CPCU 500 EVALUATION EXAM 2026 TEST
QUESTIONS AND ANSWERS SURE A+
✔✔Distinguishing Characteristics of Insurance Contracts - ✔✔1. The principle of
indemnity
2. Utmost good faith
3. Fortuitous losses
4. Contract of adhesion
5. Exchange of unequal amounts
6. Conditional
7. Nontransferable
✔✔Two concepts reduce the moral hazards associated with indemnification - ✔✔1.
Insurance should not over indemnify
2. Insured's should only be indemnified once per loss
✔✔Methods by which insurers achieve an equitable distribution of risk cost - ✔✔1.
Insurance rating plans
2. Coinsurance in property insurance
3. Subrogation
✔✔Forces that work against actuarial equity - ✔✔1. Insurance regulations
2. Social equity
, 3. No-fault insurance laws
✔✔Approaches to Insurance Policy Construction - ✔✔1. Self Contained policy
2. Modular policy
3. Pre-printed Policy
4. Manuscripted Policy
✔✔A Self Contained Policy Can Be Either - ✔✔1. Mono-line Policy
2. Package Policy
✔✔A Modular Policy Does - ✔✔1. Minimizes gaps and overlaps
2. Provides consistent terminology and definitions
3. Uses fewer forms
4. Makes underwriting more efficient
5. Reduces adverse selection when the same insurer provides several types of
insurance for the same insured
6. Results in a package discount when several coverage's are included in the same
policy.
✔✔Many insurers develop their own pre-printed nonstandard policies for - ✔✔1. High
volume lines of insurance
2. Coverage's in which the insurers specialize
✔✔Types of documents that may be included in insurance policies. - ✔✔1. Completed
applications
2. Endorsements
3. Insurer's bylaws and relevant statutes
4. Insurer's rating manual
5. Miscellaneous documents
✔✔Parts of a property - liability policy - ✔✔1. Declarations
2. Definitions
3. Insuring agreements
4. Conditions
5. Exclusions
6. Miscellaneous provisions
✔✔Two broad categories of insuring agreements - ✔✔1. Comprehensive insuring
agreements - provide broad coverage that is classified and limited by definitions and
exclusions.
2. Limited insuring agreements - restrict coverage to certain causes of loss or certain
situations.
✔✔DICED - ✔✔1. Declarations
2. Insuring agreements
QUESTIONS AND ANSWERS SURE A+
✔✔Distinguishing Characteristics of Insurance Contracts - ✔✔1. The principle of
indemnity
2. Utmost good faith
3. Fortuitous losses
4. Contract of adhesion
5. Exchange of unequal amounts
6. Conditional
7. Nontransferable
✔✔Two concepts reduce the moral hazards associated with indemnification - ✔✔1.
Insurance should not over indemnify
2. Insured's should only be indemnified once per loss
✔✔Methods by which insurers achieve an equitable distribution of risk cost - ✔✔1.
Insurance rating plans
2. Coinsurance in property insurance
3. Subrogation
✔✔Forces that work against actuarial equity - ✔✔1. Insurance regulations
2. Social equity
, 3. No-fault insurance laws
✔✔Approaches to Insurance Policy Construction - ✔✔1. Self Contained policy
2. Modular policy
3. Pre-printed Policy
4. Manuscripted Policy
✔✔A Self Contained Policy Can Be Either - ✔✔1. Mono-line Policy
2. Package Policy
✔✔A Modular Policy Does - ✔✔1. Minimizes gaps and overlaps
2. Provides consistent terminology and definitions
3. Uses fewer forms
4. Makes underwriting more efficient
5. Reduces adverse selection when the same insurer provides several types of
insurance for the same insured
6. Results in a package discount when several coverage's are included in the same
policy.
✔✔Many insurers develop their own pre-printed nonstandard policies for - ✔✔1. High
volume lines of insurance
2. Coverage's in which the insurers specialize
✔✔Types of documents that may be included in insurance policies. - ✔✔1. Completed
applications
2. Endorsements
3. Insurer's bylaws and relevant statutes
4. Insurer's rating manual
5. Miscellaneous documents
✔✔Parts of a property - liability policy - ✔✔1. Declarations
2. Definitions
3. Insuring agreements
4. Conditions
5. Exclusions
6. Miscellaneous provisions
✔✔Two broad categories of insuring agreements - ✔✔1. Comprehensive insuring
agreements - provide broad coverage that is classified and limited by definitions and
exclusions.
2. Limited insuring agreements - restrict coverage to certain causes of loss or certain
situations.
✔✔DICED - ✔✔1. Declarations
2. Insuring agreements
