IDAHO PROPERTY AND CASUALTY
INSURANCE Exam Questions and Answers
Updated Graded A+
1. Open peril
: Term used in property insurance to describe the breadth of coverageprovided
under an insurance policy form that insures against "any risk of loss" that is not
specifically excluded.
2. a term used in property insurance to describe the breadth of coverage
provided under an insurance policy form that lists specific covered perils. No
coverage is provided for unlisted perils
Open Peril
Named Peril
Specific Peril
Single Peril
: Named Peril
3. What are the two types of property losses that an individual or business
are exposed to?
direct and indirect
,open peril and closed peril
single peril and multiple perils
direct and proximate: direct and indirect
4. What type of loss does property insurance cover?
Indirect Loss
Specific Loss
Direct Loss
Real Loss: Direct loss
5. 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.
Blanket Insurance
Monoline
Specific Insurance
Umbrella Insurance: Blanket Insurance
6. Loss Valuation: A factor in determining the premium charged and the amount
of insurance required.
7. A property insurance policy that covers a specific kind or unit of property
for a specific amount of insurance.
Specific Insurance
Blanket Insurance
Monoline Insurance
Umbrella Insurance: Specific Insurance
,8. method of valuation reinforces the principle of indemnity because it rec-
ognizes the reduction of value of property as it ages and becomes subject to
wear and tear and obsolescence.
Replacement Cost
Actual cash value
Market Value
Agreed Value: Actual Cash Value
9. How is actual cash value calculated?
Current Replacement Cost + Depreciation = Actual Cash Value
Current Replacement Cost - Depreciation = Actual Cash Value
Original Purchase Price - Depreciation = Actual Cash Value
Original Purchase Price + Appreciation = Actual Cash Value: Current Replace-
ment Cost - Depreciation = Actual Cash Value
10. The cost to replace damaged property with like kind and quality at today's
price, without any deduction for depreciation.
Replacement Cost
Actual Cash Value
Agreed Value
Market Value: Replacement Cost
11. The cost to replace damaged property with less expensive and more
modern construction or equipment.
Modern Replacement Formula
Functional Replacement Cost
, Actual Cash Value
Replacement Cost: Functional Replacement Cost
12. Valuing a loss based upon the amount a willing buyer would pay to a
willing seller for the property prior to the loss. This seldom used-method takes
into consideration the value of land and location, rather than just the cost of
rebuilding the structure itself.
Real Estate Value
Market Value
Replacement Cost
Actual Cash Value: Market Value
13. 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.
Stated Value
Insured Cost
Replacement Cost
Agreed value: Agreed Value
14. An amount of insurance scheduled in a property policy that is not subject
to any coinsurance requirements in the event of a covered loss.
Agreed Value
Stated Amount
Replacement Cost
Actual Cash Value: Stated Amount
15. Provides for payment of the full policy amount in the event of a total loss
without regard to actual value or depreciation
INSURANCE Exam Questions and Answers
Updated Graded A+
1. Open peril
: Term used in property insurance to describe the breadth of coverageprovided
under an insurance policy form that insures against "any risk of loss" that is not
specifically excluded.
2. a term used in property insurance to describe the breadth of coverage
provided under an insurance policy form that lists specific covered perils. No
coverage is provided for unlisted perils
Open Peril
Named Peril
Specific Peril
Single Peril
: Named Peril
3. What are the two types of property losses that an individual or business
are exposed to?
direct and indirect
,open peril and closed peril
single peril and multiple perils
direct and proximate: direct and indirect
4. What type of loss does property insurance cover?
Indirect Loss
Specific Loss
Direct Loss
Real Loss: Direct loss
5. 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.
Blanket Insurance
Monoline
Specific Insurance
Umbrella Insurance: Blanket Insurance
6. Loss Valuation: A factor in determining the premium charged and the amount
of insurance required.
7. A property insurance policy that covers a specific kind or unit of property
for a specific amount of insurance.
Specific Insurance
Blanket Insurance
Monoline Insurance
Umbrella Insurance: Specific Insurance
,8. method of valuation reinforces the principle of indemnity because it rec-
ognizes the reduction of value of property as it ages and becomes subject to
wear and tear and obsolescence.
Replacement Cost
Actual cash value
Market Value
Agreed Value: Actual Cash Value
9. How is actual cash value calculated?
Current Replacement Cost + Depreciation = Actual Cash Value
Current Replacement Cost - Depreciation = Actual Cash Value
Original Purchase Price - Depreciation = Actual Cash Value
Original Purchase Price + Appreciation = Actual Cash Value: Current Replace-
ment Cost - Depreciation = Actual Cash Value
10. The cost to replace damaged property with like kind and quality at today's
price, without any deduction for depreciation.
Replacement Cost
Actual Cash Value
Agreed Value
Market Value: Replacement Cost
11. The cost to replace damaged property with less expensive and more
modern construction or equipment.
Modern Replacement Formula
Functional Replacement Cost
, Actual Cash Value
Replacement Cost: Functional Replacement Cost
12. Valuing a loss based upon the amount a willing buyer would pay to a
willing seller for the property prior to the loss. This seldom used-method takes
into consideration the value of land and location, rather than just the cost of
rebuilding the structure itself.
Real Estate Value
Market Value
Replacement Cost
Actual Cash Value: Market Value
13. 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.
Stated Value
Insured Cost
Replacement Cost
Agreed value: Agreed Value
14. An amount of insurance scheduled in a property policy that is not subject
to any coinsurance requirements in the event of a covered loss.
Agreed Value
Stated Amount
Replacement Cost
Actual Cash Value: Stated Amount
15. Provides for payment of the full policy amount in the event of a total loss
without regard to actual value or depreciation
