Property and Casualty License in Arkansas Exam Questions & Answers 100% Correct

What is Risk? - ANSWER-Chance of loss occuring What are 3 types of Hazzards? - ANSWER-Physical, Moral, Morale What is a Peril? - ANSWER-Causes of loss insured against What does Indemnify mean? - ANSWER-Right for Reimbursement but only to the extent of the loss. Cannot gain from loss. Define Subrogation - ANSWER-Right to seek damages from 3rd party so that the insured cannot collect 2xs. What is an accident? - ANSWER-Sudden unplanned event resulting in a loss What is an occurrence? - ANSWER-Repeated action or event that results in a loss What is a direct loss? - ANSWER-Things physically loss. For ex. If a fire burned down a house that would be a direct loss of the fire. What is an indirect loss? - ANSWER-A loss resulting from the direct loss. For Ex. If a fire burned down a house and you had to rent a hotel room the added expense of the hotel would be an indirect loss of the fire. What is a vacancy? - ANSWER-When someone has been absent and no property is stored on the premises for 60 days consecutively. What is unoccupied? - ANSWER-When someone has been absent from the premises for more than 60 consecutive days but still has property stored there. What type of insurance provides coverage for multiple classes of property at one location? - ANSWER-Blanket Insurance Explain the actual cash value method of valuation - ANSWER-Current replacement cost-depreciation = ACV When absolute liability is involved, does the injured party have to prove negligence? - ANSWER-No