ILLINOIS CASUALTY INSURANCE
STATE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS 100% CORRECT
Peril – Answer ✔✔
An event or cause that leads to damage, injury, or financial loss resulting in an
insurance claim
Risk – Answer ✔✔
The possibility or likelihood that a harmful or unexpected event may occur and
produce a loss
Speculative Risk – Answer ✔✔
A type of risk involving the chance of either financial gain or financial loss
Pure Risk – Answer ✔✔
A situation involving only the possibility of loss or no loss, with no opportunity for
profit
Hazard – Answer ✔✔
A condition or circumstance that increases the likelihood of a peril or loss
occurring
Indemnity – Answer ✔✔
Payment made by an insurance company to restore the insured financially after a
covered loss
,Indemnity -ANSWER ✔✔Compensation payments made from the insurance
company to the insured to compensate for a loss
Insurable Interest -ANSWER ✔✔Reasonable concern for a person to obtain
insurance against unforeseen events (death, losses)
Actual Cash Value Coverage -ANSWER ✔✔Amount of $ the insurance company
will pay to the insured to cover the value of replacement cost minus damages
(depreciation) at time of loss
Replacement Cost -ANSWER ✔✔Amount of $ the insurance company will pay to
the insured to compensate value of similar or same property
Negligence -ANSWER ✔✔Failure to act in a reasonable/expected way that results
in a loss
Limits of Liability -ANSWER ✔✔The amount of money the insurance company
will pay if something bad happens to you or your property
Supplemental Payments -ANSWER ✔✔Things specified in auto policies that
insurance company will pay for in addition to the auto policy limits of liability
(first aid expenses, appeal and bond expenses)
Burglary -ANSWER ✔✔Theft of property from one premises to another with
forced entry or exit
Robbery -ANSWER ✔✔Theft of property from one premises to another by force
or threat of force
, Theft -ANSWER ✔✔Intent to steal property with intent to deprive the owner
Bond -ANSWER ✔✔A contract that guarantees a promise
(Principal, Obligee, Surety)
Fair Credit Reporting Act -ANSWER ✔✔The applicants right to information
regarding their insurance policies
Law of Torts -ANSWER ✔✔Legal proceeding through which claims for money
for bodily injuries and/or property damage are made.
Commercial General Liability Policy -ANSWER ✔✔Covers liability for insured's
business as well as new hazards arising during the policy term, whether they are
reported to the insurance company or not. The CGL policy covers legal liability for
all members of the business.
Comprehensive (All-Risk) Coverage -ANSWER ✔✔Covers all forms of damage
to insured auto except those excluded ***
Collision Coverage -ANSWER ✔✔Covers damage to insured vehicle caused by
collision or upset
Auto Liability Coverage -ANSWER ✔✔Pays for all sums for which an insured
business becomes legally responsible for bodily injuries, physical damage, and
injuries/damage caused to third parties.
STATE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS 100% CORRECT
Peril – Answer ✔✔
An event or cause that leads to damage, injury, or financial loss resulting in an
insurance claim
Risk – Answer ✔✔
The possibility or likelihood that a harmful or unexpected event may occur and
produce a loss
Speculative Risk – Answer ✔✔
A type of risk involving the chance of either financial gain or financial loss
Pure Risk – Answer ✔✔
A situation involving only the possibility of loss or no loss, with no opportunity for
profit
Hazard – Answer ✔✔
A condition or circumstance that increases the likelihood of a peril or loss
occurring
Indemnity – Answer ✔✔
Payment made by an insurance company to restore the insured financially after a
covered loss
,Indemnity -ANSWER ✔✔Compensation payments made from the insurance
company to the insured to compensate for a loss
Insurable Interest -ANSWER ✔✔Reasonable concern for a person to obtain
insurance against unforeseen events (death, losses)
Actual Cash Value Coverage -ANSWER ✔✔Amount of $ the insurance company
will pay to the insured to cover the value of replacement cost minus damages
(depreciation) at time of loss
Replacement Cost -ANSWER ✔✔Amount of $ the insurance company will pay to
the insured to compensate value of similar or same property
Negligence -ANSWER ✔✔Failure to act in a reasonable/expected way that results
in a loss
Limits of Liability -ANSWER ✔✔The amount of money the insurance company
will pay if something bad happens to you or your property
Supplemental Payments -ANSWER ✔✔Things specified in auto policies that
insurance company will pay for in addition to the auto policy limits of liability
(first aid expenses, appeal and bond expenses)
Burglary -ANSWER ✔✔Theft of property from one premises to another with
forced entry or exit
Robbery -ANSWER ✔✔Theft of property from one premises to another by force
or threat of force
, Theft -ANSWER ✔✔Intent to steal property with intent to deprive the owner
Bond -ANSWER ✔✔A contract that guarantees a promise
(Principal, Obligee, Surety)
Fair Credit Reporting Act -ANSWER ✔✔The applicants right to information
regarding their insurance policies
Law of Torts -ANSWER ✔✔Legal proceeding through which claims for money
for bodily injuries and/or property damage are made.
Commercial General Liability Policy -ANSWER ✔✔Covers liability for insured's
business as well as new hazards arising during the policy term, whether they are
reported to the insurance company or not. The CGL policy covers legal liability for
all members of the business.
Comprehensive (All-Risk) Coverage -ANSWER ✔✔Covers all forms of damage
to insured auto except those excluded ***
Collision Coverage -ANSWER ✔✔Covers damage to insured vehicle caused by
collision or upset
Auto Liability Coverage -ANSWER ✔✔Pays for all sums for which an insured
business becomes legally responsible for bodily injuries, physical damage, and
injuries/damage caused to third parties.
