Insurance MCQ

The transfer of the right of recovery from the insured to the insurance company is called: a. Hold harmless b. Assignment c. Indemnity d. Subrogation Answer: d. Subrogation

All of the following statements regarding property insurance are correct, except: a. A property that contains neither occupants nor personal property is deemed vacant b. A binder is a temporary proof of insurance c. The insurer may cancel a policy, after providing proper notice d. The owner of clothing left in the care of a dry cleaner is called a bailee Answer: d. The owner of clothing left in the care of a dry cleaner is called a bailee

When filing a claim, the insured is required to do all of the following, except: a. Protect property from further damage b. Give notice of loss as soon as possible c. Cooperate with the insurance company d. Hire an appraiser Answer: d. Hire an appraiser

All of the following are insured's duties after a loss under a property policy, except: a. Submitting to examination by insurer b. Furnishing inventory of damaged property c. Abandoning the property to the insurer d. Giving notice of loss as soon as possible Answer: c. Abandoning the property to the insurer

Which of the following is attached to a property and casualty insurance policy to amend policy provisions or conditions? a. Consideration b. Exclusion c. Endorsement d. Warranty Answer: c. Endorsement

What is the term for continuous exposure to the same harmful conditions? a. Risk b. Proximate cause c. Occurrence d. Accident Answer: c. Occurrence

All of the following are included in the Declarations of a property policy, except: a. The amount of premium b. The perils insured against c. The amount of coverage d. The named insured's mailing address Answer: b. The perils insured against

The standard policy structure for insurance policies includes all of the following sections, except: a. Conditions b. Exclusions c. Duties d. Insuring agreement Answer: c. Duties

The part of an insurance contract that varies with each individual policy, but is still a mandatory part of the policy, is the: a. Conditions b. Exclusions c. Declarations d. Insuring agreement Answer: c. Declarations

Which of the following statements best describes the Other Insurance condition on a standard property insurance policy, when two separate property policies provide coverage for the same loss? a. Neither policy will make payment for the loss b. Each policy pays an equal share c. One policy pays up to its limits and the other policy pays the balance d. Each policy pays its pro rata share of the loss Answer: d. Each policy pays its pro rata share of the loss

Which term describes coverage that applies only to loss by the perils stated in a policy? a. Special Form b. Open peril c. All risk d. Named peril Answer: d. Named peril

All of the following are true regarding the structure of a property policy, except: a. The insured's duties in case of loss are found in the Insuring Agreement b. The Declarations include the insured's name, policy period, policy limits and the amount of premium c. The bankruptcy condition does not relieve the insurer of its duties or obligations under the policy d. The Exclusions itemize the perils not covered Answer: a. The insured's duties in case of loss are found in the Insuring Agreement

In addition to the named insured in a property policy, coverage is automatically provided for: a. Persons who appraise the property b. The insured's spouse c. Persons who purchase the insured's property d. The insured's employer Answer: b. The insured's spouse

Which of the following may broaden the coverage found in an insurance policy? a. Conditions b. Declarations c. Endorsements d. Insuring Agreement Answer: c. Endorsements

Which clause broadens coverage of an existing policy with no increase in premium? a. Loss payable b. Subrogation c. Assignment d. Liberalization Answer: d. Liberalization

All of the following statements regarding a property policy are correct, except: a. An indirect loss is an additional loss that results from a direct loss b. A deductible is a portion of a loss that an insured must bear c. The conditions describe the responsibilities and obligations of the insurer and the insured d. The insuring agreement personalizes the policy, specifying the exact property being insured Answer: d. The insuring agreement personalizes the policy, specifying the exact property being insured

Which of the following is true about the right of salvage? a. The insured has the right to keep damaged property after payment of a loss b. The insurer has the right to take possession of damaged property after payment of a loss c. Damaged property must be disposed of after a loss. d. The insurer is required to take possession of damaged property after a loss Answer: b. The insurer has the right to take possession of damaged property after payment of a loss

Which of the following is considered a hostile fire? a. The fire in a trashcan being used to burn leaves b. An uncontrolled campfire in the woods c. A fireplace containing a roaring wood fire d. The fire in the firebox of a furnace Answer: b. An uncontrolled campfire in the woods

All of the following statements regarding the property policy structure are correct, except: a. The insured's duties and obligations are listed in the conditions section b. The insuring agreement describes the perils that are covered under the policy c. The Declarations Page lists other parties having an insurable interest in the property d. Additional coverages are added to the policy for an additional premium Answer: d. Additional coverages are added to the policy for an additional premium

What is the term for a dwelling that is uninhabited but has household furniture inside? a. Unoccupied b. Vacant c. Morale hazard d. Other Structure Answer: a. Unoccupied