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WorksheetsP&C Basics
Total questions: 64
Worksheet time: 1hrs 4mins
All of the following are risk management techniques, except:
Enhancement
Retention
Transfer
Avoidance
Which of the following is an example of Special Damages?
Special Damages are the damages assessed by the court as a penalty for gross negligence
Compensation to a husband or wife for the loss of companionship of a spouse
It is compensation to an injured party for actual medical expenses and loss of earnings
Special Damages are the amount the injured is entitled to over and above medical expenses and pain and suffering disfigurement
In situations where the insured and the insurer could disagree on the value of an item, it would be best to ensure that item on a(n) _______ basis.
Replacement Cost
Actual Cash Value
Agreed Value
different policy
When a claim is disputed and taken to court, the court costs and attorney’s fees are paid by:
The prevailing party.
The losing party.
These costs are shared pro-rata.
The public.
What type of liability is specifically imposed by statutory law?
comparative liability
vicarious liability
strict liability
pure liability
Cheryl is driving Ann's car and has an accident in which she is at fault. How will Ann's policy as the owner and Cheryl's policy as the driver respond?
Cheryl's policy is primary since she was driving
Cheryl's policy is primary and Ann's is excess
Ann's policy is primary, Cheryl's is excess
Ann's policy is excess since she was not driving
When a property claim occurs which of the following is NOT required of the insured?
reporting the loss promptly
abandonment of the property
protecting the property from further damage
cooperating with the insurer
If a liability coverage has an occurrence limit, what happens if there is another occurrence?
The occurrence limit is restored but an extra premium is charged.
The occurrence limit is already exhausted and no coverage applies.
The occurrence limit is restored.
The occurrence limit is reduced by the amount of the previous claim paid.
Phil bought an all risk policy and was told by his agent that everything was covered. After a loss, where does Phil look to see if in fact that loss will be covered?
declarations page
conditions section regarding what to do after a loss
no need to look anywhere, the agent told him everything was covered
exclusions section
Which of the following is not a type of construction for property rating purposes?
bamboo
brick
frame
fire resistive
Liability coverage could be worldwide, but most coverage is subject to a coverage territory. Which of the following is NOT part of the coverage territory?
Puerto Rico
Mexico
Canada
U.S. Territories
John wants to cover his 1965 Mustang for $17,000, this is an example of
agreed value.
replacement cost.
market value.
actual cash value.
The most the insurer will pay for one person's injury or property damage is known as the
aggregate limit.
occurrence limit.
per person limit.
combined single limit.
All of the following are examples of Absolute Liability, EXCEPT
handling explosives.
responsibility for the actions of minors.
slipping on spilled milk in the store.
dangerous animals.
Under which of the following circumstances can the insured exercise the right of assignment of an insurance policy?
Bob contacts Doug's insurer to take over the policy on the car he bought from Doug.
Doug sells his car to Bob and calls his agent to transfer the policy to Bob.
Doug's insurer agrees to assigning the policy over to Bob.
The department of insurance approves the assignment.
Wendy's policy states that it will pay up to $25,000 for injury to any one person; $50,000 for all people that are injured and $10,000 for property damage. This is known as a(n)
combined single limit.
split limit.
aggregate limit.
occurrence limit.
Where do you go in a policy to find out whom is an insured?
Definitions section
Endorsement section
Conditions page
Declarations page
What damages awarded to the injured person are covered by liability insurance?
special damages
both general and special damages
neither general or special damages
general damages
What is NOT a defense against negligence?
vicarious negligence
comparative negligence
contributory negligence
assumption of the risk
The amount of losses paid out in comparison to the premiums received is referred to as
profit and loss margin.
loss ratio.
expense ratio.
profit margin.
After a covered loss, the insurer may do all of the following, EXCEPT
replace the damage property with new.
repair with like kind and quality.
make an Actual Cash Value settlement.
pay the difference between the cost to replace it and the actual cash value.
The time frame of coverage and the location of coverage are referred to as
peril exclusions and proof of loss reporting.
policy exclusions and claim conditions.
policy period and policy territory.
perils covered and proof of loss reporting.
Which of the following best describes the Contribution by Equal Shares claim provision?
each insurer shares the claim equally until their limit is exhausted
the insurer with the lowest limit pays first until the limit is exhausted
the insurer with the highest limit pays first
each insurer pays on a pro-rata percentage based on who is most liable
What is true regarding oral binders?
an oral binder is a permanent substitute for a written binder
they are illegal in most states
coverage becomes effective when the proposed insured accepts the obligation to pay the premium
they can only be used in personal lines and not commercial lines coverage
ABC Leasing has leased a car to Dwight. They need a loss payable clause for their interest if the car is damaged. But since it is still titled to ABC Leasing, they want the liability coverage of the policy to protect them as well in case of lawsuit. ABC will request a(n)
mortgagee clause.
additional insured clause.
loss payable clause.
assignment clause.
What is the agreement that represents temporary insurance coverage until the home office can issue the coverage?
binder
premium deposit
guaranteed contract
receipt
The insurer's responsibilities to the insured is found in the
insuring agreement.
declarations.
provisions.
conditions.
What statement is true about additional coverage?
It is included for a minimum premium.
It is optional on the part of the insured.
It is included at no extra cost.
It is automatically included only if medical payments coverage is purchased.
If the insurer and the insured disagree on the amount to be paid on a property claim, the dispute may be settled by
appraisal.
judgment in small claims court.
the department of insurance.
arbitration.
A bank demanding to be listed as an insurable interest on a property policy is an example of
mortgagee rights.
lender lien interest.
mortgagor requirements.
additional insured interest.
A provision in a property insurance contract that automatically extends to an insured any advantageous changes made in a later edition of a policy may be identified as the
subrogation clause.
liberalization clause.
value reporting clause.
policy change endorsement.
The clause in a property or auto policy protecting the lender for their interest in your property that is not a building is known as the
insuring clause.
loss payable clause.
waiver clause.
mortgagee clause.
A sworn statement by the claimant stating the facts and damages in a claim is a(n)
claim notice.
itemized list of claimed assets.
recorded statement.
proof of loss.
Subrogation may follow if
forces of nature damage the insured's property.
an insured causes damage to her own goods.
firefighters damage the insured's property while putting out a fire.
an insured collects from her insurance company for damage caused by a third party.
Larry's shirts were damaged at a fire at the dry cleaner. He has turned the claim into his insurance company. The dry cleaner would like the claim check made out to them and Larry since he hasn't paid the dry cleaning bill yet. The insurer denies the request under which provision?
Doctrine of Utmost Good Faith
Loss Payable Clause
No Benefit to Bailee Clause
Doctrine of Reasonable Expectations
What best describes the concept where an insured assigns to an insurer his right of action against an at-fault party?
indemnification
transfer of rights of recovery
proximate cause
liberalization concept
In liability insurance, paying defense costs and expenses in a suit brought against the insured is a contractual obligation known as the
Indemnification principle.
Doctrine of Adhesion.
Doctrine of Estoppel.
Duty to Defend.
After a loss, the insured is required to
notify the department of insurance, bureau of claims.
file a Notice of Claim with the insurer immediately or as soon as possible.
repair the property as soon as possible.
abandon the property immediately.
