PROPERTY AND CASUALTY INSURANCE

PROPERTY AND CASUALTY INSURANCE

ACTUAL EXAM TH REAL

QUESTIONS AND VERIFIED CORRECT

ANSWERS | ALREADY GRADED A+ |

GUARANTEED PASS | PROPERTY AND

CASUALTY INSURANCE MIDTERM AND

FINAL LATEST VERSION

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called - ANSWER- Pro rata liability

Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim? - ANSWER- Get the insured's consent

In terms of parties to a contract, which of the following does NOT describe a competent party? - ANSWER- The person must have at least completed secondary education

When would a misrepresentation on the insurance application be considered fraud?

• ANSWER- If it is intentional and material
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An insured intentionally did not disclose a material fact on an application for insurance. This would be considered - ANSWER- Concealment

The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay? - ANSWER- Company A will pay $16,000 and Company B will pay $8,000

• Each policy pays its pro rata share of the loss based upon each policy's share of

the total amount of coverage.)

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the - ANSWER- Additional insured

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? - ANSWER- Other insurance

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of - ANSWER- Concealment

When a disagreement occurs as to how to settle a loss in a "fender bender" between two cars, what procedure is followed? - ANSWER- Arbitration through the court -arbitration is a low-cost alternative to a full-blown lawsuit

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss? - ANSWER- Appraisal clause

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The policy conditions define - ANSWER- How parties to the contract must act following a loss

The pro rata liability clause is designed to protect the principle of - ANSWER- Indemnity

In return for a premium, an insurance company must - ANSWER- Be fair in underwriting and pay covered losses

Elements for a contract: - ANSWER- 1) Agreement - offer and acceptance

2) Consideration 3) Competent parties 4) Legal purpose

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages? - ANSWER- Special

Which method of loss valuation is contrary to the basic concept of indemnity? - ANSWER- Replacement cost

An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have? - ANSWER- Specific

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The policy provision found in property insurance policies that prevent the insured from collecting twice for the same loss is called - ANSWER- Subrogation

Losses caused by continuous or repeated exposure to conditions resulting in injury persons or damage to property that is neither intended nor expected is the definition of which of the following terms? - ANSWER- Occurrence

An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some of furniture and clothes in the house. From an insurance standpoint, the insured's house is considered - ANSWER- Unoccupied

An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and the insured's policy is written on the actual cash value(ACV), how much will the policy pay toward the insured's new roof? - ANSWER- $5,000

An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive? - ANSWER- Nothing

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society? - ANSWER- Punitive

A tornado that destroys property would be an example of which of the following? - ANSWER- A Peril

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