CALIFORNIA PROPERTY AND
CASUALTY INSURANCE TEST
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+
The term "Time Element Coverage" is used when the amount of loss depends
on what?
✔✔ The time it takes to repair, rebuild, or restore damaged property.
Time element coverage applies to indirect losses (like business income loss) where
the loss depends on how long it takes to fix the property, not just the damage itself.
Factors like availability of supplies and parts can affect the total loss.
Which is NOT one of the common law defenses against an employer's
liability?
✔✔ Proximate cause
Traditional defenses are assumption of risk, contributory negligence, and the
fellow servant rule. Proximate cause is not a defense in this context.
Are vehicles eligible for a Personal Auto Policy (PAP) if used in a delivery
business?
✔✔ No. Vans used in a delivery business are not eligible for coverage.
Four-wheel private passenger autos, pickups, and vans owned by an individual or
couple are eligible if used for pleasure or general transportation. But pickups/vans
used for business (other than farming or ranching) are excluded.
Business Owners Policies provide additional coverage for preservation of
property when removed from the premises. The coverage applies at other
,locations for up to:
✔✔ 30 days
This coverage protects property moved to avoid loss from a covered peril. It
applies while moving and for 30 days after the property is first moved.
Which losses are excluded under the physical damage coverage of a personal auto
policy?
Loss of custom furnishings in a customized van
loss caused by freezing of the cooling system
Damage to equipment designed for the detection of Radar. - ANSWER✔✔Damage
to a covered auto while being used as apart of a car pool is not excluded.
Under the BUSINESS AUTO COVERAGE PART, liability insurance applies to
mobile equipment while it is:
Being carried or towed by a covered auto. - ANSWER✔✔Although mobile
equipment exposures are usually covered by CGL insurance, it is covered by
business auto insurance while being carried or towed by a covered auto because in
such cases it is considered an extension of the covered auto.
Insurance is a mechanism used to manage which type of risk?
Pure risks. - ANSWER✔✔Insurance is only used to manage pure risks that involve
only the possibility of loss and no opportunity for gain.
Coverage for Vandalism and malicious mischief is attached to a policy, it will be
suspended whenever the building has been vacant for more than how many days?
, 30 Consecutive days. - ANSWER✔✔If a dwelling policy includes the extended
coverage (EC) perils, coverage for vandalism and malicious mischief (V&MM)
may also be added. However, this coverage will not apply whenever the building
has been vacant from more than 30 consecutive days.
Commercial general liability coverage provides medical expense payments for
accidental injuries if the expenses are incurred and reported to the insurer within
what date?
One year after the accident date. - ANSWER✔✔CGL insurance policies provide
coverage for medical expense payments for accidental injuries if the expenses are
incurred and reported to the insurer within one year after the accident date.
An employer purchased a fidelity bond to protect against potential losses by
employee dishonesty. In this situation, each of the employees covered by the bond
is considered?
A Principle. - ANSWER✔✔Fidelity bonds are contracts between three parties. The
employees who are required to act honestly are the principals. The surety or
guarantor, which is usually an insurance company, agrees to be responsible for a
loss if a principal violates the terms of the bond. The obligee, the employer, is the
party who is being protected by the bond and who will be paid if a loss occures.
When insurance is written on a dwelling form, each of the following types of
property would be insured under Coverage A (Dwelling Coverage).
A Laundry room ATTACHED to the building
Building Equipment and outdoor equipment
CASUALTY INSURANCE TEST
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+
The term "Time Element Coverage" is used when the amount of loss depends
on what?
✔✔ The time it takes to repair, rebuild, or restore damaged property.
Time element coverage applies to indirect losses (like business income loss) where
the loss depends on how long it takes to fix the property, not just the damage itself.
Factors like availability of supplies and parts can affect the total loss.
Which is NOT one of the common law defenses against an employer's
liability?
✔✔ Proximate cause
Traditional defenses are assumption of risk, contributory negligence, and the
fellow servant rule. Proximate cause is not a defense in this context.
Are vehicles eligible for a Personal Auto Policy (PAP) if used in a delivery
business?
✔✔ No. Vans used in a delivery business are not eligible for coverage.
Four-wheel private passenger autos, pickups, and vans owned by an individual or
couple are eligible if used for pleasure or general transportation. But pickups/vans
used for business (other than farming or ranching) are excluded.
Business Owners Policies provide additional coverage for preservation of
property when removed from the premises. The coverage applies at other
,locations for up to:
✔✔ 30 days
This coverage protects property moved to avoid loss from a covered peril. It
applies while moving and for 30 days after the property is first moved.
Which losses are excluded under the physical damage coverage of a personal auto
policy?
Loss of custom furnishings in a customized van
loss caused by freezing of the cooling system
Damage to equipment designed for the detection of Radar. - ANSWER✔✔Damage
to a covered auto while being used as apart of a car pool is not excluded.
Under the BUSINESS AUTO COVERAGE PART, liability insurance applies to
mobile equipment while it is:
Being carried or towed by a covered auto. - ANSWER✔✔Although mobile
equipment exposures are usually covered by CGL insurance, it is covered by
business auto insurance while being carried or towed by a covered auto because in
such cases it is considered an extension of the covered auto.
Insurance is a mechanism used to manage which type of risk?
Pure risks. - ANSWER✔✔Insurance is only used to manage pure risks that involve
only the possibility of loss and no opportunity for gain.
Coverage for Vandalism and malicious mischief is attached to a policy, it will be
suspended whenever the building has been vacant for more than how many days?
, 30 Consecutive days. - ANSWER✔✔If a dwelling policy includes the extended
coverage (EC) perils, coverage for vandalism and malicious mischief (V&MM)
may also be added. However, this coverage will not apply whenever the building
has been vacant from more than 30 consecutive days.
Commercial general liability coverage provides medical expense payments for
accidental injuries if the expenses are incurred and reported to the insurer within
what date?
One year after the accident date. - ANSWER✔✔CGL insurance policies provide
coverage for medical expense payments for accidental injuries if the expenses are
incurred and reported to the insurer within one year after the accident date.
An employer purchased a fidelity bond to protect against potential losses by
employee dishonesty. In this situation, each of the employees covered by the bond
is considered?
A Principle. - ANSWER✔✔Fidelity bonds are contracts between three parties. The
employees who are required to act honestly are the principals. The surety or
guarantor, which is usually an insurance company, agrees to be responsible for a
loss if a principal violates the terms of the bond. The obligee, the employer, is the
party who is being protected by the bond and who will be paid if a loss occures.
When insurance is written on a dwelling form, each of the following types of
property would be insured under Coverage A (Dwelling Coverage).
A Laundry room ATTACHED to the building
Building Equipment and outdoor equipment
