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Property and Casualty Insurance Questions
and Answers (100% Correct Answers) Already
Graded A+
Elements for a contract:Ans: 1) Agreement - offer and acceptance
2) Consideration
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3) Competent parties
4) Legal purpose
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Payment for medical expenses, loss of wages, funeral expenses, or the
cost to repair or replace damaged property are known as what type of
compensatory damages?Ans: Special
Which method of loss valuation is contrary to the basic concept of
indemnity?Ans: Replacement cost
An insured owns several buildings, each at a different location and
insured on a separate policy. What type of coverage does the insured
have?Ans: Specific
The policy provision found in property insurance policies that prevents
the insured from collecting twice for the same loss is calledAns:
Subrogation
Losses caused by continuous or repeated exposure to conditions
resulting in injury persons or damage to property that is neither intended
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nor expected is the definition of which of the following terms?Ans:
Occurrence
An insured relocated to another state for work. However, she still owns
and insures a house in this state, but has had no one living in it for 3
months. She is also storing some of furniture and clothes in the house.
From an insurance standpoint, the insured's house is consideredAns:
Unoccupied
An insured's roof cost $4,000 when installed 5 years ago. It has been
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damaged by hail and must be replaced. The new roof will cost $6,000 at
today's prices. If the roof has been depreciating at $200 per year and
the insured's policy is written on the actual cash value(ACV), how much
will the policy pay toward the insured's new roof?Ans: $5,000
Guru01 - Stuvia
An insured carries a property policy on her home in the amount of
$250,000. A bank is shown as the mortgagor in the policy. Last month the
insured made her final mortgage payment, but did not remove the bank
from the policy. In the event of a covered loss to her home, how much
will the bank receive?Ans: Nothing
What type of damages may be awarded by the court to create
disincentives that discourage behavior that is deemed highly
undesirable by society?Ans: Punitive
A tornado that destroys property would be an example of which of the
following?Ans: A Peril
The insured's house is located one mile from the county's new landfill and
across the road from the entrance of a rock quarry. It would cost
$150,000 to rebuild the house if something happened to it, but when the
insured tried to sell it, the best offer he received was $80,000. The
,For Expert help and assignment handling,
3
insurance company will insure the house for only $80,000. What method
of valuation is used to insure this property?Ans: Market Value
An insured is applying for a casualty insurance policy. One of the
conditions of the policy allows the insurance company to inspect the
insured's books at the end of the policy term to make sure sufficient
premium has been collected for the exposure she plans to insure. Which
condition is part of the insured's policy?Ans: Deposit premium audit
All of the following statements concerning coinsurance are true
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EXCEPTAns: The coinsurance formula will also be applied to total losses.
A situation in which a person can only lose or have no change
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representsAns: Pure risk
A policy condition that stipulates how the amount of damaged or lost
property will be determined if the insured and the principal do not agree
is known asAns: Appraisal
An insured has a liability policy that sets the amount for all claims that
arise from a single incident at $50,000. Which type of limit of liability does
this insured's policy have?Ans: Per occurrence
Which of the following is NOT an element of negligence?Ans: Libel
-duty, breach, and unbroken chain are
Insurable interest in the property covered in a policy must be provenAns:
At time of loss
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4
A building is insured, but no one has lived or worked in it for 10 years. The
building is completely empty of any furniture or personal belongings.
From an insurance standpoint, the building is consideredAns: Vacant
For the purpose of insurance, risk is defined asAns: The uncertainty or
chance of loss
Which law is the foundation of the statistical prediction of loss upon
which rates for insurance are calculated?Ans: Law of large numbers
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The legal process that gives the insurer, after payment of a loss, the right
to seek recovery from a third party that was responsible for the loss is
known asAns: Subrogation
Guru01 - Stuvia
What is a Certificate of Insurance?Ans: A written document showing the
types and amounts of insurance that have been issued to the insured
A $100,000 house insured on a policy with an 80% coinsurance
requirement has a fire that caused $40,000 of damage; the owner has a
policy with $60,000 coverage. How much can the owner collect for his
loss?Ans: $30,000
- For the total amount of a partial loss to be paid, a house must be
insured for at least 80% of its value on the date of loss. In this case,
because the house is insured for only $60,000 (75% of the minimum
requirement), the policy will pay only 75% of the loss, or $30,000.
An insured stated on her application for life insurance that she had never
had a heart attack, when in fact she had a series of minor heart attacks
last year for which she sought medical attention. Which of the following
will explain the reason a death benefit claim is denied?Ans: Material
misrepresentation
1
Property and Casualty Insurance Questions
and Answers (100% Correct Answers) Already
Graded A+
Elements for a contract:Ans: 1) Agreement - offer and acceptance
2) Consideration
© 2026 Assignment Expert
3) Competent parties
4) Legal purpose
Guru01 - Stuvia
Payment for medical expenses, loss of wages, funeral expenses, or the
cost to repair or replace damaged property are known as what type of
compensatory damages?Ans: Special
Which method of loss valuation is contrary to the basic concept of
indemnity?Ans: Replacement cost
An insured owns several buildings, each at a different location and
insured on a separate policy. What type of coverage does the insured
have?Ans: Specific
The policy provision found in property insurance policies that prevents
the insured from collecting twice for the same loss is calledAns:
Subrogation
Losses caused by continuous or repeated exposure to conditions
resulting in injury persons or damage to property that is neither intended
,For Expert help and assignment handling,
2
nor expected is the definition of which of the following terms?Ans:
Occurrence
An insured relocated to another state for work. However, she still owns
and insures a house in this state, but has had no one living in it for 3
months. She is also storing some of furniture and clothes in the house.
From an insurance standpoint, the insured's house is consideredAns:
Unoccupied
An insured's roof cost $4,000 when installed 5 years ago. It has been
© 2026 Assignment Expert
damaged by hail and must be replaced. The new roof will cost $6,000 at
today's prices. If the roof has been depreciating at $200 per year and
the insured's policy is written on the actual cash value(ACV), how much
will the policy pay toward the insured's new roof?Ans: $5,000
Guru01 - Stuvia
An insured carries a property policy on her home in the amount of
$250,000. A bank is shown as the mortgagor in the policy. Last month the
insured made her final mortgage payment, but did not remove the bank
from the policy. In the event of a covered loss to her home, how much
will the bank receive?Ans: Nothing
What type of damages may be awarded by the court to create
disincentives that discourage behavior that is deemed highly
undesirable by society?Ans: Punitive
A tornado that destroys property would be an example of which of the
following?Ans: A Peril
The insured's house is located one mile from the county's new landfill and
across the road from the entrance of a rock quarry. It would cost
$150,000 to rebuild the house if something happened to it, but when the
insured tried to sell it, the best offer he received was $80,000. The
,For Expert help and assignment handling,
3
insurance company will insure the house for only $80,000. What method
of valuation is used to insure this property?Ans: Market Value
An insured is applying for a casualty insurance policy. One of the
conditions of the policy allows the insurance company to inspect the
insured's books at the end of the policy term to make sure sufficient
premium has been collected for the exposure she plans to insure. Which
condition is part of the insured's policy?Ans: Deposit premium audit
All of the following statements concerning coinsurance are true
© 2026 Assignment Expert
EXCEPTAns: The coinsurance formula will also be applied to total losses.
A situation in which a person can only lose or have no change
Guru01 - Stuvia
representsAns: Pure risk
A policy condition that stipulates how the amount of damaged or lost
property will be determined if the insured and the principal do not agree
is known asAns: Appraisal
An insured has a liability policy that sets the amount for all claims that
arise from a single incident at $50,000. Which type of limit of liability does
this insured's policy have?Ans: Per occurrence
Which of the following is NOT an element of negligence?Ans: Libel
-duty, breach, and unbroken chain are
Insurable interest in the property covered in a policy must be provenAns:
At time of loss
, For Expert help and assignment handling,
4
A building is insured, but no one has lived or worked in it for 10 years. The
building is completely empty of any furniture or personal belongings.
From an insurance standpoint, the building is consideredAns: Vacant
For the purpose of insurance, risk is defined asAns: The uncertainty or
chance of loss
Which law is the foundation of the statistical prediction of loss upon
which rates for insurance are calculated?Ans: Law of large numbers
© 2026 Assignment Expert
The legal process that gives the insurer, after payment of a loss, the right
to seek recovery from a third party that was responsible for the loss is
known asAns: Subrogation
Guru01 - Stuvia
What is a Certificate of Insurance?Ans: A written document showing the
types and amounts of insurance that have been issued to the insured
A $100,000 house insured on a policy with an 80% coinsurance
requirement has a fire that caused $40,000 of damage; the owner has a
policy with $60,000 coverage. How much can the owner collect for his
loss?Ans: $30,000
- For the total amount of a partial loss to be paid, a house must be
insured for at least 80% of its value on the date of loss. In this case,
because the house is insured for only $60,000 (75% of the minimum
requirement), the policy will pay only 75% of the loss, or $30,000.
An insured stated on her application for life insurance that she had never
had a heart attack, when in fact she had a series of minor heart attacks
last year for which she sought medical attention. Which of the following
will explain the reason a death benefit claim is denied?Ans: Material
misrepresentation
