Property and Casualty Quiz
Questions: 16 · 10 minutes
1. A professional liability claim is first made and reported while a claims-made policy is active. Subject to the policy’s terms and retroactive date, which feature is most relevant to whether coverage may apply?
The damaged property must have been replaced during the policy period.
The event must involve a vehicle listed on the policy.
The claimant must wait until the policy expires to seek payment.
The claim must generally be made and reported within the required coverage period.
2. In a property claim, what does proximate cause generally identify?
The nearest repair company available after a loss
The final expense included in a claim estimate
Any event occurring after the policy was purchased
The legally significant cause that produced the loss through a natural, continuous sequence
3. After a storm damages a roof, what is generally the most appropriate immediate claim-related action by the insured?
Discard all damaged materials before documenting them.
Take reasonable steps to prevent further damage, document the loss, and notify the insurer promptly.
Leave the property exposed until an adjuster arrives, regardless of further damage.
Complete permanent repairs without preserving records or notifying the insurer.
4. Which statement correctly distinguishes a peril from a hazard?
A peril is a policy condition, while a hazard is a coverage limit.
A peril is an excluded property type, while a hazard is an insured location.
A peril increases a deductible, while a hazard decreases a premium.
A peril is a cause of loss, while a hazard is a condition that increases the chance or extent of loss.
5. A covered repair costs $8,000, and the policy has a $1,000 deductible. Assuming no other limits or adjustments apply, how much would the insurer generally pay?
$1,000
$8,000
$7,000
$9,000
6. Which loss is primarily addressed by property insurance?
An employee’s allegation of wrongful termination
A customer’s bodily injury caused by a business
Fire damage to an insured commercial building
A driver’s legal responsibility for another person’s injuries
7. A business wants to add coverage not included in its standard policy form. Which policy document is commonly used to add, remove, or modify coverage terms?
A loss notice
A proof-of-loss inventory
An endorsement
A premium receipt
8. A covered fire forces a restaurant to close temporarily, causing lost income and continuing expenses. Which coverage is designed to address this type of financial loss, subject to its terms?
Business income coverage
Workers’ compensation coverage
Commercial general liability coverage
Inland marine coverage
9. A five-year-old appliance would cost $10,000 to replace, and its depreciation is estimated at $3,000. Before applying any deductible, what is its actual cash value under the common replacement-cost-minus-depreciation approach?
$10,000
$7,000
$13,000
$3,000
10. Which set lists the elements generally required to establish negligence?
Duty, breach, causation, and damages
Ownership, possession, insurance, and damages
Offer, acceptance, consideration, and capacity
Intent, concealment, reliance, and rescission
11. What is the main purpose of a coinsurance provision in many property policies?
To encourage insurance to a stated percentage of property value, with a possible penalty for underinsurance
To divide every claim equally between two insurers
To require the insured to pay the same amount as the insurer on every loss
To replace the deductible after a total loss
12. A driver loses control on ice and strikes a guardrail, damaging only the insured vehicle. Which personal auto coverage would most directly address the vehicle damage, subject to policy terms and deductible?
Medical payments coverage
Bodily injury liability coverage
Uninsured motorist bodily injury coverage
Collision coverage
13. After paying its insured for damage caused by a negligent contractor, an insurer seeks reimbursement from that contractor. What principle is the insurer using?
Indemnification
Subrogation
Contribution by the insured
Coinsurance
14. A deer runs into the side of an insured car. Which personal auto coverage would generally respond to the car’s damage, subject to policy terms and deductible?
Comprehensive or other-than-collision coverage
Collision coverage
Property damage liability coverage
Personal injury protection
15. In an auto liability limit written as 100/300, what does the notation commonly mean for bodily injury coverage?
$100,000 for property damage and $300,000 for bodily injury
$100,000 deductible and $300,000 policy limit
$100,000 per injured person and $300,000 total per accident
$100,000 per accident and $300,000 per policy year
16. Why must a person or business generally have an insurable interest in property when a covered loss occurs?
They must hold insurance on every item located near the property.
They must face a genuine financial or other recognized loss if the property is damaged.
They must be the only person legally permitted to use the property.
They must have previously filed a claim involving the property.