Property and Casualty Insurance
Exam Practice MT questions and
answers Graded A+
HO-2 - answersmid range home insurance policy that is named perils
HO-3 - answersMost common---open perils on house, named perils on personal
belongings
HO-4 - answersrenter's insurance...personal property and improvements covered
named perils
HO-5 - answersopen perils policy on home and personal property
HO-6 - answerstown home and condo named perils policy...owner only needs to insure
the interior
HO-8 - answersWORST POLICY---Named perils on home and belongings but only 10
perils covered
DP-1 - answersoffers most basic insurance for land lords...cheapest... named
perils(ACV)
DP-2 - answersaverage protection, named perils policy (Replacement Cost)
DP-3 - answersbest rental insurance. It is open perils excluding ordinance, earth
movement, water damage, power failure, nuclear hazard, intentional loss, mold, govn.
action... Replacement Cost----coverage similar to HO
Replacement Cost - answers
CPP - answerspurchased by large or expanding companies or companies w/
heightened risk...starts with property and general liability insurance
Business Income Insurance - answersreplaces lost revenue and covers expenses if
business is shut down due to any covered loss
Business Vehicle Insurance - answerscovers vehicles owned and used by your
business
Business Crime Insurance - answerscovers losses from burglary, corporate fraud,
employee dishonesty, and other crimes that are covered
,Commercial Umbrella Liability - answersincreases and broadens liability, filling in gaps
left by other coverages
Electronic Data Processing Coverage - answerscovers costs associated with the loss or
damage of electronic data processing media or equipment
Equipment Breakdown - answersaka Boiler and Machinery Insurance, covers losses
from the malfunction of heating, electrical, air conditioning, telephone system, and other
equip
Employment Practices Liability - answerscovers costs tied to disputes with employees
over issues
Inland Marine - answerscovers transport of goods over water and land
Pollution Liability - answerscovers costs related to pollution, including clean-up and
injuries
Commercial Building and Business Personal Property Form - answerscovers building,
business personal property and personal property of others for direct loss or damage,
subject to declared limits...includes add-ons
Causes of Loss Form - answerscauses of loss form is combined with one or more
coverage forms, the commercial property conditions, the common policy conditions
form, and the declarations to make up ISO commercial prop policy.
Basic - answers10 peril
Broad - answers16 peril
Special - answersall risk
Business Income - answerscoverage applies to loss suffered during repair or
replacement of damaged property
ISO Forms - answers1) business income and extra expense coverage form(CP0030)
2) Business Income coverage form without expense(CP0032)(BIC)
Extra Expense - answersaddition to or in stead of BIC. There are 2 ISO:
1) Commercial prop forms that provide extra expense coverage
2)extra expense coverage form
Equipment Breakdown(Commercial property) - answerscovers loss of equipment due to
mechanical or electrical issues(Replacement)
, Business Owners Policy(BOP) - answerspolicy for smaller companies, grants three
protections: Prop Insurance(Standard or Special), Business Interruption
Insurance(covers loss of income), and liability
Builder's Risk - answerscoverage that applies to person's or organization's insurable
interest in materials, fixtures, and equip used in building of structure
Personal Article Floaters - answersinsures valuable personal property(rings, necklace),
which usually aren't covered under HO coverage
Commercial Property Floaters - answersoffer protection for business prop that is not in
a fixed location...Attached to base prop insurance policy...covers in-transit
National Flood Insurance Program(Reasons for it) - answers-created to protect people
from floods
-must be in a community participating in NFIP(1968)
-if mortgage is backed by govn., you MUST have insurance
-if house is above flood-zone, rates are less
-flood insurance is important!!
Earthquake - answerscovers damage from earthquakes or other earth movement...rates
change on where you live and how high your risk is...this is optional and is NOT covered
under HO's
Mobile Homes:Comprehensive Coverage - answersprovides liability and prop damage
for mobile homes
Property Coverage(Watercraft) - answersprotects a boat from certain risks. May pay for
repairs or replacement
Liability Coverage(Watercraft) - answersmay help pay for expenses due to boat
accident that causes damage to someone else
Medical Payments Coverage(Watercraft) - answersmay help pay for medical expenses
of someone injured on your boat
Uninsured Watercraft Coverage - answerswill cover you for damage done by a boat that
is not insured
Farm Owners - answerscovers other structures and livestock on farm
Windstorm - answersin windy areas, companies exclude wind damage
Law of Large Numbers - answerscredibility of data increases with the size of the data
pool....some use adverse risk, which may single out high risk areas
Exam Practice MT questions and
answers Graded A+
HO-2 - answersmid range home insurance policy that is named perils
HO-3 - answersMost common---open perils on house, named perils on personal
belongings
HO-4 - answersrenter's insurance...personal property and improvements covered
named perils
HO-5 - answersopen perils policy on home and personal property
HO-6 - answerstown home and condo named perils policy...owner only needs to insure
the interior
HO-8 - answersWORST POLICY---Named perils on home and belongings but only 10
perils covered
DP-1 - answersoffers most basic insurance for land lords...cheapest... named
perils(ACV)
DP-2 - answersaverage protection, named perils policy (Replacement Cost)
DP-3 - answersbest rental insurance. It is open perils excluding ordinance, earth
movement, water damage, power failure, nuclear hazard, intentional loss, mold, govn.
action... Replacement Cost----coverage similar to HO
Replacement Cost - answers
CPP - answerspurchased by large or expanding companies or companies w/
heightened risk...starts with property and general liability insurance
Business Income Insurance - answersreplaces lost revenue and covers expenses if
business is shut down due to any covered loss
Business Vehicle Insurance - answerscovers vehicles owned and used by your
business
Business Crime Insurance - answerscovers losses from burglary, corporate fraud,
employee dishonesty, and other crimes that are covered
,Commercial Umbrella Liability - answersincreases and broadens liability, filling in gaps
left by other coverages
Electronic Data Processing Coverage - answerscovers costs associated with the loss or
damage of electronic data processing media or equipment
Equipment Breakdown - answersaka Boiler and Machinery Insurance, covers losses
from the malfunction of heating, electrical, air conditioning, telephone system, and other
equip
Employment Practices Liability - answerscovers costs tied to disputes with employees
over issues
Inland Marine - answerscovers transport of goods over water and land
Pollution Liability - answerscovers costs related to pollution, including clean-up and
injuries
Commercial Building and Business Personal Property Form - answerscovers building,
business personal property and personal property of others for direct loss or damage,
subject to declared limits...includes add-ons
Causes of Loss Form - answerscauses of loss form is combined with one or more
coverage forms, the commercial property conditions, the common policy conditions
form, and the declarations to make up ISO commercial prop policy.
Basic - answers10 peril
Broad - answers16 peril
Special - answersall risk
Business Income - answerscoverage applies to loss suffered during repair or
replacement of damaged property
ISO Forms - answers1) business income and extra expense coverage form(CP0030)
2) Business Income coverage form without expense(CP0032)(BIC)
Extra Expense - answersaddition to or in stead of BIC. There are 2 ISO:
1) Commercial prop forms that provide extra expense coverage
2)extra expense coverage form
Equipment Breakdown(Commercial property) - answerscovers loss of equipment due to
mechanical or electrical issues(Replacement)
, Business Owners Policy(BOP) - answerspolicy for smaller companies, grants three
protections: Prop Insurance(Standard or Special), Business Interruption
Insurance(covers loss of income), and liability
Builder's Risk - answerscoverage that applies to person's or organization's insurable
interest in materials, fixtures, and equip used in building of structure
Personal Article Floaters - answersinsures valuable personal property(rings, necklace),
which usually aren't covered under HO coverage
Commercial Property Floaters - answersoffer protection for business prop that is not in
a fixed location...Attached to base prop insurance policy...covers in-transit
National Flood Insurance Program(Reasons for it) - answers-created to protect people
from floods
-must be in a community participating in NFIP(1968)
-if mortgage is backed by govn., you MUST have insurance
-if house is above flood-zone, rates are less
-flood insurance is important!!
Earthquake - answerscovers damage from earthquakes or other earth movement...rates
change on where you live and how high your risk is...this is optional and is NOT covered
under HO's
Mobile Homes:Comprehensive Coverage - answersprovides liability and prop damage
for mobile homes
Property Coverage(Watercraft) - answersprotects a boat from certain risks. May pay for
repairs or replacement
Liability Coverage(Watercraft) - answersmay help pay for expenses due to boat
accident that causes damage to someone else
Medical Payments Coverage(Watercraft) - answersmay help pay for medical expenses
of someone injured on your boat
Uninsured Watercraft Coverage - answerswill cover you for damage done by a boat that
is not insured
Farm Owners - answerscovers other structures and livestock on farm
Windstorm - answersin windy areas, companies exclude wind damage
Law of Large Numbers - answerscredibility of data increases with the size of the data
pool....some use adverse risk, which may single out high risk areas
