Property and Casualty Insurance Exam set Questions With
Complete Solutions
*Dwelling vs Homeowners* Correct Answers The dwelling
policy provides more limited property coverage than the
Homeowners policy
The unendorsed Dwelling policy provides PROPERTY
COVERAGE ONLY, while the Homeowners policy provides a
PACKAGE OF PROPERTY AND LIABILITY
Doesn't cover peril or theft
3 Levels of Agent Authority Correct Answers Authority
specifically given to an agent either orally or in writing by the
principal
Consist of Written Authority, Implied Authority, Apparent
Authority
4 Property Coverages Section 1 Homeowners Correct Answers
Coverage A: Dwelling
Coverage B: Other Structures- Appurtenant
Coverage C: Personal Property
Coverage D: Loss of use
A.M. Best Correct Answers There are several organizations
that rate the financial strength of insurance carriers, based on an
analysis of a company's claim experience, investment
performance, management, and other factors
Company Ratings
,Abondonment condition Correct Answers The insured may not
abandon property to the company and ask to be reimbursed for
its value
Accounts Receivable Coverage Correct Answers Reimburses
the insured for amounts that can't be collected from customers
due to damage to the company's account receivable records
Actual Cash Value (ACV) Correct Answers Replacement cost
less depreciation
Actuarial and Statistical Department Correct Answers The
numbers department
Actuaries determine the rates to be charged for various types of
insurance
Additional Coverage in All HO Forms Correct Answers Debris
Removal
Reasonable Repairs
Trees, Shrubs and other plants 5% of Coverage A or max of
$500 for any one tree
Fire Department Service Charge: $500 with no deductible
Property Removed up to 30 days
Glass or Safety Glazing Material
Additional Coverages Correct Answers Damage to property of
others
Pays up to $1,000 per occurrence for PD or destruction by the
insured without regard to legal liability
,Additional Insured Correct Answers A mortgage company that
has an outstanding loan (and therefore a insurable interest) on
the property
Address Change for Licensees Correct Answers Licensees
must inform the Commissioner in 30 days
Adhesion (Preparation) Correct Answers Adhesion contracts
means that one party has greater power over the other party in
drafting the contract
The provision of the contract are prepared by one party, the
insurer
The other party, the insured, does not take part in the preparation
of the contract
Admitted or Authorized insurer Correct Answers A company
that meets the insurance departments standard and is authorized
to do business in a state
Adverse Selection Correct Answers The tendency for people
with a greater than average exposure to loss to purchase
insurance
This means the company may experience large financial losses
and decreased profitability
Age Correct Answers Must be 15 years of age
Agent Correct Answers An individual or business entity
appointed by and insurer to sell or solicit applications
Producer: required to be licensed to sell or solicit
, Agent License Correct Answers At least 18 years old
Had fulfilled the residence requirements
Trustworthy reliable and of good reputation
Competent to exercise license
20 hours per line (40 hours for Property and Casualty)
Deposited $20,000 with Commissioner
Agreed Amount Contract Correct Answers For certain hard to
value items
An example is artwork
Aleatory Correct Answers An insurance is aleatory, which
means it is contingent on an uncertain even (a loss)
Apparent Authority Correct Answers A doctrine that holds that
an agent may have whatever authority a reasonable person
would assume he or she has
Application Correct Answers The insured's offer
May bind coverage but will not issue a policy without one
Appraisal Condition Correct Answers Provides that either party
may demand an appraisal for a loss
If this happens, each party pays for the appraisal and then shares
the costs of an umpire
The umpire decides final amount of indemnification
Assigned Risk Plans Correct Answers voluntary agreements
between insurance companies licensed in a particular state.
These companies agree to share poor risks themselves
Complete Solutions
*Dwelling vs Homeowners* Correct Answers The dwelling
policy provides more limited property coverage than the
Homeowners policy
The unendorsed Dwelling policy provides PROPERTY
COVERAGE ONLY, while the Homeowners policy provides a
PACKAGE OF PROPERTY AND LIABILITY
Doesn't cover peril or theft
3 Levels of Agent Authority Correct Answers Authority
specifically given to an agent either orally or in writing by the
principal
Consist of Written Authority, Implied Authority, Apparent
Authority
4 Property Coverages Section 1 Homeowners Correct Answers
Coverage A: Dwelling
Coverage B: Other Structures- Appurtenant
Coverage C: Personal Property
Coverage D: Loss of use
A.M. Best Correct Answers There are several organizations
that rate the financial strength of insurance carriers, based on an
analysis of a company's claim experience, investment
performance, management, and other factors
Company Ratings
,Abondonment condition Correct Answers The insured may not
abandon property to the company and ask to be reimbursed for
its value
Accounts Receivable Coverage Correct Answers Reimburses
the insured for amounts that can't be collected from customers
due to damage to the company's account receivable records
Actual Cash Value (ACV) Correct Answers Replacement cost
less depreciation
Actuarial and Statistical Department Correct Answers The
numbers department
Actuaries determine the rates to be charged for various types of
insurance
Additional Coverage in All HO Forms Correct Answers Debris
Removal
Reasonable Repairs
Trees, Shrubs and other plants 5% of Coverage A or max of
$500 for any one tree
Fire Department Service Charge: $500 with no deductible
Property Removed up to 30 days
Glass or Safety Glazing Material
Additional Coverages Correct Answers Damage to property of
others
Pays up to $1,000 per occurrence for PD or destruction by the
insured without regard to legal liability
,Additional Insured Correct Answers A mortgage company that
has an outstanding loan (and therefore a insurable interest) on
the property
Address Change for Licensees Correct Answers Licensees
must inform the Commissioner in 30 days
Adhesion (Preparation) Correct Answers Adhesion contracts
means that one party has greater power over the other party in
drafting the contract
The provision of the contract are prepared by one party, the
insurer
The other party, the insured, does not take part in the preparation
of the contract
Admitted or Authorized insurer Correct Answers A company
that meets the insurance departments standard and is authorized
to do business in a state
Adverse Selection Correct Answers The tendency for people
with a greater than average exposure to loss to purchase
insurance
This means the company may experience large financial losses
and decreased profitability
Age Correct Answers Must be 15 years of age
Agent Correct Answers An individual or business entity
appointed by and insurer to sell or solicit applications
Producer: required to be licensed to sell or solicit
, Agent License Correct Answers At least 18 years old
Had fulfilled the residence requirements
Trustworthy reliable and of good reputation
Competent to exercise license
20 hours per line (40 hours for Property and Casualty)
Deposited $20,000 with Commissioner
Agreed Amount Contract Correct Answers For certain hard to
value items
An example is artwork
Aleatory Correct Answers An insurance is aleatory, which
means it is contingent on an uncertain even (a loss)
Apparent Authority Correct Answers A doctrine that holds that
an agent may have whatever authority a reasonable person
would assume he or she has
Application Correct Answers The insured's offer
May bind coverage but will not issue a policy without one
Appraisal Condition Correct Answers Provides that either party
may demand an appraisal for a loss
If this happens, each party pays for the appraisal and then shares
the costs of an umpire
The umpire decides final amount of indemnification
Assigned Risk Plans Correct Answers voluntary agreements
between insurance companies licensed in a particular state.
These companies agree to share poor risks themselves
