WV LICENSING TEST QUESTIONS AND ANSWERS
1. Methods of risk management include:
A. Transfer
B. Sharing
C. Avoidance
D. All of the above. - Answers-D. All of the above.
2. An insured has suffered a fire loss to his/her dwelling. This insured is which party to
the claim?
A. Third party
B. First party
C. Second party
D. Loss payee - Answers-B. First party
3. Mr. Jones, a pedestrian, was injured by Mr. Smith while driving his vehicle. Mr. Smith
is insured by I Am Bogus Insurance Company. The insurance company would be which
party to the claim?
A. First party since they are the one that has to pay
B. The second party
C. The third party
D. Guarantor - Answers-B. The second party
4. Which of the following is NOT included in the Declarations section of an insurance
contract?
A. The identity of the named insured
B. The policy period
C. The covered perils
D. The policy premium - Answers-C. The covered perils
5. Which of the following is the section of an insurance contract that contains the
provisions, rules of conduct, duties and obligations of the parties?
A. The Insuring Agreement
B. The Conditions
C. The Exclusions
D. The Limitations - Answers-B. The Conditions
6. A loss that is a direct consequence of a particular peril is called a(n):
A. Indirect loss
B. Peril
C. Hazard
D. Direct loss - Answers-D. Direct loss
7. Which of the following is a clause in property and casualty contracts which states that
if policy or endorsement forms are broadened and no additional premium is required,
,then all existing similar policies or endorsements will be construed to include the
broadened coverage?
A. Liberalization
B. Assignment
C. Binder
D. Coinsurance - Answers-A. Liberalization
8. Which of the following provides written evidence of coverage pending the issuance of
a policy?
A. Cause of Loss Form
B. Assignment
C. Binder
D. Blanket coverage - Answers-C. Binder
9. Which of the following is an example of a Loss Evaluation Method?
A. Liberalization
B. Cause of Loss form
C. Stated amount
D. Conditions - Answers-C. Stated amount
10. The cost of replacement minus depreciation is the definition of:
A. Valued Policy
B. Market Value
C. Replacement Cost
D. Actual Cash Value - Answers-D. Actual Cash Value
11. Which of the following is a method of requiring the insured to insure at least 80% of
the value of the covered commercial property?
A. Cause of Loss Form
B. Standard Mortgage clause
C. Loss Payable clause
D. Coinsurance clause - Answers-D. Coinsurance clause
12. Which of the following is a basis for insuring property that allows the insured to
report the value of the building contents to the insurance company on a monthly basis?
A. Blanket Basis
B. Reporting Form
C. Specific Basis
D. Agreed Value - Answers-B. Reporting Form
13. Which of the following is NOT a factor in determining negligence on the part of the
insured?
A. Legal duty is owed
B. There is a breach of protection
C. Proximate cause
D. Damage - Answers-B. There is a breach of protection
, 21. The insured is hit in the rear while stopped at a traffic light. The insured's company
pays for his repairs then seeks reimbursement from the responsible party. This is
described as:
A. Subrogation
B. Reimbursement
C. Arbitration
D. Appeal - Answers-A. Subrogation
22. Damage to a windshield by a bird would be covered under:
A. Collision
B. Comprehensive
C. Liability
D. All of the above - Answers-B. Comprehensive
23. The personal Auto Policy provides coverage in all of the following locations
EXCEPT:
A. Hawaii
B. Mexico
C. Canada
D. Alaska - Answers-B. Mexico
24. Mr. Pfister carried 15/30/5 limits on an auto, when he negligently ran into a parked
car containing three occupants resulting in the following claims:
Tom- BI-$18,000
PD-$8,000
Dick- BI- $8,000
Harry- BI- $4,000
In addition to these settlement awards, there was $18,000 in legal fees. In response to
this accident, Pfister's P.A.P will pay:
A. $32,000
B. $38,000
C. $50,000
D. $68,000 - Answers-C. $50,000
25. After a loss, the insured must:
A. Notify the company
B. Permit the company to inspect a damaged auto before repairs are started
C. Submit to a physical exam if needed
D. All of the above - Answers-D. All of the above
26. All of the following are Physical Damage exclusions EXCEPT:
A. Loss to vehicle used as a livery
B. Damage due to wear and tear
C. Loss to audio tapes
1. Methods of risk management include:
A. Transfer
B. Sharing
C. Avoidance
D. All of the above. - Answers-D. All of the above.
2. An insured has suffered a fire loss to his/her dwelling. This insured is which party to
the claim?
A. Third party
B. First party
C. Second party
D. Loss payee - Answers-B. First party
3. Mr. Jones, a pedestrian, was injured by Mr. Smith while driving his vehicle. Mr. Smith
is insured by I Am Bogus Insurance Company. The insurance company would be which
party to the claim?
A. First party since they are the one that has to pay
B. The second party
C. The third party
D. Guarantor - Answers-B. The second party
4. Which of the following is NOT included in the Declarations section of an insurance
contract?
A. The identity of the named insured
B. The policy period
C. The covered perils
D. The policy premium - Answers-C. The covered perils
5. Which of the following is the section of an insurance contract that contains the
provisions, rules of conduct, duties and obligations of the parties?
A. The Insuring Agreement
B. The Conditions
C. The Exclusions
D. The Limitations - Answers-B. The Conditions
6. A loss that is a direct consequence of a particular peril is called a(n):
A. Indirect loss
B. Peril
C. Hazard
D. Direct loss - Answers-D. Direct loss
7. Which of the following is a clause in property and casualty contracts which states that
if policy or endorsement forms are broadened and no additional premium is required,
,then all existing similar policies or endorsements will be construed to include the
broadened coverage?
A. Liberalization
B. Assignment
C. Binder
D. Coinsurance - Answers-A. Liberalization
8. Which of the following provides written evidence of coverage pending the issuance of
a policy?
A. Cause of Loss Form
B. Assignment
C. Binder
D. Blanket coverage - Answers-C. Binder
9. Which of the following is an example of a Loss Evaluation Method?
A. Liberalization
B. Cause of Loss form
C. Stated amount
D. Conditions - Answers-C. Stated amount
10. The cost of replacement minus depreciation is the definition of:
A. Valued Policy
B. Market Value
C. Replacement Cost
D. Actual Cash Value - Answers-D. Actual Cash Value
11. Which of the following is a method of requiring the insured to insure at least 80% of
the value of the covered commercial property?
A. Cause of Loss Form
B. Standard Mortgage clause
C. Loss Payable clause
D. Coinsurance clause - Answers-D. Coinsurance clause
12. Which of the following is a basis for insuring property that allows the insured to
report the value of the building contents to the insurance company on a monthly basis?
A. Blanket Basis
B. Reporting Form
C. Specific Basis
D. Agreed Value - Answers-B. Reporting Form
13. Which of the following is NOT a factor in determining negligence on the part of the
insured?
A. Legal duty is owed
B. There is a breach of protection
C. Proximate cause
D. Damage - Answers-B. There is a breach of protection
, 21. The insured is hit in the rear while stopped at a traffic light. The insured's company
pays for his repairs then seeks reimbursement from the responsible party. This is
described as:
A. Subrogation
B. Reimbursement
C. Arbitration
D. Appeal - Answers-A. Subrogation
22. Damage to a windshield by a bird would be covered under:
A. Collision
B. Comprehensive
C. Liability
D. All of the above - Answers-B. Comprehensive
23. The personal Auto Policy provides coverage in all of the following locations
EXCEPT:
A. Hawaii
B. Mexico
C. Canada
D. Alaska - Answers-B. Mexico
24. Mr. Pfister carried 15/30/5 limits on an auto, when he negligently ran into a parked
car containing three occupants resulting in the following claims:
Tom- BI-$18,000
PD-$8,000
Dick- BI- $8,000
Harry- BI- $4,000
In addition to these settlement awards, there was $18,000 in legal fees. In response to
this accident, Pfister's P.A.P will pay:
A. $32,000
B. $38,000
C. $50,000
D. $68,000 - Answers-C. $50,000
25. After a loss, the insured must:
A. Notify the company
B. Permit the company to inspect a damaged auto before repairs are started
C. Submit to a physical exam if needed
D. All of the above - Answers-D. All of the above
26. All of the following are Physical Damage exclusions EXCEPT:
A. Loss to vehicle used as a livery
B. Damage due to wear and tear
C. Loss to audio tapes
