WA State Property & Casualty State Exam Questions with Correct Answers

Assignment Correct Answer The transfer of a policy to another party. Often done when commercial property is sold to a new owner. Building & Personal Property (BPP) Correct Answer The commercial property policy for larger businesses. Business Income Policy Correct Answer A commercial policy covering the indirect loss of income following a loss. Cancellation Correct Answer Termination of a policy during the policy period. Casualty Insurance Correct Answer A broad term which includes all of the policy types that may be sold with a Casualty License - in most states this includes auto, liability, work comp, commercial crime, and surety bonds. Claims Made Form Correct Answer A policy that pays according to the coverage in effect in the year the claim is made rather than according to the coverage in effect at the time of the loss. Professional Liability policies are usually written on a Claims Made basis, while other Liability Policies are written on an Occurrence Basis. Coinsurance Clause Correct Answer The policy provision which sates that if the Insured has less than a specified amount of coverage (usually 80%), the Insurer will not fully cover a partial loss. Commercial Package Policy (CPP) Correct Answer A bundling of commercial policies Competent Party Correct Answer A person who is capable of entering into an insurance contract. Such a person must be sane, sober, and of age of majority (age 15 in most states). Employers Liability Correct Answer The section of a Work Comp policy covering the employer for claims made by the injured worker's family members. Fair Credit Reporting Act Correct Answer What an item would sell for in the marketplace. Fidelity Bond Correct Answer A contract sold by a Surety Producer to cover employee theft. Gramm-Leach-Bliley Act Correct Answer A federal law which protects consumer privacy and which encourages the states to adopt uniform licensing standards. Hazzard Correct Answer Any factor that increases the likelihood that a peril will occur. Twisting Correct Answer Is the illegal and means that no person can, by misrepresentations or misleading comparisons, induce, or tend to induce any insured to lapse, terminate, forfeit, surrender, retain or convert any insurance policy. Law of Large Numbers Correct Answer The maximum the policy will pay for any one loss - this amount will be stated on the Declarations. Medical Payments Correct Answer A liability insurance term which refers to payment for a victim's medical bills without regard to fault. The policy will have a specified Limit of Liability for "med pay." Medical payments are never made to the Insured. Morale Hazzard Correct Answer An Insured's carelessness or indifference which will make a loss more likely to occur. Moral Hazzard Correct Answer Refer to the fact that we all act differently when we have insurance. We are simply less likely to prevent a loss if we know that the Insurer will pay the claim. Moral Hazzard may also refer to a thief or arsonist who intentionally causes a loss. Mutual Insurer Correct Answer An insurance company owned by the policy holders. Inherent Vice Correct Answer A loss caused by natural deterioration. Insurers will not pay claims for inherent vice. Extra Expense Policy Correct Answer Commercial property coverage to pay for the extra cost of continuing a business after a loss. Business Income Policy Correct Answer A commercial policy covering the indirect loss of income following a loss. Comprehension Coverage Correct Answer Physical damage insurance that covers all property losses except collision. Also known as "Other than Collision." Concealment Correct Answer Intentionally hiding the truth or intentionally telling only a partial truth. Conditions Section Correct Answer The part of the policy containing the details of the policy, including the duties of the Insured. Consent to Settle Provision Correct Answer The provision in an E&O policy or Employment Practices Liability Policy requiring the Insured's consent prior to any claim settlement. Consideration Correct Answer Something of value given by each party in a contract. Declarations Correct Answer The "Dec Sheet" is the first page of the policy and includes the "fill-in-the blanks" information obtained by the Producer, including the names of the parties, the description of the covered property, the policy's limit of