7/13/25, 1:06
PM
CPCU 553 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
GRADED A++ 2025/2026
Terms in this set (154)
Special Damages form of compensatory damages for
specific, identifiable losses
Type of risk transfer Insurance; Hold Harmless Agreements;
Hedging
Unemployment sponsored by all states; 2/3 of all previous
Compensation income
Program
Six approaches to Tort Liability; Financial Responsibility
compensation of Laws; Compulsory Insurance Laws;
auto victimes Uninsured Motorists Coverage;
Underinsured Motorists Coverage;
No-Fault Laws
Financial Required to show proof after accident;
Responsibility Laws failure to do so results in license
suspensions
1/
16
,7/13/25, 1:06
PM
Compulsory Require to hold minimum level of
Insurance Laws insurance before registering vehicle;
prior to accident
No pay no play In states with compulsory insurance
laws laws; states that prohibit uninsured
drivers from initiating lawsuits
Unsatisfied fund for source of recovery when at
Judgement Funds fault motorist is unable to pay;
limited to minimum insurance
requirement
Uninsured + cannot collect both; negligent driver must
Underinsured be responsible
Underinsured Policy pays when insurance that the
Monetary Limits negligent driver carriers are lower
Trigger than the injured parties stated
underinsured limit
Underinsured Policy pays when the insurance that
Damages Trigger the negligent driver carriers are
lower than injured parties
damages
"Personal Injury included on an auto policy with no-
2/
16
, 7/13/25, 1:06
PM
Protection" fault insurance. Covers victim on first
party basis regardless of fault
Three Types of No- Modified No-Fault Plan, Add-On Plan,
Fault Laws Choice No-Fault Plan
Modified No Fault Can collect from PIP but also sue in some
Plan scenarios (monetary or verbal threshold)
Add-on No Fault Offers PIP but does not place any
Plan restriction on right to sue negligent
party; optional
Choice No Fault can choose Add-On (more $$) or Modified
Plan
Automobile assigned risk plan; most states have
Insurance Plan to insure high risk drivers on
proportional basis. Must prove
cannot obtain auto insurance
within 60 days
Joint Underwriting Similar to assigned risk plan but
Associations (JUAs) assign servicing insurers to handle
the rates and policies
Primary Auto Rating territory; use of auto; age; gender; martial
Factors status
Insurance Score credit based (financial history); may
be used as a secondary rating factor
3/
16
PM
CPCU 553 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
GRADED A++ 2025/2026
Terms in this set (154)
Special Damages form of compensatory damages for
specific, identifiable losses
Type of risk transfer Insurance; Hold Harmless Agreements;
Hedging
Unemployment sponsored by all states; 2/3 of all previous
Compensation income
Program
Six approaches to Tort Liability; Financial Responsibility
compensation of Laws; Compulsory Insurance Laws;
auto victimes Uninsured Motorists Coverage;
Underinsured Motorists Coverage;
No-Fault Laws
Financial Required to show proof after accident;
Responsibility Laws failure to do so results in license
suspensions
1/
16
,7/13/25, 1:06
PM
Compulsory Require to hold minimum level of
Insurance Laws insurance before registering vehicle;
prior to accident
No pay no play In states with compulsory insurance
laws laws; states that prohibit uninsured
drivers from initiating lawsuits
Unsatisfied fund for source of recovery when at
Judgement Funds fault motorist is unable to pay;
limited to minimum insurance
requirement
Uninsured + cannot collect both; negligent driver must
Underinsured be responsible
Underinsured Policy pays when insurance that the
Monetary Limits negligent driver carriers are lower
Trigger than the injured parties stated
underinsured limit
Underinsured Policy pays when the insurance that
Damages Trigger the negligent driver carriers are
lower than injured parties
damages
"Personal Injury included on an auto policy with no-
2/
16
, 7/13/25, 1:06
PM
Protection" fault insurance. Covers victim on first
party basis regardless of fault
Three Types of No- Modified No-Fault Plan, Add-On Plan,
Fault Laws Choice No-Fault Plan
Modified No Fault Can collect from PIP but also sue in some
Plan scenarios (monetary or verbal threshold)
Add-on No Fault Offers PIP but does not place any
Plan restriction on right to sue negligent
party; optional
Choice No Fault can choose Add-On (more $$) or Modified
Plan
Automobile assigned risk plan; most states have
Insurance Plan to insure high risk drivers on
proportional basis. Must prove
cannot obtain auto insurance
within 60 days
Joint Underwriting Similar to assigned risk plan but
Associations (JUAs) assign servicing insurers to handle
the rates and policies
Primary Auto Rating territory; use of auto; age; gender; martial
Factors status
Insurance Score credit based (financial history); may
be used as a secondary rating factor
3/
16
