IDAHO PROPERTY AND CASUALTY
INSURANCE Exam 2 Questions and Answers
Updated Graded A+
1. An applicant knowingly fails to communicate information that would help an
underwriter make a sound decision regarding coverage. This is an example of:
Concealment
Misrepresentation
Fraud
Breach of warranty
: Concealment
2. When a parent is required to pay for damages caused by his or her children,
this is an example of
Strict liability
Intervening cause
Assumption of risk
Vicarious liability
: Vicarious liability
3. Which of the following statements is true regarding a mobile equipment
endorsement in commercial auto policies?
,Mobile equipment is covered for property insurance.
The endorsement is available for additional premium.
The endorsement is automatic.
Liability coverage is not provided on equipment that is being towed.
: Theendorsement is available for additional premium
4. What is the legal defense that can be used in most states in which propor-
tionate damages may be awarded when both the plaintiff and defendant were
negligent?
Proximate cause
Comparative negligence
Relative degree of damage statute
Contributory negligence: Comparative negligence
,5. Who are the parties to a bond?
Principal, obligee, and guarantor
Insured and agent
Surety and custodian
Contractor, broker, and dealer: Principal, obligee, and guarantor
6. Which of the following statements would be an example of a product
liability claim?
The insured's product has to be recalled because of an expiration date.
Faulty packaging of a cereal caused spoilage that resulted in someone getting
sick.
An insured, while delivering product to a customer hits another car with the
delivery truck causing bodily injury and property damage
Someone tampers with the insured's product causing the insured to have to
recall all products that are on the shelf.: Faulty packaging of a cereal caused
spoilage that resulted in someone getting sick.
7. The court finds that both parties of the case are negligent. The extent of
negligence is determined for each party, and the amount of damages awarded
are adjusted accordingly. This illustrates the process of:
Comparative liability
Comparative negligence
, Proportional negligence
Proportional liability: Comparative negligence
8. Which of the following entities protects policyowners, insureds, and bene-
ficiaries under insurance contracts when insurers fail to perform contractual
obligations due to financial impairment?
Consumer Protection Agency
Insurance Guaranty Association
Insurance Consumer Protectorate
Insurance Solvency Association: Insurance Guaranty Association
9. What effect does the Terrorism Risk Insurance Act of 2002 have on the war
and military action exclusion with regard to property and casualty insurance?
INSURANCE Exam 2 Questions and Answers
Updated Graded A+
1. An applicant knowingly fails to communicate information that would help an
underwriter make a sound decision regarding coverage. This is an example of:
Concealment
Misrepresentation
Fraud
Breach of warranty
: Concealment
2. When a parent is required to pay for damages caused by his or her children,
this is an example of
Strict liability
Intervening cause
Assumption of risk
Vicarious liability
: Vicarious liability
3. Which of the following statements is true regarding a mobile equipment
endorsement in commercial auto policies?
,Mobile equipment is covered for property insurance.
The endorsement is available for additional premium.
The endorsement is automatic.
Liability coverage is not provided on equipment that is being towed.
: Theendorsement is available for additional premium
4. What is the legal defense that can be used in most states in which propor-
tionate damages may be awarded when both the plaintiff and defendant were
negligent?
Proximate cause
Comparative negligence
Relative degree of damage statute
Contributory negligence: Comparative negligence
,5. Who are the parties to a bond?
Principal, obligee, and guarantor
Insured and agent
Surety and custodian
Contractor, broker, and dealer: Principal, obligee, and guarantor
6. Which of the following statements would be an example of a product
liability claim?
The insured's product has to be recalled because of an expiration date.
Faulty packaging of a cereal caused spoilage that resulted in someone getting
sick.
An insured, while delivering product to a customer hits another car with the
delivery truck causing bodily injury and property damage
Someone tampers with the insured's product causing the insured to have to
recall all products that are on the shelf.: Faulty packaging of a cereal caused
spoilage that resulted in someone getting sick.
7. The court finds that both parties of the case are negligent. The extent of
negligence is determined for each party, and the amount of damages awarded
are adjusted accordingly. This illustrates the process of:
Comparative liability
Comparative negligence
, Proportional negligence
Proportional liability: Comparative negligence
8. Which of the following entities protects policyowners, insureds, and bene-
ficiaries under insurance contracts when insurers fail to perform contractual
obligations due to financial impairment?
Consumer Protection Agency
Insurance Guaranty Association
Insurance Consumer Protectorate
Insurance Solvency Association: Insurance Guaranty Association
9. What effect does the Terrorism Risk Insurance Act of 2002 have on the war
and military action exclusion with regard to property and casualty insurance?
