7/13/25, 1:45
PM
CPCU 555 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
GRADED A++
Terms in this set (65)
Loss Exposure Any condition or
situation that presents a
possibility of loss,
whether or not an
actual loss occurs.
Endorsement A document that amends an insurance
policy.
Replacement Cost The cost to repair or replace property
using new materials of like kind and
quality with no deduction for
depreciation.
Actual Cash Value Cost to replace property with new
(ACV) property of like kind and quality less
depreciation.
The process by which an
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insurer can, after it has
paid a loss under the
Subrogation policy, recover the
amount paid from any
party (other than the
insured) who caused the
loss or is otherwise
legally liable for the
loss.
Money claimed by, or a
Damages monetary award to, a
party who has suffered
loss or injury for which
another party is
legally responsible.
Compensatory A payment awarded by a
Damages court to reimburse a
victim for actual harm.
A payment awarded
by a court to punish a
Punitive Damages defendant for a
(Exemplary reckless, malicious, or
Damages) deceitful act to deter
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PM
similar
conduct; the award need
not bear any relation to a
party's actual damages.
Separate coverage limits that allow one
Split-Limits Basis limit for bodily injury to each person; a
second usually higher limit for bodily
injury to all persons in each accident;
and a third limit for all property
damage in each accident.
Single-Limits Basis One coverage limit that applies to all
damages arising from bodily injury or
property damage or both, resulting
from a single accident.
Various expenses the insurer agrees
to pay under a liability insurance
Supplementary policy (in addition to the liability
Payments limits) for items such as premiums
on bail bonds and appeal bonds, loss
of the insured's earnings because of
attendance at trials, and other
reasonable expenses incurred by the
insured at the insurer's request.
3/
17
PM
CPCU 555 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
GRADED A++
Terms in this set (65)
Loss Exposure Any condition or
situation that presents a
possibility of loss,
whether or not an
actual loss occurs.
Endorsement A document that amends an insurance
policy.
Replacement Cost The cost to repair or replace property
using new materials of like kind and
quality with no deduction for
depreciation.
Actual Cash Value Cost to replace property with new
(ACV) property of like kind and quality less
depreciation.
The process by which an
1/
17
,7/13/25, 1:45
PM
insurer can, after it has
paid a loss under the
Subrogation policy, recover the
amount paid from any
party (other than the
insured) who caused the
loss or is otherwise
legally liable for the
loss.
Money claimed by, or a
Damages monetary award to, a
party who has suffered
loss or injury for which
another party is
legally responsible.
Compensatory A payment awarded by a
Damages court to reimburse a
victim for actual harm.
A payment awarded
by a court to punish a
Punitive Damages defendant for a
(Exemplary reckless, malicious, or
Damages) deceitful act to deter
2/
17
, 7/13/25, 1:45
PM
similar
conduct; the award need
not bear any relation to a
party's actual damages.
Separate coverage limits that allow one
Split-Limits Basis limit for bodily injury to each person; a
second usually higher limit for bodily
injury to all persons in each accident;
and a third limit for all property
damage in each accident.
Single-Limits Basis One coverage limit that applies to all
damages arising from bodily injury or
property damage or both, resulting
from a single accident.
Various expenses the insurer agrees
to pay under a liability insurance
Supplementary policy (in addition to the liability
Payments limits) for items such as premiums
on bail bonds and appeal bonds, loss
of the insured's earnings because of
attendance at trials, and other
reasonable expenses incurred by the
insured at the insurer's request.
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17
