Property And Casualty Insurance License Property Insurance Basics 3

Question 1

Which of the following best describes 'subrogation' in property insurance?

Accepted Answer

The insurer's right to recover from a negligent third party after paying a claim

Answer

The insured's right to cancel the policy

Answer

The insured's duty to report losses promptly

Answer

The insurer's ability to increase premiums after a loss

Question 2

What is an 'inland marine' policy primarily designed to cover?

Accepted Answer

Goods in transit and movable property

Answer

Boats on inland waterways

Answer

Flood damage to inland properties

Answer

Marine liability for river vessels

Question 3

What is the primary purpose of a deductible in a property insurance policy?

Accepted Answer

To reduce small claims and encourage loss prevention by the insured

Answer

To increase the insurer's profit margin

Answer

To penalize insureds who file claims

Answer

To lower state-mandated minimum coverage requirements

Question 4

A 'scheduled personal property endorsement' is used to:

Accepted Answer

Provide higher limits and broader coverage for specific high-value items

Answer

List excluded items under the homeowners policy

Answer

Schedule when the policy renews

Answer

Add a second insured to the policy

Question 5

Under a standard homeowners policy, Coverage E (Personal Liability) covers:

Accepted Answer

Legal liability for bodily injury or property damage caused to others by the insured

Answer

Damage to the insured's own property

Answer

Medical payments to the insured's family members

Answer

Auto-related accidents on the insured's property

Question 6

What is the 'vacancy clause' in a property insurance policy?

Accepted Answer

A provision that suspends or limits coverage if the property is vacant beyond a specified period (typically 60 days)

Answer

Coverage for unoccupied buildings in new developments

Answer

Protection for landlords when tenants vacate without notice

Answer

A clause requiring the insurer to inspect vacant buildings