Property and Casualty Insurance Flashcards
7 cards from real EXAMFX practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Property and Casualty Insurance flashcards as text
Which of the following liability coverages would respond if a business's advertisement is alleged to infringe on another company's copyright?
Answer: Personal and advertising injury liability
Personal and advertising injury coverage under the CGL policy includes offenses such as copyright infringement in advertising.
An insured purchases a $1 million commercial umbrella policy with a $10,000 self-insured retention (SIR). A claim not covered by the underlying policy totals $500,000. How much does the insured pay out of pocket?
Answer: $10,000
The SIR acts like a deductible; the insured pays the first $10,000, then the umbrella covers the remaining $490,000.
Which of the following statements about 'replacement cost' coverage is TRUE?
Answer: It pays the cost to repair or replace property with like kind and quality without deducting depreciation
Replacement cost coverage pays the full cost to restore or replace property with no depreciation deduction, subject to policy limits.
Under the National Flood Insurance Program (NFIP), which of the following is TRUE regarding waiting periods?
Answer: There is a standard 30-day waiting period before coverage takes effect
The NFIP typically imposes a 30-day waiting period before a new flood policy becomes effective, with limited exceptions.
A 'mortgagee clause' in a homeowners policy protects the lender by ensuring that:
Answer: The lender's interest is protected even if the insured commits fraud
The standard mortgage clause protects the mortgagee's interest independently, so the lender is paid even if the insured's claim is denied due to fraud.
Which of the following is an example of a 'morale hazard' in property and casualty insurance?
Answer: An insured who becomes indifferent to loss prevention because they have insurance
Morale hazard is the indifferent or careless attitude an insured develops toward loss prevention once they know they are covered.
Under personal auto policy physical damage coverage, 'comprehensive' coverage would pay for which of the following losses?
Answer: Damage from colliding with a deer
Hitting an animal is considered a comprehensive (other-than-collision) loss, not a collision loss.