SC Property, Casualty, Surety, Marine
exam questions with 100% correct
answers
Accumulated Depreciation - answer The total decrease in an item's value over a period of time.
Formula:(Annual Depreciation x Number ofyears used) 1-J
Acreage Reporting Date - answer The deadline for providing the insurer with an acreage report, which is
used to determine the amount of coverage needed and the premium charged for a particular crop. 3-E
Actual Cash Value (ACV) - answer A valuation method used by insurers to reflect an item's current
market value right before being damaged or destroyed. Formula: (Replacement cost - Accumulated
Depreciation) 1-J
Actual Production History - answer A history of a farmer's crop yields over a multi-year period, which is
used to determine the normal production level of a farm. 3-E
Adhesion - answer Characteristic of an insurance contract. Means that one party (the insurer) sets the
terms, and the other (the policyholder) can "take it or leave it."1-B
Adjusted Gross Revenue (Crop Insurance) - answer Narrowest (and least expensive) form of Crop
Revenue Insurance. Insures farm revenue as a whole instead of individual crops. Guarantees a
percentage of the insured farm's average revenue. 3-E
Adjuster - answer An agent who, for compensation, processes insurance claims. Can represent either the
insured or the insurer. 2-B
Adjuster - Emergency - answer Adjusters who are temporarily licensed by the insurance commissioner to
handle claims during catastrophes or emergencies that produce an overwhelming number of claims in a
short period of time. 2-B
,Adjuster - Independent - answer Self-employed adjusters who contract with multiple insurers at the
same time. Paid on a commission or fee-plus-expenses basis for each claim. Also called: Fee Adjuster,
Bureau Adjuster 2-B
Adjuster - Public - answer An adjuster who is hired to represent the claimant and help determine a fair
indemnification. Usually specializes in appraisals and negotiation. Paid commission, usually a percentage
of final settlement. 2-B
Adjuster - Staff - answer Salaried employee of one insurance company who can work locally, regionally,
or nationally. Also called: Company Adjuster 2-B
Advance Payment Settlement - answer A settlement option that lets the insurer offer some financial
relief to the claimant before the claim has been fully settled. The insurer makes advance payments to the
claimant, which are then subtracted from the final settlement amount. Often used when a claimant
suffers bodily injury and is unable to work.2-D
Agency Authority - answer The Agent's authority to act on behalf of someone else, usually an insurer.
This authority is derived from the agent's contract with the insurer. 2-A
Agency Authority - express - answer Authority that is expressly given to the agent in writing. Allows
agent to act on behalf of the principal. 2-A
Agency Authority - implied - answer Authority that an agent possesses by implication of her behavior,
regardless of whether this authority is granted in writing. 2-A
Agency Authority - apparent - answer Authority that an agent possesses based on the appearance of
representing the insurer. 2-A
Agent - answer Someone who has received authority from an insurer to sell or service insurance policies.
2-A
Aggregate Limit - answer A type of policy limit found in some health, liability, and property damage
policies. It represents the total amount the insurer will pay for all losses (as opposed to an occurrence
limit, which denotes the total amount the insurer will pay per occurrence). 1-K
, Agreement - answer One of the four requirements of a legally binding contract. All parties involved must
agree to the terms of the contract. Can also refer to a binder, which is the preliminary substance of a
contract. 1-A
Agricultural Producer - answer A business that grows, harvests, and sells crops for profit. 3-E
Aleatory - answer A characteristic of an insurance contract. Means "depending on an unknown future
event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party knows
how much the contract will end up paying when they enter into the contract. 1-B
Answer - answer In liability cases, the defendant's response to a complaint. There are three possible
answers: 1) accept complaint and pay for damages, 2) deny the complaint, or 3) accept the complaint
with a right to insert evidence into the case. 1-L
Annual Depreciation - answer An item's Replacement cost divided by the number of years in its expected
lifespan. 1-J
Appraisal - answer A negotiation method which allows the claimant and the insurer each to select an
appraiser. The two appraisers in turn select an Umpire. The appraisers then work together to determine
a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is
binding. 2-D
Arbitration - answer A negotiation method in which the opposing parties each submit their evidence to a
mutually-agreed-upon and neutral third party, called an arbitrator. The arbitrator reviews the positions
of each opposing side, and makes a final and legally binding decision.
Arbitrator - answer The mutually-agreed-upon and neutral third party in an arbitration who reviews the
positions of each opposing side, and makes a final and legally binding decision. 2-D
Artificially Generated Current - answer Also called "artificial current." A peril covered in some property
insurance policies. It includes sudden and accidental damage from any electrical current, except currents
that are naturally generated, such as lightning or static electricity.3-A
exam questions with 100% correct
answers
Accumulated Depreciation - answer The total decrease in an item's value over a period of time.
Formula:(Annual Depreciation x Number ofyears used) 1-J
Acreage Reporting Date - answer The deadline for providing the insurer with an acreage report, which is
used to determine the amount of coverage needed and the premium charged for a particular crop. 3-E
Actual Cash Value (ACV) - answer A valuation method used by insurers to reflect an item's current
market value right before being damaged or destroyed. Formula: (Replacement cost - Accumulated
Depreciation) 1-J
Actual Production History - answer A history of a farmer's crop yields over a multi-year period, which is
used to determine the normal production level of a farm. 3-E
Adhesion - answer Characteristic of an insurance contract. Means that one party (the insurer) sets the
terms, and the other (the policyholder) can "take it or leave it."1-B
Adjusted Gross Revenue (Crop Insurance) - answer Narrowest (and least expensive) form of Crop
Revenue Insurance. Insures farm revenue as a whole instead of individual crops. Guarantees a
percentage of the insured farm's average revenue. 3-E
Adjuster - answer An agent who, for compensation, processes insurance claims. Can represent either the
insured or the insurer. 2-B
Adjuster - Emergency - answer Adjusters who are temporarily licensed by the insurance commissioner to
handle claims during catastrophes or emergencies that produce an overwhelming number of claims in a
short period of time. 2-B
,Adjuster - Independent - answer Self-employed adjusters who contract with multiple insurers at the
same time. Paid on a commission or fee-plus-expenses basis for each claim. Also called: Fee Adjuster,
Bureau Adjuster 2-B
Adjuster - Public - answer An adjuster who is hired to represent the claimant and help determine a fair
indemnification. Usually specializes in appraisals and negotiation. Paid commission, usually a percentage
of final settlement. 2-B
Adjuster - Staff - answer Salaried employee of one insurance company who can work locally, regionally,
or nationally. Also called: Company Adjuster 2-B
Advance Payment Settlement - answer A settlement option that lets the insurer offer some financial
relief to the claimant before the claim has been fully settled. The insurer makes advance payments to the
claimant, which are then subtracted from the final settlement amount. Often used when a claimant
suffers bodily injury and is unable to work.2-D
Agency Authority - answer The Agent's authority to act on behalf of someone else, usually an insurer.
This authority is derived from the agent's contract with the insurer. 2-A
Agency Authority - express - answer Authority that is expressly given to the agent in writing. Allows
agent to act on behalf of the principal. 2-A
Agency Authority - implied - answer Authority that an agent possesses by implication of her behavior,
regardless of whether this authority is granted in writing. 2-A
Agency Authority - apparent - answer Authority that an agent possesses based on the appearance of
representing the insurer. 2-A
Agent - answer Someone who has received authority from an insurer to sell or service insurance policies.
2-A
Aggregate Limit - answer A type of policy limit found in some health, liability, and property damage
policies. It represents the total amount the insurer will pay for all losses (as opposed to an occurrence
limit, which denotes the total amount the insurer will pay per occurrence). 1-K
, Agreement - answer One of the four requirements of a legally binding contract. All parties involved must
agree to the terms of the contract. Can also refer to a binder, which is the preliminary substance of a
contract. 1-A
Agricultural Producer - answer A business that grows, harvests, and sells crops for profit. 3-E
Aleatory - answer A characteristic of an insurance contract. Means "depending on an unknown future
event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party knows
how much the contract will end up paying when they enter into the contract. 1-B
Answer - answer In liability cases, the defendant's response to a complaint. There are three possible
answers: 1) accept complaint and pay for damages, 2) deny the complaint, or 3) accept the complaint
with a right to insert evidence into the case. 1-L
Annual Depreciation - answer An item's Replacement cost divided by the number of years in its expected
lifespan. 1-J
Appraisal - answer A negotiation method which allows the claimant and the insurer each to select an
appraiser. The two appraisers in turn select an Umpire. The appraisers then work together to determine
a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is
binding. 2-D
Arbitration - answer A negotiation method in which the opposing parties each submit their evidence to a
mutually-agreed-upon and neutral third party, called an arbitrator. The arbitrator reviews the positions
of each opposing side, and makes a final and legally binding decision.
Arbitrator - answer The mutually-agreed-upon and neutral third party in an arbitration who reviews the
positions of each opposing side, and makes a final and legally binding decision. 2-D
Artificially Generated Current - answer Also called "artificial current." A peril covered in some property
insurance policies. It includes sudden and accidental damage from any electrical current, except currents
that are naturally generated, such as lightning or static electricity.3-A
