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Exam Code : Property-and-Casualty
Exam Name : Property and Casualty Insurance
Vendor Name :
"P-and-C"

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Property-and-Casualty Actual Questions

P-and-C

Property-and-Casualty

Property and Casualty Insurance

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Question: 296

A. The policy period

B. The coverage parts purchased and their premiums

C. The exclusions that apply to the coverages

D. The identity and mailing address of the named insured

Answer: C

The Common Policy Declarations contain vital summary information about the contract, such as name and address of the named insured, policy period, coverage

parts attached, premiums, and a list of forms attached to the policy. Exclusions are found in the individual coverage parts. Exclusions may be contained in

coverage forms, causes of loss forms, or both.

Question: 297

Under the loss sustained version of commercial crime coverage forms, the policy will cover losses sustained during the policy period and discovered either during

the policy term or no later than which of the following?

A. Three years after policy expiration

B. Two years after policy expiration

C. One year after policy expiration

D. Six months after policy expiration

The commercial Common Policy declarations would include all of the following types of information except which one?

1. The policy period

2. The coverage parts purchased and their premiums

3. The exclusi ns that apply to the coverages

4. The identity and mailing addre s of the named insured

Answ C

The Com on P licy Declarations c ntain vital summary inf rmation abo t the contract such as name and address of the na ed insured licy period, co erage

parts attached premiums and a list of forms attached to the policy. Excl sions ar fo nd in the individ a coverage arts. Excl sions may be contained in

coverage forms, causes of loss forms, or both.

Q estion: 297

Under the loss ustained ersi n of comm ci l crime c ver e f ms, the p licy ill cover los e sus ai ed d ri g the p licy p riod an di cov red either during

the p licy ter or n lat r h n hich of the f llo in

1. Thr e years after policy expiration

2. T o y ars after policy expiration

3. One year after policy expiration

4. Six months after policy expiration

Answer: C

Crime insurance written under a loss sustained form covers losses sustained during the policy period and discovered either during the policy period or up to one year after the policy expires.

Under the NCCI workers compensation and employers liability policy form, the employers liability coverage excludes any claim for which of the following?

1. Care and loss of service

2. Liability assumed under contract

3. Damages to a third party

4. Consequential injury to a spouse or relative of an injured worker

Answer B

Liability assu ed u d der the employers liability section f a workers compensation policy. The other answer choices are

not excluded a d are commonly cov red by the policy.

Questi n: 299

Each f the foll wing is true about f rm coverages except which one?

1. Livestock nd equipm nt may be nsured.

2. Property and liability c verages may be incl ded.

3. The prin ipal residenc may be co ered by farm or homeowners forms.

4. Farm verage may be written as mono-line policy or art of a package.

A swer C

Far property including the principal residen e and oth r structu s may n t b

covered by h m o er form . ll of th ther a sw r choices efl ct exposure that ay be c vered by arm fo ms.

Qu ti 300

Becaus an insurer writes the policy language and the insured has little o no control over the content, any ambiguity in the ordin i us lly resolved in favor

Answer: B

Liability assumed under contract is specifically excluded under the employers liability section of a workers compensation policy. The other answer choices are

not excluded and are commonly covered by the policy.

Question: 299

Each of the following is true about farm coverages except which one?

A. Livestock and equipment may be insured.

B. Property and liability coverages may be included.

C. The principal residence may be covered by farm or homeowners forms.

D. Farm coverage may be written as a mono-line policy or part of a package.

Answer: C

Farm property, including the principal residence and other structures, may not be covered by homeowner forms. All of the other answer choices reflect exposures

that may be covered by farm forms.

Question: 300

Because an insurer writes the policy language and the insured has little or no control over the content, any ambiguity in the wording is usually resolved in favor

of the insured. Because the design and wording of a policy are in the hands of the

of the insured. Because the design and wording of a policy are in the hands of the

insurer, insurance policies are said to be which of the following?

1. Contracts of indemnity

2. Unilateral contracts

3. Contracts of adhesion

4. Aleatory contracts

Answer: C

Insurance policies are contracts of adhesion. The insurer draws up the contract language, and the insured simply adheres to the terms. For this reason, any ambiguity in the wording is usually resolved in favor of the insured by the courts.

Question: 301

A. The basic, broad, and special forms.

B. The broad and special forms only.

C. The special form only.

D. None of the forms provide theft coverage.

Answer: C

Only the special causes of loss form provides theft coverage for commercial property.

Question: 302

After a homeowners policy has been in effect for at least 60 days, when the insurer cancels for any reason other than nonpayment of premium, it must give the insured advance written notice of at least how many days?

A. 60 days

B. 30 days

C. 20 days

D. 10 days

Answer: B

The insurance company is only required to give notice 10 days in advance when it cancels a policy for any reason during the first 60 days of coverage or for

Which of the commercial property causes of loss forms provide theft coverage?

1. The basic, broad, p .

2. The broad and special forms only.

3. The spe ial form nly.

4. None f th for s provide thef coverage.

Answ C

Only the pecial causes of loss form provides theft coverage for commercial property.

Qu stion: 302

After a hom policy in effect for a , hen the

in urer cancels for any reason other than nonpayment of premium, it must giv

the insured advance written notice of at least how many days?

1. 60 days

2. 30 day

3. 20 days

4. 0 days

Answ B

The insurance company is only required to giv tic 10 d ys in dvance when it cancels a policy for any reason during the first 60 days of coverage or for

nonpayment of premium at any time during the policy term. However, after a policy has been in effect for 60 days, the insurer must give notice at least 30 days in advance when canceling for any reason other than nonpayment of premium.

Under which policy provision is an insured's right to recover for a loss from a third party transferred to the insurance company?

1. Abandonment

2. Pair or set clause

3. Subrogation

   
   
   Answer: C

   The Transfer of Rights of Recovery clause, also known as subrogation, gives the insurance company the right to recover from a third party who was at fault for a

   loss, up to the amount that the insurer has paid the insured for the loss. The abandonment provision merely states that the insured cannot decide to surrender damaged property to the insurer in return for full payment. (The acquisition of

   damaged property is at the option of the insurance company.) The pair or set clause states that the settlement for damage to one item that is part of a pair or set will be made with recognition of the reduction in value of the pair or set.

   Arbitration is a means of settling claims disputes when the insured and the insurance company disagree on the value of damaged property.

   
   

   
   Question: 304

   A businessowners policy may provide additional coverage for increased cost of construction when required to comply with an existing ordinance or law.

   However, this coverage is available only for buildings that are insured on a replacement cost basis and it is limited to which of the following amounts?

   
   

   A. $10,000 B. $7,500 C. $5,000 D. $2,500

4. Arbitration

Answer C

The Transfer of Righ , brog tion, gives the insurance company the right to recover from a third party who as at fault for a

loss, up to the amount that the insurer has paid the insured for the loss. The abandonment provision merely states that the insured cannot decide to surrender damaged pr perty to the insur r in return for full payment. (The acquisition of

damaged p operty is at the option of the in urance c mpany.) The pair o set clause states that the settlement for d mage to one item that i part of p ir or set will be ade with recognition of the educti in value of the pair or set.

Arbitration is a means of ettling clai s disputes when the insured and the insurance co pany disagr e on the v lue of da aged property.

Q estion: 304

A businessowners policy may provide additional coverage for increased cost f onstruction when required to comply with an existing ordinance or law.

owever, thi c ver g is v il ble nl fo b ildings that are sured on a repla ement ost basis d it is imited t whi h of the followi g amounts?

A. $10 000 B. $7,500 C. $5,000 D. $2,500

Answer: A

If a building is insured on a replacement cost basis, a businessowners policy will provide additional coverage for increased cost of construction when required to

comply with an existing ordinance or law. This coverage is limited to 10,000.

Which of the following is not available as one of the farm liability coverages included in an ISO policy?

1. Medical payments to others

2. Bodily injury and property damage

3. Personal injury and advertising injury

4. Injury to farm employees

Answer D

Similar to CGL cov , verage for bodily injury and property damage, personal injury and advertising inj ry, and medical

payments t others. Coverage for injury to farm employees is specifically

excluded.

Questio : 306

Which of the f llowing is not an opti nal property cover n homeo ners policies?

1. P rsonal property repl cement cost

2. Permitt d incident l occu ancies

3. Increased limits for jewelry, watches, and furs

4. Coverage for loss of use of the premises

n wer D

All h meowner poli ie pr vid so e c erage fo l ss f use. The other ans er ch ices reflect a ail bl op i na co er ges, bu they u t b a ded by

end rs ment.

Question: 307

Answer: D

Similar to CGL coverage, the farm liability form provides coverage for bodily injury and property damage, personal injury and advertising injury, and medical

payments to others. Coverage for injury to farm employees is specifically excluded.

Question: 306

Which of the following is not an optional property coverage on homeowners policies?

A. Personal property replacement cost

B. Permitted incidental occupancies

C. Increased limits for jewelry, watches, and furs

D. Coverage for loss of use of the premises

Answer: D

All homeowner policies provide some coverage for loss of use. The other answer choices reflect available optional coverages, but they must be added by endorsement.

Question: 307

Which of the following is true about commercial crime coverage written on a

Which of the following is true about commercial crime coverage written on a

discovery policy form?

1. In order to be covered, losses must be sustained and discovered during the policy period.

2. Losses may be covered if they are discovered at any time up to 18 months after the policy expires.

3. No exclusions apply to the types of losses that may be covered by this form.

4. A loss discovered during the policy period will be covered even if it was sustained years earlier.

Answer: D

Commercial crime coverage written on a discovery policy form will cover a loss discovered during the policy period even if it was sustained months or years earlier. It will also cover a loss discovered up to 60 days after the policy expires.

Question: 308

Withholding, rather than misstating, a material fact on an insurance application is an act of which of the following?

A. Misrepresentation

B. Concealment

C. Waiver and estoppel

D. Fraud

Answer: B

Concealment is similar to misrepresentation, except that it involves withholding a material fact where misrepresentation involves misstating a material fact. Fraud

has a more extensive definition, which includes the insurance company relying on and being harmed by the misstatement of a material fact. Waiver and estoppel are terms that involve

someone giving up a known right.

Question: 309

When an insurer cancels a commercial package policy for reasons other than nonpayment of premium, it must give written notice to the first named insured at

least how long?

Exclusions do apply to this coverage.

Question: 308

Withholding, r ther than misstating a material fact on a insuran e pplication is an act of hi h of the following?

1. Mis epresentation

2. Co ce lment

3. Waiver and estoppel

4. Fraud

An er

Co cealm i i ilar to i ntation, except th t i i l withholding m terial fact where misrepresentation involves misstating a material fact. Fra d

ha a more extensive definition, which includes the insurance company relying on nd being harmed by the misstatement f a materi l fact W iver d estopp l a e

t rm that invol e

someone givi g up a k wn ight.

Qu ti 309

When an insurer cancels a commercial package policy for reasons other than nonpayment of premium, it must give written n tice t the irst n ed insured at

least how long?

1. 60 days in advance

2. 30 days in advance

3. 20 days in advance

4. 10 days in advance

Answer: B

If the insurer cancels a commercial package policy, it must mail a written notice to the last known address of the first named insured. Ten days' notice is required for cancellation for nonpayment of premium; 30 days notice is required for cancellation for any other reason permitted by the policy.

Question: 310

without the necessity of issuing an endorsement?

A. Miscellaneous type vehicles

B. Towing and labor costs

C. Transportation expenses

D. Named nonowner coverage

Answer: C

Coverage for transportation expenses is included in the physical damage section of a personal auto policy. All of the other answer choices are optional coverages

that may be added by endorsement.

Question: 311

The commercial building and personal property coverage form provides a number of coverage extensions but only if which of the following is true?

A. The coverage for buildings is written on a replacement basis.

B. All coverages are written on a blanket basis.

C. They are shown in the declarations and an additional premium is paid.

D. An 80% or higher coinsurance percentage or a value reporting symbol is shown in the declarations.

Which of the following coverages may be included in a personal auto policy

without the neces y g

1. Miscellaneous type vehicles

2. Towing and labo costs

3. Transport tion xpenses

4. Named onowner coverag

Ans e C

Coverage for transportati n expenses is included in the physical damage section of a p rsonal auto polic . All of the ther answ r choices re optional cov rages

that ay be added by end rsement.

Q estion: 311

The commercial building and person l pr erty c vera form pr vides a number of c verage e tensions ut o ly if whic f th follo ing i tru ?

1. Th cover g fo bui ding is written n r place nt b si

2. All overages are written on a blanket basis.

3. They re shown in the declarations and an additional premium is paid.

4. An 0% or higher coinsurance percentage or a value reporting symbol is shown in the declarations.

Answer: D

The commercial building and personal property coverage form does provide a number of coverage extensions but only if an 80% or higher coinsurance percentage or a value reporting symbol is shown in the declarations.

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