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PROPERTY AND CASUALTY EXAM QUESTIONS
AND ANSWERS 100% PASS
The one basic characteristic of any type of insurance is that the insured is returned to the same status that existed prior to the loss, but without a chance for gain or profit - โโ - true Which of the following coverages does an open peril policy provide? - โโ - perils other than those specifically named as being excluded Determine the actual cash value in the following situation: original price of office equiptment when purchased 8 years ago- 9,000. Depreciated amount at time of fire- 5,000 current replacement cost 12,000 - โโ - 7, Liquor liability - โโ - need for a dram shot, liquor, or package store Inherent vice or defect - โโ - iron rusting, milk going sour, rubber breaking down are all inherent vices How is hitting an animal on the road covered? - โโ - other than collision otc Medicare supplement insurance - โโ - aka medical gap insurance. Must include core benefits Ordinance or law - โโ - an endorsement for building code upgrades Loss sustained/discovery forms under crime coverage - โโ - loss is for later than the policy period. Discovery is for before the policy (loss is later, discovery before) Designated brush fire or civil unrest areas - โโ - qualifying areas under the fair plan
Stop loss provision - โโ - used in health insurance to limit the maximum amount of money the insured would have to pay out of pocket on a health claim in any particular claim Shortages of inventory - โโ - under crime insurance the employee dishonesty endorsement never covers Can the mortgagee still collect if the insured burns their house down - โโ - yes, the mortgage clause is a standard provision Otc covers - โโ - earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset) Law of large numbers - โโ - the greater the number of insured the more accurately the prediction Where does a driver have coverage? - โโ - u.s. canada and us possessions eg puerto rico, guam What is excluded under commercial general liability? - โโ - pollution-with the exception of fuel spilled during normal operations. Pollution is normally covered under cpp or builders risk What is the midi-tail on claims made? - โโ - provides 5 years coverage for something reported during minitail Speculative risk - โโ - chance for loss or gain Commercial package - โโ - modular policy
Dp-1 covers - โโ - fire, lightning, and internal explosion Dp1, 2, 3 all dwelling forms cover? - โโ - loss of rental income Third party - โโ - the injured party. To whom liability insurance pays claims Personal property - โโ - property that can move eg furniture, clothes, paintings, etc Why is yacht like ocean marine, even though yacht is a personal line? - โโ - the structure of the policy is the same; hull covers damage to the vessel. P and c covers liability and workers comp. A yacht policy can be used for organized racing while ocean marine cannot. Medical payments in boat owners insurance covers? - โโ - covers medical payments and injury for insured and others on a personal boat. Does not cover business use or competitive racing. Protection and indemnity on ocean marine or yacht - โโ - liability and workers comp. Portion of ocean marine or yacht policies. Code section 770 - โโ - when buying property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker Part of protection and indemnity - โโ - worker compensation in a yacht policy Elimination period - โโ - used in disability income health insurance. That time period benefits are not paid. Also called the waiting period
Did over should - โโ - did over should is the fraction of the loss the company pays. The remaining is paid by the insured.( take what they did carry over what they should have carried. Occupational disability income contract - โโ - a disability income policy that will pay benefits whether on or off the job. Guaranteed renewable insurance contract - โโ - a life or health insurance policy that cannot be changed except for the rate. Does the fair plan cover vandalism and mischief - โโ - yes, during civil unrest ( riots) you will need it. Misc vehicle - โโ - motorcycle atvs (not autos, not mobile equiptment) Open peril - โโ - all perils except those specifically excluded. Whats the penalty for not carrying the amount required in a coinsurance clause? - โโ - you become a coinsurer and pay a portion of the loss Consequential loss - โโ - a consequence of a direct loss eg. A store loses business income after a fire. Personnel loss - โโ - loss of an employee Do corporations have absolute liability? - โโ - yes
Indemnify - โโ - to restore one to there previous financial condition that existed prior to the loss Mexican liability endorsement - โโ - excess liability for accidents within 25 miles of the u.s. border (trips of 10 days or less) Section 2 on homeowners policy - โโ - liability and medical payments. Paid to others only Selling price - โโ - market value Where are covered perils listed - โโ - declarations page Exclusions - โโ - things that arent covered Where are excluded perils listed? - โโ - exclusions are found in the cause of loss form Coordination of benefits - โโ - discourages multiple payments for the same claim under two or more policies What are common things not covered by the basic dwelling policy dp1? - โโ - no burglary, no falling objects, no collapse, no coverage e, additional living expenses Boat coverage is strucured like? - โโ - auto insurance Nfip (flood insurance) is only found where? - โโ - participating communities, areas designated on a flood map
Where does the insurer make promises? - โโ - insuring clause. Aka insuring agreement Which nfip coverage pays more to the insured, the standard or emergency? - โโ - standard Tort - โโ - a wrongful act other than breach of contract or a crime Non-admitted insurer - โโ - an insurer that is not licensed to business in a particular state. (a surplus lines broker works with non-admitted carriers) Number of days to notify an insurer to add collision to a new car replacing a a car that only had liability? - โโ - 4 days Pure risk - โโ - chance of loss Any occupation - โโ - definition for being totally disabled in a disability income policy. Person cannot perform any occupation he/she is qualified For what amount can a binder be written for? - โโ - 1 million dollars Minimum limits for low cost auto insurance - โโ - 10/20/ What are special damages for? - โโ - time away from work is special. Going to the doctor is special. Starr - โโ - share, transfer, avoid, retain, reduce (ways to manage risk)
Disability income insurance - โโ - type of health insurance that pays a monthly income to the insured if he/she is sick or injured and cannot work. Pays partial portion Cargo insurance covers - โโ - merchandise being shipped What is the mini-tail on claims made commercial general liability? - โโ - automatically gives 60 days to report a claim after the policy period Pre-existing condition - โโ - a health condition or sickness that occurred prior to the issuing of a health policy Hull covers - โโ - physical damage to insured's ship or yacht Endorsement - โโ - written agreement attached to a policy to add or subtract insurance coverages Broad form of coverage for personal property of a condo owner - โโ - h Physical hazard - โโ - disctinct characteristics arising from material, structural, or operational features that increase a chance for loss ie being next to a nuclear power plant Workers comp insurance - โโ - insurance purchased by employers to cover their employees in case a worker is hurt on the job Renters - โโ - h A, b, and c in a homeowners policy are? - โโ - a=dwelling, b=other structures, c=personal property
In a contract who is we? - โโ - the insurer Standard risk - โโ - classification of risk that is normal Risk - โโ - uncertainty of loss. A risk must be uncertain to be insurable Raising the deductible - โโ - lowers the premium because small claims are eliminated Is a building under constructin vacant? - โโ - no Repair, replace, acv - โโ - the amount a company pays on a damaged or stolen vehicle whatever is less Insurable interest - โโ - financial interest A,b,c of commecial liability cgl are: - โโ - a-bodily injury and property damage, b- personal and advertising injury, c-medical payments Underwriter - โโ - a person whos job it is to assess risk and determine classification of the insured. (an agent is a field underwriter) Noncontributory benefits - โโ - a life or health insurance plan that an employer provides for employees in which the employee does not pay any part of the premium Minimum good driver discount - โโ - 20% A vehicle for hire, to transport people eg limo - โโ - livery
Broker - โโ - a person who represents the client in transaction: property and casualty only H02,46 - โโ - broad forms also dp2 and mobile home policies Replacement cost - โโ - the cost to replace without deduction for depreciation. Not what someone paid for it Will the cost of sandbaggin a home be covered? - โโ - yes the insured does not have to bear the cost
