PROPERTY AND CASUALTY INSURANCE
ACTUAL EXAM SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◉ Real Property . Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
◉ Insurable Interest . Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged. Must
exist at the time of loss in P&C insurance.
◉ Elements of Insurable Interest . Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower), Blood
(Family), Business (Business partners over a company).
◉ Actual Cash Value . Answer: Replacement cost less than depreciation
(RC-Depreciation=Amount Paid). Reinforces the principal of indemnity.
◉ Replacement Cost . Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
, ◉ Functional Replacement Cost . Answer: Replacing a property with a
more modern and less expensive property.
◉ Market Value . Answer: What a willing buyer is willing to pay a
willing seller.
◉ Agreed Value . Answer: The amount agreed upon by the insured and
insurer. Amount is stated in the policy.
◉ Stated Amount . Answer: The amount the insurer says for a particular
property. Amount is written in the policy.
◉ Proximate Cause of Loss . Answer: A loss is covered only if a
covered peril is the proximate cause. Proximate cause is the event
initiating an unbroken chain of events leading to the loss.
◉ Named Peril Policy . Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
◉ Theft . Answer: Taking of property.
◉ Burglary . Answer: Taking of property using forced entry and exit.
◉ Robbery . Answer: Taking of property using threatening tactics.
ACTUAL EXAM SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◉ Real Property . Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
◉ Insurable Interest . Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged. Must
exist at the time of loss in P&C insurance.
◉ Elements of Insurable Interest . Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower), Blood
(Family), Business (Business partners over a company).
◉ Actual Cash Value . Answer: Replacement cost less than depreciation
(RC-Depreciation=Amount Paid). Reinforces the principal of indemnity.
◉ Replacement Cost . Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
, ◉ Functional Replacement Cost . Answer: Replacing a property with a
more modern and less expensive property.
◉ Market Value . Answer: What a willing buyer is willing to pay a
willing seller.
◉ Agreed Value . Answer: The amount agreed upon by the insured and
insurer. Amount is stated in the policy.
◉ Stated Amount . Answer: The amount the insurer says for a particular
property. Amount is written in the policy.
◉ Proximate Cause of Loss . Answer: A loss is covered only if a
covered peril is the proximate cause. Proximate cause is the event
initiating an unbroken chain of events leading to the loss.
◉ Named Peril Policy . Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
◉ Theft . Answer: Taking of property.
◉ Burglary . Answer: Taking of property using forced entry and exit.
◉ Robbery . Answer: Taking of property using threatening tactics.
