WA STATE PROPERTY & CASUALTY
STATE EXAM QUESTIONS &
ACCURATE COMPLETE SOLUTIONS
RATED 100% CORRECT
Assignment - Correct Answer ✔✔ The transfer of a policy to another party. Often done
when commercial property is sold to a new owner.
Building & Personal Property (BPP) - Correct Answer ✔✔ The commercial property
policy for larger businesses.
Business Income Policy - Correct Answer ✔✔ A commercial policy covering the indirect
loss of income following a loss.
Cancellation - Correct Answer ✔✔ Termination of a policy during the policy period.
Casualty Insurance - Correct Answer ✔✔ A broad term which includes all of the policy
types that may be sold with a Casualty License - in most states this includes auto,
liability, work comp, commercial crime, and surety bonds.
Claims Made Form - Correct Answer ✔✔ A policy that pays according to the coverage
in effect in the year the claim is made rather than according to the coverage in effect at
the time of the loss. Professional Liability policies are usually written on a Claims Made
basis, while other Liability Policies are written on an Occurrence Basis.
Coinsurance Clause - Correct Answer ✔✔ The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the Insurer will not
fully cover a partial loss.
Commercial Package Policy (CPP) - Correct Answer ✔✔ A bundling of commercial
policies
Competent Party - Correct Answer ✔✔ A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of majority (age 15
in most states).
Employers Liability - Correct Answer ✔✔ The section of a Work Comp policy covering
the employer for claims made by the injured worker's family members.
,Fair Credit Reporting Act - Correct Answer ✔✔ What an item would sell for in the
marketplace.
Fidelity Bond - Correct Answer ✔✔ A contract sold by a Surety Producer to cover
employee theft.
Gramm-Leach-Bliley Act - Correct Answer ✔✔ A federal law which protects consumer
privacy and which encourages the states to adopt uniform licensing standards.
Hazzard - Correct Answer ✔✔ Any factor that increases the likelihood that a peril will
occur.
Twisting - Correct Answer ✔✔ Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any insured to
lapse, terminate, forfeit, surrender, retain or convert any insurance policy.
Law of Large Numbers - Correct Answer ✔✔ The maximum the policy will pay for any
one loss - this amount will be stated on the Declarations.
Medical Payments - Correct Answer ✔✔ A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will have a
specified Limit of Liability for "med pay." Medical payments are never made to the
Insured.
Morale Hazzard - Correct Answer ✔✔ An Insured's carelessness or indifference which
will make a loss more likely to occur.
Moral Hazzard - Correct Answer ✔✔ Refer to the fact that we all act differently when we
have insurance. We are simply less likely to prevent a loss if we know that the Insurer
will pay the claim. Moral Hazzard may also refer to a thief or arsonist who intentionally
causes a loss.
Mutual Insurer - Correct Answer ✔✔ An insurance company owned by the policy
holders.
Inherent Vice - Correct Answer ✔✔ A loss caused by natural deterioration. Insurers will
not pay claims for inherent vice.
Extra Expense Policy - Correct Answer ✔✔ Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
Business Income Policy - Correct Answer ✔✔ A commercial policy covering the indirect
loss of income following a loss.
Comprehension Coverage - Correct Answer ✔✔ Physical damage insurance that
covers all property losses except collision. Also known as "Other than Collision."
, Concealment - Correct Answer ✔✔ Intentionally hiding the truth or intentionally telling
only a partial truth.
Conditions Section - Correct Answer ✔✔ The part of the policy containing the details of
the policy, including the duties of the Insured.
Consent to Settle Provision - Correct Answer ✔✔ The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior to any claim
settlement.
Consideration - Correct Answer ✔✔ Something of value given by each party in a
contract.
Declarations - Correct Answer ✔✔ The "Dec Sheet" is the first page of the policy and
includes the "fill-in-the blanks" information obtained by the Producer, including the
names of the parties, the description of the covered property, the policy's limit of liability,
the duration of the policy, the amount of the premium, and the amount of the deductible.
Deductible - Correct Answer ✔✔ The amount of loss that the insured must pay before
the policy will begin to pay.
Direct Loss - Correct Answer ✔✔ Damage to property from a covered peril. Property
policies typically cover Direct Losses and exclude Indirect Losses.
Stock Insurer - Correct Answer ✔✔ An insurer owned by investors, as opposed to a
mutual insurer which is owned by the policy holders.
Uninsured Motor Vehicle - Correct Answer ✔✔ A vehicle driven by one who has the
state required amount of liability insurance but who does not have adequate insurance,
or who is a hit and run driver.
Unilateral Contract - Correct Answer ✔✔ A contract which contains only one promise.
Insurance policies are unilateral because they contain the Insurer's promise to pay a
claim but do not contain a promise by the Insured to pay future premiums.
Underwriting - Correct Answer ✔✔ The process of selecting and classifying risks.
Underinsured Motor Vehicle - Correct Answer ✔✔ A vehicle driven by one who has the
state required amount of liability insurance but who does have adequate insurance to
cover a liability claim.
Strict Liability - Correct Answer ✔✔ A legal concept holding manufacturers, distributors,
and retailers of products liable for products which are defective and unreasonably
dangerous.
STATE EXAM QUESTIONS &
ACCURATE COMPLETE SOLUTIONS
RATED 100% CORRECT
Assignment - Correct Answer ✔✔ The transfer of a policy to another party. Often done
when commercial property is sold to a new owner.
Building & Personal Property (BPP) - Correct Answer ✔✔ The commercial property
policy for larger businesses.
Business Income Policy - Correct Answer ✔✔ A commercial policy covering the indirect
loss of income following a loss.
Cancellation - Correct Answer ✔✔ Termination of a policy during the policy period.
Casualty Insurance - Correct Answer ✔✔ A broad term which includes all of the policy
types that may be sold with a Casualty License - in most states this includes auto,
liability, work comp, commercial crime, and surety bonds.
Claims Made Form - Correct Answer ✔✔ A policy that pays according to the coverage
in effect in the year the claim is made rather than according to the coverage in effect at
the time of the loss. Professional Liability policies are usually written on a Claims Made
basis, while other Liability Policies are written on an Occurrence Basis.
Coinsurance Clause - Correct Answer ✔✔ The policy provision which sates that if the
Insured has less than a specified amount of coverage (usually 80%), the Insurer will not
fully cover a partial loss.
Commercial Package Policy (CPP) - Correct Answer ✔✔ A bundling of commercial
policies
Competent Party - Correct Answer ✔✔ A person who is capable of entering into an
insurance contract. Such a person must be sane, sober, and of age of majority (age 15
in most states).
Employers Liability - Correct Answer ✔✔ The section of a Work Comp policy covering
the employer for claims made by the injured worker's family members.
,Fair Credit Reporting Act - Correct Answer ✔✔ What an item would sell for in the
marketplace.
Fidelity Bond - Correct Answer ✔✔ A contract sold by a Surety Producer to cover
employee theft.
Gramm-Leach-Bliley Act - Correct Answer ✔✔ A federal law which protects consumer
privacy and which encourages the states to adopt uniform licensing standards.
Hazzard - Correct Answer ✔✔ Any factor that increases the likelihood that a peril will
occur.
Twisting - Correct Answer ✔✔ Is the illegal and means that no person can, by
misrepresentations or misleading comparisons, induce, or tend to induce any insured to
lapse, terminate, forfeit, surrender, retain or convert any insurance policy.
Law of Large Numbers - Correct Answer ✔✔ The maximum the policy will pay for any
one loss - this amount will be stated on the Declarations.
Medical Payments - Correct Answer ✔✔ A liability insurance term which refers to
payment for a victim's medical bills without regard to fault. The policy will have a
specified Limit of Liability for "med pay." Medical payments are never made to the
Insured.
Morale Hazzard - Correct Answer ✔✔ An Insured's carelessness or indifference which
will make a loss more likely to occur.
Moral Hazzard - Correct Answer ✔✔ Refer to the fact that we all act differently when we
have insurance. We are simply less likely to prevent a loss if we know that the Insurer
will pay the claim. Moral Hazzard may also refer to a thief or arsonist who intentionally
causes a loss.
Mutual Insurer - Correct Answer ✔✔ An insurance company owned by the policy
holders.
Inherent Vice - Correct Answer ✔✔ A loss caused by natural deterioration. Insurers will
not pay claims for inherent vice.
Extra Expense Policy - Correct Answer ✔✔ Commercial property coverage to pay for
the extra cost of continuing a business after a loss.
Business Income Policy - Correct Answer ✔✔ A commercial policy covering the indirect
loss of income following a loss.
Comprehension Coverage - Correct Answer ✔✔ Physical damage insurance that
covers all property losses except collision. Also known as "Other than Collision."
, Concealment - Correct Answer ✔✔ Intentionally hiding the truth or intentionally telling
only a partial truth.
Conditions Section - Correct Answer ✔✔ The part of the policy containing the details of
the policy, including the duties of the Insured.
Consent to Settle Provision - Correct Answer ✔✔ The provision in an E&O policy or
Employment Practices Liability Policy requiring the Insured's consent prior to any claim
settlement.
Consideration - Correct Answer ✔✔ Something of value given by each party in a
contract.
Declarations - Correct Answer ✔✔ The "Dec Sheet" is the first page of the policy and
includes the "fill-in-the blanks" information obtained by the Producer, including the
names of the parties, the description of the covered property, the policy's limit of liability,
the duration of the policy, the amount of the premium, and the amount of the deductible.
Deductible - Correct Answer ✔✔ The amount of loss that the insured must pay before
the policy will begin to pay.
Direct Loss - Correct Answer ✔✔ Damage to property from a covered peril. Property
policies typically cover Direct Losses and exclude Indirect Losses.
Stock Insurer - Correct Answer ✔✔ An insurer owned by investors, as opposed to a
mutual insurer which is owned by the policy holders.
Uninsured Motor Vehicle - Correct Answer ✔✔ A vehicle driven by one who has the
state required amount of liability insurance but who does not have adequate insurance,
or who is a hit and run driver.
Unilateral Contract - Correct Answer ✔✔ A contract which contains only one promise.
Insurance policies are unilateral because they contain the Insurer's promise to pay a
claim but do not contain a promise by the Insured to pay future premiums.
Underwriting - Correct Answer ✔✔ The process of selecting and classifying risks.
Underinsured Motor Vehicle - Correct Answer ✔✔ A vehicle driven by one who has the
state required amount of liability insurance but who does have adequate insurance to
cover a liability claim.
Strict Liability - Correct Answer ✔✔ A legal concept holding manufacturers, distributors,
and retailers of products liable for products which are defective and unreasonably
dangerous.
