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PSI Exam Property and Casualty Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What does "subrogation" mean in the context of insurance?✔✔It is the process by which an insurance company seeks reimbursement from the party at fault after paying a claim to the insured
What is the purpose of "auto liability insurance"?✔✔It covers damages to other people’s property or injuries caused by the policyholder’s driving
What is the term "insured" referring to in an insurance policy?✔✔The person or entity covered by the insurance policy against specified risks
What does "homeowners insurance" typically include?✔✔Coverage for damage to the home structure, personal property, and liability for injuries or damages occurring on the property
What is the role of an "insurance broker"? 1 / 3
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✔✔An individual who helps clients compare policies from different insurance companies to find the best coverage
What is "loss of use" coverage in property insurance?✔✔It provides compensation for temporary housing or expenses if the insured property becomes uninhabitable due to a covered loss
What does "all-risk" insurance cover?✔✔It covers all types of damage or loss except those specifically excluded in the policy
What is the difference between "insurable interest" and "coverage" in insurance?✔✔Insurable interest means the policyholder has a financial stake in the property or person being insured, while coverage refers to the extent of protection provided by the policy
What is "medical payment coverage" in an auto insurance policy?✔✔It pays for medical expenses resulting from an accident, regardless of who is at fault
What is the difference between "general liability insurance" and "professional liability insurance"? 2 / 3
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✔✔General liability covers basic bodily injury and property damage, while professional liability covers errors and omissions in professional services
What is "hazard insurance" in a property insurance policy?✔✔It protects against risks or hazards that could damage the property, such as fire or theft
What is the purpose of "specialty insurance"?✔✔It provides coverage for specific risks or property that standard insurance policies do not typically cover, such as pet insurance or antique car insurance
What does "underinsured motorist coverage" in auto insurance provide?✔✔It covers the insured driver when involved in an accident with a driver who lacks sufficient insurance to cover the damages
What is the purpose of property insurance?✔✔To provide financial protection against damages to property due to covered events
What does "liability insurance" cover?
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