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Property and Casualty Exam Questions And Correct Answers Graded A+
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Property and Casualty Exam Questions AndCorrect Answers Graded A+
Bailee A person or company that has possession of, is controlling and/or has custody of
another's property for servicing, repair or storage
Hazard Something which increases the probability or likelihood of a loss occurring.
PCP
(physical or moral or morale)
Market Value - Answer A property policy provision that amends the valuation method
otherwise applicable (ACV or RV) to a valuation method that allows reimbursement to the
insured, according to the price a willing buyer would pay for the property purchases from
a willing seller
Insurable Interest
(limit of liability) - Answer the amount that states the insurer will not be responsible for
more than an amount which is greater than the financial interest of an insured person or
more that the limit of liability stated on the Declarations Page
Actual Cash Value
(ACV) - Answer The policy pays for the cost to repair or replace the damaged property at
the time of loss, less depreciation
,Deductible - Answer The amount of money which the insured party must pay prior to the
beginning of the insurance company's own coverage plan.
Vacancy - Answer A property that has neither occupants nor personal property is defined
as being vacant.
Right of Salvage - Answer The right of the insurer to take possession of damaged
property subsequent to the loss to the property having been paid. The salvage belongs to
the insurer.
Inherent Vice - Answer A condition or defect that exists within property itself that causes
the property to spoil, break, become defective, or destroy itself. Insurance policies
typically exclude inherent vice. Example: The quality of materials used in a painting
allows the painting to fade or lose luster with time.
Aircraft Hull Insurance - Provides coverage on an open peril basis for physical loss or
damage to the insured aircraft, either on ground, or in flight.
In flight is from the instant it moves forward for takeoff until it completes its landing run.
Motor Carrier Act of 1980 - The Department of Transportaion (DOT) requires:
Motor carrier must carry an insurance policy of certain minimum limits, or
File a surety bond that represents some financial stability standards to carry either
passengers or cargo.
Equal Shares Contribution- Answer When 2 or more insurers' policies cover at the same
level - Primary or Excess, then under this concept each insurer contributes an equal
amount to the loss settlement until the loss is paid, or until each insurer has exhausted
its limits of insurance, whichever comes first.
, Example: If there are 3 insurers participating, each would pay 33 1/3 percent of the loss; if
4 insurers participating, each would pay 25 percent of the loss; or if 5 insurers
participating, each would pay 20 percent of the loss.
Certified Act of Terrorism - Answer Any act, certified jointly as terrorism by the Secretary
of Treasury, State and Attorney General which is at least one of the following:
Violent/dangerous to human life/property/infrastructure.
Damaging within the U.S. or on U.S. air carrier/vessel/mission.
Committed by persons on behalf of any foreign person/interest to coerce/influence the
U.S. civilian/government policy.
Nationwide Marine Definition - Answer Wet insurance and Dry insurance are terms that
the Nationwide Marine Definition uses in specifying risks that may be written under
marine insurance. The National Association of Insurance Commissioners adopted the
Nationwide Marine Definition that defines 6 broad classes of property that may be insured
under marine contract
The classes are:
1. Imports
2. Exports
3. Domestic Shipments
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