Arkansas Property & Casualty Practice Exam Questions and Answers (RATED A+)
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Course
Arkansas Property & Casualty
Institution
Arkansas Property & Casualty
Which of the following is not a reaction to risk? - ANSWER-Accumulating Risk
Which of the following describes a hazard? - ANSWER-An increase in the possibility that a loss may occur.
Which of the following best meets the test of the "Principle of Indemnity"? - ANSWER-Requiring the policyholde...
Arkansas Property & Casualty Practice
Exam Questions and Answers (RATED
A+)
A primary obligation of an insurance company is to: - ANSWER-Pay the claims
covered under the policy.
Which of the following is not a reaction to risk? - ANSWER-Accumulating Risk
Which of the following describes a hazard? - ANSWER-An increase in the possibility
that a loss may occur.
Which of the following best meets the test of the "Principle of Indemnity"? -
ANSWER-Requiring the policyholder to carry insurance to value.
The principle of indemnity is designed to avoid: - ANSWER-Overpayment of a claim
Which of the following losses would not be covered on an "all-risk" crop insurance
policy? - ANSWER-Flood
The Fair Plan offers what kind of coverage for individuals and businesses in high
hazard areas? - ANSWER-Crime Insurance
An agent who collects premiums and converts those premiums to his own personal
use is guilty of: - ANSWER-Embezzlement
Which of the following terms describes what is subtracted from a claim payment to
the insured? - ANSWER-Deductible
Oral discussion prior to the development of a written contract can not be used to
extend the terms of the final document. This because of the: - ANSWER-Parol
Evidence rule
To be licensed by more than one insurance company: - ANSWER-The agent must
be appointed by each company.
The basic difference between the DP-1 and the DP-3 is: - ANSWER-The covered
perils
Which of the following has the unlimited right to cancel an insurance policy? -
ANSWER-The client
The main difference between a claims made liability coverage and an occurence for
liability coverage is: - ANSWER-The trigger
, What is used to change an insurance policy from its original wording? - ANSWER-
Endorsement
An insured hires someone to burn his home. The insurance company can prove this
fact. All of the following are true except: - ANSWER-A claim by the mortgagee can
be denied.
A certificate of authority is not required for transacting: - ANSWER-Surplus Lines
Insurance
An umbrella liability policy has a form of deductible called: - ANSWER-Retained Limit
Coverage against loss by some perils (vandalism, theft, etc.) under the Building and
Personal Property Coverage form is suspended if: - ANSWER-The insured building
is vacant for over 60 days.
Which of the following may be competent? - ANSWER-A retired person.
A 15 year old dwelling valued at $100,000 is insured for $60,000 on an HO-3 with an
HO-15 encorsement. A $250 deductible applies. If the insured had a $10,000 loss,
how much would he be paid? - ANSWER-$7,250
An order of the Commissioner may be: - ANSWER-Appealed to the Courts
All of the following are true about Professional Liability except: - ANSWER-
Professional Liability is used in lieu of General Liability
Which of the following exposures is covered under the basic Commercial General
Liability policy? - ANSWER-Damages caused by products after their sale.
Property and Casualty licenses must be renewed: - ANSWER-On the biennial
anniversary of your birthday.
Which of the following terms is defined as the uncertainty of future outcome? -
ANSWER-Risk
Because the exact terms of an insurance policy are not the subject of negotiation
with the companym the contract of insurance is said to be: - ANSWER-Unilateral
The kind of examination performed of a foreign insurer for the benefit of all licensing
states is called: - ANSWER-The Zone Exam
If an agent leaves the state to take domicile elsewhere: - ANSWER-he must return
his license within 10 days
Who elects the Board of Directors in a mutual insurance company? - ANSWER-The
policyholders
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