P&C Trivia 5

Question 1

Which insurer-initiated cancellation requires a longer notice period and typically involves non-renewal rather than mid-term termination?

Accepted Answer

Non-renewal

Answer

Non-renewal is the insurer's decision not to continue coverage at the end of the policy term, requiring advance written notice per state law.

Question 2

A 'vacancy clause' in a commercial property policy typically suspends certain coverages when a building has been vacant for more than:

Accepted Answer

60 days

Answer

Standard commercial property policies suspend coverage for vandalism, sprinkler leakage, and glass breakage after 60 consecutive days of vacancy.

Question 3

Which of the following is an example of 'concurrent causation'?

Accepted Answer

A flood (excluded) combines with windstorm (covered) to cause a loss

Answer

Concurrent causation occurs when both a covered and an excluded peril contribute to the same loss, creating coverage disputes.

Question 4

What is the role of an insurance 'underwriter'?

Accepted Answer

To evaluate and select risks the insurer will accept and at what price

Answer

Underwriters assess risk, decide whether to accept it, and determine the appropriate premium to charge.

Question 5

Under the 'other insurance' provision, when two policies cover the same loss, each typically pays:

Accepted Answer

A pro rata share based on each policy's limit relative to the total

Answer

The pro rata 'other insurance' clause splits the loss proportionally between policies based on each policy's limit relative to the combined limits.

Property & Casualty Insurance License Test Practice Test