Georgia Property and Casualty Exam Study Questions with Complete Solutions Latest Updated 2024/2025 Insurance Terms and Related Concepts.What is insurance? - Correct Answer transfers the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.Insurance Terms and Related Concepts.What is risk? - Correct Answer the uncertainty or chance of a loss occurring.Insurance Terms and Related Concepts.What are the 3 types of hazards? - Correct Answer Physical, moral and morale.Insurance Terms and Related Concepts.What does indemnify mean? - Correct Answer To "restore" an insured to the same financial status as before the loss.Insurance Terms and Related Concepts.Define subrogation. - Correct Answer the acquisition by an insurer of an insured's rights against any third party for indemnification of loss or other payment, to the extent that the insurer pays the loss.Insurance Terms and Related Concepts.What is the difference between an accident and an occurrence? - Correct Answer Both result in injury to persons or damage to property that is neither intended nor expected; however, an accident is a sudden, unplanned and unexpected event, and an occurrence includes those losses caused by continuous or repeated exposure to certain conditions.Insurance Terms and Related Concepts.How are indirect and direct loss related? - Correct Answer Direct losses can cause indirect losses.Insurance Terms and Related Concepts. 1 / 3
In which of the two types of damage - property damage and bodily injury - is it more difficult to determine the monetary value of the loss and why? - Correct Answer It is more difficult to determine the loss monetarily with bodily injury, since it may lead to claims by the injured party not only for medical expenses and lost wages, but also for disfigurement, pain and suffering , mental anguish, and loss of consortium.Insurance Terms and Related Concepts.What is the difference between vacancy and unoccupancy? - Correct Answer An insured structure in which no people have been living or working and no property has been stored for the specified period of time constitutes vacancy. Unoccupancy refers to an insured structure in which no people have been living or working within the required period of the time, but some property is stored.Insurance Terms and Related Concepts.What type of insurance provides coverage for multiple classes of property at one location? - Correct Answer Blanket insurance is a single property insurance policy provides coverage for multiple classes of property at one location, or for one or more classes of property at multiple locations.Insurance Terms and Related Concepts.Explain the actual cash value method of valuation. - Correct Answer reinforces the principle of indemnity because it recognizes the reduction of value of property as it ages and becomes subject to wear and tear and obsolescence.Insurance Terms and Related Concepts.When absolute liability is involved, does the injured party need to prove negligence? - Correct Answer the injured party does not need to prove negligence.Insurance Terms and Related Concepts.If a product is unsafe, what kind of liability applies to the manufacturer? - Correct Answer Strict liability.Insurance Terms and Related Concepts.Compare bodily injury liability and personal injury liability. - Correct Answer Bodily injury liability is physical injury, while personal injury liability includes injury to the character of another person. 2 / 3
Insurance Terms and Related Concepts.What is proximate cause? - Correct Answer an act or event considered a natural and reasonably foreseeable cause of the damage to property or injures a plaintiff.Insurance Terms and Related Concepts.What type of policies may include the insurance to value provision? - Correct Answer Homeowners policies.Insurance Terms and Related Concepts.What is a certificate of insurance? - Correct Answer Written evidence showing that an insurance policy has been issued.Policy Provisions and Contract Law.What are the four elements of an insurance contract? - Correct Answer Agreement- offer and acceptance, consideration, competent parties, and legal purpose.Policy Provisions and Contract Law.What does representation mean and how does it differ from a warranty? - Correct Answer statements believed to be true to the best of one's knowledge. A warranty is an absolutely true statement upon which the validity of the insurance policy depends.Policy Provisions and Contract Law.What is a binder? - Correct Answer a temporary oral or written agreement issued by an agent or insurer that provides temporary coverage until a policy becomes effective.Policy Provisions and Contract Law.What information is included in a policy's declarations? - Correct Answer include the basic underwriting information (such as the insured's name, address, amount of coverage and premiums, and a description of insured locations), and any supplemental representations by the insured.Policy Provisions and Contract Law.
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