Part of the insured's consideration in a property insurance contract is the...
a) payment of a loss by the company
b) payment of the premium by the insured
c) provision of a grace period
d) offer a preferred contract to the customer correct answers b) payment of the premium by the insured
Th...
WI Property Insurance Exam || All Correct.
Part of the insured's consideration in a property insurance contract is the...
a) payment of a loss by the company
b) payment of the premium by the insured
c) provision of a grace period
d) offer a preferred contract to the customer correct answers b) payment of the premium by the
insured
The portion or the policy that specifies exactly what items will be covered and the dollar
amounts of coverage is called the...
a) insuring clause
b) exclusions
c) declarations
d) conditions correct answers c) declarations
All of the following are essentials of a contract EXCEPT a...
a) acceptance
b) consideration
c) offer
d) written instrument correct answers d) written instrument
Which of the following would be considered incompetent under insurance law?
a) a fourteen-year-old honor student
b) a man under the influence of alcohol
c) a customer who buys a policy under duress
d) all of the above correct answers d) all of the above
Which of the following grants express authority to an agent?
a) fiduciary contract
b) state provisions
c) agent contract with the insurance company
d) agents insurance license correct answers c) agents contract with the insurance company
What is the term for the entity that an agent represents regarding contractual agreements with
third parties?
a) designee
b) insured
c) principal
d) client correct answers c) principal
In insurance, an offer is usually made when...
a) the agent delivers the policy to the policyholder
b) the agent explains policy provisions to a potential applicant
c) the applicant submits an application for insurance
,d) the insurer approves the application and receives the initial premium correct answers c) the
applicant submits an application for insurance
A situation in which a person can only lose or have no change represents...
a) pure risk
b) speculative risk
c) adverse selection
d) hazard correct answers a) pure risk
An insured intentionally did not disclose a material fact on an application for insurance. This
would be considered...
a) concealment
b) lying
c) coercion
d) misrepresentation correct answers a) concealment
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which
term best describes the insurer's classification in Wyoming?
a) domestic
b) unauthorized
c) foreign
d) alien correct answers c) foreign
For the purpose of insurance, risk is defined as...
a) the guaranty of loss
b) the cause of loss
c) an event that increases the chance of loss
d) the uncertainty or chance of loss correct answers d) the uncertainty or chance of loss
Which of the following would be considered a risk sharing arrangement?
a) stock
b) mutual
c) surplus lines
d) reciprocal correct answers d) reciprocal
At the time of loss, the insured in a property and casualty policy, the insurer's claim settlement
options include all of the following EXCEPT...
a) paying the value of the lost or damaged property
b) replacing the property with other property of a lesser kind of quality
c) paying the cost of repairing or replacing the lost or damaged property
d) taking all or part of the property at an agreed or appraised value correct answers b) replacing
the property with other property of a lesser kind or quality
The part of the policy which sets forth the rules of conduct, duties, and obligations of the parties
is called the...
a) exclusions
, b) declarations
c) insuring clause
d) conditions correct answers d) conditions
Claims related expenses, reasonable expenses incurred by an insured to protect damaged
property from further loss, or defense expenses are covered by which part of a policy?
a) exclusions
b) declarations
c) insuring agreement
d) additional coverages correct answers d) additional coverages
Three years ago, an insured moved to an unfurnished apartment. She bought new furniture that
cost $9,000. Last week there was a fire in the apartment that destroyed the furniture.
Replacement cost is $10,500. The adjuster told the insured that her furniture depreciated $2,500.
If insurance is written on an Actual Cash Value basis, how much will it pay for the loss?
a) $10,500
b) $6,500
c) $8,000
d) $9,000 correct answers c) $8,000
Which of the following is not named as an insured on the declaration page of a policy but are
protected by the policy, usually in regards to a specific interest is known as...
a) policy owner
b) named insured
c) first named insured
b) additional insured correct answers d) additional insured
Which of the following is the correct formula for computing a loss ration?
a) loss adjusting expenses - incurred expenses
b) incurred losses + loss adjusting expenses / earned premium
c) incurred expenses + loss adjusting expenses / interest rate
d) incurred losses - loss adjusting expense / earned premium correct answers b) incurred losses +
loss adjusting expenses / earned premium
Gertrude Frump has an insurable interest in all of the following EXCEPT...
a) improvements she made to her apartment
b) the life of her husband, Lurch
c) her automobile
d) property her uncle might leave her correct answers d) property her uncle might leave her
When an insurance company sues a negligent third part to recover a loss payment, paid to an
insured, the company is exercising its right of...
a) assignment
b) arbitration
c) indemnification
d) subrogation correct answers d) subrogation
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