PROPERTY AND CASUALTY INSURANCE TEST QUESTION NOTES AND CORRECT
VERIFIED ANSWERS 2026/2027 BEST EXAM SOLUTION GRADED A+ FOR
SUCCESS
What is a peril? - CORRECT ANSWERS A Peril is a cause of loss
What is a hazard? - CORRECT ANSWERS Something that increases the chance of a loss
What is the difference between a Moral hazard and a Morale Hazard? - CORRECT ANSWERS
Moral Hazard - dishonesty, against the law
Morale Hazard - carelessness
What is the method of handling risk that involves a deductible? - CORRECT ANSWERS
Retention (loss or portion of loss)
If a fire causes damage to a building, what is the fire considered? - CORRECT ANSWERS A
Peril
What are the elements of an insurable risk? - CORRECT ANSWERS CANHAM
Calculable, Affordable, Non-Catastrophic, Homogeneous, Accidental, Measurable
If an insurance company is housed in Tennessee, what type of insurer are they considered? -
CORRECT ANSWERS Domestic
An insurance company incorporated in Wisconsin and conducting business in Minnesota is
know as what type of insurer? - CORRECT ANSWERS Foreign
What is it meant by "Express Authority"? - CORRECT ANSWERS Authorities are written in
agent contract
What is a term that is typically used to describe an Insurance Agent? - CORRECT ANSWERS
Fiduciary - a person in a position of financial trust
What is a contract or device for transferring risk from a persons, business, or organization to
an insurance company? - CORRECT ANSWERS Insurance
, PROPERTY AND CASUALTY INSURANCE TEST QUESTION NOTES AND CORRECT
VERIFIED ANSWERS 2026/2027 BEST EXAM SOLUTION GRADED A+ FOR
SUCCESS
What is Reinsurance? - CORRECT ANSWERS When insurance companies purchase insurance
to cover their own exposures to loss
What is a fiduciary? - CORRECT ANSWERS A person in a position of financial trust
What is it meant by a contract of adhesion? - CORRECT ANSWERS Policy written by the
insurer with the insured having no input
What part of the insurance policy shows the premium payment? - CORRECT ANSWERS
Declarations page
What are the duties of the insured after a loss? - CORRECT ANSWERS Notice to insurer,
protect property from further damage, Proof of loss, property available for inspection,
examination under oath if needed, cooperate with insurer
What is the FCRA? - CORRECT ANSWERS Fair Credit Reporting Act - If the insurer uses
credit, must inform insured
What are the parts to an insurance contract? - CORRECT ANSWERS Declarations,
Conditions, Insuring Agreements, and Exclusions
When an insured decides to cancel an insurance policy before the expiration date, how is the
unearned premium returned? - CORRECT ANSWERS Short-Rate basis
What are the three basic perils? - CORRECT ANSWERS Fire, Lightning, and Internal
Explosion
What are the extended coverage perils? - CORRECT ANSWERS WCSHAVVER and V&MM -
Wind, Civil commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic Eruption, Explosion, Riot,
Vandalism and malicious mischef
VERIFIED ANSWERS 2026/2027 BEST EXAM SOLUTION GRADED A+ FOR
SUCCESS
What is a peril? - CORRECT ANSWERS A Peril is a cause of loss
What is a hazard? - CORRECT ANSWERS Something that increases the chance of a loss
What is the difference between a Moral hazard and a Morale Hazard? - CORRECT ANSWERS
Moral Hazard - dishonesty, against the law
Morale Hazard - carelessness
What is the method of handling risk that involves a deductible? - CORRECT ANSWERS
Retention (loss or portion of loss)
If a fire causes damage to a building, what is the fire considered? - CORRECT ANSWERS A
Peril
What are the elements of an insurable risk? - CORRECT ANSWERS CANHAM
Calculable, Affordable, Non-Catastrophic, Homogeneous, Accidental, Measurable
If an insurance company is housed in Tennessee, what type of insurer are they considered? -
CORRECT ANSWERS Domestic
An insurance company incorporated in Wisconsin and conducting business in Minnesota is
know as what type of insurer? - CORRECT ANSWERS Foreign
What is it meant by "Express Authority"? - CORRECT ANSWERS Authorities are written in
agent contract
What is a term that is typically used to describe an Insurance Agent? - CORRECT ANSWERS
Fiduciary - a person in a position of financial trust
What is a contract or device for transferring risk from a persons, business, or organization to
an insurance company? - CORRECT ANSWERS Insurance
, PROPERTY AND CASUALTY INSURANCE TEST QUESTION NOTES AND CORRECT
VERIFIED ANSWERS 2026/2027 BEST EXAM SOLUTION GRADED A+ FOR
SUCCESS
What is Reinsurance? - CORRECT ANSWERS When insurance companies purchase insurance
to cover their own exposures to loss
What is a fiduciary? - CORRECT ANSWERS A person in a position of financial trust
What is it meant by a contract of adhesion? - CORRECT ANSWERS Policy written by the
insurer with the insured having no input
What part of the insurance policy shows the premium payment? - CORRECT ANSWERS
Declarations page
What are the duties of the insured after a loss? - CORRECT ANSWERS Notice to insurer,
protect property from further damage, Proof of loss, property available for inspection,
examination under oath if needed, cooperate with insurer
What is the FCRA? - CORRECT ANSWERS Fair Credit Reporting Act - If the insurer uses
credit, must inform insured
What are the parts to an insurance contract? - CORRECT ANSWERS Declarations,
Conditions, Insuring Agreements, and Exclusions
When an insured decides to cancel an insurance policy before the expiration date, how is the
unearned premium returned? - CORRECT ANSWERS Short-Rate basis
What are the three basic perils? - CORRECT ANSWERS Fire, Lightning, and Internal
Explosion
What are the extended coverage perils? - CORRECT ANSWERS WCSHAVVER and V&MM -
Wind, Civil commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic Eruption, Explosion, Riot,
Vandalism and malicious mischef
