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WISCONSIN PROPERTY AND CASUALTY EXAM QUESTIONS WITH CORRECT ANSWERS
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WISCONSIN PROPERTY AND CASUALTY EXAM QUESTIONS WITH CORRECT ANSWERS
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WISCONSIN PROPERTY ANDCASUALTY EXAM QUESTIONS WITH
CORRECT ANSWERS
FAIR - Answer-Fair Access to Insurance Requirements
Elements of a Legal Contract. L. O. A. C. - Answer-• Consideration
• Legal Purpose
• Offer
• Acceptance
• Competent Parties
Consideration - Answer-Money and statements made on application
Legal Purpose - Answer-Risk transfer doesn't violate the law
Offer - Answer-Insured submits application and first month premium to insurer
Insurer accepts or insurer declines the risk
Counteroffer - Answer-Agrees to issue policy but with higher premium or restrictions/
exclusions
Insured either accepts the conditions or withdraws their application
Competent Parties - Answer-Competent• Legal age (usually 18) • Mentally sane• Sober
Adhesion - Answer-Policy written by the insurance company
Adhesion = glue
Insured has no input
If ambiguous, court will take the side of the insured
Aleatory Contract - Answer-• Unequal value
• Pay small premium and have a large claim, or pay premiums for many years without a
claim
representation - Answer-believed to be true
misrepresentation - Answer-representation that is actually false.
Material misrepresentation - Answer-information given that is not true and DOES affect
the insurer's decision
,warranty - Answer-statement that is guaranteed to be true, and it may be relied on by
the other party. If a warranty is not kept, there is a breach of warranty that voids the
contract.
Concealment - Answer-failure to disclose known facts
Property insurance policies - Answer-Covers"mystuff"
"Mystuff"=buildings(real property) and personal belongings
First Part Loss
Casualty Insurance - Answer-Casualty = Liability
Always pays the other guy, never me
Third party losses
D. I. C. E. E. - Answer-■ Declarations■ Insuring agreements■ Conditions■
Endorsements and additional supplementary coverages ■ Exclusions
Declarations - Answer-who, what, when, where, and how much
Insuring agreement(s) - Answer-promise to pay and perils covered
Conditions - Answer-rules for the policy
Endorsements - Answer-changes to the original policy
Exclusions - Answer-items not covered
Named insured - Answer-listed on the declarations
First-named insured - Answer-first on the declarations
policy territory - Answer-typically includes the United States, Canada, Puerto Rico, and
other U.S. territories and possessions. Most insurance policies do not extend coverage
into Mexico
flat cancellation. - Answer-policy is canceled on the effective date, by either the insurer
or insured
Cancellation - Answer-occurs before the policy's expiration date
Insurer cancellation requires advance notice
Insured cancellation—no advance notice
Nonrenewal - Answer-occurs at the expiration date
Insurer must give advance notice
No advance notice required by the insured
, Nonconcurrency - Answer-result of two or more policies covering the same property but
providing different or non-identical coverage.
Pro Rata - Answer-Each insurer's liable for a portion of the loss
calculate pro rata - Answer-policy limit of one company/ loss policy limit of all companies
X loss
Contribution by equal share - Answer-each policy pays the same up to the smallest
policy limit
• Prevents gain (indemnity)
duties after loss - Answer-Prompt notice to insurer
Protect property from further damage
Complete proof of loss (if asked)
Make property available for inspection
Submit to examination under oath if required
Cooperate with insurer
Assignment - Answer-Policy cannot be transferred without written consent from the
insurer
Transfer of rights
Abandonment - Answer-abandonment condition states that the insured may not
abandon property to the insurance company and ask to be reimbursed for its full value.
salvage - Answer-the insurance company can take possession of damaged property
after payment of a total loss.
liberalization - Answer-• Extended coverage to insured• No additional premium charged
• No action required by insured
Subrogation - Answer-Insurer has the right to sue an at-fault party for damages the
insurer had to pay to the insured
• Common when at-fault party does not have insurance
Proof Of Loss - Answer-Completed Claim Form
Insurable interest - Answer-• Risk of financial loss
• May be present at the time of application and MUST be present at the time of loss
Underwriting - Answer-Underwriting—process of evaluating a risk
• Field underwriting is performed by the agent or producer.
• Company underwriters decide if a policy is to be issued.
Binder - Answer-Temporary insurance
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