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Pathfinder P&C License Quiz Chapter 1

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All taken from the book and online quizes
Linsey Starr Bis
Quiz by Linsey Starr Bis, updated more than 1 year ago
Linsey Starr Bis
Created by Linsey Starr Bis over 10 years ago
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Resource summary

Question 1

Question
Which of the Following Statements about insurable interest is not true?
Answer
  • The seller of a home still has insurable interest in the home for up to 30 days after the deed has been transferred
  • A lending institution has an insurable interest in an properties on which it holds mortgages.
  • A repairman has insurable interest in the equipment he has serviced until the repair bill has been paid
  • A tenant has an insurable interest in any improvements he's made to a building he rents

Question 2

Question
The purpose of insurance is to accomplish which of the following?
Answer
  • Transfer Risk
  • Eliminate Risk
  • Mitigate Risk
  • Avoid Risk

Question 3

Question
An Insurance Contract in Which the applicant cannot bargain for terms, rates, or benefits, and whose language is drafted completely by the insurance company is referred to as a(n)
Answer
  • Contract of Adhesion
  • Unilateral Contract
  • Aleatory Contract
  • Executroy Contract

Question 4

Question
To be binding, a contract between two parties must include all of the following EXCEPT a(n)
Answer
  • Written Instrument
  • Consideration
  • Legal purpose
  • Offer and Acceptance

Question 5

Question
A customer requests immediate coverage on a boat she just purchased. The producer gives the customer an oral binder over the phone. Coverage commences
Answer
  • At the end of the initial conversation
  • when the policy is delivered to the customer
  • when the written binder is received by the customer
  • when the initial premium is received by the Producer

Question 6

Question
The principle under which the purchaser of insurance must be in a position to lose something of value is called
Answer
  • Insurable Interest
  • Indemnification
  • Consideration
  • Subrogation

Question 7

Question
All of the following statements about concealment are true EXCEPT that
Answer
  • Concealment is an intentional misstatement on an application
  • Concealment is the failure to disclose a material fact
  • Concealment must be intentional to affect the policy
  • Concealment can be grounds for voiding the policy contract

Question 8

Question
A Binder is
Answer
  • An interim agreement between the parties
  • the same as a policy
  • A written document
  • A substitute for an insurance policy

Question 9

Question
The Fair Credit Reporting Act requires that
Answer
  • The applicant for insurance must be advised that a consumer report may be requested
  • The applicant cannot be advised of the name and address of the reporting agency
  • The insurance company, if requested, must provide the Federal Trade Commission with a list of applicants rejected during the previous calender year and the reasons for such actions
  • No outside reporting agencies may be used to collect confidential information

Question 10

Question
The insurer's promises to the insured would be found in/on the
Answer
  • Insuring clause
  • Declarations page
  • Provisions Section
  • Conditions section

Question 11

Question
Which of the following is the insurance Company's Consideration in a property and Casualty Contract?
Answer
  • The promises contained in the policy
  • The oral or written binder
  • the policy itself
  • the payment of a claim under the policy

Question 12

Question
You may use a term more than once or not at all on Questions 12 - 14 about Jack... Jack Davis applies for insurance coverage on his factory. Most of the statements Jack makes on the application are considered to be a
Answer
  • Representation
  • Warranty
  • Misrepresentation
  • Concealment

Question 13

Question
Jack also tells the Producer that he has a sprinkler system in the factory and affirms that it is always operable. Jack's statement is a
Answer
  • Warranty
  • Concealment
  • Misrepresentation
  • Representation

Question 14

Question
Although Jack responds truthfully to all questions asked by the Producer over the telephone, he does not inform the Producer that the factory next door is on fire. If Jack presented a fire claim on his factory later that same day, the company would probably deny the claim on the basis of Jacks
Answer
  • Concealment
  • Representation
  • Warranty
  • Misrepresentation

Question 15

Question
A written binder may terminate on all of the following dates EXCEPT..
Answer
  • The policy application date
  • It's expiration date
  • The policy Issue date
  • The day after notification is received that the company has cancelled the binder

Question 16

Question
The dollar Limits for a specific coverage are found in the?..
Answer
  • Declarations
  • Policy Conditions
  • Insurance Company's rate manual
  • Limits of Liability

Question 17

Question
Which of the following statements is true about the principle of Indemnity?
Answer
  • It states that the insured should not profit from a loss
  • It encourages the insured to purchase policies with face values larger than the value of protected property
  • It relieves the insurance company from paying for property losses caused by the insured
  • It gives the insured the right to collect the full replacement cost for every property loss

Question 18

Question
Which of the following is a synonym for "Indirect loss"
Answer
  • Consequential Loss
  • Total Loss
  • Partial Loss
  • Secondary Loss

Question 19

Question
All of the following are true concerning a stock Company EXCEPT
Answer
  • It is owned by policy owners
  • It is owned by shareholders
  • It pays dividends to stockholders
  • It Pays Dividends to the policy owners

Question 20

Question
In insurance lingo, if you have a financial interest in a piece of property, you are said to have an _____.
Answer
  • Insurable Interest
  • Financial Interest
  • Interest Risk
  • Pro Rata

Question 21

Question
A broader definition of accident that also covers losses that occur over time as the result of continuous and repeated exposure to injurious conditions is called an ______.
Answer
  • Occurrence
  • Accident
  • Inherent Vice
  • Liberalization

Question 22

Question
Iron rusts. Cheese turns moldy. In insurance lingo, these latent defects are called ____.
Answer
  • Inherent Vice
  • Occurrence
  • Liability
  • Risk

Question 23

Question
Loss is defined as a ___ Hurt
Answer
  • Financial
  • Pro Rata
  • Short Rate

Question 24

Question
On Exam A chance of loss is called ___ ?
Answer
  • Risk
  • Pro Rata
  • Liberalization
  • Accident

Question 25

Question
If an insured cancels his/her policy, then they are only entitled to a ____ refund of premium.
Answer
  • Short Rate
  • Pro Rata
  • Limit of Liability
  • small

Question 26

Question
The promise in your P and C policy, which states that modifications that make the contract more generous and put into effect during the policy period will be automatic enhancements to your policy, is found in the _____ clause.
Answer
  • Liberalization
  • Declaration
  • Liability
  • Enhancement

Question 27

Question
The transfer of ownership of an insurance policy from one individual to another is called _____.
Answer
  • Assignment
  • Transference
  • Enhancement
  • Occurrence

Question 28

Question
In proportion, share or ratio is called ____.
Answer
  • Pro Rata
  • Liberalization
  • Short Rate
  • Risk

Question 29

Question
The stated maximum that an insurance company will pay on a claim is called the _____.
Answer
  • Financial
  • Limit of Liability
  • Liberalization
  • Liability or Casualty

Question 30

Question
Insurance will only cover ____ risks
Answer
  • Pure
  • Pro Rata
  • Risk
  • Insurance

Question 31

Question
Gambling is an example of ____.
Answer
  • Speculative Risk
  • Cancellation
  • Short Rate
  • Risk

Question 32

Question
The transfer of risk from an individual or business to a professional risk taking company is called ____.
Answer
  • Insurance
  • Occurrence
  • Financial
  • pure

Question 33

Question
Insurance that protects you when your stuff gets you in trouble with The Other Guy is called ____ or _____ insurance.
Answer
  • Liability or Casualty
  • Limit of Liability
  • Certificate of Insurance
  • Short Rate or Short Changed

Question 34

Question
Property insurance policies are ____ party contracts, whereas liability policies are ____ party contracts.
Answer
  • Two, Third
  • Third, Two
  • Unilateral, Single
  • Short Rate, Pro rate

Question 35

Question
In addition to the policy, written proof of insurance coverage is provided by a _____.
Answer
  • Certificate of Insurance
  • First named Insured
  • Liability or Casualty
  • Limit of liability

Question 36

Question
What is it to be Indemnified ?
Answer
  • When an insurance company pays a policy owner on a claim, the company is said to have _____ the insured.
  • If the insurance company cancels a policy, then the customer is entitled to a ____ refund of premium
  • The stated maximum that an insurance company will pay on a claim is called the _____.
  • A written modification or addition to a policy of insurance is called an ______.

Question 37

Question
Which best describes how to use the work Pro Rata?
Answer
  • If the insurance company cancels a policy, then the customer is entitled to a ____ refund of premium
  • If an insured cancels his/her policy, then they are only entitled to a ____ refund of premium.
  • When an insurance company pays a policy owner on a claim, the company is said to have _____ the insured.
  • Insurance that covers your stuff is called ____ insurance.

Question 38

Question
A written modification or addition to a policy of insurance is called an ______. Endorsement →
Answer
  • True
  • False

Question 39

Question
Cancellation → The termination of an insurance policy during the policy period by either the insurance company or the insured is called _____.
Answer
  • True
  • False

Question 40

Question
The refusal of an insurer to continue insurance coverage beyond the end of the policy period is called ____. → Non-renewal.
Answer
  • True
  • False

Question 41

Question
Having your car stolen is an example of a ____ loss, whereas not having the use of your stolen car would be referred to as an _____ or consequential loss. → Direct and Indirect
Answer
  • True
  • False

Question 42

Question
Losses that are specifically NOT covered by an insurance policy are called _____. → Pro rata.
Answer
  • True
  • False

Question 43

Question
An ____ is a sudden, unforeseen and unintended event that happens at a known place and known time. → Accident
Answer
  • True
  • False

Question 44

Question
In personal lines insurance policies, the individual(s) who have the rights and duties under the policy are called the _____. → Cancellation
Answer
  • True
  • False

Question 45

Question
First Named Insured → In commercial lines the key contact person who represents the Named Insured(s) is called the ______.
Answer
  • True
  • False

Question 46

Question
Property → If the insurance company cancels a policy, then the customer is entitled to a ____ refund of premium
Answer
  • True
  • False

Question 47

Question
We will never cover an indirect loss unless we first cover a what?
Answer
  • Peril
  • Direct loss
  • Damaged loss
  • Individual loss

Question 48

Question
Insurable interest is needed when?
Answer
  • At the time of a loss
  • When buying a house
  • When covering your contents
  • during limit of liability

Question 49

Question
Fortuitous means it must be?
Answer
  • unexpected and unforeseen
  • covered elsewhere
  • be able to make whole
  • able to get better

Question 50

Question
The state of being subject to loss is referred to as?
Answer
  • Exposure
  • risk
  • pure risk
  • casualty

Question 51

Question
pure risk ?
Answer
  • only a chance to lose
  • you would gain or lose
  • reduces risk
  • contract of insurance

Question 52

Question
Speculative risk ?
Answer
  • You would gain or lose
  • only a chance to lose
  • contrast in insurance
  • member of society

Question 53

Question
Loss of stuff is a ?
Answer
  • direct loss
  • indirect loss
  • Casualty
  • Liability

Question 54

Question
Loss of use of something ?
Answer
  • Indirect Loss
  • direct loss
  • casualty
  • indemnify

Question 55

Question
Who never gets the money from a liability claim?
Answer
  • Policyholder
  • shareholder
  • stockholder
  • the other guy

Question 56

Question
What kind of contract is property under?
Answer
  • two party contract
  • third party contract

Question 57

Question
To indemnify someone is to make them...?
Answer
  • financially whole
  • exposed
  • at risk
  • predictable

Question 58

Question
A written modification or addition to a policy is known as what?
Answer
  • Endorsement
  • Writers
  • Mod
  • Addition

Question 59

Question
If you and your spouse are living in the same house, then you are both a what?
Answer
  • Named insured
  • first named insured
  • two party contract
  • third party contract
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