Insurance: Property & Casualty UPDATED Exam Questions and CORRECT Answers
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Course
Insurance: Property & Casualty
Institution
Insurance: Property & Casualty
Insurance: Property & Casualty UPDATED
Exam Questions and CORRECT Answers
Accident - Correct Answer- A sudden and unexpected event which occurs at a specific time
and place.
Actual Cash Value (ACV) - Correct Answer- The cost to replace an item of property at the
time of loss, less an allowa...
Insurance: Property & Casualty UPDATED
Exam Questions and CORRECT Answers
Accident - Correct Answer- A sudden and unexpected event which occurs at a specific time
and place.
Actual Cash Value (ACV) - Correct Answer- The cost to replace an item of property at the
time of loss, less an allowance for depreciation. Often used to determine amount of
reimbursement for a loss.
Additional Living Expense - Correct Answer- A coverage designed to reimburse the insured
for an increase in living expenses necessitated by loss to the dwelling. This indirect loss must
be the result of a direct loss by a covered peril.
Adhesion - Correct Answer- A characteristic of insurance policies that means the contract is
prepared by the insurer and is non-negotiable or "one-sided".
Admitted Company - Correct Answer- A company which meets the state insurance
department's standards and is authorized to do business in the state.
Agent - Correct Answer- The state-licensed professional who represents the insurance
company in the sale and servicing of insurance. The direct link between the insurance
company and the policyholder.
Aggregate Limit - Correct Answer- A type of policy limit found in liability policies which
limits coverage to a specified total amount for all losses occurring within the policy period.
Aleatory - Correct Answer- A characteristic of insurance contracts, meaning a contract in
which equal value is not given by both parties to the contract.
Alien Company - Correct Answer- An insurance company incorporated in a country other
than the United States.
,Allied Lines - Correct Answer- Used to insure additional types of losses to property and sold
in conjunction with fire insurance.
All-Risk - Correct Answer- A term used to indicate that property is covered against all perils
except those specifically excluded.
Apportionment - Correct Answer- A method determining how much will be contributed by
each company toward a loss covered under more than one policy.
Appurtenant Structures - Correct Answer- A structure belonging to the insured and associated
with the insured property. (another name for "other structures")
Appraisal Clause - Correct Answer- A clause which provides a specific procedure when the
insured and the insurer are in disagreement regarding the amount of a loss.
Binder - Correct Answer- An acknowledgment (or receipt), usually from the agent, that
insurance applied for is in force regardless of any premium settlement.
Blanket Position Bond - Correct Answer- Fidelity bond which specifies a single limit of
liability applicable to each employee involved in a loss.
Bodily Injury - Correct Answer- __________ coverage pays for injuries, sickness, disease, or
required care for death that the policyholder is found legally liable for.
Boiler and Machinery Policy - Correct Answer- Insurance which covers the insured against
loss (liability and physical damage) arising out of the use of scheduled commercial
equipment.
Broker - Correct Answer- An individual who represents the prospect, instead of the insurance
company, in the insurance transaction. Frequently involved in the placement of very large or
unusual risks.
Burglary - Correct Answer- The unlawful taking of property by forced entry into the premises
while the premises is closed for business (must be visible evidence of forced entry or exit).
, Business Interruption Insurance - Correct Answer- A Time-Element coverage which
reimburses the insured for loss of earnings due to the inability to operate caused by a covered
peril.
Casualty Insurance - Correct Answer- A broad category of coverage against loss of property,
damage, or other liabilities. Includes auto, liability, theft, elevator, glass, aviation, boiler and
machinery, worker's comp, bonds, and many other types of insurance.
Causes of Loss Form - Correct Answer- Commercial property insurance forms that establish
and define the perils for which coverage is provided and is combined with one or more
coverage forms, the commercial property conditions form, the common policy conditions
form, and the declarations to make up an ISO commercial property policy. ex: Basic, Broad,
Special
Claims-Made Coverage Form - Correct Answer- Part of the Commercial General Liability
coverage part of the CPP. Provides coverage for bodily injury and property damage if a
written claim is made during the policy period, regardless of when the injury or damage
actually occurred.
Coinsurance Clause - Correct Answer- A clause that requires an insured to pay part of a loss
if the coverage provided under the policy limits is less than a specific percentage of the value
of the property at the time of loss.
Collision - Correct Answer- A type of physical damage insurance which covers loss due to
the insured object striking another object. Always written with a deductible, and includes
overturning of a vehicle.
Commercial Blanket Bond - Correct Answer- A bond which covers loss arising from the
dishonesty of one or more employees acting separately or in collusion. The limit of liability
applies separately to each loss, regardless of the number of employees involved.
Commercial General Liability (CGL) - Correct Answer- A coverage part of the CPP that
protects the insured from claims by third parties as the result of business conduct.
Commercial Package Policy (CPP) - Correct Answer- A commercial insurance policy
introduced by ISO in an effort to simplify the packaging of the various commercial
coverages. Includes coverages for property, liability, inland marine, auto, crime, and boiler &
machinery.
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