Chapter 2 Property and Casualty Insurance Basics Quiz
1. The declarations page of the homeowners policy provides all of the follow-ing information
EXCEPT: A statement that earthquake damage is not covered
2. Which of the following types of valuation works best for property whosevalue does not
fluctuate much?: Agreed value
3. Which of the following is not included in a binder or temporary contract fora Standard Fire
Policy?: Effective hours that coverage commences
4. All of the following are conditions commonly found in the insurance policyEXCEPT:
Insuring agreement
5. 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'sprices. If the roof has been
depreciating at $200 per year and the insured's policy is written on the actual cash value,
ACV, how much will the policy paytoward the insured's new roof?: $5,000
6. If an insurer decides to nonrenew a commercial policy, how much priornotice must be
given to the first named insured?: 60 days
7. According to the doctrine of contributory negligence, when an individual is found to have
contributed to his or her own loss in any way, another party: maynot be held liable
8. Which part of an insurance policy covers claims-related expenses, rea- sonable expenses
incurred by an insured to protect damaged property fromfurther loss or defense expenses?:
Additional coverage
9. A Standard Fire Policy may be written to cover all of the following EXCEPT-
: Reinsurance
10. Which of the following definitions best defines the term "accident"?: A sudden, unplanned
and unexpected event, not under the control of the insured, resulting in injury or damage
neither expected nor intended
11. What provision in a property policy applies when the insurer broadens coverage but does
not increase the premium?: Liberalization clause
12. A deli owner has a businessowners liability policy. When a customer slipped and hurt
herself at the deli, the liability policy paid for medical expens-es. The customer, however, is
now suing the business owner beccause she claims there was no caution sign warning her that
the floor was wet. What isthe insurer obligated to do?: Pay to defend the policyowner in the
lawsuit becauseliability coverage contains a duty-to-defend provision
13. The transfer of an insured's right to seek damages from a negligent partyto the insurer is
found in which of the followng clauses?: Subrogation
14. Funding for the operation and administration of the Louisiana Insurance Guaranty
Association comes from: Annual assessments paid by member insur-ers
1. The declarations page of the homeowners policy provides all of the follow-ing information
EXCEPT: A statement that earthquake damage is not covered
2. Which of the following types of valuation works best for property whosevalue does not
fluctuate much?: Agreed value
3. Which of the following is not included in a binder or temporary contract fora Standard Fire
Policy?: Effective hours that coverage commences
4. All of the following are conditions commonly found in the insurance policyEXCEPT:
Insuring agreement
5. 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'sprices. If the roof has been
depreciating at $200 per year and the insured's policy is written on the actual cash value,
ACV, how much will the policy paytoward the insured's new roof?: $5,000
6. If an insurer decides to nonrenew a commercial policy, how much priornotice must be
given to the first named insured?: 60 days
7. According to the doctrine of contributory negligence, when an individual is found to have
contributed to his or her own loss in any way, another party: maynot be held liable
8. Which part of an insurance policy covers claims-related expenses, rea- sonable expenses
incurred by an insured to protect damaged property fromfurther loss or defense expenses?:
Additional coverage
9. A Standard Fire Policy may be written to cover all of the following EXCEPT-
: Reinsurance
10. Which of the following definitions best defines the term "accident"?: A sudden, unplanned
and unexpected event, not under the control of the insured, resulting in injury or damage
neither expected nor intended
11. What provision in a property policy applies when the insurer broadens coverage but does
not increase the premium?: Liberalization clause
12. A deli owner has a businessowners liability policy. When a customer slipped and hurt
herself at the deli, the liability policy paid for medical expens-es. The customer, however, is
now suing the business owner beccause she claims there was no caution sign warning her that
the floor was wet. What isthe insurer obligated to do?: Pay to defend the policyowner in the
lawsuit becauseliability coverage contains a duty-to-defend provision
13. The transfer of an insured's right to seek damages from a negligent partyto the insurer is
found in which of the followng clauses?: Subrogation
14. Funding for the operation and administration of the Louisiana Insurance Guaranty
Association comes from: Annual assessments paid by member insur-ers
