact.
Casualty bInsurance b- bcorrect banswers✔✔Refers bto bcoverage bdesigned bto baddress
bthe bliability bof bindividuals band borganizations bresulting bfrom bnegligent bacts bin btheir
bpersonal, bbusiness, bor bprofessional broles.
Overinsurance b- bcorrect banswers✔✔Exists bif ba bproperty bor ban binsurable binterest bin
bproperty bis binsured bby bone bor bmore binsurance bcontracts bagainst bthe bsame
bhazard bin bexcess bof bthe bfair bvalue bof bthe bproperty bor bof bsuch binterest.
Specific bInsurance b- bcorrect banswers✔✔Coverage bon bONE btype bof bproperty b(real
bor bpersonal) bin bONE blocation.
Blanket bInsurance b- bcorrect banswers✔✔A bsingle bpolicy bwritten bon ban binsured's
binterest bfor b2 bor bmore bdifferent btypes bof bproperty b(dwelling/building band bcontents)
bat bthe bsame blocation, bor bat bdifferent blocations.
Uninsured bMotor bVehicle b- bcorrect banswers✔✔A bmotor bvehicle bor btrailer bto bwhich:
- bNo bliability bcoverage bat bthe btime bof baccident
-has bliability bcoverage bbut bnot benough bto bmeet bthe bstate's bfinancial bresponsibility
brequirement
- bOperated bby ba bhit band brun bdriver b
- bHas binvalid bliability binsurance bat bthe btime bof bthe baccident bbecause bthe binsurer
bis binsolvent bor bdenies bcoverage
Part bC: bUninsured bMotorist bCoverage b- bcorrect banswers✔✔this bcoverage
bcompensates bthe binsured bfor bbodily binjury bONLY bas ba bresult bof ban baccident bwith
ban buninsured bmotorist.
Medical bPayments b- bcorrect banswers✔✔Insurance bcompany bagrees bto bpay bfor
breasonable bexpenses bincurred bfor bnecessary bmedical band bfuneral bservices
bbecause bof bbodily binjury.
- bCovers bfirst bparty. b
- b"Stays bin bthe bcar"
- b3 byears bis btime blimit bfor bincurring bmedical bexpenses
Supplementary bPayments b- bcorrect banswers✔✔Payments bmade bin baddition bto bthe
bLimits bof bLiability.
b
- bUp bto b$200/day bfor bloss bof bearnings
- bUp bto b$250 bfor bthe bcost bof bbail bbonds brequired bbecause bof ban baccident.
Questions And Answers
Specific binsurance b- bcorrect banswers✔✔This btype bof binsurance bdesignates ba
bparticular bitem bto bbe binsured
Blanket binsurance b- bcorrect banswers✔✔This btype bof binsurance bcovers bmore bthan
bone bitem bof bproperty bat ba bsingle blocation bor bone bmore bitems bof bproperty bat
bmultiple blocations.
Speculative b- bcorrect banswers✔✔possibility bof bboth bgain band bloss. bNot binsurable.
Pure b- bcorrect banswers✔✔only bthe bpossibility bof bloss. bInsurable.
What bare bthe b5 bmethods bof bmanaging bor bhandling brisk? b- bcorrect
banswers✔✔avoid, bcontrol, bretain, band btransfer brisk.
Hazard b- bcorrect banswers✔✔A bcondition bor bsituation bwhich bincreases bthe bchance
bfor bloss
Physical bHazards b- bcorrect banswers✔✔a bhazard bthat barises bfrom bthe bcondition,
boccupancy, bor buse bof bthe bproperty bitself. b
ex: bskateboard bleft bon bthe bsteps
Moral bHazards b- bcorrect banswers✔✔when ban bindividual bthrough bcarelessness bor
bby birresponsible bactions bcan bincrease bthe bpossibly bfor ba bloss. b
ex: bperson bwho bdrives bcarelessly bjust bbecause bthey bknow bthey bare binsured.
Morale bHazards b- bcorrect banswers✔✔when ba bperson bmight bcreate ba bloss
bsituation bon bpurpose bjust bto bcollect bfrom bthe binsurance bcompany. b
ex: bPrearranged, bfaked btheft bof bsomeone's bold bvehicle bso bthey bcan bget ban
binsurance bpayout bto bbuy ba bnew bvehicle.
Replacement bCost b- bcorrect banswers✔✔The bamount bof bmoney bit bwould btake bto
breplace ba bdamaged bor bdestroyed bitem bwith bone bof blike bkind band bquality bAT bTHE
bTIME bOF bLOSS. bNo bdeduction bfor bdepreciation.
,Actual bCash bValue b(ACV) b- bcorrect banswers✔✔Replacement bCost, bminus
bdepreciation.
Pair band bSet bClause b- bcorrect banswers✔✔Loss bto bone bitem bof ba bpair bor bset
bdoes bnot bconstitute bloss bto bthe bentire bpair bor bset.
Appraisal b- bcorrect banswers✔✔A bmethod bof bresolving bdisputes bbetween binsurers
band binsureds bover bthe bamount bowed bon ba bcovered bloss.
-both bparties bselect ban bappraiser
-the btwo bappraisers bselect ban bumpire
-if bthe bappraisers bdo bnot bagree, bthe bumpire bis bconsulted
-the bamount bagreed bon bby b2 bout bof b3 bis bthe bamount bthat bwill bbe bpaid
Subrogation b- bcorrect banswers✔✔An binsurer's bright bto brecover bthe bamount bof bits
bloss bpayment bfrom bthe bthird bparty bwho bis blegally bresponsible bfor bthe bloss.
Arbitration b- bcorrect banswers✔✔this bcondition bis bsimilar bto bthe bAppraisal bCondition
bbut bit bis bnot blimited bto bdisputes bover bthe bvalue bof bthe bloss. bIt bmay balso bbe bused
bto bresolve bother bareas bof bdisagreement bbetween bthe binsured band bthe binsurance
bcompany.
What bdoes bWC bSHAVVER bstand bfor? b- bcorrect banswers✔✔Windstorm, bCivil
bcommotion, bSmoke, bHail, bAircraft, bVehicles, bVolcanic beruption, bExplosion, bRiot
What bdoes bBIG bAFFECT bstand bfor? b- bcorrect banswers✔✔Burglar bdamage, bIce b&
bsnow bweight, bGlass bbreakage, bAccidental bdischarge, bFalling bobjects, bFreezing bof
bpipes, bElectrical bdamage, bCollapse, bTearing bapart.
Insolvency b- bcorrect banswers✔✔A bfinancial bstate bthat boccurs bif bliabilities bare
bgreater bthan bassets.
Law bof bAgency b- bcorrect banswers✔✔Knowledge bof bthe bAgents bis bKnowledge bof
bthe bPrincipal b(Insurance bCompany)
Principal b- bcorrect banswers✔✔Insurance bCompany
What bis bthe bISO? b- bcorrect banswers✔✔Insurance bServices bOffice bwhich bis ban
borganization bestablished bfor bthe bbenefit bof bits bmember binsurance bcompanies. bThis
borganization bgathers bstatistics, bprovides bloss bcosts, bdrafts bpolicy bforms band
bcoverage bprovisions band bconducts binspections bfor brate bmaking bpurposes.
Coinsurance bClause b- bcorrect banswers✔✔Requires bthe binsured bto bcarry ba
bminimum bspecified bamount b(generally b80%) bof bthe breplacement bcost bvalue bof bthe
binsured bproperty bin border bfor bpartial blosses bto bbe bpaid bin bfull.
,Estoppel b- bcorrect banswers✔✔A blegal bbar bto bchanging bor bdenying ba bfact bbecause
bof bone's bown bprevious bactions bor bwords bto bthe bcontrary.
ex: bIf ban binsurance bcompany brepresentative bintentionally bor bunintentionally bgives
bthe bimpression bthat ba bspecific bfact bexists bwhen bit bdoes bnot band ba bclient brelies
bon bthat bimpression band bis bdamaged ba bresult.
Binder b- bcorrect banswers✔✔A btemporary bcontract bof binsurance, boral bor bwritten,
boffered bby ban binsurer bpending bissuance bof bthe bpolicy. bUsually bwritten bfor ba
bperiod bof b30-60 bdays band bremains bin bforce bfor bthat bperiod bor buntil ba bpermanent
bpolicy bis beither bissued bor bdenied bby bthe binsurer.
Warranty b- bcorrect banswers✔✔A bprovision bin ba bpolicy bthat bpledges bthat ba
bcondition bdoes bexist bor bwill bexist bat bsome btime bin bthe bfuture.
Deposit bPremium b- bcorrect banswers✔✔Tentative bcharge bmade bat bthe bbeginning bof
bcertain bpolicies band breinsurance bagreements bto bbe badjusted bwhen bthe bactual
bearned bcharge bhas bbeen blater bdetermined.
Audit b- bcorrect banswers✔✔Verification bof bbooks bor baccounts bto bdetermine btheir
baccuracy.
Occurrence b- bcorrect banswers✔✔An baccident, bincluding bcontinuous bor brepeated
bexposure bto bthe bsame bharmful bconditions, bwhich bresult bin bbodily binjury bor
bproperty bdamage.
Special bDamages b- bcorrect banswers✔✔type bof bcompensatory bdamages bthat
breimburse bthe binjured bpart bfor bdirect band bspecific bexpenses binvolved bin bthe bloss.
bSuch bas bmedical bexpenses, bfuneral bexpenses band bloss bwages.
General bDamages b- bcorrect banswers✔✔type bof bcompensatory bdamages bthat
breimburse bthe binjured bparty bfor bsuch bthings bas bpain band bsuffering band
bdisfigurement.
Punitive bDamages b- bcorrect banswers✔✔type bof bdamages bintended bto bpunish bthe
bdefendant band bmake ban bexample bout bof bher bto bdiscourage bothers bfrom bbehaving
bthe bsame bway.
Proximate bCause b- bcorrect banswers✔✔An bact, bthrough ban buniterrupted bchain bof
bevents, bthat bcan bbe bdetermined bto bbe bthe bimmediate bor bactual bcause bof ba bloss.
4 belements bof bnegligence b- bcorrect banswers✔✔1. bThe bexistence bof ba bDUTY bto
bact bin ba bcertain bway
2. bA bFAILURE bto blive bup bto bthis bduty
3. bAn bactual bINJURY bmust boccur
, 4. bThe bfailure bin bduty bmust bbe bthe bPROXIMATE bCAUSE bof bthe binjury.
Negligence b- bcorrect banswers✔✔An bunreasonable bor bprudent bact, bA bthoughtless
bor bcareless bact bor bone bcommitted bout bof bignorance. bIt bmay bbe ba bnon-act bor
bomission, bbut bit bis bNEVER ban bintentional bact.
Casualty bInsurance b- bcorrect banswers✔✔Refers bto bcoverage bdesigned bto baddress
bthe bliability bof bindividuals band borganizations bresulting bfrom bnegligent bacts bin btheir
bpersonal, bbusiness, bor bprofessional broles.
Overinsurance b- bcorrect banswers✔✔Exists bif ba bproperty bor ban binsurable binterest bin
bproperty bis binsured bby bone bor bmore binsurance bcontracts bagainst bthe bsame
bhazard bin bexcess bof bthe bfair bvalue bof bthe bproperty bor bof bsuch binterest.
Specific bInsurance b- bcorrect banswers✔✔Coverage bon bONE btype bof bproperty b(real
bor bpersonal) bin bONE blocation.
Blanket bInsurance b- bcorrect banswers✔✔A bsingle bpolicy bwritten bon ban binsured's
binterest bfor b2 bor bmore bdifferent btypes bof bproperty b(dwelling/building band bcontents)
bat bthe bsame blocation, bor bat bdifferent blocations.
Uninsured bMotor bVehicle b- bcorrect banswers✔✔A bmotor bvehicle bor btrailer bto bwhich:
- bNo bliability bcoverage bat bthe btime bof baccident
-has bliability bcoverage bbut bnot benough bto bmeet bthe bstate's bfinancial bresponsibility
brequirement
- bOperated bby ba bhit band brun bdriver b
- bHas binvalid bliability binsurance bat bthe btime bof bthe baccident bbecause bthe binsurer
bis binsolvent bor bdenies bcoverage
Part bC: bUninsured bMotorist bCoverage b- bcorrect banswers✔✔this bcoverage
bcompensates bthe binsured bfor bbodily binjury bONLY bas ba bresult bof ban baccident bwith
ban buninsured bmotorist.
Medical bPayments b- bcorrect banswers✔✔Insurance bcompany bagrees bto bpay bfor
breasonable bexpenses bincurred bfor bnecessary bmedical band bfuneral bservices
bbecause bof bbodily binjury.
- bCovers bfirst bparty. b
- b"Stays bin bthe bcar"
- b3 byears bis btime blimit bfor bincurring bmedical bexpenses
Supplementary bPayments b- bcorrect banswers✔✔Payments bmade bin baddition bto bthe
bLimits bof bLiability.
b
- bUp bto b$200/day bfor bloss bof bearnings
- bUp bto b$250 bfor bthe bcost bof bbail bbonds brequired bbecause bof ban baccident.
