Casualty Insurance Policies Flashcards
6 cards from real P&C practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Casualty Insurance Policies flashcards as text
The 'insuring agreement' in a casualty insurance policy is best described as:
Answer: The insurer's promise to pay covered losses in exchange for the premium
The insuring agreement is the section of the policy where the insurer makes its promise to pay, defend, or indemnify the insured for covered losses.
Under a commercial auto policy, a 'symbol 1' designation means:
Answer: Any auto is covered, including those newly acquired
Symbol 1 is the broadest coverage symbol in a commercial auto policy and extends coverage to any auto, including those acquired during the policy period.
Workers compensation insurance is required in most states because:
Answer: State statutes mandate employers provide no-fault wage replacement and medical benefits to injured workers
Workers compensation is a statutory program — nearly every state requires employers to carry it, providing injured employees with medical care and wage replacement on a no-fault basis in exchange for the employee giving up the right to sue the employer.
In homeowners insurance, 'replacement cost' coverage differs from 'actual cash value' in that replacement cost:
Answer: Pays the cost to repair or replace the property with like kind and quality without deducting for depreciation
Replacement cost coverage pays the full cost to repair or replace damaged property with new materials of like kind and quality, without subtracting depreciation.
Which of the following describes a 'non-owned auto' exposure?
Answer: An employee using their personal vehicle for company business
Non-owned autos are vehicles used in the business but not owned or leased by the insured — most commonly employees' personal cars used on company business. The employer has vicarious liability for accidents in these vehicles.
What is the purpose of a 'garage liability' coverage form?
Answer: To cover the unique liability exposures of auto dealerships and repair shops, including customer vehicles in the shop's care
Garage liability covers the general liability and auto liability exposures unique to auto dealers, service stations, and repair shops, including liability for customer vehicles in the insured's care, custody, or control (garagekeepers).