GEORGIA PROPERTY & CASUALTY
EXAM 2025 QUESTIONS AND
ANSWERS
An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate
glass window. The insured was found legally liable for the cost of replacing the
window. This is an example of - --Answer --vicarious liability
What type of compensatory damages will pay for pain and suffering and
disfigurement? - --Answer --General
Which insurance principle states that if a policy allows for greater compensation
than the financial loss incurred, the insured may only receive benefits for the
amount lost? - --Answer --Indemnity
Payment for medical expenses, loss of wages, funeral expenses, or the cost to
repair or replace damaged property are known as what type of compensatory
damages? - --Answer --Special
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,Which of the following best expresses the purpose of a stated value contract? - --
Answer --To pre-establish the amount of coverage available for property
items that are difficult to value
An insured carries a property policy on her home in the amount of $250,000. A
bank is shown as the mortgagor in the policy. Last month the insured made her
final mortgage payment, but did not remove the bank from the policy. In the event
of a covered loss to her home, how much will the bank receive? - --Answer -
-Nothing
Events or conditions that increase the chances of an insured loss occurring are
referred to as - --Answer --Hazards
What is the purpose of the coinsurance clause found in property insurance
policies? - --Answer --Encourage the insured to insure the property closer to
its full value
For the purpose of insurance, risk is defined as - --Answer --The uncertainty
or chance of loss
A beauty parlor burns to the ground. What type of loss is this to the owner? - --
Answer --Direct
When a parent is required to pay for damages caused by his or her children, this is
an example of - --Answer --Vicarious liability
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,If a liability policy had split limits of 50/100/30, what is the maximum amount that
would be payable in the event of injury to a single person? - --Answer --
$50,000
Which of the following coverages in dwelling and homewoners policies is for
indirect losses? - --Answer --Loss of use
Events in which a person has both the chance of winning or losing are classified as
- --Answer --Speculative risk
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become - --Answer --Larger
Which method of loss valuation is contrary to the basic concept of indemnity? - --
Answer --Replacement cost
What term includes damage where the insured peril was the proximate cause of
loss? - --Answer --Direct loss
A man is working on the roof of his house, and his neighbor is watching from the
ground. When roof shingles are thrown off the roof, they hit the neighbor in the
face, injuring his eye. Which best classifies the homeowner's legal liability? - --
Answer --Bodily injury
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and his policy is ACV, how much will
it pay toward the insured's new roof? - --Answer --$5,000
The insured's house is located one mile from the county's new landfill and across
from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if
something happened to it, but when the insured tried to sell it, the best offer he
received was $80,000. The insurance company will insure the house for only
$80,000. What method of valuation is used to insure this property? - --
Answer --Market value
Most insurance policies exclude losses by - --Answer --mysterious
disappearance
Losses caused by continuous or repeated exposure to conditions resulting in injury
persons or damage to property that is neither intended nor expected is the
definition of which of the following terms? - --Answer --Occurrence
With respect to the business of insurance, a hazard is - --Answer --Any
condition that increases the possibility of loss
Which of the following would be covered under personal injury liability? - --
Answer --Libel, slander, false arrest, invasion of privacy, and other acts
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
EXAM 2025 QUESTIONS AND
ANSWERS
An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate
glass window. The insured was found legally liable for the cost of replacing the
window. This is an example of - --Answer --vicarious liability
What type of compensatory damages will pay for pain and suffering and
disfigurement? - --Answer --General
Which insurance principle states that if a policy allows for greater compensation
than the financial loss incurred, the insured may only receive benefits for the
amount lost? - --Answer --Indemnity
Payment for medical expenses, loss of wages, funeral expenses, or the cost to
repair or replace damaged property are known as what type of compensatory
damages? - --Answer --Special
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,Which of the following best expresses the purpose of a stated value contract? - --
Answer --To pre-establish the amount of coverage available for property
items that are difficult to value
An insured carries a property policy on her home in the amount of $250,000. A
bank is shown as the mortgagor in the policy. Last month the insured made her
final mortgage payment, but did not remove the bank from the policy. In the event
of a covered loss to her home, how much will the bank receive? - --Answer -
-Nothing
Events or conditions that increase the chances of an insured loss occurring are
referred to as - --Answer --Hazards
What is the purpose of the coinsurance clause found in property insurance
policies? - --Answer --Encourage the insured to insure the property closer to
its full value
For the purpose of insurance, risk is defined as - --Answer --The uncertainty
or chance of loss
A beauty parlor burns to the ground. What type of loss is this to the owner? - --
Answer --Direct
When a parent is required to pay for damages caused by his or her children, this is
an example of - --Answer --Vicarious liability
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,If a liability policy had split limits of 50/100/30, what is the maximum amount that
would be payable in the event of injury to a single person? - --Answer --
$50,000
Which of the following coverages in dwelling and homewoners policies is for
indirect losses? - --Answer --Loss of use
Events in which a person has both the chance of winning or losing are classified as
- --Answer --Speculative risk
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become - --Answer --Larger
Which method of loss valuation is contrary to the basic concept of indemnity? - --
Answer --Replacement cost
What term includes damage where the insured peril was the proximate cause of
loss? - --Answer --Direct loss
A man is working on the roof of his house, and his neighbor is watching from the
ground. When roof shingles are thrown off the roof, they hit the neighbor in the
face, injuring his eye. Which best classifies the homeowner's legal liability? - --
Answer --Bodily injury
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and his policy is ACV, how much will
it pay toward the insured's new roof? - --Answer --$5,000
The insured's house is located one mile from the county's new landfill and across
from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if
something happened to it, but when the insured tried to sell it, the best offer he
received was $80,000. The insurance company will insure the house for only
$80,000. What method of valuation is used to insure this property? - --
Answer --Market value
Most insurance policies exclude losses by - --Answer --mysterious
disappearance
Losses caused by continuous or repeated exposure to conditions resulting in injury
persons or damage to property that is neither intended nor expected is the
definition of which of the following terms? - --Answer --Occurrence
With respect to the business of insurance, a hazard is - --Answer --Any
condition that increases the possibility of loss
Which of the following would be covered under personal injury liability? - --
Answer --Libel, slander, false arrest, invasion of privacy, and other acts
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
