Property & Casualty Insurance License MCQ Flashcards
7 cards from real P&C 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 License MCQ flashcards as text
A business owner's fire sprinkler system activates accidentally and damages inventory. Which commercial property coverage would respond?
Answer: Sprinkler leakage coverage
Sprinkler leakage coverage specifically covers damage caused by the accidental discharge of water from automatic sprinkler systems.
Which of the following best describes the 'coinsurance' clause in a commercial property policy?
Answer: Requires the insured to carry coverage equal to a specified percentage of the property's value or share in any loss
The coinsurance clause requires the insured to maintain coverage at a specified percentage (commonly 80%) of the property's value or become a co-insurer in any loss.
Under workers' compensation, the employer's liability portion of the policy covers:
Answer: Employee lawsuits alleging employer negligence not covered by the WC statute
Part Two (Employer's Liability) of a workers' comp policy covers common-law suits by employees for work-related injuries that fall outside the statutory WC system.
An agent who binds coverage on behalf of an insurer without authorization is acting under which type of authority?
Answer: Apparent authority
Apparent authority arises when an insurer's actions lead a third party to reasonably believe the agent has authority that was never actually granted.
Business interruption insurance is designed primarily to cover:
Answer: Lost net income and continuing expenses while a business is closed due to a covered loss
Business interruption (Business Income) coverage replaces lost net income and pays continuing fixed expenses during the period of restoration after a covered property loss.
Under the Personal Auto Policy, which coverage pays for damage to the insured's own vehicle caused by a collision with another car?
Answer: Collision coverage
Collision coverage pays for damage to the insured vehicle resulting from a collision with another vehicle or object, regardless of fault.
A 'binder' in property and casualty insurance serves as:
Answer: Temporary evidence of coverage until a formal policy is issued
A binder is a temporary contract that provides immediate insurance coverage until the formal policy can be prepared and delivered.