Utah Property and Casualty Insurance
UPDATED Exam Questions and CORECT
Answers
Abandonment - CORRECT ANSWER -The abdication of insured property into the hands
of another, or into the possession of no one in particular.
Absolute Liability - CORRECT ANSWER -A type of liability that occurs due to
extremely dangerous operations, such as the use of explosives or working at extreme heights.
Accident - CORRECT ANSWER -An unplanned, unforeseen event which occurs suddenly
and at a specific place.
Actual Cash Value (ACV) - CORRECT ANSWER -The required amount to pay damages
or for property loss, which is calculated based on the property's current replacement value minus
depreciation.
Additional Coverage - CORRECT ANSWER -A provision in an insurance policy that
allows for more coverage for a specific loss expense without increase in premium.
Additional Insureds - CORRECT ANSWER -Individuals or business that are not named as
insured on the declaration page, but are protected by the policy, usually in regard to a specific
interest.
Adhesion - CORRECT ANSWER -A contact offered on a "take-it-or-leave-it" basis by an
insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in
the contract will be settled in favor of the insured.
Admitted Insurer - CORRECT ANSWER -An insurance company authorized and licensed
to transact business in a particular state.
,Adverse Selection - CORRECT ANSWER -The tendency of risks with higher probability
of loss to purchase and maintain insurance more often than the risks who present lower
probability.
Agent - CORRECT ANSWER -An individual who is licensed to sell, negotiate, or effect
insurance contracts on behalf of an insurer.
Aggregate Limit - CORRECT ANSWER -The maximum limit of coverage available to
under a liability policy during a policy year regardless of the number of claims that may be made
or the number of accidents that may occur.
Agreed Value - CORRECT ANSWER -A property policy with a provision agreed upon by
the insurer and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
Aleatory - CORRECT ANSWER -A contract in which the participating parties agree to
exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will
pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
Alien Insurer - CORRECT ANSWER -An insurance company that is incorporated outside
the United States.
Apparent Authority - CORRECT ANSWER -The appearance or the assumption of
authority based on the actions, words, or deeds of the principal or because of circumstances the
principal created.
Appraisal - CORRECT ANSWER -An assessment of property to determine either the
correct amount of insurance to be written or the amount of loss to be paid.
Arbitration - CORRECT ANSWER -Method of claim settlement used when the insured
and insurer cannot agree upon the amount of the loss.
,Assignment - CORRECT ANSWER -The transfer of a legal right or interest in an
insurance policy. In property and casualty insurance, assignments of policies are usually valid
only with the prior written consent of the insurer.
Authorized Insurer - CORRECT ANSWER -An insurance company that has qualified and
received a Certificate of Authority from the Department of Insurance to transact insurance in the
state.
Auto - CORRECT ANSWER -A land motor vehicle, trailer or semi-trailer designed for
use on public roads, including attached machinery or equipment, auto does not include mobile
equipment.
Avoidance - CORRECT ANSWER -A method of dealing with risk by deliberately keeping
away from it (e.g. if a person wanted to avoid risk of being killed in a airplane crash, he/she
might choose to never ply in a plane).
Bailee - CORRECT ANSWER -A person or entity that has possession of personal
property entrusted to him/her by the owner. For example, a television repair person that has
possession of a customer's television would be a bailee.
Beneficiary - CORRECT ANSWER -The person who receives the proceeds from the
insurance policy.
Binder - CORRECT ANSWER -A temporary contract that puts an insurance policy into
force before the premium has been paid.
Blanket Bond - CORRECT ANSWER -A type of bond that covers losses caused by
dishonest employees.
Blanket Insurance - CORRECT ANSWER -A single property insurance policy that
provides coverage for multiple classes of property at one location, or provides coverage for one
or more classes of property at multiple locations.
, Bodily Injury Liability - CORRECT ANSWER -Legal liability arising from death or
physical trauma to a person as a result of a negligent or purposeful act and omissions by the
insured.
Boycott - CORRECT ANSWER -An unfair trade practice in which one person refuses to
do business with another until he or she agrees to certain conditions.
Builder's Risk Coverage Form - CORRECT ANSWER -A commercial property form that
covers buildings under construction.
Building and personal Property Coverage Form - CORRECT ANSWER -A commercial
property form that covers buildings, and/or their contents.
Burglary - CORRECT ANSWER -The forced entry into another's premises with felonious
intent.
Cancellation - CORRECT ANSWER -The termination of an in-force insurance policy by
either insured or the insurer prior to the expiration date shown in the policy.
Casualty Insurance - CORRECT ANSWER -A type of insurance that covers losses caused
by injury to persons or damage to the property of others.
Cease and Desist Order - CORRECT ANSWER -A demand of a person to stop
committing an action that is in violation of a provision.
Certificate of Authority - CORRECT ANSWER -A document that authorizes a company
to start conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
Certificate of Insurance - CORRECT ANSWER -A legal document that indicates that an
insurance policy has been issued, and that states both the amounts and types of insurance
provided.
UPDATED Exam Questions and CORECT
Answers
Abandonment - CORRECT ANSWER -The abdication of insured property into the hands
of another, or into the possession of no one in particular.
Absolute Liability - CORRECT ANSWER -A type of liability that occurs due to
extremely dangerous operations, such as the use of explosives or working at extreme heights.
Accident - CORRECT ANSWER -An unplanned, unforeseen event which occurs suddenly
and at a specific place.
Actual Cash Value (ACV) - CORRECT ANSWER -The required amount to pay damages
or for property loss, which is calculated based on the property's current replacement value minus
depreciation.
Additional Coverage - CORRECT ANSWER -A provision in an insurance policy that
allows for more coverage for a specific loss expense without increase in premium.
Additional Insureds - CORRECT ANSWER -Individuals or business that are not named as
insured on the declaration page, but are protected by the policy, usually in regard to a specific
interest.
Adhesion - CORRECT ANSWER -A contact offered on a "take-it-or-leave-it" basis by an
insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in
the contract will be settled in favor of the insured.
Admitted Insurer - CORRECT ANSWER -An insurance company authorized and licensed
to transact business in a particular state.
,Adverse Selection - CORRECT ANSWER -The tendency of risks with higher probability
of loss to purchase and maintain insurance more often than the risks who present lower
probability.
Agent - CORRECT ANSWER -An individual who is licensed to sell, negotiate, or effect
insurance contracts on behalf of an insurer.
Aggregate Limit - CORRECT ANSWER -The maximum limit of coverage available to
under a liability policy during a policy year regardless of the number of claims that may be made
or the number of accidents that may occur.
Agreed Value - CORRECT ANSWER -A property policy with a provision agreed upon by
the insurer and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
Aleatory - CORRECT ANSWER -A contract in which the participating parties agree to
exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will
pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
Alien Insurer - CORRECT ANSWER -An insurance company that is incorporated outside
the United States.
Apparent Authority - CORRECT ANSWER -The appearance or the assumption of
authority based on the actions, words, or deeds of the principal or because of circumstances the
principal created.
Appraisal - CORRECT ANSWER -An assessment of property to determine either the
correct amount of insurance to be written or the amount of loss to be paid.
Arbitration - CORRECT ANSWER -Method of claim settlement used when the insured
and insurer cannot agree upon the amount of the loss.
,Assignment - CORRECT ANSWER -The transfer of a legal right or interest in an
insurance policy. In property and casualty insurance, assignments of policies are usually valid
only with the prior written consent of the insurer.
Authorized Insurer - CORRECT ANSWER -An insurance company that has qualified and
received a Certificate of Authority from the Department of Insurance to transact insurance in the
state.
Auto - CORRECT ANSWER -A land motor vehicle, trailer or semi-trailer designed for
use on public roads, including attached machinery or equipment, auto does not include mobile
equipment.
Avoidance - CORRECT ANSWER -A method of dealing with risk by deliberately keeping
away from it (e.g. if a person wanted to avoid risk of being killed in a airplane crash, he/she
might choose to never ply in a plane).
Bailee - CORRECT ANSWER -A person or entity that has possession of personal
property entrusted to him/her by the owner. For example, a television repair person that has
possession of a customer's television would be a bailee.
Beneficiary - CORRECT ANSWER -The person who receives the proceeds from the
insurance policy.
Binder - CORRECT ANSWER -A temporary contract that puts an insurance policy into
force before the premium has been paid.
Blanket Bond - CORRECT ANSWER -A type of bond that covers losses caused by
dishonest employees.
Blanket Insurance - CORRECT ANSWER -A single property insurance policy that
provides coverage for multiple classes of property at one location, or provides coverage for one
or more classes of property at multiple locations.
, Bodily Injury Liability - CORRECT ANSWER -Legal liability arising from death or
physical trauma to a person as a result of a negligent or purposeful act and omissions by the
insured.
Boycott - CORRECT ANSWER -An unfair trade practice in which one person refuses to
do business with another until he or she agrees to certain conditions.
Builder's Risk Coverage Form - CORRECT ANSWER -A commercial property form that
covers buildings under construction.
Building and personal Property Coverage Form - CORRECT ANSWER -A commercial
property form that covers buildings, and/or their contents.
Burglary - CORRECT ANSWER -The forced entry into another's premises with felonious
intent.
Cancellation - CORRECT ANSWER -The termination of an in-force insurance policy by
either insured or the insurer prior to the expiration date shown in the policy.
Casualty Insurance - CORRECT ANSWER -A type of insurance that covers losses caused
by injury to persons or damage to the property of others.
Cease and Desist Order - CORRECT ANSWER -A demand of a person to stop
committing an action that is in violation of a provision.
Certificate of Authority - CORRECT ANSWER -A document that authorizes a company
to start conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
Certificate of Insurance - CORRECT ANSWER -A legal document that indicates that an
insurance policy has been issued, and that states both the amounts and types of insurance
provided.
