PROPERTY AND CASUALTY STATE
EXAM QUESTIONS AND ANSWERS
A heating and cooling company who will be affixing central air conditioners at a jobsite
should - Answer- purchase an installation floater because the installer is responsible for
the property until it actually installed and becomes part of a structure (real property)
Which of the following losses would require the insured to pay a deductible required by
a business owner policy? - Answer- High winds do damage to the roof of the described
building
The federal law that states that insurer must have written permission from the insured to
use credit in underwriting is known as - Answer- Fair Credit Reporting Act
Hired Auto Coverage - Answer- protects the owner of a business when they rent a car
for business use
Y has suffered a covered loss on his property. When the company sent an adjuster out
to assess the damage Y did not feel that the value of the loss was correct. Y can
request - Answer- Appraisal
Which is excluded incident under a DP-3 policy? - Answer- Burglary of a property that
was vacant for 30 consecutive days
Binders are issued on what type of policies? - Answer- Property and casualty
B has a property policy and would like to know perils are covered. B should read -
Answer- Insuring Clause
In a policy the clause entitled obligations of the insurance company states that -
Answer- insurer must pay covered losses in a timely manner and be fair in underwriting
In an HO-8 modified form what percentage of the Coverage A amount is available for
Coverage D, Loss of Use? - Answer- 10%
Which home owners forms offers replacement cost coverage for detached garage -
Answer- HO-2, HO-3, HO-5
A change made by an insurer on an auto policy that deletes benefits after a policy has
been issued - Answer- Endorsement
,In order to legally operate a motor vehicle titled within the state of Georgia, an owner
must provide proof of financial responsibility. The most common way to do this is to -
Answer- Provide written certificate showing a liability policy meeting state's min
requirements
What is supplementary payment is found under the term of a Commercial General
Liability policy - Answer- All expenses incurred by insurance company, all court cost
levied against an insured in a lawsuit, lost wages up to $250 a day
An agent license can be suspended or revoked by - Answer- writing primarily controlled
business
If an insured hides information and fails to disclose a known material fact to the insurer
is known as - Answer- Concealment
which of the following statements pertaining to medical payment Part C of the CGL is
false - Answer- A person has to establish the liability of the insured before medical
benefits will be paid under the contract
All of the following is Correct about Market Value EXCEPT - Answer- The only policy
that normally carries Market Value is HO-6 form
What is Market Value? - Answer- the value is the price at which property will sell in
regular marketplace when the sell nor buyer is forced to terms.
All of the following are covered under Directors and Officers Coverage EXCEPT -
Answer- Punitive Damages
What does Directors and Officers (D&O) insurance protect? - Answer- individuals that
serve as officers or on the board of directors of organizations and protects them against
wrongful actors or omissions. It does not pay fines, salary or punitive damages
If the building in which a business operates is a total loss, which of the following
expenses will not be covered under Business Income Coverage? - Answer- Utility Bills
Business Income Coverage? - Answer- does not pay for expenses that are susceptibile
to the shutdown( no building means not electric or gas bills) and only continuing
expenses of the business are paid
What is the minimum dollar coverage amount requirement for Basic for coverage in a
Dwelling policy? - Answer- There is not minimum dollar coverage requirement
J is an agent who has induced an insured through misrepresentation to surrender an
existing insurance policy. What is J guilty of? - Answer- Twisting
, What is Twisting? - Answer- is inducing or attempting to induce any insured person
through misrepresentation to lapse, forfeit or surrender insurance
Which type of Fidelity Bond would cover a maximum amount for a single loss regardless
of the number of employees involved? - Answer- Commercial Blanket
What does a Commercial Blanket bond cover? - Answer- covers a maximum amount
not matter how many employees are in involved in a single loss
When may an insured cancel an Insurance policy? - Answer- At any time with proper
notice
Exclusions - Answer- limit the scope of benefits, list which type of perils are not covered,
limits the wording of the insuring agreements
K owns a factory and has an Equipment Breakdown Policy on his business. Which of
the following would be covered as a pure accident under the contract language? -
Answer- A boiler malfunctions and blows up
Which of the following statements about NFIP deductibles are TRUE? - Answer- There
is a deductible applied to the building and another to the contents under both the
emergency and regular programs.
If a painter wished to buy a Business Owner Policy? - Answer- His payroll cannot
exceed $300,000
Contractors such as painters, electricians, drywallers, carpenters etc are all eligible for
the BOP (Business Owner Policy) whats the stipulation? - Answer- The maximum
payroll cant exceed $300,00
Beth is offered a favorable loan on a new car, but is uncomfortable when the loan officer
indicates that she needs to place her auto insurance with a specific agent in order to
make sure the loan is approved. This kind of intimidation is legally called - Answer-
Coercion
what is coercion? - Answer- any kind of threat or intimidating action to participate in an
insurance transaction
An example of an unfair claims settlement practice - Answer- turning down a claim
without providing the basis of denial
Replacement Cost - Answer- provides benefits that are the exact amount of money to
replace destroyed property at the time loss occured
EXAM QUESTIONS AND ANSWERS
A heating and cooling company who will be affixing central air conditioners at a jobsite
should - Answer- purchase an installation floater because the installer is responsible for
the property until it actually installed and becomes part of a structure (real property)
Which of the following losses would require the insured to pay a deductible required by
a business owner policy? - Answer- High winds do damage to the roof of the described
building
The federal law that states that insurer must have written permission from the insured to
use credit in underwriting is known as - Answer- Fair Credit Reporting Act
Hired Auto Coverage - Answer- protects the owner of a business when they rent a car
for business use
Y has suffered a covered loss on his property. When the company sent an adjuster out
to assess the damage Y did not feel that the value of the loss was correct. Y can
request - Answer- Appraisal
Which is excluded incident under a DP-3 policy? - Answer- Burglary of a property that
was vacant for 30 consecutive days
Binders are issued on what type of policies? - Answer- Property and casualty
B has a property policy and would like to know perils are covered. B should read -
Answer- Insuring Clause
In a policy the clause entitled obligations of the insurance company states that -
Answer- insurer must pay covered losses in a timely manner and be fair in underwriting
In an HO-8 modified form what percentage of the Coverage A amount is available for
Coverage D, Loss of Use? - Answer- 10%
Which home owners forms offers replacement cost coverage for detached garage -
Answer- HO-2, HO-3, HO-5
A change made by an insurer on an auto policy that deletes benefits after a policy has
been issued - Answer- Endorsement
,In order to legally operate a motor vehicle titled within the state of Georgia, an owner
must provide proof of financial responsibility. The most common way to do this is to -
Answer- Provide written certificate showing a liability policy meeting state's min
requirements
What is supplementary payment is found under the term of a Commercial General
Liability policy - Answer- All expenses incurred by insurance company, all court cost
levied against an insured in a lawsuit, lost wages up to $250 a day
An agent license can be suspended or revoked by - Answer- writing primarily controlled
business
If an insured hides information and fails to disclose a known material fact to the insurer
is known as - Answer- Concealment
which of the following statements pertaining to medical payment Part C of the CGL is
false - Answer- A person has to establish the liability of the insured before medical
benefits will be paid under the contract
All of the following is Correct about Market Value EXCEPT - Answer- The only policy
that normally carries Market Value is HO-6 form
What is Market Value? - Answer- the value is the price at which property will sell in
regular marketplace when the sell nor buyer is forced to terms.
All of the following are covered under Directors and Officers Coverage EXCEPT -
Answer- Punitive Damages
What does Directors and Officers (D&O) insurance protect? - Answer- individuals that
serve as officers or on the board of directors of organizations and protects them against
wrongful actors or omissions. It does not pay fines, salary or punitive damages
If the building in which a business operates is a total loss, which of the following
expenses will not be covered under Business Income Coverage? - Answer- Utility Bills
Business Income Coverage? - Answer- does not pay for expenses that are susceptibile
to the shutdown( no building means not electric or gas bills) and only continuing
expenses of the business are paid
What is the minimum dollar coverage amount requirement for Basic for coverage in a
Dwelling policy? - Answer- There is not minimum dollar coverage requirement
J is an agent who has induced an insured through misrepresentation to surrender an
existing insurance policy. What is J guilty of? - Answer- Twisting
, What is Twisting? - Answer- is inducing or attempting to induce any insured person
through misrepresentation to lapse, forfeit or surrender insurance
Which type of Fidelity Bond would cover a maximum amount for a single loss regardless
of the number of employees involved? - Answer- Commercial Blanket
What does a Commercial Blanket bond cover? - Answer- covers a maximum amount
not matter how many employees are in involved in a single loss
When may an insured cancel an Insurance policy? - Answer- At any time with proper
notice
Exclusions - Answer- limit the scope of benefits, list which type of perils are not covered,
limits the wording of the insuring agreements
K owns a factory and has an Equipment Breakdown Policy on his business. Which of
the following would be covered as a pure accident under the contract language? -
Answer- A boiler malfunctions and blows up
Which of the following statements about NFIP deductibles are TRUE? - Answer- There
is a deductible applied to the building and another to the contents under both the
emergency and regular programs.
If a painter wished to buy a Business Owner Policy? - Answer- His payroll cannot
exceed $300,000
Contractors such as painters, electricians, drywallers, carpenters etc are all eligible for
the BOP (Business Owner Policy) whats the stipulation? - Answer- The maximum
payroll cant exceed $300,00
Beth is offered a favorable loan on a new car, but is uncomfortable when the loan officer
indicates that she needs to place her auto insurance with a specific agent in order to
make sure the loan is approved. This kind of intimidation is legally called - Answer-
Coercion
what is coercion? - Answer- any kind of threat or intimidating action to participate in an
insurance transaction
An example of an unfair claims settlement practice - Answer- turning down a claim
without providing the basis of denial
Replacement Cost - Answer- provides benefits that are the exact amount of money to
replace destroyed property at the time loss occured
