Trivia 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 Trivia flashcards as text
Which insurer-initiated cancellation requires a longer notice period and typically involves non-renewal rather than mid-term termination?
Answer: Non-renewal
Non-renewal is the insurer's decision not to continue coverage at the end of the policy term, requiring advance written notice per state law.
A 'vacancy clause' in a commercial property policy typically suspends certain coverages when a building has been vacant for more than:
Answer: 60 days
Standard commercial property policies suspend coverage for vandalism, sprinkler leakage, and glass breakage after 60 consecutive days of vacancy.
Which of the following is an example of 'concurrent causation'?
Answer: A flood (excluded) combines with windstorm (covered) to cause a loss
Concurrent causation occurs when both a covered and an excluded peril contribute to the same loss, creating coverage disputes.
What is the role of an insurance 'underwriter'?
Answer: To evaluate and select risks the insurer will accept and at what price
Underwriters assess risk, decide whether to accept it, and determine the appropriate premium to charge.
Under the 'other insurance' provision, when two policies cover the same loss, each typically pays:
Answer: A pro rata share based on each policy's limit relative to the total
The pro rata 'other insurance' clause splits the loss proportionally between policies based on each policy's limit relative to the combined limits.
A surety bond differs from traditional insurance because:
Answer: The principal is expected to reimburse the surety for any losses paid
In a surety bond, the principal (bonded party) is ultimately responsible for the obligation; if the surety pays, it seeks reimbursement from the principal.
Which of the following best describes 'adverse selection' in insurance?
Answer: High-risk individuals are more likely to seek insurance than low-risk individuals
Adverse selection occurs when people with higher-than-average risk are disproportionately more likely to purchase insurance, skewing the risk pool.