EXAMFX Property and Casualty Insurance 3

Question 1

Which of the following is an example of an 'inland marine' policy?

Accepted Answer

Cargo coverage for goods shipped by truck

Answer

Inland marine policies cover property in transit over land and certain types of movable property.

Question 2

A 'named-perils' property policy differs from an 'open-perils' policy in that it:

Accepted Answer

Only covers perils specifically listed in the policy

Answer

Named-perils policies only pay for losses caused by perils explicitly listed, placing the burden of proof on the insured.

Question 3

Under personal auto policy (PAP) liability coverage, the insurer's duty to defend the insured ends when:

Accepted Answer

The policy limits have been exhausted

Answer

Once the insurer pays its policy limit, its duty to defend the insured in that claim is extinguished.

Question 4

Which homeowners form provides the BROADEST coverage for both the dwelling and personal property?

Accepted Answer

HO-3 (Special Form)

Answer

The HO-3 covers the dwelling on an open-perils basis and personal property on a named-perils basis, making it the most widely used and broadest standard form.

Question 5

A 'split limit' auto liability policy expressed as 25/50/25 means:

Accepted Answer

$25,000 per person BI, $50,000 per accident BI, $25,000 property damage

Answer

Split limits are expressed as bodily injury per person / bodily injury per accident / property damage per accident.

(EXAMFX) Exam FX Insurance Practice Test

(EXAMFX) Exam FX Insurance Practice Test

EXAMFX Property and Casualty Insurance 3