Exam Fx-Property and Casualty Exam QUESTIONS AND ANSWERS| GRADED A
To be considered an insurable risk, a loss may NOT be Correct Answer: catastrophic
Which of the following persons would be required to hold a producer license? Correct Answer:
a nonresident agent who negotiates insurance contracts
Which of the following is the oldest known type of insurance? Correct Answer: ocean marine
The contents coverage on a homeowners policy would pay how much after the loss of one of a
pair of golden candlesticks? Correct Answer: the difference in the actual cash value as a pair and
as a single
Which of the following additional perils is covered under both of the Basic and Broad forms in
dwelling policies? Correct Answer: internal explosion
When would a misrepresentation on the insurance application be considered fraud? Correct
Answer: If it is intentional and material
A bond is written for a set limit, and the surety will be liable only for this amount. This limit is
known as the Correct Answer: penalty
In insurance, an offer is usually made when Correct Answer: the application is submitted
All of the following actions by a producer may be grounds for license revocation or non-renewal
EXCEPT Correct Answer: participating in controlled business
In personal auto policies, the term "you" refers to Correct Answer: the named insured
Business personal property coverage form covers all of the following except: Correct Answer:
automobiles held for sale
in dwelling policies, automatic increase in insurance is Correct Answer: coverage by
endorsement
To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher
than Correct Answer: 6 stories
Elaborate homes with replacement costs greater than ACV or market value are insured on the
Correct Answer: HO-8 Form
Which of the following dwelling coverage forms would pay replacement cost for the dwelling?
Correct Answer: DP-2 and DP-3
Business personal property coverage insures property out in the open if it is Correct Answer:
Within 100 feet of the described premises
, A runaway shopping cart injures a customer in a supermarket's parking lot. Coverage for this
claim would be provided under Correct Answer: premises and operations
Which of the following businesses would be eligible for a businessowners policy? Correct
Answer: Hill & Morton Funeral Home
The designation symbols used in commercial auto policies can be found in which policy section?
Correct Answer: covered auto
Which of the following is used in the formula for calculating the actual cash value (ACV) of a
property? Correct Answer: replacement cost
What type of bond guarantees that the principal will complete the contract as agreed upon?
Correct Answer: performance bond
Peril is most easily defined as Correct Answer: The cause of loss insured against
An insured building has had no residents for 10 years and it is empty of personal belongings.
From an insurance standpoint, the building is Correct Answer: vacant
Under a workers compensation policy, premiums will be determined when Correct Answer: the
policy period ends
Which commercial property form is used to insure buildings while under construction? Correct
Answer: Builders risk
Which of the following information will be found in the Declarations page of the commercial
property policy? Correct Answer: description of the policy insured
An insured is injured while driving his own car. Which personal auto coverage will pay for the
loss? Correct Answer: Part B-Medical Payments
According to the BOP definitions, which of the following does NOT mean valuable papers and
records? Correct Answer: Securities
Supplementary payments under the personal auto policy include all of the following EXCEPT?
Correct Answer: unlimited cost of bail bonds
Items of property that would be difficult to appraise after a loss are best insured with Correct
Answer: stated-amount insurance
Which of the following is NOT consideration in an insurance policy? Correct Answer: the
application given to a perspective insured
To be considered an insurable risk, a loss may NOT be Correct Answer: catastrophic
Which of the following persons would be required to hold a producer license? Correct Answer:
a nonresident agent who negotiates insurance contracts
Which of the following is the oldest known type of insurance? Correct Answer: ocean marine
The contents coverage on a homeowners policy would pay how much after the loss of one of a
pair of golden candlesticks? Correct Answer: the difference in the actual cash value as a pair and
as a single
Which of the following additional perils is covered under both of the Basic and Broad forms in
dwelling policies? Correct Answer: internal explosion
When would a misrepresentation on the insurance application be considered fraud? Correct
Answer: If it is intentional and material
A bond is written for a set limit, and the surety will be liable only for this amount. This limit is
known as the Correct Answer: penalty
In insurance, an offer is usually made when Correct Answer: the application is submitted
All of the following actions by a producer may be grounds for license revocation or non-renewal
EXCEPT Correct Answer: participating in controlled business
In personal auto policies, the term "you" refers to Correct Answer: the named insured
Business personal property coverage form covers all of the following except: Correct Answer:
automobiles held for sale
in dwelling policies, automatic increase in insurance is Correct Answer: coverage by
endorsement
To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher
than Correct Answer: 6 stories
Elaborate homes with replacement costs greater than ACV or market value are insured on the
Correct Answer: HO-8 Form
Which of the following dwelling coverage forms would pay replacement cost for the dwelling?
Correct Answer: DP-2 and DP-3
Business personal property coverage insures property out in the open if it is Correct Answer:
Within 100 feet of the described premises
, A runaway shopping cart injures a customer in a supermarket's parking lot. Coverage for this
claim would be provided under Correct Answer: premises and operations
Which of the following businesses would be eligible for a businessowners policy? Correct
Answer: Hill & Morton Funeral Home
The designation symbols used in commercial auto policies can be found in which policy section?
Correct Answer: covered auto
Which of the following is used in the formula for calculating the actual cash value (ACV) of a
property? Correct Answer: replacement cost
What type of bond guarantees that the principal will complete the contract as agreed upon?
Correct Answer: performance bond
Peril is most easily defined as Correct Answer: The cause of loss insured against
An insured building has had no residents for 10 years and it is empty of personal belongings.
From an insurance standpoint, the building is Correct Answer: vacant
Under a workers compensation policy, premiums will be determined when Correct Answer: the
policy period ends
Which commercial property form is used to insure buildings while under construction? Correct
Answer: Builders risk
Which of the following information will be found in the Declarations page of the commercial
property policy? Correct Answer: description of the policy insured
An insured is injured while driving his own car. Which personal auto coverage will pay for the
loss? Correct Answer: Part B-Medical Payments
According to the BOP definitions, which of the following does NOT mean valuable papers and
records? Correct Answer: Securities
Supplementary payments under the personal auto policy include all of the following EXCEPT?
Correct Answer: unlimited cost of bail bonds
Items of property that would be difficult to appraise after a loss are best insured with Correct
Answer: stated-amount insurance
Which of the following is NOT consideration in an insurance policy? Correct Answer: the
application given to a perspective insured
