P&C Trivia 3

Question 1

Which rating factor is generally NOT used to calculate personal auto insurance premiums?

Accepted Answer

Driver's religion

Answer

Religion is not a permissible rating factor; insurers use actuarially justified factors such as age, marital status, and vehicle type.

Question 2

Under a commercial general liability (CGL) policy, what does 'occurrence' trigger mean?

Accepted Answer

Coverage applies when the policy is in force at the time of the injurious event

Answer

An occurrence-based policy covers losses that happen during the policy period, regardless of when the claim is filed.

Question 3

What is the primary purpose of workers' compensation insurance?

Accepted Answer

To provide medical and wage benefits to employees injured on the job

Answer

Workers' compensation provides no-fault benefits including medical care and lost wage replacement for work-related injuries or illnesses.

Question 4

Which term describes the maximum amount an insurer will pay for a covered loss under a policy?

Accepted Answer

Policy limit

Answer

The policy limit (also called the limit of liability) is the maximum dollar amount the insurer will pay for a covered claim.

Question 5

A property insurance policy that pays the cost to repair or replace damaged property without deducting depreciation is known as:

Accepted Answer

Replacement cost coverage

Answer

Replacement cost coverage pays the full cost to repair or replace property with like kind and quality without depreciation deductions.

Property & Casualty Insurance License Test Practice Test