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
Under a BOP (Business Owners Policy), which of the following is automatically included without a separate endorsement?
Answer: Business income and extra expense coverage
The ISO BOP automatically includes business income and extra expense coverage as a standard component of the package policy.
Which doctrine holds that an insurer cannot deny a claim on a policy provision that it failed to communicate clearly to the insured?
Answer: Estoppel
Estoppel prevents an insurer from asserting a right or exclusion that it previously waived or failed to clearly disclose, preventing unfair denial of claims.
Under a personal auto policy, collision coverage would respond to which of the following scenarios?
Answer: The insured backs into a concrete pillar in a parking garage
Backing into a stationary object is a collision loss; storm damage, theft, and flood are comprehensive perils.
A 'vacancy clause' in a commercial property policy typically suspends or limits coverage when a building has been vacant for more than:
Answer: 60 consecutive days
ISO commercial property forms define a building as vacant after 60 consecutive days and suspend or limit certain coverages during that period.
Which of the following best describes 'occurrence' versus 'claims-made' liability policy triggers?
Answer: Occurrence policies respond when harm happens during the policy period; claims-made policies respond when the claim is first made during the policy period
An occurrence policy is triggered by when the injury or damage happens; a claims-made policy is triggered by when the claim is first made against the insured.
The 'absolute pollution exclusion' in a CGL policy typically excludes coverage for bodily injury or property damage arising from:
Answer: Chemical contamination or pollutants discharged into the environment
The absolute pollution exclusion broadly bars coverage for BI/PD caused by the release of pollutants into the environment, though courts vary in their interpretation of scope.
When an adjuster applies the 'principle of indemnity' in settling a property claim, the goal is to:
Answer: Restore the insured to the same financial position they were in before the loss, no better and no worse
Indemnity means the insured should be made whole — returned to their pre-loss financial condition — without profiting from the insurance claim.