Property & Casualty Final Exam
1. Which of the following statements concerning the types of Homeowner's policies is
correct?
a. HO-2 and HO-3 differ primarily with respect to coverage for personal property
b. HO-4 provides all-risk coverage for personal property of tenants
c. HO-6 provides coverage for the insured's interest in additions, alterations and
improvements made to a condominium unit
d. HO-8 is designed for high-value dwellings for which the owner wants broader
coverage than is available under HO-3c - answersHO-6 provides coverage for the
insured's interest in additions, alterations and improvements made to a condominium
unit
1. Laws which form the most common legal basis for responsibility to others for losses
caused by one's action are the:
a. Laws of Insurance
b. Laws of Contract
c. Laws of Neglect
d. Laws of Negligence - answersLaws of Negligence
1. In the Property and Casualty insurance field, for a loss to be payable, insurable
interest must exist:
a. continuously throughout the policy period
b. at the time of the policy application only
c. at the time of the loss only
d. both at the time of application for insurance and at the time of loss - answersat the
time of the loss only
1. General liability insurance does not cover liability arising out of:
a. aircraft owned by the insured
b. Host Liquor Liability
c. Contractual Liability
d. mobile equipment or construction sites - answersaircraft owned by the insured
1. The Insurance Commissioner of this state is:
a. appointed by the governor
b. elected for a two (2) year term
c. elected for a four (4) year term
d. selected by the insurance commission - answerselected for a four (4) year term
,1. A Mobile Home:
a. is usually insured on an inland marine form because it is mobile in nature
b. is considered personal property therefore ineligible for Homeowner's Coverage
c. is often difficult to insure in the standard market because of windstorm losses
d. can be insured much like a conventional home with the same perils insured with a
Modified Homeowner's policy - answersd. can be insured much like a conventional
home with the same perils insured with a Modified Homeowner's policy
1. An insurer that is an unincorporated aggregation of persons, operating individually
and collectively through an attorney-in-act to provide insurance among themselves is
known as:
a. a fraternal benefit society
b. a mutual insurer
c. a Lloyds syndication
d. a reciprocal insurer - answersd. a reciprocal insurer
1. Which of the following losses to personal property would be covered in full under an
HO-3 policy that contained no endorsements increasing coverage?
a. The theft of a $1,000 motorcycle
b. The theft of a $2,500 boat and outboard motor
c. A $500 fire loss to a coin collection
d. A $2,000 fire loss to jewelry - answersd. A $2,000 fire loss to jewelry
1. A foreign insurance company is:
a. a company issuing on foreign policies
b. a non-admitted company
c. a company organized under the laws of a foreign country
d. an American company not organized under the laws of this state but licensed in this
state - answersd. an American company not organized under the laws of this state but
licensed in this state
1. Under commercial general liability claims made coverage, the basic extended
reporting period:
a. provides unlimited "tail" coverage
b. covers losses that occur within five (5) years after the end of the policy period
c. provides a five (5) year period for reporting claims for which the occurrence was
reported during the policy period or within sixty (60) days past expiration
d. covers losses that occur within sixty (60) days after the end of the policy period -
answersc. provides a five (5) year period for reporting claims for which the occurrence
was reported during the policy period or within sixty (60) days past expiration
, 1. All of the following are correct, except:
a. burglary includes forcible and visible entry or exit
b. theft implies physical violence
c. a messenger is someone authorized to possess property off premises
d. a guard is one who accompanies a messenger - answersb. theft implies physical
violence
1. An agent induces a policyholder to drop one policy and replace it with a new one to
his detriment. This is called:
a. misrepresentation
b. rebating
c. distortion
d. twisting - answersd. twisting
1. The act of returning to the insured or applicant a part of his premium or giving the
insured or applicant a special favor or advantage in dividends or other financial profits
on the policy, or offering to give, sell or purchase any stocks or bonds or other securities
of any corporation including the insurance company, as a special inducement for the
purchaser to buy insurance, is called:
a. rebating
b. reneging
c. twisting
d. profit sharing - answersa. rebating
1. Marshall and Gloria have a HO-3 with $100,000 Coverage A limit. They suffer a
$100,000 loss to the dwelling. What will their policy pay for debris removal?
a. nothing
b. the entire loss as debris removal coverage has no limit
c. up to $5,000
d. up to $10,000 - answersc. up to $5,000
1. Which of the following provisions of a Fidelity Bond permits an employer to make a
claim after the bond expires, providing the loss is ascertained within a specified time
after expiration and assuming that the loss was caused while the bond was in force?
a. Thirty (30) day coverage rider
b. Discovery period clause
c. Superseded suretyship rider
d. Proof of loss - answersb. Discovery period clause
1. The principle of indemnity prevents insureds from profiting from losses. Which of the
following is determined by subtracting depreciation from replacement cost?
1. Which of the following statements concerning the types of Homeowner's policies is
correct?
a. HO-2 and HO-3 differ primarily with respect to coverage for personal property
b. HO-4 provides all-risk coverage for personal property of tenants
c. HO-6 provides coverage for the insured's interest in additions, alterations and
improvements made to a condominium unit
d. HO-8 is designed for high-value dwellings for which the owner wants broader
coverage than is available under HO-3c - answersHO-6 provides coverage for the
insured's interest in additions, alterations and improvements made to a condominium
unit
1. Laws which form the most common legal basis for responsibility to others for losses
caused by one's action are the:
a. Laws of Insurance
b. Laws of Contract
c. Laws of Neglect
d. Laws of Negligence - answersLaws of Negligence
1. In the Property and Casualty insurance field, for a loss to be payable, insurable
interest must exist:
a. continuously throughout the policy period
b. at the time of the policy application only
c. at the time of the loss only
d. both at the time of application for insurance and at the time of loss - answersat the
time of the loss only
1. General liability insurance does not cover liability arising out of:
a. aircraft owned by the insured
b. Host Liquor Liability
c. Contractual Liability
d. mobile equipment or construction sites - answersaircraft owned by the insured
1. The Insurance Commissioner of this state is:
a. appointed by the governor
b. elected for a two (2) year term
c. elected for a four (4) year term
d. selected by the insurance commission - answerselected for a four (4) year term
,1. A Mobile Home:
a. is usually insured on an inland marine form because it is mobile in nature
b. is considered personal property therefore ineligible for Homeowner's Coverage
c. is often difficult to insure in the standard market because of windstorm losses
d. can be insured much like a conventional home with the same perils insured with a
Modified Homeowner's policy - answersd. can be insured much like a conventional
home with the same perils insured with a Modified Homeowner's policy
1. An insurer that is an unincorporated aggregation of persons, operating individually
and collectively through an attorney-in-act to provide insurance among themselves is
known as:
a. a fraternal benefit society
b. a mutual insurer
c. a Lloyds syndication
d. a reciprocal insurer - answersd. a reciprocal insurer
1. Which of the following losses to personal property would be covered in full under an
HO-3 policy that contained no endorsements increasing coverage?
a. The theft of a $1,000 motorcycle
b. The theft of a $2,500 boat and outboard motor
c. A $500 fire loss to a coin collection
d. A $2,000 fire loss to jewelry - answersd. A $2,000 fire loss to jewelry
1. A foreign insurance company is:
a. a company issuing on foreign policies
b. a non-admitted company
c. a company organized under the laws of a foreign country
d. an American company not organized under the laws of this state but licensed in this
state - answersd. an American company not organized under the laws of this state but
licensed in this state
1. Under commercial general liability claims made coverage, the basic extended
reporting period:
a. provides unlimited "tail" coverage
b. covers losses that occur within five (5) years after the end of the policy period
c. provides a five (5) year period for reporting claims for which the occurrence was
reported during the policy period or within sixty (60) days past expiration
d. covers losses that occur within sixty (60) days after the end of the policy period -
answersc. provides a five (5) year period for reporting claims for which the occurrence
was reported during the policy period or within sixty (60) days past expiration
, 1. All of the following are correct, except:
a. burglary includes forcible and visible entry or exit
b. theft implies physical violence
c. a messenger is someone authorized to possess property off premises
d. a guard is one who accompanies a messenger - answersb. theft implies physical
violence
1. An agent induces a policyholder to drop one policy and replace it with a new one to
his detriment. This is called:
a. misrepresentation
b. rebating
c. distortion
d. twisting - answersd. twisting
1. The act of returning to the insured or applicant a part of his premium or giving the
insured or applicant a special favor or advantage in dividends or other financial profits
on the policy, or offering to give, sell or purchase any stocks or bonds or other securities
of any corporation including the insurance company, as a special inducement for the
purchaser to buy insurance, is called:
a. rebating
b. reneging
c. twisting
d. profit sharing - answersa. rebating
1. Marshall and Gloria have a HO-3 with $100,000 Coverage A limit. They suffer a
$100,000 loss to the dwelling. What will their policy pay for debris removal?
a. nothing
b. the entire loss as debris removal coverage has no limit
c. up to $5,000
d. up to $10,000 - answersc. up to $5,000
1. Which of the following provisions of a Fidelity Bond permits an employer to make a
claim after the bond expires, providing the loss is ascertained within a specified time
after expiration and assuming that the loss was caused while the bond was in force?
a. Thirty (30) day coverage rider
b. Discovery period clause
c. Superseded suretyship rider
d. Proof of loss - answersb. Discovery period clause
1. The principle of indemnity prevents insureds from profiting from losses. Which of the
following is determined by subtracting depreciation from replacement cost?
