WA State Property & Casualty State exam
UPDATED Questions and CORRECT
ANSWERS
Assignment - CORRECT ANSWERS The transfer of a policy to another party. Often done
when commercial property is sold to a new owner.
Building & Personal Property (BPP) - CORRECT ANSWERS The commercial property
policy for larger businesses.
Business Income Policy - CORRECT ANSWERS A commercial policy covering the
indirect loss of income following a loss.
Cancellation - CORRECT ANSWERS Termination of a policy during the policy period.
Casualty Insurance - CORRECT ANSWERS A broad term which includes all of the
policy types that may be sold with a Casualty License - in most states this includes auto, liability,
work comp, commercial crime, and surety bonds.
Claims Made Form - CORRECT ANSWERS A policy that pays according to the coverage
in effect in the year the claim is made rather than according to the coverage in effect at the time
of the loss. Professional Liability policies are usually written on a Claims Made basis, while
other Liability Policies are written on an Occurrence Basis.
Coinsurance Clause - CORRECT ANSWERS The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the Insurer will not fully
cover a partial loss.
Commercial Package Policy (CPP) - CORRECT ANSWERS A bundling of commercial
policies
,Competent Party - CORRECT ANSWERS A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of majority (age 15 in most
states).
Employers Liability - CORRECT ANSWERS The section of a Work Comp policy
covering the employer for claims made by the injured worker's family members.
Fair Credit Reporting Act - CORRECT ANSWERS What an item would sell for in the
marketplace.
Fidelity Bond - CORRECT ANSWERS A contract sold by a Surety Producer to cover
employee theft.
Gramm-Leach-Bliley Act - CORRECT ANSWERS A federal law which protects
consumer privacy and which encourages the states to adopt uniform licensing standards.
Hazzard - CORRECT ANSWERS Any factor that increases the likelihood that a peril will
occur.
Twisting - CORRECT ANSWERS Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any insured to lapse,
terminate, forfeit, surrender, retain or convert any insurance policy.
Law of Large Numbers - CORRECT ANSWERS The maximum the policy will pay for
any one loss - this amount will be stated on the Declarations.
Medical Payments - CORRECT ANSWERS A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will have a specified
Limit of Liability for "med pay." Medical payments are never made to the Insured.
Morale Hazzard - CORRECT ANSWERS An Insured's carelessness or indifference which
will make a loss more likely to occur.
, Moral Hazzard - CORRECT ANSWERS Refer to the fact that we all act differently when
we have insurance. We are simply less likely to prevent a loss if we know that the Insurer will
pay the claim. Moral Hazzard may also refer to a thief or arsonist who intentionally causes a
loss.
Mutual Insurer - CORRECT ANSWERS An insurance company owned by the policy
holders.
Inherent Vice - CORRECT ANSWERS A loss caused by natural deterioration. Insurers
will not pay claims for inherent vice.
Extra Expense Policy - CORRECT ANSWERS Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
Business Income Policy - CORRECT ANSWERS A commercial policy covering the
indirect loss of income following a loss.
Comprehension Coverage - CORRECT ANSWERS Physical damage insurance that
covers all property losses except collision. Also known as "Other than Collision."
Concealment - CORRECT ANSWERS Intentionally hiding the truth or intentionally
telling only a partial truth.
Conditions Section - CORRECT ANSWERS The part of the policy containing the details
of the policy, including the duties of the Insured.
Consent to Settle Provision - CORRECT ANSWERS The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior to any claim
settlement.
UPDATED Questions and CORRECT
ANSWERS
Assignment - CORRECT ANSWERS The transfer of a policy to another party. Often done
when commercial property is sold to a new owner.
Building & Personal Property (BPP) - CORRECT ANSWERS The commercial property
policy for larger businesses.
Business Income Policy - CORRECT ANSWERS A commercial policy covering the
indirect loss of income following a loss.
Cancellation - CORRECT ANSWERS Termination of a policy during the policy period.
Casualty Insurance - CORRECT ANSWERS A broad term which includes all of the
policy types that may be sold with a Casualty License - in most states this includes auto, liability,
work comp, commercial crime, and surety bonds.
Claims Made Form - CORRECT ANSWERS A policy that pays according to the coverage
in effect in the year the claim is made rather than according to the coverage in effect at the time
of the loss. Professional Liability policies are usually written on a Claims Made basis, while
other Liability Policies are written on an Occurrence Basis.
Coinsurance Clause - CORRECT ANSWERS The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the Insurer will not fully
cover a partial loss.
Commercial Package Policy (CPP) - CORRECT ANSWERS A bundling of commercial
policies
,Competent Party - CORRECT ANSWERS A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of majority (age 15 in most
states).
Employers Liability - CORRECT ANSWERS The section of a Work Comp policy
covering the employer for claims made by the injured worker's family members.
Fair Credit Reporting Act - CORRECT ANSWERS What an item would sell for in the
marketplace.
Fidelity Bond - CORRECT ANSWERS A contract sold by a Surety Producer to cover
employee theft.
Gramm-Leach-Bliley Act - CORRECT ANSWERS A federal law which protects
consumer privacy and which encourages the states to adopt uniform licensing standards.
Hazzard - CORRECT ANSWERS Any factor that increases the likelihood that a peril will
occur.
Twisting - CORRECT ANSWERS Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any insured to lapse,
terminate, forfeit, surrender, retain or convert any insurance policy.
Law of Large Numbers - CORRECT ANSWERS The maximum the policy will pay for
any one loss - this amount will be stated on the Declarations.
Medical Payments - CORRECT ANSWERS A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will have a specified
Limit of Liability for "med pay." Medical payments are never made to the Insured.
Morale Hazzard - CORRECT ANSWERS An Insured's carelessness or indifference which
will make a loss more likely to occur.
, Moral Hazzard - CORRECT ANSWERS Refer to the fact that we all act differently when
we have insurance. We are simply less likely to prevent a loss if we know that the Insurer will
pay the claim. Moral Hazzard may also refer to a thief or arsonist who intentionally causes a
loss.
Mutual Insurer - CORRECT ANSWERS An insurance company owned by the policy
holders.
Inherent Vice - CORRECT ANSWERS A loss caused by natural deterioration. Insurers
will not pay claims for inherent vice.
Extra Expense Policy - CORRECT ANSWERS Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
Business Income Policy - CORRECT ANSWERS A commercial policy covering the
indirect loss of income following a loss.
Comprehension Coverage - CORRECT ANSWERS Physical damage insurance that
covers all property losses except collision. Also known as "Other than Collision."
Concealment - CORRECT ANSWERS Intentionally hiding the truth or intentionally
telling only a partial truth.
Conditions Section - CORRECT ANSWERS The part of the policy containing the details
of the policy, including the duties of the Insured.
Consent to Settle Provision - CORRECT ANSWERS The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior to any claim
settlement.
