Property & Casualty Insurance License MCQ Flashcards
7 cards from real P&C 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 & Casualty Insurance License MCQ flashcards as text
Under an umbrella liability policy, 'drop-down coverage' occurs when:
Answer: The umbrella policy drops down to cover losses excluded by underlying policies
Drop-down coverage means the umbrella policy covers certain losses excluded by underlying policies, subject to a self-insured retention (SIR).
The 'vacancy clause' in a commercial property policy typically suspends certain coverages after the building has been vacant for:
Answer: 60 consecutive days
Under standard commercial property forms, coverage for certain perils (vandalism, sprinkler leakage, glass breakage, water damage) is suspended after 60 consecutive days of vacancy.
Which auto coverage is required in 'no-fault' states to pay for the insured's own medical expenses regardless of who caused the accident?
Answer: Personal Injury Protection (PIP)
Personal Injury Protection (PIP) is the mandated coverage in no-fault states that pays the insured's own medical bills, lost wages, and other expenses without regard to fault.
An insured purchases a homeowners policy and then suffers a fire loss the next day. The insurer discovers the insured knew the house had faulty wiring when applying. This is an example of:
Answer: Material misrepresentation
Knowingly withholding or misrepresenting a material fact (faulty wiring) that would affect the insurer's underwriting decision constitutes material misrepresentation.
Under the CGL policy, 'products-completed operations' coverage is triggered when:
Answer: A product causes injury or damage after it leaves the insured's premises or operations are completed
Products-completed operations coverage applies once a product has left the insured's control or work has been completed, covering resulting bodily injury or property damage.
A 'retroactive date' in a claims-made policy means:
Answer: The earliest date of an occurrence for which a claim will be covered under the policy
The retroactive date sets the earliest point in time from which an occurrence can arise and still be covered under a claims-made policy.
Which of the following describes 'actual cash value' (ACV) in property insurance?
Answer: Replacement cost minus depreciation
Actual cash value is calculated as the replacement cost of the property minus depreciation for age, wear, and obsolescence.