P&C General Practice 5

Question 1

Under the personal auto policy, 'underinsured motorist coverage' (UIM) responds when:

Accepted Answer

The at-fault driver's liability limits are insufficient to cover the insured's damages

Answer

UIM coverage pays the difference between the at-fault driver's liability limits and the insured's actual damages when those limits are too low to fully compensate the insured.

Question 2

An agent who has the authority to bind coverage, issue policies, and adjust claims on behalf of an insurer is known as a/an:

Accepted Answer

General agent

Answer

A general agent has broad authority granted by the insurer, including binding coverage, issuing policies, and sometimes settling claims within defined limits.

Question 3

Which of the following losses would MOST LIKELY be covered under the 'comprehensive' portion of a personal auto policy?

Accepted Answer

A tree falls on the insured's parked car during a windstorm

Answer

Comprehensive coverage pays for damage from causes other than collision, including fire, theft, vandalism, and falling objects such as trees.

Question 4

The 'vacancy clause' in a commercial property policy typically suspends or limits certain coverages if a building has been vacant for more than:

Accepted Answer

60 consecutive days

Answer

Most commercial property policies reduce or suspend coverage for certain perils (vandalism, sprinkler leakage, glass breakage, theft, water damage) if the building has been vacant for more than 60 consecutive days.

Question 5

A surety bond that guarantees a contractor will complete a project according to contract terms is called a:

Accepted Answer

Performance bond

Answer

A performance bond guarantees that the principal (contractor) will fulfill the terms and conditions of a contract, protecting the obligee (project owner) if the contractor defaults.

Property & Casualty Insurance License Test Practice Test

Property & Casualty Insurance License Test Practice Test

P&C General Practice 5