PA Property & Casualty Insurance Exam
questions And Answers Verified 100% Correct
What sublimit in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident? - ANSWER -Per occurrence
In property insurance, what is actual cash value? - ANSWER -Replacement cost at
the time of loss, minus depreciation
A policy that covers all causes of loss except for those specifically excluded is
known as what type of policy? - ANSWER -Open Peril or Special form
In property insurance, when must insurable interest exist? - ANSWER -At the
time of loss
An insured's business is damaged by a fire, and temporarily shut down for repairs.
As a result, the insured suffers loss of income. What type of loss is the loss of
income? - ANSWER -Indirect or consequential
If an insured peril was the proximate cause of loss, what type of loss is it? -
ANSWER -Direct
What is the process that insurers use to determine whether a policy should be
issued and on what terms and conditions? - ANSWER -Underwriting
What is the difference between cancellation and nonrenewal? - ANSWER -
Cancellation is the termination of an insurance policy by either party prior to the
policy's expiration date. Nonrenewal is the termination of a policy at its expiration
date by not offering a continuation of the existing policy
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - ANSWER -Limits of liability
, What type of limits of liability has the limits separately stated for different
coverages? - ANSWER -Split limits
What are the 3 types of coverage available in dwelling policies? - ANSWER -
Basic, Broad and Special
What is the maximum number of units in residential dwellings insurable by a
Dwelling policy? - ANSWER -Up to 4 units
An insured's house becomes uninhabitable due to damage by a fire. As a result, the
insured has to rent an apartment until repairs are made. Which type of coverage
under the dwelling policy will pay for the expense of renting the apartment? -
ANSWER -Coverage E- Additional Living Expenses
What are the 5 coverages of dwelling policies? - ANSWER -Coverage A -
Dwelling, Coverage B - Other structures, Coverage C - Personal property,
Coverage D - Fair rental value, and Coverage E - Additional living expenses
Which of the 3 DP forms provides the most limited coverage? - ANSWER -DP-1
Basic
Which dwelling policy coverage will insure a garage not attached to the primary
insured dwelling? - ANSWER -Coverage B- Other Structures
What do dwelling policies insure? - ANSWER -Dwelling only, contents only, or
both dwelling and contents
When will damage to the interior of the building be covered under the falling
objects peril in the broad form of the dwelling policy? - ANSWER -Only if the
interior damage is a direct result of exterior damage from a falling object
What are some of the exclusions found in all 3 dwelling forms? - ANSWER -Earth
movement, water damage, power failure, neglect, war, nuclear hazard, intentional
loss, freezing or plumbing, ordinance or law, and government action
, A gas stove exploding in the dwelling is an example of which named peril? -
ANSWER -Internal explosion
If 3 volcanic eruptions happen within 48 hours, and each contributes to property
damage, how many deductibles will apply in the dwelling policy? - ANSWER -
One deductable ( all instances of volcanic eruptions that occur within a 72 hour
period are considered 1 occurance)
In dwelling policies, what is the purpose of the automatic increase in insurance
endorsement that increases the amount of insurance by an annual percentage? -
ANSWER -To offset the effects of inflation
Which dwelling policy coverage will provide protection for contents damaged by
fire in an insured dwelling? - ANSWER -Coverage C- Personal Property
What are extended covered perils on a basic Dwelling policy? - ANSWER -
Windstorm or hail, explosion, smoke, aircraft and vehicles, riot or civil
commotion, volcanic eruption, and vandalism and malicious mischief
A basic dwelling policy automatically provides coverage against what? -
ANSWER -Fire, Lightning, and internal explosion
Under Coverage C- Personal Property in the dwelling policy, when will a guest's
property be covered? - ANSWER -Only when the property is at the insured
location
DP-3(Special) is an open- peril form. What does that mean? - ANSWER -All
perils are insured unless specifically excluded.
Which dwelling coverage form(s) will pay for the replacement cost of a dwelling?
- ANSWER -DP-2 Broad, and DP-3 Special
If an insured is in the process of moving to a new location, his personal property
coverage under the dwelling policy will apply on a pro rata basis at both locations
for how long? - ANSWER -30 Days
questions And Answers Verified 100% Correct
What sublimit in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident? - ANSWER -Per occurrence
In property insurance, what is actual cash value? - ANSWER -Replacement cost at
the time of loss, minus depreciation
A policy that covers all causes of loss except for those specifically excluded is
known as what type of policy? - ANSWER -Open Peril or Special form
In property insurance, when must insurable interest exist? - ANSWER -At the
time of loss
An insured's business is damaged by a fire, and temporarily shut down for repairs.
As a result, the insured suffers loss of income. What type of loss is the loss of
income? - ANSWER -Indirect or consequential
If an insured peril was the proximate cause of loss, what type of loss is it? -
ANSWER -Direct
What is the process that insurers use to determine whether a policy should be
issued and on what terms and conditions? - ANSWER -Underwriting
What is the difference between cancellation and nonrenewal? - ANSWER -
Cancellation is the termination of an insurance policy by either party prior to the
policy's expiration date. Nonrenewal is the termination of a policy at its expiration
date by not offering a continuation of the existing policy
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - ANSWER -Limits of liability
, What type of limits of liability has the limits separately stated for different
coverages? - ANSWER -Split limits
What are the 3 types of coverage available in dwelling policies? - ANSWER -
Basic, Broad and Special
What is the maximum number of units in residential dwellings insurable by a
Dwelling policy? - ANSWER -Up to 4 units
An insured's house becomes uninhabitable due to damage by a fire. As a result, the
insured has to rent an apartment until repairs are made. Which type of coverage
under the dwelling policy will pay for the expense of renting the apartment? -
ANSWER -Coverage E- Additional Living Expenses
What are the 5 coverages of dwelling policies? - ANSWER -Coverage A -
Dwelling, Coverage B - Other structures, Coverage C - Personal property,
Coverage D - Fair rental value, and Coverage E - Additional living expenses
Which of the 3 DP forms provides the most limited coverage? - ANSWER -DP-1
Basic
Which dwelling policy coverage will insure a garage not attached to the primary
insured dwelling? - ANSWER -Coverage B- Other Structures
What do dwelling policies insure? - ANSWER -Dwelling only, contents only, or
both dwelling and contents
When will damage to the interior of the building be covered under the falling
objects peril in the broad form of the dwelling policy? - ANSWER -Only if the
interior damage is a direct result of exterior damage from a falling object
What are some of the exclusions found in all 3 dwelling forms? - ANSWER -Earth
movement, water damage, power failure, neglect, war, nuclear hazard, intentional
loss, freezing or plumbing, ordinance or law, and government action
, A gas stove exploding in the dwelling is an example of which named peril? -
ANSWER -Internal explosion
If 3 volcanic eruptions happen within 48 hours, and each contributes to property
damage, how many deductibles will apply in the dwelling policy? - ANSWER -
One deductable ( all instances of volcanic eruptions that occur within a 72 hour
period are considered 1 occurance)
In dwelling policies, what is the purpose of the automatic increase in insurance
endorsement that increases the amount of insurance by an annual percentage? -
ANSWER -To offset the effects of inflation
Which dwelling policy coverage will provide protection for contents damaged by
fire in an insured dwelling? - ANSWER -Coverage C- Personal Property
What are extended covered perils on a basic Dwelling policy? - ANSWER -
Windstorm or hail, explosion, smoke, aircraft and vehicles, riot or civil
commotion, volcanic eruption, and vandalism and malicious mischief
A basic dwelling policy automatically provides coverage against what? -
ANSWER -Fire, Lightning, and internal explosion
Under Coverage C- Personal Property in the dwelling policy, when will a guest's
property be covered? - ANSWER -Only when the property is at the insured
location
DP-3(Special) is an open- peril form. What does that mean? - ANSWER -All
perils are insured unless specifically excluded.
Which dwelling coverage form(s) will pay for the replacement cost of a dwelling?
- ANSWER -DP-2 Broad, and DP-3 Special
If an insured is in the process of moving to a new location, his personal property
coverage under the dwelling policy will apply on a pro rata basis at both locations
for how long? - ANSWER -30 Days
