Exam Fx-Property and Casualty
Questions and Answers 2026 | Solved
and Verified | 100% Accurate
• Insurance -✓✓Transfers the risk of loss from an individual or business
entity to an insurance company
• The three elements of insurable risk are -✓✓1) Financial 2) Blood
(relative) 3) Business
• Risk -✓✓The uncertainty or chance of a loss occurring
• Types of risks are -✓✓1) Pure risk 2) Speculative risk
• What type of risk does insurance cover? -✓✓Pure risk
• What is pure risk? -✓✓It can only result in a loss or no change
• What type of risk is not insurable? -✓✓speculative risk
• What is speculative risk? -✓✓Opportunity for loss or gain. For
example, gambling.
• What is a peril? -✓✓a specific cause of loss
• What is a hazard? -✓✓conditions or situations that increase the
probability of a loss occurring
• What is a loss? -✓✓reduction, decrease or disappearance of value of
the person or property insured.
, • What is indemnity? -✓✓provision in an insurance policy that states
that in the event of loss, an insured can only collect to the extent of the
financial loss. The insured is not allowed to gain financially.
• Subrogation -✓✓insurer's legal right to seek damages from third
parties after it has reimbursed the insured.
• Accident -✓✓The sudden, unplanned and unexpected event not under
the control of the insured. Neither expected or intended.
• Occurrence -✓✓losses caused by continuous or repeated exposure to
conditions neither intended or expected.
• Direct loss -✓✓direct, physical damage to buildings and/or personal
property
• Indirect Loss (consequential) -✓✓results of a direct loss
• What is the most prevalent indirect loss for homeowners? -✓✓Extra
living expense that may be incurred by the insured while the home is
being repaired.
• What is the primary type of indirect loss for commercial property? -
✓✓The loss of profits a business may suffer from closing business while
repaired.
• General damages -✓✓compensates an injured person for pain &
suffering, mental anguish and disfigurement
• Open Peril -✓✓ANY risk of loss not specifically excluded
• Named Peril -✓✓Specific covered perils. There is no coverage for
unlisted perils
Questions and Answers 2026 | Solved
and Verified | 100% Accurate
• Insurance -✓✓Transfers the risk of loss from an individual or business
entity to an insurance company
• The three elements of insurable risk are -✓✓1) Financial 2) Blood
(relative) 3) Business
• Risk -✓✓The uncertainty or chance of a loss occurring
• Types of risks are -✓✓1) Pure risk 2) Speculative risk
• What type of risk does insurance cover? -✓✓Pure risk
• What is pure risk? -✓✓It can only result in a loss or no change
• What type of risk is not insurable? -✓✓speculative risk
• What is speculative risk? -✓✓Opportunity for loss or gain. For
example, gambling.
• What is a peril? -✓✓a specific cause of loss
• What is a hazard? -✓✓conditions or situations that increase the
probability of a loss occurring
• What is a loss? -✓✓reduction, decrease or disappearance of value of
the person or property insured.
, • What is indemnity? -✓✓provision in an insurance policy that states
that in the event of loss, an insured can only collect to the extent of the
financial loss. The insured is not allowed to gain financially.
• Subrogation -✓✓insurer's legal right to seek damages from third
parties after it has reimbursed the insured.
• Accident -✓✓The sudden, unplanned and unexpected event not under
the control of the insured. Neither expected or intended.
• Occurrence -✓✓losses caused by continuous or repeated exposure to
conditions neither intended or expected.
• Direct loss -✓✓direct, physical damage to buildings and/or personal
property
• Indirect Loss (consequential) -✓✓results of a direct loss
• What is the most prevalent indirect loss for homeowners? -✓✓Extra
living expense that may be incurred by the insured while the home is
being repaired.
• What is the primary type of indirect loss for commercial property? -
✓✓The loss of profits a business may suffer from closing business while
repaired.
• General damages -✓✓compensates an injured person for pain &
suffering, mental anguish and disfigurement
• Open Peril -✓✓ANY risk of loss not specifically excluded
• Named Peril -✓✓Specific covered perils. There is no coverage for
unlisted perils
