Property And Casualty Insurance License Casualty Insurance Basics 2

Question 1

What is the split limit '25/50/10' on an auto liability policy?

Accepted Answer

$25,000 per person bodily injury, $50,000 per accident bodily injury, $10,000 property damage

Answer

The split limit 25/50/10 means $25,000 maximum per injured person, $50,000 maximum per accident for all bodily injuries, and $10,000 for property damage.

Question 2

What does 'occurrence' mean in a liability policy?

Accepted Answer

An accident or continuous exposure to conditions that result in bodily injury or property damage

Answer

An occurrence is an accident, including repeated exposure to substantially the same general harmful conditions, that results in bodily injury or property damage.

Question 3

What is the difference between an 'occurrence' form and a 'claims-made' form?

Accepted Answer

Occurrence covers losses that happen during the policy period; claims-made covers claims filed during the policy period

Answer

An occurrence form triggers coverage based on when the loss occurred, while a claims-made form triggers coverage based on when the claim is first reported during the active policy period.

Question 4

Personal Injury Protection (PIP) coverage is associated with which type of auto insurance system?

Accepted Answer

No-fault system

Answer

PIP is a component of no-fault auto insurance systems, providing medical and income loss benefits to the insured regardless of who caused the accident.

Question 5

What is the purpose of an 'umbrella' liability policy?

Accepted Answer

To provide excess limits above underlying primary policies and drop-down coverage for some uncovered claims

Answer

An umbrella policy sits above primary liability policies, paying claims that exceed underlying limits and sometimes covering gaps left by underlying policies.

Property And Casualty Insurance License Practice Test

Property And Casualty Insurance License Practice Test

Property And Casualty Insurance License Casualty Insurance Basics 2