P&C Casualty Insurance Policies 3

Question 1

The 'insuring agreement' in a casualty insurance policy is best described as:

Accepted Answer

The insurer's promise to pay covered losses in exchange for the premium

Answer

The list of exclusions that limit coverage

Answer

The conditions the insured must satisfy to receive payment

Answer

The schedule of covered property and its values

Question 2

Under a commercial auto policy, a 'symbol 1' designation means:

Accepted Answer

Any auto is covered, including those newly acquired

Answer

Only specifically described vehicles are covered

Answer

Only private passenger autos are covered

Answer

Only hired autos are covered

Question 3

Workers compensation insurance is required in most states because:

Accepted Answer

State statutes mandate employers provide no-fault wage replacement and medical benefits to injured workers

Answer

Employers voluntarily choose it for employee morale

Answer

Federal law uniformly requires it for all employers

Answer

It replaces all other forms of employee health insurance

Question 4

In homeowners insurance, 'replacement cost' coverage differs from 'actual cash value' in that replacement cost:

Accepted Answer

Pays the cost to repair or replace the property with like kind and quality without deducting for depreciation

Answer

Pays only the depreciated value of the damaged property

Answer

Pays the market value of the home at the time of loss

Answer

Is limited to the original purchase price of the property

Question 5

Which of the following describes a 'non-owned auto' exposure?

Accepted Answer

An employee using their personal vehicle for company business

Answer

A vehicle owned by the insured but not listed on the policy

Answer

A rental car used on vacation for personal purposes

Answer

A leased vehicle listed as a covered auto on the policy

Question 6

What is the purpose of a 'garage liability' coverage form?

Accepted Answer

To cover the unique liability exposures of auto dealerships and repair shops, including customer vehicles in the shop's care

Answer

To provide property coverage for vehicles stored at a dealership

Answer

To replace a personal auto policy for dealership owners

Answer

To cover only the dealership's owned vehicles