WEBCE Property and Casualty Insurance Test with all
Correct & 100% Verified Answers |Actual Complete
Update |Already Graded A+
real property ✔Correct Answer-includes land and the buildings and other items attached to it
(trees, shrubs, patios)
personal property ✔Correct Answer-any tangible item other than real property; appliances,
jewelry, cameras
4 types of construction ✔Correct Answer-frame: home with interior and exterior walls of
combustible material including wood, plaster on wood, or aluminium or plastic **higher
premium for fire
masonry veneer: combustible frame and interior walls but an outside veneer of brick or stone;
this veneer is cosmetic and does not support the building besides fire protection
masonry construction: walls support the house and are constructed out of adobe, brick,
concrete, stone, or similar noncombustible materials **hire premium for earthquake
superior construction: most durable and fire resistant including 3 main types: noncombustible,
masonry combustible, and fire resistive **mostly commercial buildings
direct loss ✔Correct Answer-loss to insured property
indirect loss ✔Correct Answer-refers to loss that are related to direct loss; may incur
additional living expenses if house burns down
consequential loss ✔Correct Answer-losses related to equipment failure such as food spoiling
from fridge failing
insurable interest ✔Correct Answer-Any financial interest in life or property such that, if the
life or property were lost or harmed, the insured would suffer financially.
loss valuation methods (6) ✔Correct Answer-Replacement Cost
Functional Replacement
Actual Cash Value
Market Value
Agreed Value
Stated Value
, replacement cost ✔Correct Answer-The cost to replace damaged property with like kind and
quality at current price, without any deduction for depreciation.
functional replacement cost ✔Correct Answer-used with older buildings that have
components no longer found in modern buildings; cost to repair a damaged building with
common (and less costly) construction materials
actual cash value ✔Correct Answer-replacement cost minus depreciation
broad evidence rule ✔Correct Answer-rule of valuation that deviates from the principle that
the traditional measure of actual cash value (ACV) (replacement cost less depreciation) is the
sole measure of value at the time of loss.
under this rule, the insurance company examines every standard of value bearing on the
property under consideration, such as age of property, the profit likely to accure, and tac value
market value ✔Correct Answer-used in establishing the value of cars and other personal
property; not used for houses or real property
stated amount ✔Correct Answer-the insured items and their values are listed in a schedule
that is made part of the policy; the insurer agrees to pay the lowest of the following three
amounts if the covered property is damaged or stolen:
- the property's actual cash value at the time of loss
- the cost to repair or replace the property with similar property
- the dollar amount of insurance specified in the policy schedule
agreed value ✔Correct Answer-typically covers paintings, sculptures, antiques, or one of a
kind items for which it is difficult to determine a value
hazard ✔Correct Answer-condition that increases the likely occurrence of a peril or the
severity of a loss
moral hazard ✔Correct Answer-individual's tendencies or traits that increase the chance of a
loss
- bad credit
morale hazard ✔Correct Answer-also individual tendencies but they arise from an attitude or
indifference to loss
- not locking car because the insurance will cover it
physical hazard ✔Correct Answer-physical conditions that increase the chance of loss
- icy sidewalk
peril ✔Correct Answer-cause of loss
Correct & 100% Verified Answers |Actual Complete
Update |Already Graded A+
real property ✔Correct Answer-includes land and the buildings and other items attached to it
(trees, shrubs, patios)
personal property ✔Correct Answer-any tangible item other than real property; appliances,
jewelry, cameras
4 types of construction ✔Correct Answer-frame: home with interior and exterior walls of
combustible material including wood, plaster on wood, or aluminium or plastic **higher
premium for fire
masonry veneer: combustible frame and interior walls but an outside veneer of brick or stone;
this veneer is cosmetic and does not support the building besides fire protection
masonry construction: walls support the house and are constructed out of adobe, brick,
concrete, stone, or similar noncombustible materials **hire premium for earthquake
superior construction: most durable and fire resistant including 3 main types: noncombustible,
masonry combustible, and fire resistive **mostly commercial buildings
direct loss ✔Correct Answer-loss to insured property
indirect loss ✔Correct Answer-refers to loss that are related to direct loss; may incur
additional living expenses if house burns down
consequential loss ✔Correct Answer-losses related to equipment failure such as food spoiling
from fridge failing
insurable interest ✔Correct Answer-Any financial interest in life or property such that, if the
life or property were lost or harmed, the insured would suffer financially.
loss valuation methods (6) ✔Correct Answer-Replacement Cost
Functional Replacement
Actual Cash Value
Market Value
Agreed Value
Stated Value
, replacement cost ✔Correct Answer-The cost to replace damaged property with like kind and
quality at current price, without any deduction for depreciation.
functional replacement cost ✔Correct Answer-used with older buildings that have
components no longer found in modern buildings; cost to repair a damaged building with
common (and less costly) construction materials
actual cash value ✔Correct Answer-replacement cost minus depreciation
broad evidence rule ✔Correct Answer-rule of valuation that deviates from the principle that
the traditional measure of actual cash value (ACV) (replacement cost less depreciation) is the
sole measure of value at the time of loss.
under this rule, the insurance company examines every standard of value bearing on the
property under consideration, such as age of property, the profit likely to accure, and tac value
market value ✔Correct Answer-used in establishing the value of cars and other personal
property; not used for houses or real property
stated amount ✔Correct Answer-the insured items and their values are listed in a schedule
that is made part of the policy; the insurer agrees to pay the lowest of the following three
amounts if the covered property is damaged or stolen:
- the property's actual cash value at the time of loss
- the cost to repair or replace the property with similar property
- the dollar amount of insurance specified in the policy schedule
agreed value ✔Correct Answer-typically covers paintings, sculptures, antiques, or one of a
kind items for which it is difficult to determine a value
hazard ✔Correct Answer-condition that increases the likely occurrence of a peril or the
severity of a loss
moral hazard ✔Correct Answer-individual's tendencies or traits that increase the chance of a
loss
- bad credit
morale hazard ✔Correct Answer-also individual tendencies but they arise from an attitude or
indifference to loss
- not locking car because the insurance will cover it
physical hazard ✔Correct Answer-physical conditions that increase the chance of loss
- icy sidewalk
peril ✔Correct Answer-cause of loss
