Property & Casualty Insurance Coverage Flashcards
7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Property & Casualty Insurance Coverage flashcards as text
Which coverage under the commercial auto policy pays for physical damage to a covered auto caused by rollover or collision with another vehicle or object?
Answer: Collision
Collision coverage pays for damage to the insured vehicle resulting from overturn or impact with another vehicle or object.
Under a standard homeowners policy, 'additional living expenses' (Coverage D) pays for:
Answer: Reasonable increase in living costs above normal when the home is uninhabitable due to a covered loss
Coverage D reimburses the increased costs of living (hotel, meals, etc.) above the insured's normal expenses while the home is uninhabitable due to a covered peril.
A subrogation clause in a property policy allows the insurer to:
Answer: Step into the insured's shoes to recover from a negligent third party after paying a claim
Subrogation transfers the insured's right to recover against a responsible third party to the insurer after it pays the claim.
Which commercial liability coverage is specifically designed to protect directors and officers from claims alleging wrongful acts in their management of an organization?
Answer: Directors and officers (D&O) liability
D&O liability insurance covers personal liability of corporate directors and officers for alleged wrongful acts in their managerial capacity.
Under the ISO commercial property form, which of the following losses is specifically excluded under the 'earth movement' exclusion?
Answer: Earthquake that damages a building's foundation
Earthquake and other forms of earth movement are excluded under standard commercial property forms; coverage requires a separate endorsement or policy.
A claims-made CGL policy includes a 'retroactive date' provision. What is its purpose?
Answer: To exclude coverage for incidents that occurred before a specified date
The retroactive date limits claims-made coverage to incidents that occur on or after that date, excluding prior acts.
An umbrella liability policy typically provides coverage by:
Answer: Dropping down to pay losses below the retained limit when an underlying policy is exhausted or does not apply
An umbrella policy sits above underlying policies and may drop down to cover gaps or pay above exhausted primary limits, subject to a self-insured retention.