P&C Policy Provisions and Options 2

Question 1

The 'declarations page' (dec page) of an insurance policy contains:

Accepted Answer

Specific information about the insured, covered property, policy period, limits, and premium

Answer

The detailed exclusions that limit coverage

Answer

The general terms and conditions that apply to all policies of the same type

Answer

The insurer's financial statements and solvency data

Question 2

An 'endorsement' to an insurance policy:

Accepted Answer

Modifies the terms of the original policy by adding, deleting, or changing coverage

Answer

Is a separate policy purchased from a different insurer

Answer

Is required by law for all commercial policies

Answer

Replaces the insuring agreement entirely

Question 3

What is the purpose of a 'deductible' in an insurance policy?

Accepted Answer

To share the risk of loss between the insured and the insurer, reducing the premium and discouraging small claims

Answer

To prevent the insurer from paying any claims

Answer

To increase the insurer's profit margin

Answer

To comply with state minimum coverage requirements

Question 4

Which policy provision requires the insured to notify the insurer of a loss within a reasonable time?

Accepted Answer

Prompt notice condition

Answer

Subrogation clause

Answer

Coinsurance clause

Answer

Appraisal provision

Question 5

The 'appraisal clause' in a property insurance policy is triggered when:

Accepted Answer

There is a dispute about the amount of loss (not coverage) between the insurer and the insured

Answer

The insurer suspects the insured has committed fraud

Answer

The insured wants to increase policy limits

Answer

The insured files a claim for the first time

Question 6

An 'occurrence limit' in a liability policy refers to:

Accepted Answer

The maximum amount the insurer will pay for all damages arising out of a single occurrence, regardless of the number of claimants

Answer

The maximum amount the policy will pay over its lifetime

Answer

The minimum deductible amount per claim

Answer

The total number of occurrences covered in a policy period