Property and Casualty Insurance Flashcards
7 cards from real EXAMFX 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 and Casualty Insurance flashcards as text
An insured's home is valued at $200,000 but is only insured for $120,000. The coinsurance requirement is 80%. If a covered loss of $40,000 occurs, how much will the insurer pay (ignoring deductible)?
Answer: $30,000
Using the coinsurance formula: ($120,000 / $160,000) × $40,000 = $30,000 paid by the insurer.
Which of the following is NOT covered under the medical payments (Med Pay) coverage in a personal auto policy?
Answer: Injuries to the other driver when the insured is at fault
Med Pay covers the insured and passengers regardless of fault, but not the other party—that is covered under the insured's liability.
A 'vacancy clause' in a commercial property policy typically suspends or limits coverage after the building has been vacant for how long?
Answer: 60 days
Most commercial property policies suspend or limit certain coverages if the building has been vacant for more than 60 consecutive days.
Which of the following best describes 'occurrence' vs. 'claims-made' liability policy triggers?
Answer: Occurrence policies pay if the injury occurred during the policy period; claims-made pay only if the claim is made during the policy period
An occurrence policy is triggered by when the injury happened; a claims-made policy is triggered by when the claim is reported to the insurer.
Under a homeowners policy, 'loss of use' coverage (Coverage D) pays for:
Answer: Additional living expenses when the home is uninhabitable due to a covered loss
Coverage D reimburses the insured for additional living expenses—hotel, meals, etc.—while the home is being repaired after a covered loss.
The 'garage coverage form' used in commercial auto policies is specifically designed for:
Answer: Businesses that service, repair, store, or sell vehicles, such as dealerships and repair shops
The garage coverage form combines auto liability, garagekeepers legal liability, and physical damage for businesses that work on or sell autos.
What does 'actual cash value' (ACV) mean in property insurance claim settlements?
Answer: Replacement cost minus depreciation
ACV is calculated as replacement cost minus depreciation, accounting for the age and condition of the damaged property.