review p c insurance basics questions
with right answers
which statement regarding "functional replacement cost" is correct?
•functional replacement cost is only available for buildings, not business contents
•functional replacement cost is only offered through non-admitted surplus lines insurers
•functional replacement cost covers the cost to replace with similar property that
performs the same function
•functional replacement cost is only applicable to buildings constructed before 1950 -
answersfunctional replacement cost covers the cost to replace with similar property that
performs the same function
which of the following is not considered a type of hazard?
•physical
•moral
•morale
•peril - answersperil
when the court determines the amount of liability awarded in a claim it is considered:
•contributory negligence
•intervening cause
•proximate cause
•comparative negligence - answerscomparitive negligenge
how do policy exclusions related to wear and tear or gradual deterioration help insurers
control costs?
•insurers can avoid paying for damages caused by natural wear and tear, reducing
claim frequency
•exclusions for wear and tear shift the responsibility for maintenance and repairs to the
policyholder
•exclusions for wear and tear encourage policyholders to properly maintain their
property
•insurers can charge higher premiums for policies that cover wear and tear or general
deterioration - answersinsurers can avoid paying for damages caused by natural wear
and tear, reducing claim frequency
the perils covered in a property and liability insurance contract are found in the:
•conditions
•exclusions
•declarations
, •insuring agreement - answersinsuring agreement
which of the following is true of casualty insurance, as opposed to property insurance?
•it seeks to indemnify the policyholder
•it pays the policyowner
•it covers damage to the policyowners property
•it can cover claims for personal injury - answersit can cover claims for personal injury
if the first named insured dies who is responsible for the duties under the policy?
•partner of the business
•spouse of the deceased
•director of the business
•temporary custodian - answerstemporary custodian
an insurer finds that a fraudulent claim was filed on property and decides to cancel the
policy. written notice of the cancellation must be sent to:
•the individual responsible for the fraudulent claim
•any household member
•all those listed on the policy
•the first named insured - answersthe first named insured
which of the following lowers premiums in an insurance policy?
•insuring more than one auto under one policy
•adding an additional insured
•deductibles
•endorsements - answersdeductibles
which of the following says the owner of an auto policy is responsible for an accident
caused by a friend who was permitted to borrow the car?
•vicarious liability
•strict liability
•absolute liability
•third party liability - answersvicarious liability
what damages awarded to the injured person are covered by liability insurance?
•neither general or special damages
•special damages
•general damages
•both general and special damages - answersboth general and special damages
in order to cover losses on a replacement cost basis insurance must be carried to what
percent of the replacement value?
•0.4
•80%
•0.6
•1 - answers80%
with right answers
which statement regarding "functional replacement cost" is correct?
•functional replacement cost is only available for buildings, not business contents
•functional replacement cost is only offered through non-admitted surplus lines insurers
•functional replacement cost covers the cost to replace with similar property that
performs the same function
•functional replacement cost is only applicable to buildings constructed before 1950 -
answersfunctional replacement cost covers the cost to replace with similar property that
performs the same function
which of the following is not considered a type of hazard?
•physical
•moral
•morale
•peril - answersperil
when the court determines the amount of liability awarded in a claim it is considered:
•contributory negligence
•intervening cause
•proximate cause
•comparative negligence - answerscomparitive negligenge
how do policy exclusions related to wear and tear or gradual deterioration help insurers
control costs?
•insurers can avoid paying for damages caused by natural wear and tear, reducing
claim frequency
•exclusions for wear and tear shift the responsibility for maintenance and repairs to the
policyholder
•exclusions for wear and tear encourage policyholders to properly maintain their
property
•insurers can charge higher premiums for policies that cover wear and tear or general
deterioration - answersinsurers can avoid paying for damages caused by natural wear
and tear, reducing claim frequency
the perils covered in a property and liability insurance contract are found in the:
•conditions
•exclusions
•declarations
, •insuring agreement - answersinsuring agreement
which of the following is true of casualty insurance, as opposed to property insurance?
•it seeks to indemnify the policyholder
•it pays the policyowner
•it covers damage to the policyowners property
•it can cover claims for personal injury - answersit can cover claims for personal injury
if the first named insured dies who is responsible for the duties under the policy?
•partner of the business
•spouse of the deceased
•director of the business
•temporary custodian - answerstemporary custodian
an insurer finds that a fraudulent claim was filed on property and decides to cancel the
policy. written notice of the cancellation must be sent to:
•the individual responsible for the fraudulent claim
•any household member
•all those listed on the policy
•the first named insured - answersthe first named insured
which of the following lowers premiums in an insurance policy?
•insuring more than one auto under one policy
•adding an additional insured
•deductibles
•endorsements - answersdeductibles
which of the following says the owner of an auto policy is responsible for an accident
caused by a friend who was permitted to borrow the car?
•vicarious liability
•strict liability
•absolute liability
•third party liability - answersvicarious liability
what damages awarded to the injured person are covered by liability insurance?
•neither general or special damages
•special damages
•general damages
•both general and special damages - answersboth general and special damages
in order to cover losses on a replacement cost basis insurance must be carried to what
percent of the replacement value?
•0.4
•80%
•0.6
•1 - answers80%
