Ohio Property and Casualty Exam 2025
Latest Update
What do individuals use to transfer their risk of loss to a larger group? - ANSWER
Insurance
What are the four elements of an insurance contract? - ANSWER Agreement (Offer and
Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? - ANSWER Insurer
Insurance contracts are aleatory in nature. What does that mean? - ANSWER Unequal
values are exchanged between the parties to a contract.
What are the methods of managing risk? - ANSWER Avoidance, transfer, sharing,
retention, and reduction
In insurance contracts, when does acceptance usually occur? - ANSWER When the
insurer approves a prepaid application
Wagering on a sporting event is known as what type of risk? - ANSWER Speculative
A situation in which a person can experience only a loss and no gain presents what type
of risk? - ANSWER Pure Risk
What type of insurer is formed under the laws of another state? - ANSWER Foreign
When would a misrepresentation on an insurance application be considered fraud? -
ANSWER When it is intentional and material
According to the Law of Agency, who represents the principal? - ANSWER Agent or
producer
What does indemnify mean in insurance? - ANSWER To restore an insured to the same
financial status as before a loss.
What is a warranty in an insurance contract? - ANSWER An absolutely true statement
upon which the validity of the policy depends.
What is the term for the causes of loss insured against in an insurance policy? -
ANSWER Peril
What is a risk? - ANSWER Uncertainty of loss
,If an insurer holds a Certificate of Authority, it is known as what type of insurer? -
ANSWER Authorized or Admitted
What is consideration in an insurance contract? - ANSWER Consideration is something
of value that each party gives to the other. Consideration on the part of the insurer is
binding.
What is consideration on the part of the insurer? - ANSWER A promise to pay in the
event of a loss
A tornado that destroys a property would be an example of what? - ANSWER Peril
What does the term reasonable expectations mean in insurance? - ANSWER Certain
expectations for coverage that a reasonable person would have based on sources other
than just the policy language.
Conditions that increase the chance of loss are known as what? - ANSWER Hazards
What provision states that if a policy allows for greater benefits than the financial loss
incurred, the insured may be compensated only for the amount lost? - ANSWER
Indemnity
What are the three types of hazards? - ANSWER Physical, moral, and morale
What document is required for an insurance company to transact insurance? -
ANSWER Certificate of Authority
What does the term unilateral contract mean? - ANSWER A unilateral contract is a one-
sided contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? - ANSWER When the insurance
application is submitted.
What are the three types of agent authority? - ANSWER Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers?
- ANSWER Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? - ANSWER Apparent
A policy that covers all causes of loss except for those specifically excluded is known as
what type of policy? - ANSWER Open Peril (or special) form
How are direct and indirect losses related? - ANSWER Direct losses can cause indirect
losses.
, What is the difference between cancellation and nonrenewal? - ANSWER Cancellation
is the termination of an insurance policy by either party prior to the policy's expiration
date. Nonrenewal is the termination of a policy at its expiration date by not offering a
continuation of the existing policy.
What is the process that insurers use to determine whether a policy should be insured
and on what terms and conditions? - ANSWER Underwriting
In property insurance, when must insurable interest exist? - ANSWER At the time of
loss
If an insured peril was the proximate cause of loss, what type of loss is it? - ANSWER
Direct
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - ANSWER Limits of liability
In property insurance, what is actual cash value? - ANSWER Replacement cost at the
time of loss, minus depreciation
What type of limits of liability has the limits separately stated for different coverages? -
ANSWER Split limits
What sublimit in a liability policy puts a ceiling on the payment for all claims that arise
from a single accident? - ANSWER Per Occurrence
An insured's business is damaged by a fire, and temporarily shut down for repairs. As a
result, the insured suffers loss of income. What type of loss is the loss of income? -
ANSWER Indirect or consequential
How is the coverage usually written for HO-8 forms? - ANSWER For the market value of
the property
What are the additional coverages available in Homeowners policies without additional
premiums? (name several) - ANSWER Debris removal, lawns/plants/shrubs, and trees,
removal, reasonable repairs, and fire department service charge
What are the 2 liability coverages included in Homeowners policy forms? - ANSWER
Coverage E - Personal Liability, and Coverage F - Medical Payments to others
Under Coverage C of an HO-3 Policy, what is the amount of insurance provided for
personal property? - ANSWER At least 50% of the Coverage A limit (this applies to all
policies except for HO-4 and HO-6)
Why does the HO-4 form not provide dwelling coverage? - ANSWER HO-4 is written for
a tenant residing in a rented dwelling
Latest Update
What do individuals use to transfer their risk of loss to a larger group? - ANSWER
Insurance
What are the four elements of an insurance contract? - ANSWER Agreement (Offer and
Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? - ANSWER Insurer
Insurance contracts are aleatory in nature. What does that mean? - ANSWER Unequal
values are exchanged between the parties to a contract.
What are the methods of managing risk? - ANSWER Avoidance, transfer, sharing,
retention, and reduction
In insurance contracts, when does acceptance usually occur? - ANSWER When the
insurer approves a prepaid application
Wagering on a sporting event is known as what type of risk? - ANSWER Speculative
A situation in which a person can experience only a loss and no gain presents what type
of risk? - ANSWER Pure Risk
What type of insurer is formed under the laws of another state? - ANSWER Foreign
When would a misrepresentation on an insurance application be considered fraud? -
ANSWER When it is intentional and material
According to the Law of Agency, who represents the principal? - ANSWER Agent or
producer
What does indemnify mean in insurance? - ANSWER To restore an insured to the same
financial status as before a loss.
What is a warranty in an insurance contract? - ANSWER An absolutely true statement
upon which the validity of the policy depends.
What is the term for the causes of loss insured against in an insurance policy? -
ANSWER Peril
What is a risk? - ANSWER Uncertainty of loss
,If an insurer holds a Certificate of Authority, it is known as what type of insurer? -
ANSWER Authorized or Admitted
What is consideration in an insurance contract? - ANSWER Consideration is something
of value that each party gives to the other. Consideration on the part of the insurer is
binding.
What is consideration on the part of the insurer? - ANSWER A promise to pay in the
event of a loss
A tornado that destroys a property would be an example of what? - ANSWER Peril
What does the term reasonable expectations mean in insurance? - ANSWER Certain
expectations for coverage that a reasonable person would have based on sources other
than just the policy language.
Conditions that increase the chance of loss are known as what? - ANSWER Hazards
What provision states that if a policy allows for greater benefits than the financial loss
incurred, the insured may be compensated only for the amount lost? - ANSWER
Indemnity
What are the three types of hazards? - ANSWER Physical, moral, and morale
What document is required for an insurance company to transact insurance? -
ANSWER Certificate of Authority
What does the term unilateral contract mean? - ANSWER A unilateral contract is a one-
sided contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? - ANSWER When the insurance
application is submitted.
What are the three types of agent authority? - ANSWER Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers?
- ANSWER Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? - ANSWER Apparent
A policy that covers all causes of loss except for those specifically excluded is known as
what type of policy? - ANSWER Open Peril (or special) form
How are direct and indirect losses related? - ANSWER Direct losses can cause indirect
losses.
, What is the difference between cancellation and nonrenewal? - ANSWER Cancellation
is the termination of an insurance policy by either party prior to the policy's expiration
date. Nonrenewal is the termination of a policy at its expiration date by not offering a
continuation of the existing policy.
What is the process that insurers use to determine whether a policy should be insured
and on what terms and conditions? - ANSWER Underwriting
In property insurance, when must insurable interest exist? - ANSWER At the time of
loss
If an insured peril was the proximate cause of loss, what type of loss is it? - ANSWER
Direct
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - ANSWER Limits of liability
In property insurance, what is actual cash value? - ANSWER Replacement cost at the
time of loss, minus depreciation
What type of limits of liability has the limits separately stated for different coverages? -
ANSWER Split limits
What sublimit in a liability policy puts a ceiling on the payment for all claims that arise
from a single accident? - ANSWER Per Occurrence
An insured's business is damaged by a fire, and temporarily shut down for repairs. As a
result, the insured suffers loss of income. What type of loss is the loss of income? -
ANSWER Indirect or consequential
How is the coverage usually written for HO-8 forms? - ANSWER For the market value of
the property
What are the additional coverages available in Homeowners policies without additional
premiums? (name several) - ANSWER Debris removal, lawns/plants/shrubs, and trees,
removal, reasonable repairs, and fire department service charge
What are the 2 liability coverages included in Homeowners policy forms? - ANSWER
Coverage E - Personal Liability, and Coverage F - Medical Payments to others
Under Coverage C of an HO-3 Policy, what is the amount of insurance provided for
personal property? - ANSWER At least 50% of the Coverage A limit (this applies to all
policies except for HO-4 and HO-6)
Why does the HO-4 form not provide dwelling coverage? - ANSWER HO-4 is written for
a tenant residing in a rented dwelling
