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 garage owner's policy (garage policy) is specifically designed to cover:
Answer: Auto dealerships, service stations, and repair shops
The Garage Policy is a specialized commercial policy designed for auto dealerships, service stations, repair shops, and similar auto-related businesses.
Under a surety bond, the party that guarantees the principal's performance to the obligee is called the:
Answer: Surety
The surety is the bonding company that guarantees to the obligee that the principal will fulfill their contractual or legal obligation.
Which rating factor most directly affects a commercial auto policy premium for a fleet of delivery trucks?
Answer: The radius of operations and type of cargo hauled
For commercial autos, the radius of operations and cargo type are primary rating factors because they directly affect the frequency and severity of potential losses.
An 'inland marine' policy would most appropriately cover which of the following?
Answer: A contractor's tools and equipment transported between job sites
Inland marine insurance covers movable property, equipment in transit, and instrumentalities of transportation and communication — such as a contractor's equipment on the move.
The 'insuring agreement' in an insurance policy serves what primary purpose?
Answer: Defines the insurer's promise to pay and describes what is covered
The insuring agreement is the core coverage promise of the policy, describing what the insurer agrees to pay for or do in the event of a covered loss.
Under the 'other insurance' provision of a liability policy, 'pro-rata' sharing means:
Answer: Each policy pays its proportionate share of the loss based on each policy's limit relative to total available limits
Pro-rata sharing requires each insurer to pay its proportional share of a loss, calculated by dividing each policy's limit by the total of all applicable limits.
A property insurer cancels a policy mid-term for non-payment of premium. The return premium is calculated on a:
Answer: Short-rate basis
When the insured cancels or is cancelled for non-payment, the return premium is calculated on a short-rate basis, which retains a penalty portion for the insurer.