INSURANCE PROPERTY AND CASUALTY

INSURANCE PROPERTY AND CASUALTY

ACTUAL LATEST EXAM WITH QUESTIONS

AND CORRECT ANSWERS | ACTUAL STUDY

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PASS | INSURANCE PROPERTY AND CASUALTY

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Which of the following policies does NOT contain an automatic reinstatement provision? - ANSWER- a) Homeowners

b) General liability written with an aggregate limit *****

c) Business automobile liability

d) Personal automobile liability with split limits

An aggregate limit is reduced by the payment of claims. It is possible for an insured to run out of coverage before the expiration of the policy. Aggregate limits are restored on the anniversary date of the policy.

Which of the following is NOT covered by the condominium unit owners endorsement? - ANSWER- a) Appliances in the building

b) Fixtures in the building

c) Furniture in the building*****

d) Alterations to the building

Alterations, appliances, fixtures and improvements that are part of the building, but which the insured is required to maintain coverage on because of the condominium 1 / 4

association agreement, can be insured with this endorsement. Furniture is not specifically covered.

The pro rata liability clause is designed to protect the principle of - ANSWER- a) Waiver and estoppel.

b) Indemnity.*****

c) Subrogation.

d) Insurable interest.

If more than one policy is in force on the same property at the same time covering the same perils, this is concurrent coverage. The intent of insurance is that after a loss, the insured is restored to the condition he or she was in before the loss (indemnified). Each policy pays a percentage of a loss directly related to the amount of insurance it provides compared to the total amount of coverage.

Under a policy, the condition that determines how the amount of damaged or lost property will be determined is known as - ANSWER- a) Loss payment.

b) Appraisal.

c) Coinsurance.

d) Loss valuation.*****

Loss valuation is a factor in determining the premium charged and the amount of insurance required.

All of the following are essential parts of the insurance contract EXCEPT - ANSWER- a) Insuring clause.

b) Conditions.

c) Provisions.****** 2 / 4

d) Exclusions.

"Provisions" is a broad term used to refer to the sections or clauses of an insurance policy that communicates the policy's benefits, conditions, etc. The essential parts of the policy are declarations, insuring clause, conditions and exclusions.

All of the following are conditions commonly found in the insurance policy EXCEPT - ANSWER- a) Subrogation.

b) Appraisal.

c) Insuring agreement.*****

d) Cancellation and nonrenewal.

Insuring agreement provides information on the policy's coverages. Conditions state the legal obligations and duties of the parties to the contract.

Which of the following is an example of an agent's fiduciary responsibilities? - ANSWER- a) Offering additional coverage to a client

b) Forwarding premiums to the insurer ******

c) Helping clients to file claims

d) Performing a review of clients' coverage

Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity.

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? - ANSWER- a) Liability coverage*****

b) Medical payments 3 / 4

c) Comprehensive coverage

d) Collision coverage

Supplementary payments, found in Part A - Liability, include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings.

All of the following are perils covered under the broad form dwelling policy EXCEPT - ANSWER- a) Lightning.

b) Collapse.

c) Theft. **

d) Fire.

Theft is not a peril named in the policy.

An additional loss that results from a direct loss of property is called a/an - ANSWER- a) Indirect loss. ***

b) Proximate loss.

c) Liability loss.

d) Punitive loss.

Direct losses come about because of perils named in the policy. Indirect losses, also known as consequential losses, come about as a result of a direct loss.

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is - ANSWER- a) Considered underinsured. ***

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