Pearson VUE: Casualty Insurance Practice Exam Questions And Correct Answers

Pearson VUE: Casualty Insurance Practice Exam Questions And Correct Answers An insured may cancel a Personal Auto Policy by taking which of the following actions? A. Paying the insurance company any past due premiums B. Waiting until the policy expiration date C. Giving written notice to the insurance company D. Informing the producer by telephone C In insurance, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor intended? A. An accident B. An occurrence C. An event D. A condition B Which of the following vehicles is considered a temporary substitute auto under a Personal Auto policy? A. A neighbor's pickup truck borrowed by an insured to run an errand B. An auto purchased by an insured to replace a previously owned vehicle C. An auto rented by an insured when the insured is on vacation D. An auto rented by an insured when the insured's car is in a garage for repairs D An insurance binder is best described as: A. a large bound volume of rules, rates, and forms B. a rate manual supplied by one of the rating organizations C. a temporary agreement to pay a claim pending final settlement D. temporary short-term evidence of coverage D Anything that increases the chance of loss is known as a(n): A. risk B. hazard C. direct loss D. indirect loss B The Fair Credit Reporting Act requires the: A. insurance company to review the applicant's credit history prior to underwriting a policy B. insurance producer to summarize a policy for the insured C. insurance producer to review the applicant's credit history prior to issuing a policy D. insurance company to inform the applicant a credit report may be obtained D The limits of liability are found in which of the following sections of a casualty policy? A. Conditions B. Insuring Agreement C. Declarations D. Definitions C A policyholder would expect to find which of the following information in the Insuring Agreement section of an auto policy? A. Bodily Injury limits of liability B. The insurance company's promise to pay on the behalf of the insured C. Exclusions regarding certain uses of the auto D. The obligations of the insured in the event of a loss B Products Liability coverage would insure damages that arise from which of the following situations? A. A manufacturer is required to recall a defective product. B. A contractor installs inferior-grade siding on a building. C. A customer receives an electrical shock from a curling iron during an in-store demonstration. D. A bicycle rider is injured when a wheel malfunctions. D Which of the following sections of an insurance policy would explain the term "auto" ? A. Declarations B. Definitions C. Insuring agreement D. Obligations of the insurance company B A business insured under a Commercial General Liability policy has a General Aggregate limit of $1,000,000 and an Occurrence limit of $100,000. An injured party is awarded $100,000. What limits will remain available to the insured? A. General Aggregate of $1,000,000; Occurrence limit of $100,000 B. General Aggregate of $900,000; Occurrence limit of $100,000 C. General Aggregate of $1,000,000; Occurrence limit of $0 D. General Aggregate of $900,000; Occurrence limit of $0 B In insurance, all of the following losses are examples of pure risk EXCEPT: A. auto accident B. flood damage to a home C. decline of stock values on the stock market D. fire damage to a building C In an application for marine insurance, a yacht owner states that the yacht will only be sailed on inland waters. If the insured subsequently sails the yacht on the seas, coverage may be denied because the insured has breached: A. the Inchmaree clause B. the policy clause C. a representation D. a warranty D An insured is required to take which of the following actions immediately after an occurence? A. Request a subrogation statement from the producer B. Give notice of claim to the insurance company C. Notify an independent adjuster D. Obtain a written report from the police department B The act of intentionally withholding from an insurance application a fact that would affect issuance of the policy is referred to as: A. concealment B. misrepresentation C. defamation D. twisting A Which of the following claims may be covered under Bodily Injury Liability coverage? A. Physical impairment B. False arrest C. Libel D. Suicide A Which of the following individuals is likely to have a valid Workers Compensation claim? A. A retired employee injured while visiting his old workplace B. An employee who suffers a diabetic coma from failure to take prescribed medicine C. A sole proprietor injured in an auto accident while driving to a friend's house D. An employee injured while undergoing job training D In a state where minimum auto bodily injury liability limits are 20/40, S is driving with limits of 20/40. S is responsible for an accident with T in which T suffers bodily injury in the amount of $120,000. T has non-stacked Underinsured Motorists limits of 100/300. How much will T's policy pay toward T's injuries? A. $20,000 B. $80,000 C. $100,000 D. $120,000 B The Conditions section of an insurance policy states the: A. deductible amount, if any B. policy term C. policy provisions D. duties of the insured D In the event of a loss under a Personal Auto Policy, an insured is required to submit to the insurance company all of the following information EXCEPT: A. a Proof of Loss statement if requested B. a Notice of Claim C. a list of any known witnesses D. an appraisal of the damaged property D Which of the following policies is intended to broaden the coverages and increase the limits of underlying insurance? A. Owners and Contractors Protective Liability B. Umbrella Liability C. Excess Liability D. Commercial General Liability B Which of the following individuals is a named insured under a Personal Auto policy? A. A person who is listed in the Declarations section B. A valet who parks an insured's car C. An insured's employer who drives the insured's car for personal use D. A neighbor who drives an insured's car with permission A After paying a claim, an insurance company may have the right to pursue legal action against the negligent party. This right is called: A. assignment B. other insurance C. subrogation D. action against the company C Which of the following occurrences would be included under the definition of a personal injury? A. A customer injured in a department store when a sign falls on her sues the store for medical costs and pain and suffering. B. An employee injured lifting a heavy carton sues his employer for costs. C. An individual fired from her job sues her employer for unemployment benefits. D. A tenant evicted by his landlord sues the landlord for invasion of privacy and wrongful eviction. D