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WASHINGTON STATE INSURANCE PROPERTY & CASULTY
FINAL EXAM 2025 LATEST ACTUAL QUESTIONS AND
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If a building under a BPP has been vacant over 60 days, the BPP will cover? - CORRECT ANSWER Fire, Wind, Explosion, and Volcano are all covered after 60 days of vacancy A CGL provides liability coverage for: - CORRECT ANSWER A person whose reputation is harmed by the insured's innocent dissemination of information. Law of Large Numbers - CORRECT ANSWER A principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss. Insurable losses will be listed where? - CORRECT ANSWER Insuring agreements Commercial Liability - CORRECT ANSWER Purchased to cover completed operations/ products liability Is crime covered under a CPP? - CORRECT ANSWER Yes, crime is covered under a CPP
Insured's Responsibilities are listed where? - CORRECT ANSWER Conditions Policy coverages will be found where? - CORRECT ANSWER Insuring agreements Does a broad form policy cover volcano - CORRECT ANSWER Yes Strict Liability - CORRECT ANSWER The legal responsibility for damage or injury even if you are not negligent - a lawnmower manufacturer is liable if a blade flies off the mower. Seasonal inventory variable - CORRECT ANSWER 25% in addition to the policies limit of liability. Ex: $200,000 limit of liability, for total loss policy pays $250,000 (200,000x25%) Is homeowners personal property covered on an ACV or RC basis? - CORRECT ANSWER It's covered to 50% of A on an ACV basis. ($100,000 limit of liability x 50 %) covers up to $50, Who is the principal in a principal agent relationship? - CORRECT ANSWER The insurer is the principal in a ..
General damages - CORRECT ANSWER Are intangible Utility Services - Direct Damage Endorsement - CORRECT ANSWER Covers damage to covered property caused by interruption of utilities, such as water, communication, or power to the insured premises - perishable goods spoil due to no power Commercial ordinance or law endorsement cover extra expense? - CORRECT ANSWER No, will not cover extra expenses insured to operate at a new location Compensatory Damages - CORRECT ANSWER money intended to restore a plaintiff to the position he was in before the injury If a tree falls, a covered peril includes - CORRECT ANSWER Wind, hail, or weight of ice, snow, or sleet Joint Ownership Coverage - CORRECT ANSWER optional endorsement added to PAP when two unmarried individuals own a car Reasonable Expectations - CORRECT ANSWER A concept which states that the insured is entitled to coverage under a policy that a sensible and prudent person would expect it to provide. Reinforces the rule that
ambiguities in insurance contracts should be interpreted in favor of the policyholder. Spoilage Endorsement - CORRECT ANSWER Covers damage to perishable stock caused by breakdown or contamination and power outages (on and off premises). NOT if the refrigerator is left open though What is used to develop rates? - CORRECT ANSWER Business expenses, loss costs, and profits. NOT loss reserves Loss Payable Clause - CORRECT ANSWER An insurance provision authorizing payment in the event of loss to a person or entity other than the named insured having an insurable interest in the covered property Special Damages - CORRECT ANSWER economic losses such as loss of earnings, property damage and medical expenses Forgery or Alteration - CORRECT ANSWER provides worldwide coverage for loss of money resulting from forgery and alteration of outgoing checks, drafts, or promissory notes Funds Transfer Fraud - CORRECT ANSWER This coverage will pay for loss of funds resulting directly from
PIP covers - CORRECT ANSWER Funeral expenses, loss of income plus loss of services, medical and hospital expenses, but NOT bodily injury to others Larcenous theft - CORRECT ANSWER A producer who converts to his own use funds received in a fiduciary capacity is guilty of If an insurers proposed premium rates are too low, the commissioner will - CORRECT ANSWER Reject the proposed rates UIM Property Damage deductible for a phantom or hit and run vehicle - CORRECT ANSWER Can not exceed $ The commissioner could suspend or revoke license for - CORRECT ANSWER Twisting, rebating, guaranteeing dividends. NOT for waiting 1 business day before putting premium in the premium trust account Under WA law, UIM coverage covers - CORRECT ANSWER An insureds vehicle where the insurer is insolvent and can't pay. What is eligible for coverage under the WA Fair plan? - CORRECT ANSWER Residential property
The insurer doesnt need a reason to cancel an auto policy that has been in effect less than - CORRECT ANSWER 60 days Every insurer ad must state - CORRECT ANSWER The full name of the insurer If an insureds check is made payable to the insurer, the funds may be - CORRECT ANSWER Sent to the insurer without first depositing the check in the premium trust account A WA driver may be required to post a minimum $500 security deposit with the DOL if the accident - CORRECT ANSWER Involves BI or PD in the amount of at least $ The commissioner may - CORRECT ANSWER Approve premium rates Is the producers address required to be on a binder premium receipt? - CORRECT ANSWER No. It needs to briefly describe the coverage bound, state that it is a binder, identify the insurer. Is a surplus line broker required to be bonded? - CORRECT ANSWER Yes Can PIP be rejected orally? - CORRECT ANSWER No. It must be rejected in writing
How long is a temporary agent license effective for - CORRECT ANSWER 180 days only If an applicant is eligible for FAIR plan coverage, the policy must provide coverage for how long - CORRECT ANSWER At least 12 months Illegal Inducement - CORRECT ANSWER • Offer during the recruiting process to provide something outside of NCAA guidelines in exchange for signing Offering $150 rebate as an incentive to purchase WA FAIR plan is designed to cover - CORRECT ANSWER Property coverage only Both PIP & UIM cover - CORRECT ANSWER The insured Can an insurer discriminate on race? - CORRECT ANSWER No, but they CAN on the basis of sex, marital status, and geographical location. An insurer can cancel a policy if a drivers license is suspended and the policy has been in force how many days - CORRECT ANSWER At least 60 days or more
Who can receive a combination of a commission paid by the insurer and a fee paid by the insured? - CORRECT ANSWER Either an appointed producer or a bonded producer Who are licensed adjusters - CORRECT ANSWER Public adjusters and independent adjusters Who are non licensed adjusters - CORRECT ANSWER Salaried adjusters working for insurers To non renew a private auto insurance policy in WA, the insurer must give how much notices explaining the reasons for non renewal - CORRECT ANSWER At least 20 days notice The commissioner may order the immediate cancellation of a policy if - CORRECT ANSWER The policy violates any WA law Binders should be replaced promptly with insurance policies within - CORRECT ANSWER 90 days When initiating a sales presentation while away from the office, a producer must disclose what? - CORRECT ANSWER The full name of the producers company, and that the producer is an insurance agent The insured may cancel a policy by providing - CORRECT ANSWER Written notice to the insurer OR surrendering the policy to the insurer.
