GA Property & Casualty Exam questions with correct
answers
Insurance policy covers what type of losses CORRECT ANSWER Direct and
Indirect
In order to have an indirect loss, you must have CORRECT ANSWER a direct loss
What does property insurance cover? CORRECT ANSWER structures and
contents
Direct loss CORRECT ANSWER physical destruction of property by lightening,
wind, fire, theft, etc
Indirect loss CORRECT ANSWER consequences of direct losses – e.g. loss of
income, additional expenses to live, loss of rental income, etc.
What is the purpose of personal lines insurance? CORRECT ANSWER Coverage
for personal activities of the insured for losses that might take place
What is the purpose of commercial insurance? CORRECT ANSWER policies that
cover NON personal activities of the insured where losses might take place
Who transfers risk in insurance? CORRECT ANSWER Insurance involves transfer
of YOUR risk to other people for your losses to be covered
How do insurance companies use premiums? CORRECT ANSWER Insurance
companies use our premiums to cover losses of the few.
Named Insured CORRECT ANSWER HIGHEST ranking insured for any policy
Who is the insurance company? CORRECT ANSWER The author of the policy,
issuer of the policy, and enforcer of policy
Cancellation CORRECT ANSWER Stop policy mid-term before it has the chance
to expire. Both insurer and insured can cancel a policy
Insured cancels policy CORRECT ANSWER Request must be made in writing
Risk CORRECT ANSWER uncertainty of loss. The area between 1 and 100.
Made Whole CORRECT ANSWER Put you back like you were as if the loss never
happened
What kind of losses does insurance cover? CORRECT ANSWER Insurance covers
financial losses
Does insurance cover sentimental losses? CORRECT ANSWER No
3 ways to manage risks CORRECT ANSWER avoidance, reduction, retention
Full Retention CORRECT ANSWER self insured
doesn’t buy insurance
FULLY responsible for losses
Partial Retention CORRECT ANSWER partial responsibility for losses
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