Exam (elaborations)
Property & Casualty Insurance Exam Prep Florida 2 – Questions And Answers
- Course
- FLORIDA 2-20
- Institution
- FLORIDA 2-20
Property & Casualty Insurance Exam Prep Florida 2 – Questions And Answers
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Property & Casualty Insurance Exam Prep Florida2 – Questions And Answers
Coverage L - Personal Liability ✔️Ans - Coverage L is personal liability
coverage that can be purchased as a policy endorsement and provides the
insured with personal liability coverage for any damages that are the
insured's responsibility, as specified in the policy with respect to bodily injury
and property damage.
Coverage M - Medical Payments to Others ✔️Ans - . is a policy
endorsement that provides coverage for medical payments to others and
reimburses any medical expenses to a person who is injured on the insured's
property and where the person is on the property with the insured's
permission
Coverage L ✔️Ans - requires the insurance company to pay to defend
the insured against lawsuits
Coverage M - Medical Payments to Others ✔️Ans - and when someone
is injured off the insured's property, but due to the insured's activities, as the
result of something occurring on the insured's property, or the person is
injured by an animal that belongs to the insured.
Special form ✔️Ans - . The _____ ______ provides coverage for "all risks",
which is coverage due to any cause except any causes specifically excluded.
Causes of loss forms are the commercial property insurance forms that specify
the covered causes of loss for which coverage is provided.
✔️Ans - The Special and Basic forms may be included in a commercial
policy.
✔️Ans - Losses covered under the Basic causes of loss form include
fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion,
aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse and volcanic
activity
✔️Ans - . The three standard causes of loss forms are Basic, Broad and
Special.
, ✔️Ans - Losses covered under the Basic causes of loss form include
fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion,
aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse and volcanic
activity.
✔️Ans - . Causes of loss forms are the commercial property insurance
forms that specify the covered causes of loss for which coverage is provided.
✔️Ans - Broad includes all of the causes in the Basic form, and also
falling objects, the weight of snow, ice, or sleet; water damage, including
appliance leakage; and collapse from certain specified causes.
✔️Ans - The Special form provides coverage for "all risks", which is
coverage due to any cause except any causes specifically excluded.
✔️Ans - Moral hazard - Concerns someone's chance of engaging in
dishonest, immoral or illegal conduct (e.g. A person burns their own property
in an attempt to claim a loss and obtain money from an insurance company)-
✔️Ans - Hazards are things that increase the chance of loss. The types
of hazards are:
✔️Ans - Physical hazard - Relates to the actual use or occupancy of
property (e.g. Improper electrical wiring)-
✔️Ans - Morale hazard - Involves losses caused by someone's
negligent or careless conduct
✔️Ans - Dwellings eligible for a Homeowners policy include second
homes/vacation residences, life estate and trustees occupied homes, under
construction dwellings, properties that are subject to installment contract
payment plans and mobile homes that have been purchased.
✔️Ans - For Homeowners coverage, the only eligible parties are the
owner and occupants of a residential only dwelling, along with eligible
residential renters. Both property and casualty lines must be purchased,
unless the property is rented out. Additionally, there can be no more than four
family units in the dwelling.
, ✔️Ans - A National Flood Insurance Program (NFIP) policyholder gets
2 flood insurance programs: emergency and regular.. Once regular coverage is
in effect, there is currently a standard deductible of $500 and coverage limits
of $250,000 for buildings and $100,000 for the building contents.
✔️Ans - Emergency coverage is in effect before the NFIP processes the
insurance application. Emergency coverage currently has a standard
deductible of $1,000 and maximum coverage limits of $35,000 for buildings
and $10,000 for the building contents (e.g. personal property)
✔️Ans - A direct loss is caused by physical damage, loss or destruction
to property. Direct losses result from theft, fire, weather and comparable
events. The insurance policy states which types of losses are covered. The
total damages sustained to a home due to a tornado, the cost to replace a barn
destroyed by fire and the loss of personal property due to theft are all
examples of direct losses.
✔️Ans - An indirect loss (a/k/a consequential loss) is a financial loss
sustained due to a direct loss (e.g. car rental cost if the insured's vehicle is out
of service due to an accident)
✔️Ans - Rating a policy refers to calculating the premium amount for
an insurance policy. There are three primary rating methods:
-Judgment rating: This is the simplest method. The underwriter uses their
personal, expert judgment to determine the premium, instead of using rate
tables. It is the oldest rating method.
✔️Ans - -Manual rating (a/k/a class rating): This is the most common
premium rating method. Rates are grouped into categories and listed on a
table. The underwriter analyzes the risk and classifies it according to the table
categories. A premium is selected based on the corresponding category and
then calculated by multiplying the rate by the amount of insurance units. For
example, if $100,000 of insurance is purchased at a listed rate of $5 per
$1,000, the total premium would be $500. $100,000 / $1,000 = 100 units x $5
= $500.
✔️Ans - Merit rating is used for risks with unusual or unique
characteristics. First, the manual rating is calculated and it is adjusted, in
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