Property and Casualty Insurance Flashcards

Under a standard homeowners policy, which of the following losses would typically be EXCLUDED?

Answer: Flood damage from a river overflow

Standard homeowners policies exclude flood damage; separate flood insurance through the NFIP is required.

The 'other structures' coverage in a homeowners policy typically provides what percentage of the dwelling coverage limit?

Answer: 10%

Coverage B (other structures) is automatically set at 10% of the Coverage A dwelling limit.

Which auto insurance coverage pays for damage to the insured's own vehicle when the at-fault driver has no insurance?

Answer: Uninsured motorist property damage

Uninsured motorist property damage (UMPD) covers damage to the insured's vehicle caused by an uninsured at-fault driver.

A business owner's policy (BOP) is LEAST suitable for which type of business?

Answer: A large manufacturing plant

BOPs are designed for small-to-medium businesses; large manufacturers with complex exposures require individually rated commercial policies.

In property insurance, 'coinsurance' requires the insured to carry coverage equal to at least what percentage of the property's value to receive full loss payment?

Answer: 80%

The standard coinsurance clause requires the insured to carry at least 80% of the property's replacement cost value.

Which of the following describes 'subrogation' in property and casualty insurance?

Answer: The insured transfers the right to recover damages to the insurer after a loss payment

Subrogation allows the insurer to step into the insured's shoes and sue the negligent third party after paying the claim.

Under a commercial general liability (CGL) policy, which coverage part protects a business against claims arising from completed work that causes bodily injury after the job is done?

Answer: Products and completed operations liability

Products and completed operations coverage responds to claims arising after work is finished or products are sold.