CAS Property and Casualty Insurance Fundamentals Flashcards
6 cards from real CAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAS Property and Casualty Insurance Fundamentals flashcards as text
Which of the following best describes the principle of indemnity in property and casualty insurance?
Answer: The insured should be restored to the same financial position as before the loss, no more and no less
The principle of indemnity states that insurance should restore the insured to their pre-loss financial position without allowing profit from the loss.
In US property and casualty insurance, what does 'occurrence basis' coverage mean?
Answer: Coverage applies to losses that occur during the policy period, regardless of when the claim is filed
Occurrence basis coverage is triggered by when the loss event happens, not when the claim is reported, which can affect long-tail liability lines.
What is the purpose of a deductible in a property and casualty insurance policy?
Answer: To reduce moral hazard and share risk between insurer and insured
Deductibles reduce moral hazard by ensuring insureds bear some financial responsibility, which discourages careless behavior and small nuisance claims.
Which coverage part of a commercial general liability (CGL) policy covers bodily injury and property damage claims arising from the insured's products?
Answer: Products-completed operations hazard
The products-completed operations hazard covers liability arising from the insured's products after they have left the insured's custody and control.
What is subrogation in the context of property and casualty insurance?
Answer: The insurer's right to pursue a third party that caused an insurance loss to the insured
Subrogation allows the insurer, after paying a claim, to step into the insured's shoes and recover the loss from the negligent third party.
In the US, what is the primary purpose of workers' compensation insurance?
Answer: To provide wage replacement and medical benefits to employees injured on the job, regardless of fault
Workers' compensation is a no-fault system that provides injured workers with medical benefits and wage replacement without requiring proof of employer negligence.