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Michigan Property & Casualty Exam Questions and Answers 100% correct
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Michigan Property & Casualty Exam Questions and Answers
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Michigan Property & Casualty ExamQuestions and Answers
FIO - Answer -( Federal Insurance Office ) Monitors insurance industry and identifies
issues and gaps in the state regulation of insurers . It also monitors access to affordable
insurance by underserved communities and consumers
Fire Resistive - Answer -Which construction classification uses materials that can
withstand fire for at least two hours?
Declaration Page - Answer -The location of the insured risk can be found in which part
of an insurance policy?
An endorsement - Answer -In property and casualty insurance when a form, is attached
to alter or add to policy, provisions or conditions It is known as
Loss Payable Clause - Answer -Which of the following clauses protects the interest of
the loss payee
Direct losses include additional living expenses - Answer -Which of the following
statements regarding types of property loss is false?
Mediator - Answer -When the insured does not agree with the insurance companies
value of his property, damaged as a result of his recent property laws, which of the
following establishes the procedure, the insurance company, must use to settle this
issue
A binder specifies the premium amount - Answer -All of the following statements about
binders are true, except
Replacement cost minus depreciation - Answer -Which of the following is the best
definition of actual cash value in property insurance?
Endorsements - Answer -Which of the following they brought in the coverage found in
an insurance policy?
,The policy limit - Answer -An insured owns a home with a replacement cost of $300,000
and a Market value of $250,000. What is the most valued policy will pay in the event of
a total loss without a deductible
Insuring Agreement - Answer -Which of the following is not found on the declarations
page?
Prior approval forms - Answer -This is when insurance companies must obtain official
approval before using new forms and rates
This type of insurance designates a particular item to be insured - Answer -Specific
insurance
Blanket insurance - Answer -This type of insurance covers more than one item of
property at a single location or one more items of property at multiple locations.
speculative - Answer -Possibility of both gain and loss not insurable
What are the 5 methods of managing or handeling risk - Answer -Avoid, control, retain,
and transfer risk
Physical hazards - Answer -A hazard that arises from the condition, occupancy, or use
of the property itself
Moral hazard - Answer -When an individual through carelessness or by irresponsible
actions can increase the possibly for a loss
Morale Hazard - Answer -When a person might create a loss situation on purpose just
to collect from the insurance company
Replacement cost - Answer -The amount of money it would take to replace a damaged
or destroyed item with one of like kind and quality at the time of loss no deduction for
depreciation
Actual cash value - Answer -replacement cost minus depreciation
Appraisal - Answer -A method of resolving disputes between insurers and insured over
the amount owed on a covered loss
-both parties select a appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
Subrogation - Answer -An insurer's right to recover the amount of its loss payment from
the third party who is legally responsible for the loss
, Arbitration - Answer -This condition is similar to the appraisal condition but it is not
limited to disputes over the value of the loss it may also be used to resolve other areas
of disagreement between the insured and the insurance company
Insolvency - Answer -A financial state that occurs if liabilities are greater than assets
Law of agency - Answer -Knowledge of the agents is knowledge of the principal
(insurance company)
Principal - Answer -Insurance company
Coinsurance Clause - Answer -Requires the insured to carry a minimum specified
amount (generally 80%) of the replacement cost value of the insured property in order
for partial losses to be paid in full
Estoppel - Answer -A legal bar to changing or denying a fact because of one's own
previous actions or words to the contrary
Binder - Answer -A temporary contract of insurance oral or written offered by an insurer
pending issuance of the policy usually written for a period of 30-60 days and remains in
force for that period or until a permanent policy is either issued or denied by the insurer
Warranty - Answer -A provision in a policy that pledges that a condition does exist at
some time in the future
Audit - Answer -Verification of books or accounts to determine their accuracy
occurrence - Answer -An accident including continuous, or repeated exposure to the
same harmful conditions, which result and bodily injury or property damage
Special damages - Answer -Type of compensate Tori damages are reimbursing, injured
part for direct and specific expenses involved in the loss, such as medical expenses,
funeral expenses, and loss wages
General damages - Answer -Type of converse, satori damages are reimburse the
injured party for such things as pain and suffering and disfigurement
Proximate clause - Answer -An act through an uninterrupted chain of events that can be
determined to the media or actual cause of a loss
Four elements of negligence - Answer -1. the existence of a duty to act in a certain
2. A failure to live up to this duty
3. An actual injury must occur
4. The failure in duty must be the proximate cause of the injury
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