Maryland property and casualty Exam
Questions and Answers
An event or mindset that greatly Increases the change that a peril will actually occur is
known as
A) pure risk
B) speculative risk
C) hazard
D) Named peril - Answer- C. Hazard
Which of the following are components of load charges being added to premiums by the
insurer?
A) expected profit
B) admin expenses
C) commissions paid to agents
D) All of the answers listed - Answer- D. All of the answers listed
An unintended, unforeseen reduction or destruction of economic value is known as
A) loss valuation
B) occurrence
C) loss
D) Hazard - Answer- C. Loss
A policy that will cover any specific immediate losses unless they are excluded in the
policy for coverage is a
A) Specified peril
B) Open peril
C) named peril
D) None of the answers listed - Answer- B. Open peril
J has a policy and wants to know what his rights and duties of the policy will be and
what duties and rights the insurer has. J should read the:
A) insuring clause
B) conditions
,C) exclusions
D) declarations - Answer- B. Conditions
Company cabinet he pays $450 for every $600 and premium collected and also has
$100 in underwriting expenses what is the insurer's Loss ratio - Answer- B. 75%
V buys a home and has an idea to purposely set it on fire. But will make the loss look
like an accident to collect the benefits from the policy is an example of an - Answer-
Moral hazard
N has a policy that states if his property where to be damaged in the event Of loss that
this insurer Will provide benefits to buy brand new items at the time of loss. Which of the
following policy loss valuations does N have?
A) market value
B) replacement cost
C) actual cash value
D) Salvage value - Answer- B. Replacement cost
Underwriting guards against
A) healthy insureds
B) adverse selection
C) acceptable risks
D) All of the answers listed - Answer- B. Adverse selection
All of the following is correct about market value except
A) market value is the price at which property will sell in the regular market
B) market value is property value in the current market however the buyer nor seller is
forced to terms
C) market value takes into account for property value
D) An insured's home's valuation is based upon purchase price of the home - Answer-
D. An insureds homes valuation is based upon purchase price of the home
Which of the following would be an example of a peril
A) fire
B) Lightning
C) internal explosion
D) All of the answers listed - Answer- D. All of the answers listed
Which of the following is correct regarding stated value
A) The company will valuate loss based upon cost to repair property or state value
which ever is less at the time the claim Is filed
,B) Stated value will be used to determine premium amount
C) The lower the stated value in the contract the lower the premium will be for the policy
D) All of the answers listed - Answer- D.All of the answers listed
The part of the property contract that uses specific terms in the policy to avoid ambiguity
and allows both parties to understand their rights and coverages afforded under the
contract is known as
A) Definitions
B) declarations
C. Exclusions
D) Insuring clause - Answer- A.Definitions
Which of the following liability limits are given in addition to the applicable limits of
liability stated in the policy?
A) split limits
B) combined single limit
C) Per person liability
D) Additional (supplementary) payments - Answer- D. Additional (supplementary)
payments
B has a property policy and would like to know perils Are covered. B should read the
A) Insuring clause
B) Declarations
C) conditions
D) exclusions - Answer- A. Insuring clause
B has a policy with a per person limit of $10,000. B causes an accident which three
other insureds Are hurt. One person suffers $10,000 another suffers $7000 in the last
injured party suffered $12,000 in injuries. How much will B's policy Pay total to all three
injured parties?
A) $30,000
B) $29,000
C) $27,000
D) $20,000 - Answer- C. $27,000
Which of the following actions are listed under the duties of the insured provision in a
contract?
A) preventing further loss under reasonable condition
B) The injured providing immediate notice of loss
C) The insured providing all statement and paperwork that would help with claim
verification
, D) all answers listed - Answer- D. All answers listed
The stated maximum that and insurer Will pay on a loss that is listed in the declarations
is known as
A) coinsurance/insurance value
B) limits of liability
C) indemnity
D) pure risk - Answer- B. Limits of liability
And insured purchases a rental property for $250,000 it's replacement cost. He insures
it's for $150,000 under property coverage form with an 80% coinsurance clause with
$100 deductible. In the event of $100,000 loss how much will the insurer Pay on the
claim - Answer- $74,900
The name of the party that is listed in the declarations and is protected against all
covered losses is known as
A) applicant
B) insured
C) Insurer
D) Beneficiary - Answer- B. Insured
X owns a semi truck transportation company and has limits on where the property is
covered or not covered depending on specific geographic location this clause is known
as
A) declarations
B) exclusions
C) policy period
D) Policy territory - Answer- D. Policy territory
A)dwelling and detached structures on the insured's premises
B) Personal property of the insured
C) Loss of use
D) All of the answers listed - Answer- All of the answers listed
Section 2 of a homeowners policy provides
A) personal liability coverage
B) Medical payments to others coverage
C) Both personal liability and medical payments to others coverage
D) Coverage for personal property loss - Answer- Both personal liability and medical
payments to others coverage
Questions and Answers
An event or mindset that greatly Increases the change that a peril will actually occur is
known as
A) pure risk
B) speculative risk
C) hazard
D) Named peril - Answer- C. Hazard
Which of the following are components of load charges being added to premiums by the
insurer?
A) expected profit
B) admin expenses
C) commissions paid to agents
D) All of the answers listed - Answer- D. All of the answers listed
An unintended, unforeseen reduction or destruction of economic value is known as
A) loss valuation
B) occurrence
C) loss
D) Hazard - Answer- C. Loss
A policy that will cover any specific immediate losses unless they are excluded in the
policy for coverage is a
A) Specified peril
B) Open peril
C) named peril
D) None of the answers listed - Answer- B. Open peril
J has a policy and wants to know what his rights and duties of the policy will be and
what duties and rights the insurer has. J should read the:
A) insuring clause
B) conditions
,C) exclusions
D) declarations - Answer- B. Conditions
Company cabinet he pays $450 for every $600 and premium collected and also has
$100 in underwriting expenses what is the insurer's Loss ratio - Answer- B. 75%
V buys a home and has an idea to purposely set it on fire. But will make the loss look
like an accident to collect the benefits from the policy is an example of an - Answer-
Moral hazard
N has a policy that states if his property where to be damaged in the event Of loss that
this insurer Will provide benefits to buy brand new items at the time of loss. Which of the
following policy loss valuations does N have?
A) market value
B) replacement cost
C) actual cash value
D) Salvage value - Answer- B. Replacement cost
Underwriting guards against
A) healthy insureds
B) adverse selection
C) acceptable risks
D) All of the answers listed - Answer- B. Adverse selection
All of the following is correct about market value except
A) market value is the price at which property will sell in the regular market
B) market value is property value in the current market however the buyer nor seller is
forced to terms
C) market value takes into account for property value
D) An insured's home's valuation is based upon purchase price of the home - Answer-
D. An insureds homes valuation is based upon purchase price of the home
Which of the following would be an example of a peril
A) fire
B) Lightning
C) internal explosion
D) All of the answers listed - Answer- D. All of the answers listed
Which of the following is correct regarding stated value
A) The company will valuate loss based upon cost to repair property or state value
which ever is less at the time the claim Is filed
,B) Stated value will be used to determine premium amount
C) The lower the stated value in the contract the lower the premium will be for the policy
D) All of the answers listed - Answer- D.All of the answers listed
The part of the property contract that uses specific terms in the policy to avoid ambiguity
and allows both parties to understand their rights and coverages afforded under the
contract is known as
A) Definitions
B) declarations
C. Exclusions
D) Insuring clause - Answer- A.Definitions
Which of the following liability limits are given in addition to the applicable limits of
liability stated in the policy?
A) split limits
B) combined single limit
C) Per person liability
D) Additional (supplementary) payments - Answer- D. Additional (supplementary)
payments
B has a property policy and would like to know perils Are covered. B should read the
A) Insuring clause
B) Declarations
C) conditions
D) exclusions - Answer- A. Insuring clause
B has a policy with a per person limit of $10,000. B causes an accident which three
other insureds Are hurt. One person suffers $10,000 another suffers $7000 in the last
injured party suffered $12,000 in injuries. How much will B's policy Pay total to all three
injured parties?
A) $30,000
B) $29,000
C) $27,000
D) $20,000 - Answer- C. $27,000
Which of the following actions are listed under the duties of the insured provision in a
contract?
A) preventing further loss under reasonable condition
B) The injured providing immediate notice of loss
C) The insured providing all statement and paperwork that would help with claim
verification
, D) all answers listed - Answer- D. All answers listed
The stated maximum that and insurer Will pay on a loss that is listed in the declarations
is known as
A) coinsurance/insurance value
B) limits of liability
C) indemnity
D) pure risk - Answer- B. Limits of liability
And insured purchases a rental property for $250,000 it's replacement cost. He insures
it's for $150,000 under property coverage form with an 80% coinsurance clause with
$100 deductible. In the event of $100,000 loss how much will the insurer Pay on the
claim - Answer- $74,900
The name of the party that is listed in the declarations and is protected against all
covered losses is known as
A) applicant
B) insured
C) Insurer
D) Beneficiary - Answer- B. Insured
X owns a semi truck transportation company and has limits on where the property is
covered or not covered depending on specific geographic location this clause is known
as
A) declarations
B) exclusions
C) policy period
D) Policy territory - Answer- D. Policy territory
A)dwelling and detached structures on the insured's premises
B) Personal property of the insured
C) Loss of use
D) All of the answers listed - Answer- All of the answers listed
Section 2 of a homeowners policy provides
A) personal liability coverage
B) Medical payments to others coverage
C) Both personal liability and medical payments to others coverage
D) Coverage for personal property loss - Answer- Both personal liability and medical
payments to others coverage
