Property & casualty Insurance Exam Practice
Questions with Correct Detailed Answers
Which of the following are the authorities that an agent can hold? - Answer Express and implied
Which of the following terms refers to such disabilities the loss of a limb, hearing, or eye sight? - Answer
Permanent partial disability
Who is NOT considered an employee in a commercial general liability (CGL) policy? - Answer Temporary
worker
The major portion of the premium of an equipment breakdown policy pays? - Answer For inspections
and examinations
An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his
insurance policy, how, much should he insure the property for? - Answer 80% of the property's
replacement cost or more
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
contained in his or her report, the reporting agency must - Answer Respond to the consumer's
complaint.
All of the following are found in the declarations section of a policy EXCEPT the - Answer Exclusions.
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will
the policy pay to restore the records? - Answer Up to $2,000
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
Answer Dividends from a mutual insurer.
Which of the following may be covered by electronic data processing coverage form under an inland
marine policy? - Answer a) Computer hardware that is specifically scheduled.
,b) Extra expense the insured incurs to continue the business following a loss.
c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
The party to a surety or fidelity bond who promises to fulfill the obligation is the - Answer Principal
The transfer of money from inside a banking premises to a person other than a messenger outside those
premises or to a place outside those premises is covered under which commercial crime coverage? -
Answer Computer fraud
Which of the following would NOT be covered under the liability section of a personal auto policy? -
Answer Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.
When a producer holding a certificate or a broker's license has a change in his/her residence or business
address, he/she must notify the Department of Insurance and any company for which the producer
holds an appointment within - Answer 30 days.
What will happen if a house covered by a standard mortgage clause is a total loss? - Answer The insurer
pays the mortgagee according to the mortgagee's interest in the property.
What is the civil penalty for violating a cease and desist order of the Commissioner? - Answer $10,000
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the
following EXCEPT - Answer Business liability.
If a property is covered by Company A for $20,000 and Company B covers the same property for
$40,000, how much will Company A pay on a $24,000 loss? - Answer $8,000
The risk management technique that is used to prevent a specific loss by not exposing oneself to that
activity is called - Answer Avoidance.
, In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid
by - Answer The insurer.
Which of the following entities must approve all continuing education courses in this state? - Answer
The Commissioner
An applicant knowingly fails to communicate information that would help an underwriter make a sound
decision regarding coverage. This is an example of - Answer Concealment
A common exclusion found under physical damage to your auto includes - Answer Mechanical
breakdown.
Which of the following is true regarding a risk retention group? - Answer It is a liability insurance
company owned by its members.
Which of the following best describes a misrepresentation? - Answer Issuing sales material with
exaggerated statements about policy benefits
A builder's risk form is most often written as which of the following? - Answer Completed value form
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? - Answer Per occurrence
Which of the following is an example of a protective safeguard in a businessowners policy? - Answer
Automatic sprinkler system
If a licensee wants to transact insurance under a different name than that listed on his or her producer's
license, which of the following must occur? - Answer The change must be reported to the Commissioner.
If more than one person has an insurable interest in the property covered under a dwelling policy, -
Answer The insurer will be liable for only the insured's interest in the damaged property.
Questions with Correct Detailed Answers
Which of the following are the authorities that an agent can hold? - Answer Express and implied
Which of the following terms refers to such disabilities the loss of a limb, hearing, or eye sight? - Answer
Permanent partial disability
Who is NOT considered an employee in a commercial general liability (CGL) policy? - Answer Temporary
worker
The major portion of the premium of an equipment breakdown policy pays? - Answer For inspections
and examinations
An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his
insurance policy, how, much should he insure the property for? - Answer 80% of the property's
replacement cost or more
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
contained in his or her report, the reporting agency must - Answer Respond to the consumer's
complaint.
All of the following are found in the declarations section of a policy EXCEPT the - Answer Exclusions.
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will
the policy pay to restore the records? - Answer Up to $2,000
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
Answer Dividends from a mutual insurer.
Which of the following may be covered by electronic data processing coverage form under an inland
marine policy? - Answer a) Computer hardware that is specifically scheduled.
,b) Extra expense the insured incurs to continue the business following a loss.
c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
The party to a surety or fidelity bond who promises to fulfill the obligation is the - Answer Principal
The transfer of money from inside a banking premises to a person other than a messenger outside those
premises or to a place outside those premises is covered under which commercial crime coverage? -
Answer Computer fraud
Which of the following would NOT be covered under the liability section of a personal auto policy? -
Answer Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.
When a producer holding a certificate or a broker's license has a change in his/her residence or business
address, he/she must notify the Department of Insurance and any company for which the producer
holds an appointment within - Answer 30 days.
What will happen if a house covered by a standard mortgage clause is a total loss? - Answer The insurer
pays the mortgagee according to the mortgagee's interest in the property.
What is the civil penalty for violating a cease and desist order of the Commissioner? - Answer $10,000
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the
following EXCEPT - Answer Business liability.
If a property is covered by Company A for $20,000 and Company B covers the same property for
$40,000, how much will Company A pay on a $24,000 loss? - Answer $8,000
The risk management technique that is used to prevent a specific loss by not exposing oneself to that
activity is called - Answer Avoidance.
, In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid
by - Answer The insurer.
Which of the following entities must approve all continuing education courses in this state? - Answer
The Commissioner
An applicant knowingly fails to communicate information that would help an underwriter make a sound
decision regarding coverage. This is an example of - Answer Concealment
A common exclusion found under physical damage to your auto includes - Answer Mechanical
breakdown.
Which of the following is true regarding a risk retention group? - Answer It is a liability insurance
company owned by its members.
Which of the following best describes a misrepresentation? - Answer Issuing sales material with
exaggerated statements about policy benefits
A builder's risk form is most often written as which of the following? - Answer Completed value form
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? - Answer Per occurrence
Which of the following is an example of a protective safeguard in a businessowners policy? - Answer
Automatic sprinkler system
If a licensee wants to transact insurance under a different name than that listed on his or her producer's
license, which of the following must occur? - Answer The change must be reported to the Commissioner.
If more than one person has an insurable interest in the property covered under a dwelling policy, -
Answer The insurer will be liable for only the insured's interest in the damaged property.
