MICHIGAN PROPERTY CASUALTY INSURANCE EXAM

PDF Download MICHIGAN PROPERTY & CASUALTY INSURANCE EXAM Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Binders

Answer:

a temporary contract of insurance providing coverage prior to the issuing of a complete insurance policy

Question 2: Bailee

Answer:

a person or business temporarily in possession of property entrusted to them by others

Question 3: Exposure

Answer:

The potential for accidents and other losses

Question 4: Eligible Dwellings

Answer:

• 1-4 unit dwellings w/ boarders
• vacation/rental

- endorsement for: mobile home & under construction

Question 5: Dwelling Insurance

Answer:

-not homeowners insurance -does not have to be owners-occupied -covers risk that may not be covered by homeowners

DP-1: Basic

DP-2: Broad

DP-3: Special

Question 6: Arbitration

Answer:

settling a dispute by agreeing to accept the decision of an impartial outsider

Question 7: Supplementary Payments

Answer:

Paid in addition to the policy's limit of liability

Question 8: HO-5 Comprehensive Form

Answer:

Owner occupants comprehensive form

Question 9: Michigan Catastrophic Claims Association

Answer:

all insurers writing no-fault insurance are members of the:

Question 10: Loss sustained crime form

Answer:

Losses that occur after the policy are NOT covered, must be during policy period & discovered up to 1 year after policy expires

Question 11: 3 ways to assign rates

Answer:

Judgement, Manual, Experience

Question 12: Representation

Answer:

a statement believed to be true to the best of one's knowledge

Question 13: Commercial Auto Policy

Answer:

Includes liability & physical damage, medical payments can be added by endorsement

Question 14: Aleatory Contract

Answer:

The exchange of value is unequal.

Question 15: Loss Ratio

Answer:

incurred losses/earned premiums

Question 16: Adverse Selection

Answer:

risks that have a greater than average chance of loss

Question 17: Pro Rata Equation

Answer:

(Policy Limit of 1 company/limits of all companies)*loss

Question 18: Punitive Damages

Answer:

Monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future.

Question 19: Financial Strength Rating

Answer:

a report card of the company

Question 20: Self insurers

Answer:

These insurers do not transfer their share of a loss to an insurance company, but instead establish their own pool of reserves to cover losses that may arise.

Question 21: Contracts of Indemnity

Answer:

Restore the insured back to the financial state they were in before the loss, no more no less

Question 22: Symbol 7

Answer:

Specifically described autos only, most restrictive

Question 23: Indirect Loss

Answer:

Loss that is a result or consequence of a direct loss

Question 24: Sharing risk

Answer:

Two or more individuals share risk

Question 25: Pair or set condition

Answer:

When part of a set is damaged or destroyed, insured will not be reimbursed for the value of the entire set, only for the part that is damaged or destroyed

Question 26: Peril

Answer:

cause of loss

Question 27: Symbol 8

Answer:

hired autos only-- coverage only for autos leased, hired, rented, or borrowed from the named insured's employees or family members. Typically, used for liability and physical damage coverage.

Question 28: Express Authority

Answer:

written or stated authority