Chapter Property and Casualty
Insurance Basics questions with
answers
What is the legal concept underlying insurance contracts that requires that the insured
or policy owner has to suffer financially or be harmed in another way if a loss occurs in
order for insurance to be issued? - answersInsurable interest
The type of damages that can be awarded in a liability suit to pay for a loss or injury that
is a direct consequence of the tort, but not a financial loss, is called: - answersGeneral
damages
All of the following are forms of liability recognized by the courts without the necessity of
establishing negligence except: - answersGeneral Liability
What is the term for the process of evaluating an insurance risk to determine whether
an insurance policy should be issued, and if so, at what rate and with what conditions or
exclusions, if any besides those within the policy's normal terms? - answersUnderwriting
The type of rating used by underwriters when they use their own knowledge and
experience to determine the rate that should be assigned to the applicant is: -
answersjudgment rating
The type of rate setting method established by state regulation that requires that rates
and rate changes be filed by the insurance company, but also allows the insurer to use
them immediately is the: - answersfile-and-use method
Which of the following is not a type of hazard that is of concern in insurance? -
answersPhilosophical hazard
A condition or conditions that increase the likelihood that the attitude of the insured or a
person who will be paid by the insurer will cause a loss is: - answersmorale hazard
Loss that does not result directly from a cause of loss insured against but is a result of a
direct loss is caused: - answersindirect or consequential loss
Replacement cost less depreciation is often defined as - answersactual cash value
Sandy owns a work of art created by a famous sculptor. When she purchased an
insurance policy to insure the art, she and the insurer agreed that the contract would
Insurance Basics questions with
answers
What is the legal concept underlying insurance contracts that requires that the insured
or policy owner has to suffer financially or be harmed in another way if a loss occurs in
order for insurance to be issued? - answersInsurable interest
The type of damages that can be awarded in a liability suit to pay for a loss or injury that
is a direct consequence of the tort, but not a financial loss, is called: - answersGeneral
damages
All of the following are forms of liability recognized by the courts without the necessity of
establishing negligence except: - answersGeneral Liability
What is the term for the process of evaluating an insurance risk to determine whether
an insurance policy should be issued, and if so, at what rate and with what conditions or
exclusions, if any besides those within the policy's normal terms? - answersUnderwriting
The type of rating used by underwriters when they use their own knowledge and
experience to determine the rate that should be assigned to the applicant is: -
answersjudgment rating
The type of rate setting method established by state regulation that requires that rates
and rate changes be filed by the insurance company, but also allows the insurer to use
them immediately is the: - answersfile-and-use method
Which of the following is not a type of hazard that is of concern in insurance? -
answersPhilosophical hazard
A condition or conditions that increase the likelihood that the attitude of the insured or a
person who will be paid by the insurer will cause a loss is: - answersmorale hazard
Loss that does not result directly from a cause of loss insured against but is a result of a
direct loss is caused: - answersindirect or consequential loss
Replacement cost less depreciation is often defined as - answersactual cash value
Sandy owns a work of art created by a famous sculptor. When she purchased an
insurance policy to insure the art, she and the insurer agreed that the contract would
