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South Carolina Personal Lines Exam
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South Carolina Personal Lines Exam South Carolina Personal Lines Exam South Carolina Personal Lines Exam
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South Carolina Personal Lines ExamThe reduction, decrease, or disappearance of value of a person or property insured in a policy? - ANS
Loss
What is negligence? - ANS failure to use ordinary or reasonable care
Does a party need to prove negligence under absolute liability? - ANS No, absolute liability exists when
condition is inherently dangerous.
What does indemnify mean in insurance? - ANS To restore insured to same financial status before a loss.
How is ACV calculated? - ANS Current Replacement Cost - Depreciation
What determines insurance companies responsibility for payment, as it's stated in the policy? - ANS
Limits of liability
If a manufactured product is unsafe, what type of liability applies to manufacturer? - ANS Strict liability
What are the two types of compensatory damages? - ANS Special and general
A tornado that destroys a property would be an example of what? - ANS Peril
What is the term for the causes of loss insured against in an insurance policy? - ANS Peril
What sub-limit in a liability policy puts a ceiling on the payment for all claims that arise from a single
accident? - ANS Per occurrence
,What sub-limit in a liability policy puts a ceiling on the payment for bodily injury for a single person that
arise from a single accident? - ANS Per person
What provision states that if the policy allows for greater benefits, the insured may only be
compensated only for the amount lost? - ANS Indemnity
In property insurance, when must insurable interest exist? - ANS At the time of the loss
A policy that covers all causes of loss except for those specifically excluded is known as what type of
policy? - ANS Open/special peril form
What type of policy insures all property at multiple locations for a single amount? - ANS Blanket policy
What is burglary? - ANS Forced entry into premises with felonious intent.
What type of limits of liability has the limits separately stated for different coverages? - ANS Split limits
In property insurance, what is ACV? - ANS Current replacement cost, minus depreciation
How are direct and indirect losses related? - ANS Direct losses can cause indirect losses.
If insured peril was the proximate cause of loss, what type of loss is it? - ANS Direct
An insured's business is damaged because of a fire, and he is forced to close the business temporarily for
repairs. As a result, the insured lost income. What type of loss is this? - ANS Indirect or consequential
loss
,What is a deductible in an insurance policy? - ANS A specified dollar amount that the insured must pay
before the insurer will pay the policy benefits
Both robbery and burglary can be considered what? - ANS theft
Formula for coinsurance less than 80% required - ANS (carried/required) * loss amount = loss payment
In property insurance, what is the purpose of a coinsurance clause? - ANS To encourage insureds to
insure property close to its value
Difference between vacancy and unoccupancy? - ANS vacancy is when no one has live/worked and no
property is stored for 60 days - like when you move out of a home to another; unoccupancy is when no
one is living/working but property is stored - like when you go on vacation.
What term describes a loss caused by continuous exposure to a condition? - ANS Occurrence
What provision prevents insured from collecting twice for the same loss: from insurer and third party? -
ANS subrogation
Subrogation - ANS when insurance company pursues third party for funds given to insured for loss
A person who does not lock their doors shows an indifferent attitude. What type of hazard does this
represent? - ANS morale
What law protects consumers from the circulation of inaccurate or obsolete information? - ANS Fair
Credit Reporting Act
, What term defines an exact, direct, and uninterrupted cause of loss? - ANS Proximate cause
what is a risk? - ANS Uncertainty of loss
A situation in which a person can experience only a loss and no gain presents what type of risk? - ANS
Pure risk
Wagering on a sporting event is known as what type of risk? - ANS speculative risk
which is insurable pure or speculative risk? - ANS pure only
A insurer discovers that an applicant for a policy submitted a fraudulent claim in the past. What type of
hazard does this represent? - ANS Moral
What do individuals use to transfer risk of loss to a larger group? - ANS insurance
Conditions that increase chance of loss are known as what? - ANS hazard
What are the three types of hazards? - ANS Physical, Moral, Morale
Insurance is a contract that protects the insured from what? - ANS Loss
What term includes damage where the insured peril was the proximate cause of loss? - ANS Direct loss
An insured is driving her car through a residential area when she loses control and crashes into a
neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability
policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and
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