PROPERTY AND CASUALTY INSURANCE
LICENSE EXAM 2025 WITH REAL
QUESTIONS AND CORRECT ANSWERS |
ALREADY GRADED A+ | GUARANTEED A+ |
PROPERTY AND CASUALTY INSURANCE
LICENSE LATEST VERSION FINAL
What method of dealing with risk is applied when insurance is purchased? - ANSWER- Transfer
What method do insurers use to protect themselves against catastrophic losses? - ANSWER- reinsurance
a policy that covers all causes of loss except for those specifically excluded is known as what type of policy - ANSWER- open peril or special
what determines an insurer's responsibility for payment on a claim under an insurance policy - ANSWER- limits of liability
what sublimity in a liability policy puts a ceiling on the payment for all claims that arise from a single accident - ANSWER- per-occurrence
what is the name for the limits of liability that are stated separately for different coverages - ANSWER- split limits 1 / 4
if an insured peril was the proximate cause of loss, what type of loss is it - ANSWER- direct
which method of loss valuation is contrary to the principle of indemnity - ANSWER- replacement cost
what term defines an exact, direct, and uninterrupted cause of loss - ANSWER- proximate cause
How is the actual cash value of a property calculated? - ANSWER- current replacement cost minus depreciation
if a manufactured product is unsafe, what type of liability applies to the manufacturer - ANSWER- strict liability
what are the two types of compensatory damages - ANSWER- general and special
what is a binder - ANSWER- a temporary insurance contract that goes in effect prior to the policy issue
how does an endorsement affect an insurance contract - ANSWER- it modifies the contracts original terms
what type of policy insures all property at multiple locations for a single amount - ANSWER- blanket policy
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what is a deductible in an insurance policy - ANSWER- A specified dollar amount that the insured must pay before the insurer will pay the policy benefits
complete the coinsurance formula: (insurance carried/insurance required) x loss
amount - ANSWER- loss payment
conditions that increase the chance of a loss are known as what - ANSWER- hazards
a situation in which a person can only experience a loss and no gain presents what kind of risk - ANSWER- pure risk
what are the five characteristics of an ideally insurable risk - ANSWER- - due to chance
- definite and measurable
- statistically predictable
- not catastrophic
- coverage can't be mandatory
What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? - ANSWER- law of large numbers
whom does an insurance agent represent - ANSWER- the insurance company
what is the name of the process that insurance companies use to determine whether a risk is insurable - ANSWER- underwriting
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When would a misrepresentation on an insurance application be considered fraud?
- ANSWER- when it is intentional and material
What is the fee a policy owner pays an insurance company to receive coverage? - ANSWER- premium
in insurance terms, a tornado destroys an insured property would be considered what - ANSWER- peril
What law protects consumers from the circulation of inaccurate or obsolete information? - ANSWER- The Fair Credit Reporting Act
What are the four elements of an insurance contract? - ANSWER- - agreement
- consideration
- competent parties
- legal purpose
in insurance, when is the offer usually made on a contract - ANSWER- when the insurance application is submitted
what is the difference between cancellation and nonrenewal - ANSWER- cancellation is the termination of an insurance policy by either the insured or insurer prior to the policy's expiration date. nonrenewal is the termination of a policy by the insurer at its expiration date
when must insurable interest exist in a property insurance policy - ANSWER- at the time of loss
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