P&c Insurance Practice Exam

22 Questions

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Insurance Quizzes & Trivia

Insurance companies are one way in which we get to cover people from accidents, fire and even theft. There are some policies that protect people from being exhorted by such companies and it is important for one to know them. Do you have a P&C insurance exam that is coming up? Take up the practice test below and see how well you will fair.


Questions and Answers
  • 1. 
    If a company cancels an auto policy mid-term, the refund will be made on
    • A. 

      A. pro rata basis

    • B. 

      B. short rate basis

    • C. 

      C. retroactive basis

    • D. 

      D. coinsurance basis

  • 2. 
    What is the term used to describe terminating the insurance relationship at the end of the policy period?
    • A. 

      A. cancellation

    • B. 

      B. nonrenewal

    • C. 

      C. seperation

    • D. 

      D. exclusion

  • 3. 
    Which is the best example of an indirect loss?
    • A. 

      A. sequential loss

    • B. 

      B. liability loss

    • C. 

      C. employee theft

    • D. 

      D. loss of use

  • 4. 
    Which is a two party contract?
    • A. 

      A. property

    • B. 

      B. casualty

    • C. 

      C. liability

    • D. 

      D. auto

  • 5. 
    Insurance contracts offset
    • A. 

      A. speculative risk

    • B. 

      B. pure risk

    • C. 

      C. gambling

    • D. 

      D. created risk

  • 6. 
    Which of the following is a third party contract?
    • A. 

      Property

    • B. 

      Casualty

    • C. 

      Earthquake

    • D. 

      Theft

  • 7. 
    Risk is best defined as
    • A. 

      Chance of loss

    • B. 

      Certainty of loss

    • C. 

      Financial loss

    • D. 

      Sentimental loss

  • 8. 
    Being subject to a loss is
    • A. 

      Liability

    • B. 

      Indemnity

    • C. 

      Exposure

    • D. 

      Subrogation

  • 9. 
    The ranking insured in a personal lines contract is the
    • A. 

      Named insured

    • B. 

      First named insured

    • C. 

      Mortgagee

    • D. 

      Husband

  • 10. 
    To be paid a claim under a p&c contract, insurable interest must exist
    • A. 

      At the time of application

    • B. 

      On the policy date

    • C. 

      At the time of loss

    • D. 

      At the time of claim settlement

  • 11. 
    This type of company is run for the benefit of the policyholders
    • A. 

      Stock

    • B. 

      Mutual

    • C. 

      Foreign

    • D. 

      Alien

  • 12. 
    Ohio casualty is doing regular business in indiana. within the state of indiana, ohio casualty would be considered a 
    • A. 

      Domestic company

    • B. 

      Nonadmitted company

    • C. 

      Alien company

    • D. 

      Foreign company

  • 13. 
    Ohio casualty is doing regular business in indiana. within the state of indiana, ohio casualty would be considered
    • A. 

      Admitted

    • B. 

      Domestic

    • C. 

      Unauthorized

    • D. 

      Risk retention group

  • 14. 
    A company chartered in guam and puerto rico doing regular business in new york would be considered by new yorkers to be a 
    • A. 

      Domestic

    • B. 

      Foreign

    • C. 

      Alien

    • D. 

      International

  • 15. 
    With regard to insurance, the term consideration means
    • A. 

      The premium and the statements on the application

    • B. 

      The insurer's method of evaluating the applicant for coverage

    • C. 

      The screening process all agents undergo prior to licensing

    • D. 

      The sidebyside policy comparison by the applicant

  • 16. 
    Which of the following terms indicates that an insurance contract contains the legally enforcable promises of only one party?
    • A. 

      Adhesion

    • B. 

      Unilateral

    • C. 

      Conditional

    • D. 

      Aleatory

  • 17. 
    In purchasing an insurance contract, the applicant must accept the contract as written. this type of contract is reffered to as an
    • A. 

      Settled contract

    • B. 

      Aleatory contract

    • C. 

      Contract of adhesion

    • D. 

      Personal contract

  • 18. 
    Which of the following priciples states that in forming an insurance contract, both parties have a responsibility to the other?
    • A. 

      Doctorine of warrenties

    • B. 

      Doctorine of representations

    • C. 

      Doctorine of utmost good faith

    • D. 

      Doctorine of reasonable expectations

  • 19. 
    An incorrect statement made intentionally on an auto insurance application is a
    • A. 

      Fraud

    • B. 

      Warrenty

    • C. 

      Misrepresentation

    • D. 

      Concealment

  • 20. 
    A binder is an
    • A. 

      Interim insuring agreement

    • B. 

      Application

    • C. 

      Counteroffer

    • D. 

      Endorsement

  • 21. 
    • A. 

      Part of the insured's consideration is the premium

    • B. 

      Part of the insured's consideration are the statements on the application

    • C. 

      Part of the company's consideration are the promises in the policy

    • D. 

      Part of the company's consideration is the payment of a claim

  • 22. 
    Any ambiguities in a p&c policy will be resolved in favor of the policyowner because the policy is a
    • A. 

      Contract of adhesion

    • B. 

      Conditional contract

    • C. 

      Unilateral contract

    • D. 

      Aleatory contract