Property & Casualty Insurance License Test Surety Bonds and Specialty Lines Questions and Answers Flashcards
6 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 6 Property & Casualty Insurance License Test Surety Bonds and Specialty Lines Questions and Answers flashcards as text
Title insurance protects against which type of loss?
Answer: Defects in the title to real property that existed before the policy was issued
Title insurance protects property buyers and lenders against financial loss from prior ownership disputes, liens, encumbrances, or other defects in the title that existed before the policy's effective date.
Private Mortgage Insurance (PMI) is designed primarily to protect which party?
Answer: The lender in the event the borrower defaults on the mortgage
PMI protects the mortgage lender — not the homeowner — against loss if the borrower defaults and the foreclosure proceeds don't cover the outstanding loan balance.
Earthquake insurance is most commonly sold as which of the following?
Answer: A separate policy or endorsement added to a standard property policy
Earthquake damage is excluded from standard homeowners and commercial property policies; coverage must be purchased as a separate earthquake policy or added via endorsement.
A payment bond in a construction project guarantees which of the following?
Answer: That the contractor will pay all subcontractors, laborers, and material suppliers
A payment bond protects subcontractors, suppliers, and laborers by guaranteeing they will be paid even if the general contractor fails to pay them out of the project funds.
Which of the following best describes a court (judicial) bond?
Answer: A bond required by a court to protect parties involved in legal proceedings
Judicial (court) bonds include fiduciary bonds, appeal bonds, and injunction bonds — they are required by courts to protect parties against financial loss during legal proceedings.
Which specialty line of insurance covers losses to livestock and is considered part of the agricultural insurance market?
Answer: Animal mortality insurance
Animal mortality insurance covers the death of high-value livestock, horses, or exotic animals due to accident, illness, or disease, functioning similarly to life insurance for animals.