P&C Trivia 4

Question 1

Which federal program provides flood insurance to property owners in participating communities?

Accepted Answer

National Flood Insurance Program (NFIP)

Answer

The NFIP, managed by FEMA, offers federally backed flood insurance to homeowners, renters, and businesses in participating communities.

Question 2

An insured has a $200,000 home insured for only $120,000 with an 80% coinsurance requirement. A covered loss of $40,000 occurs. How much will the insurer pay (ignoring deductibles)?

Accepted Answer

$30,000

Answer

The coinsurance formula: ($120,000 ÷ $160,000 required) × $40,000 = 0.75 × $40,000 = $30,000.

Question 3

Which coverage on a personal auto policy pays for damage to the insured's own vehicle caused by perils other than collision, such as hail or vandalism?

Accepted Answer

Comprehensive (Other than Collision)

Answer

Comprehensive (OTC) covers non-collision losses such as fire, theft, hail, flooding, and vandalism to the insured vehicle.

Question 4

What is a 'named insured' on a property and casualty policy?

Accepted Answer

The person or entity specifically listed on the declarations page as the policyholder

Answer

The named insured is the person or entity whose name appears on the declarations page and has the broadest rights under the policy.

Question 5

Which of the following best describes 'moral hazard' in insurance?

Accepted Answer

The tendency of dishonest character to increase the likelihood of fraud or exaggerated claims

Answer

Moral hazard refers to the increased risk of loss due to the dishonest or fraudulent character or intent of the insured.

Property & Casualty Insurance License Test Practice Test

Property & Casualty Insurance License Test Practice Test

P&C Trivia 4