WV Licensing Test Study Questions
1. Methods of risk management include:
A. Transfer
B. Sharing
C. Avoidance
D. All of the above. - ✔✔ correct answer D. All of the above.
2. An insured has suffered a fire loss to his/her dwelling. This insured is which party to the claim?
A. Third party
B. First party
C. Second party
D. Loss payee - ✔✔ correct answer B. First party
3. Mr. Jones, a pedestrian, was injured by Mr. Smith while driving his vehicle. Mr. Smith is insured by I Am
Bogus Insurance Company. The insurance company would be which party to the claim?
A. First party since they are the one that has to pay
B. The second party
C. The third party
D. Guarantor - ✔✔ correct answer B. The second party
4. Which of the following is NOT included in the Declarations section of an insurance contract?
A. The identity of the named insured
B. The policy period
C. The covered perils
D. The policy premium - ✔✔ correct answer C. The covered perils
5. Which of the following is the section of an insurance contract that contains the provisions, rules of
conduct, duties and obligations of the parties?
A. The Insuring Agreement
B. The Conditions
,WV Licensing Test Study Questions
C. The Exclusions
D. The Limitations - ✔✔ correct answer B. The Conditions
6. A loss that is a direct consequence of a particular peril is called a(n):
A. Indirect loss
B. Peril
C. Hazard
D. Direct loss - ✔✔ correct answer D. Direct loss
7. Which of the following is a clause in property and casualty contracts which states that if policy or
endorsement forms are broadened and no additional premium is required, then all existing similar
policies or endorsements will be construed to include the broadened coverage?
A. Liberalization
B. Assignment
C. Binder
D. Coinsurance - ✔✔ correct answer A. Liberalization
8. Which of the following provides written evidence of coverage pending the issuance of a policy?
A. Cause of Loss Form
B. Assignment
C. Binder
D. Blanket coverage - ✔✔ correct answer C. Binder
9. Which of the following is an example of a Loss Evaluation Method?
A. Liberalization
B. Cause of Loss form
C. Stated amount
D. Conditions - ✔✔ correct answer C. Stated amount
,WV Licensing Test Study Questions
10. The cost of replacement minus depreciation is the definition of:
A. Valued Policy
B. Market Value
C. Replacement Cost
D. Actual Cash Value - ✔✔ correct answer D. Actual Cash Value
11. Which of the following is a method of requiring the insured to insure at least 80% of the value of the
covered commercial property?
A. Cause of Loss Form
B. Standard Mortgage clause
C. Loss Payable clause
D. Coinsurance clause - ✔✔ correct answer D. Coinsurance clause
12. Which of the following is a basis for insuring property that allows the insured to report the value of
the building contents to the insurance company on a monthly basis?
A. Blanket Basis
B. Reporting Form
C. Specific Basis
D. Agreed Value - ✔✔ correct answer B. Reporting Form
13. Which of the following is NOT a factor in determining negligence on the part of the insured?
A. Legal duty is owed
B. There is a breach of protection
C. Proximate cause
D. Damage - ✔✔ correct answer B. There is a breach of protection
14. In liability insurance, policy limits that apply one limit to each person injured, another for bodily
injury claims of all persons injured in a single accident, and a separate limit for all property damage
arising out of a single accident is:
A. Aggregate limits
, WV Licensing Test Study Questions
B. Split limits
C. Single limit
D. Total limits - ✔✔ correct answer B. Split limits
15. An insurance contract that is contingent on an uncertain event is referred to as?
A. Executory
B. Aleatory
C. Contract of adhesion
D. Conditional - ✔✔ correct answer B. Aleatory
16. Mr. Jones is involved in an at-fault accident. The other party was also at fault. The method to
determine damages due to each party based on a percentage of negligence is known as:
A. Contributory negligence
B. Intervening cause
C. Comparative negligence
D. Assumption of risk - ✔✔ correct answer C. Comparative negligence
17. The insured owns a filling station and an employee causes bodily injury to a third party. The insured
is held legally liable for the employee's acts. This is called:
A. Contributory negligence
B. Joint and several
C. Contingent liability
D. Vicarious liability - ✔✔ correct answer D. Vicarious liability
18. One characteristic of an insurance contract is that both parties must perform certain acts to make
the contract legally enforceable. This is called:
A. Personal aspect
B. Aleatory
C. Executory
D. Utmost good faith - ✔✔ correct answer C. Executory
1. Methods of risk management include:
A. Transfer
B. Sharing
C. Avoidance
D. All of the above. - ✔✔ correct answer D. All of the above.
2. An insured has suffered a fire loss to his/her dwelling. This insured is which party to the claim?
A. Third party
B. First party
C. Second party
D. Loss payee - ✔✔ correct answer B. First party
3. Mr. Jones, a pedestrian, was injured by Mr. Smith while driving his vehicle. Mr. Smith is insured by I Am
Bogus Insurance Company. The insurance company would be which party to the claim?
A. First party since they are the one that has to pay
B. The second party
C. The third party
D. Guarantor - ✔✔ correct answer B. The second party
4. Which of the following is NOT included in the Declarations section of an insurance contract?
A. The identity of the named insured
B. The policy period
C. The covered perils
D. The policy premium - ✔✔ correct answer C. The covered perils
5. Which of the following is the section of an insurance contract that contains the provisions, rules of
conduct, duties and obligations of the parties?
A. The Insuring Agreement
B. The Conditions
,WV Licensing Test Study Questions
C. The Exclusions
D. The Limitations - ✔✔ correct answer B. The Conditions
6. A loss that is a direct consequence of a particular peril is called a(n):
A. Indirect loss
B. Peril
C. Hazard
D. Direct loss - ✔✔ correct answer D. Direct loss
7. Which of the following is a clause in property and casualty contracts which states that if policy or
endorsement forms are broadened and no additional premium is required, then all existing similar
policies or endorsements will be construed to include the broadened coverage?
A. Liberalization
B. Assignment
C. Binder
D. Coinsurance - ✔✔ correct answer A. Liberalization
8. Which of the following provides written evidence of coverage pending the issuance of a policy?
A. Cause of Loss Form
B. Assignment
C. Binder
D. Blanket coverage - ✔✔ correct answer C. Binder
9. Which of the following is an example of a Loss Evaluation Method?
A. Liberalization
B. Cause of Loss form
C. Stated amount
D. Conditions - ✔✔ correct answer C. Stated amount
,WV Licensing Test Study Questions
10. The cost of replacement minus depreciation is the definition of:
A. Valued Policy
B. Market Value
C. Replacement Cost
D. Actual Cash Value - ✔✔ correct answer D. Actual Cash Value
11. Which of the following is a method of requiring the insured to insure at least 80% of the value of the
covered commercial property?
A. Cause of Loss Form
B. Standard Mortgage clause
C. Loss Payable clause
D. Coinsurance clause - ✔✔ correct answer D. Coinsurance clause
12. Which of the following is a basis for insuring property that allows the insured to report the value of
the building contents to the insurance company on a monthly basis?
A. Blanket Basis
B. Reporting Form
C. Specific Basis
D. Agreed Value - ✔✔ correct answer B. Reporting Form
13. Which of the following is NOT a factor in determining negligence on the part of the insured?
A. Legal duty is owed
B. There is a breach of protection
C. Proximate cause
D. Damage - ✔✔ correct answer B. There is a breach of protection
14. In liability insurance, policy limits that apply one limit to each person injured, another for bodily
injury claims of all persons injured in a single accident, and a separate limit for all property damage
arising out of a single accident is:
A. Aggregate limits
, WV Licensing Test Study Questions
B. Split limits
C. Single limit
D. Total limits - ✔✔ correct answer B. Split limits
15. An insurance contract that is contingent on an uncertain event is referred to as?
A. Executory
B. Aleatory
C. Contract of adhesion
D. Conditional - ✔✔ correct answer B. Aleatory
16. Mr. Jones is involved in an at-fault accident. The other party was also at fault. The method to
determine damages due to each party based on a percentage of negligence is known as:
A. Contributory negligence
B. Intervening cause
C. Comparative negligence
D. Assumption of risk - ✔✔ correct answer C. Comparative negligence
17. The insured owns a filling station and an employee causes bodily injury to a third party. The insured
is held legally liable for the employee's acts. This is called:
A. Contributory negligence
B. Joint and several
C. Contingent liability
D. Vicarious liability - ✔✔ correct answer D. Vicarious liability
18. One characteristic of an insurance contract is that both parties must perform certain acts to make
the contract legally enforceable. This is called:
A. Personal aspect
B. Aleatory
C. Executory
D. Utmost good faith - ✔✔ correct answer C. Executory
