Exam Fx-Property and Casualty
Questions and Answers (Updated
2026) | A+ Guaranteed | Fully Solved
• Warranty -✓✓A material stipulation in the policy that if breached may
void coverage.
• Waiver -✓✓The voluntary abandonment of a known or legal right or
advantage.
• Waiting Period -✓✓Time between the beginning of a disability and the
start of disability insurance benefits.
• Vicarious Liability -✓✓A type of liability in which one person is
responsible for the acts of another. For example, employers may be
vicariously liable for the actions of their employees, and parents may be
held responsible for negligent acts of their children.
• Valued Policy -✓✓A policy used when it is difficult to establish the
actual cash value of insured property after a loss occurs because of its
rarity or uniqueness. A valued policy provides for payment of the full
policy amount in the event of a total loss without regard to actual value
or depreciation.
• Vacant -✓✓A property that has no contents, furnishings, or occupants.
• Upmost Good Faith -✓✓The fair and equal bargaining by both parties
in forming the contract, where the applicant must make full disclosure of
risk to the company, and the insurance company must be fair in
underwriting the risk.
,• Unoccupied -✓✓A property that has contents or furnishings in it, but is
not being used or lived in.
• Unintentional Tort -✓✓The result of acting without proper care,
generally referred to as negligence.
• Uninsured Motorist Coverage -✓✓Coverage that allows the named
insured, resident relative(s) and passengers in a covered auto to collect
sums another driver would be legally liable to pay for bodily injury
resulting from an auto accident, providing the accident was caused by an
uninsured motorist, a hit-and-run driver or a driver whose insurance
company is insolvent.
• Underinsured Motorist Coverage -✓✓Coverage in an automobile
insurance policy under which the insurer will pay costs up to specified
limits for bodily injury, if the liable driver's policy limits are exhausted
and he/she cannot pay the full amount for which he or she is liable.
• Unilateral Contract -✓✓A contract that legally binds only one party to
contractual obligations after the premium is paid.
• Underwriting -✓✓The process of reviewing, accepting or rejecting
applications for insurance.
• Underwriter -✓✓A person who evaluates and classifies risks to accept
or reject them on behalf of the insurer.
• Unauthorized Insurer -✓✓An insurance company that has not applied,
or has applied and been denied a Certificate of Authority.
• Umbrella Liability Coverage -✓✓Coverage that provides extra
protection against liability, and excess amount of insurance above the
primary policy.
,• Twisting -✓✓A form of misrepresentation in which an agent persuades
an insured/owner to cancel, lapse, or switch policies, even when it's to
the insured's disadvantage.
• Transfer -✓✓A basic principle of insurance under which the risk of
financial loss is assigned to another party.
• Tort -✓✓A wrongful act or the violation of someone's rights that leads
to legal liability. Torts are classified as intentional or unilateral (referred
to as negligence).
• Third-Party Provisions -✓✓Insurance provisions that address the rights
of someone other than the policyowner to have a secured financial
interest in the insured property.
• Theft -✓✓Any act of stealing or removing property from its rightful
owner. Theft encompasses both burglary and robbery.
• Surplus Lines -✓✓Insurance for which there is no readily available,
admitted market.
• Surety Bond -✓✓A guarantee that debts and obligations will be carried
out, and the benefits will be paid for losses caused by nonperformance.
• Superintendent (Commissioner, Director) -✓✓The head of the state
department of insurance.
• Subrogation -✓✓The acquisition by an insurer of an insured's rights
against any third party for indemnification of loss or other payment, to
the extent that the insurer pays the loss.
, • Strict Liability -✓✓A liability that refers to damages caused by
defective products even though the manufacturer's fault or negligence
cannot be proven.
• Stock Companies -✓✓Companies owned by the stockholders whose
investments provide the capital necessary to establish and operate the
insurance company.
• Statute Law -✓✓The written law as enacted by a legislative body (i.e.
the laws of the state), which generally takes precedence in cases where
both common law and statute law apply.
• Stated Amount -✓✓An amount of insurance scheduled in a property
policy which is not subject to any coinsurance requirements in the event
of a covered loss.
• Split -✓✓Separately stated limits of liability for different coverage,
which may be stated on a per person, per occurrence, per policy period
basis, or can be divided between bodily injury and property damage.
• Speculative Risk -✓✓The uncertainty or chance of a loss occurring in a
situation that involves the opportunity for either loss or gain.
• Specific Insurance -✓✓A property insurance policy that covers a
specific kind or unit of property for a specific amount of insurance.
• Sharing -✓✓A method of dealing with risk for a group of individual
persons or businesses with the same or similar exposure to loss who
share the losses that occur within that group.
• Severability of Interests -✓✓A provision that insurance applies
separately to each insured in a policy, treating each individual as the
only insured.
Questions and Answers (Updated
2026) | A+ Guaranteed | Fully Solved
• Warranty -✓✓A material stipulation in the policy that if breached may
void coverage.
• Waiver -✓✓The voluntary abandonment of a known or legal right or
advantage.
• Waiting Period -✓✓Time between the beginning of a disability and the
start of disability insurance benefits.
• Vicarious Liability -✓✓A type of liability in which one person is
responsible for the acts of another. For example, employers may be
vicariously liable for the actions of their employees, and parents may be
held responsible for negligent acts of their children.
• Valued Policy -✓✓A policy used when it is difficult to establish the
actual cash value of insured property after a loss occurs because of its
rarity or uniqueness. A valued policy provides for payment of the full
policy amount in the event of a total loss without regard to actual value
or depreciation.
• Vacant -✓✓A property that has no contents, furnishings, or occupants.
• Upmost Good Faith -✓✓The fair and equal bargaining by both parties
in forming the contract, where the applicant must make full disclosure of
risk to the company, and the insurance company must be fair in
underwriting the risk.
,• Unoccupied -✓✓A property that has contents or furnishings in it, but is
not being used or lived in.
• Unintentional Tort -✓✓The result of acting without proper care,
generally referred to as negligence.
• Uninsured Motorist Coverage -✓✓Coverage that allows the named
insured, resident relative(s) and passengers in a covered auto to collect
sums another driver would be legally liable to pay for bodily injury
resulting from an auto accident, providing the accident was caused by an
uninsured motorist, a hit-and-run driver or a driver whose insurance
company is insolvent.
• Underinsured Motorist Coverage -✓✓Coverage in an automobile
insurance policy under which the insurer will pay costs up to specified
limits for bodily injury, if the liable driver's policy limits are exhausted
and he/she cannot pay the full amount for which he or she is liable.
• Unilateral Contract -✓✓A contract that legally binds only one party to
contractual obligations after the premium is paid.
• Underwriting -✓✓The process of reviewing, accepting or rejecting
applications for insurance.
• Underwriter -✓✓A person who evaluates and classifies risks to accept
or reject them on behalf of the insurer.
• Unauthorized Insurer -✓✓An insurance company that has not applied,
or has applied and been denied a Certificate of Authority.
• Umbrella Liability Coverage -✓✓Coverage that provides extra
protection against liability, and excess amount of insurance above the
primary policy.
,• Twisting -✓✓A form of misrepresentation in which an agent persuades
an insured/owner to cancel, lapse, or switch policies, even when it's to
the insured's disadvantage.
• Transfer -✓✓A basic principle of insurance under which the risk of
financial loss is assigned to another party.
• Tort -✓✓A wrongful act or the violation of someone's rights that leads
to legal liability. Torts are classified as intentional or unilateral (referred
to as negligence).
• Third-Party Provisions -✓✓Insurance provisions that address the rights
of someone other than the policyowner to have a secured financial
interest in the insured property.
• Theft -✓✓Any act of stealing or removing property from its rightful
owner. Theft encompasses both burglary and robbery.
• Surplus Lines -✓✓Insurance for which there is no readily available,
admitted market.
• Surety Bond -✓✓A guarantee that debts and obligations will be carried
out, and the benefits will be paid for losses caused by nonperformance.
• Superintendent (Commissioner, Director) -✓✓The head of the state
department of insurance.
• Subrogation -✓✓The acquisition by an insurer of an insured's rights
against any third party for indemnification of loss or other payment, to
the extent that the insurer pays the loss.
, • Strict Liability -✓✓A liability that refers to damages caused by
defective products even though the manufacturer's fault or negligence
cannot be proven.
• Stock Companies -✓✓Companies owned by the stockholders whose
investments provide the capital necessary to establish and operate the
insurance company.
• Statute Law -✓✓The written law as enacted by a legislative body (i.e.
the laws of the state), which generally takes precedence in cases where
both common law and statute law apply.
• Stated Amount -✓✓An amount of insurance scheduled in a property
policy which is not subject to any coinsurance requirements in the event
of a covered loss.
• Split -✓✓Separately stated limits of liability for different coverage,
which may be stated on a per person, per occurrence, per policy period
basis, or can be divided between bodily injury and property damage.
• Speculative Risk -✓✓The uncertainty or chance of a loss occurring in a
situation that involves the opportunity for either loss or gain.
• Specific Insurance -✓✓A property insurance policy that covers a
specific kind or unit of property for a specific amount of insurance.
• Sharing -✓✓A method of dealing with risk for a group of individual
persons or businesses with the same or similar exposure to loss who
share the losses that occur within that group.
• Severability of Interests -✓✓A provision that insurance applies
separately to each insured in a policy, treating each individual as the
only insured.
