ARKANSAS PROPERTY AND CASUALTY INSURANCE EXAM 2024 ACTUAL EXAM COMPLETE 250 QUESTIONS, Exams of Nursing

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ARKANSAS PROPERTY AND CASUALTY INSURANCE EXAM 2024 ACTUAL EXAM COMPLETE 250 QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS) ALREADY GRADED A+  A hazard is best defined as: - ....ANSWER

Something that increases the chance of loss What is the term for a cause of loss, such as theft of a car? - ....ANSWER >>>>A Peril A state requiring that the commissioner agree that a company's rates are appropriate before they are made effective used which

type of rating approval? - ....ANSWER

Prior approval The following are all true regarding risk management , except: - ....ANSWER Insurance is designed to cover both intentional & unintentional losses Which type of risk involves the possibility of loss or gain? - ....ANSWER >>>>Speculative A fire sprinkler system installed in a factory is considered which of the following methods of managing risk? - ....ANSWER >>>>Reduction Which of the following statements is not correct regarding rates and premiums? - ....ANSWER >>>>Rates may only be excessive if the inside is making up for lossy reserves

An agent for ABC Insurance company is representing an insured in an insurance transaction. The principal in the agency relationship is: - ....ANSWER >>>>ABC Insurance Company The Terrorism Insurance Program created by the TRIA is administered by which of the following federal entities? - ....ANSWER

Department of the Treasury Dividends issued by Stock insurers are paid to: - ....ANSWER >>>>stockholders Which of the following is not an element of an insurable risk? - ....ANSWER >>>>The loss must be catastrophic Which of the following has the primary responsibility of determining acceptable risks? - ....ANSWER >>>>Underwriter

Which of the following places insurance with a non-admitted insurer when insurance cannot be placed with an admitted insurer? - ....ANSWER >>>>Surplus lines producer Because only the insurance company makes a promise to pay a future claim, the insurance contract is: - ....ANSWER >>>>Unilateral In property insurance, which clause prevents the insured from relinquishing ownership and leaving damaged property to the insurer and claiming a total loss? - ....ANSWER

Abandonment The loss of property when the cause of loss is not known is considered: - ....ANSWER Mysterious disappearance

When the insurer elects to end coverage at the end of the policy period, the policy is said to be? - ....ANSWER >>>>Nonrenewed When coverage applies to losses from all perils except those specifically excluded, the policy is said to be written on which of the following basis? - ....ANSWER >>>>Open Perils The insured is not required to do which of the following in the event of a property claim? - ....ANSWER >>>>Notify police, whether or not a law has been broken Actual cash value is best defined as which of the following? - ....ANSWER >>>>Today's current price, minus depreciation All of the following are methods of writing property insurance limits, except: - ....ANSWER >>>>Concurrent coverage

Under the Other Insurance condition, when two property policies cover the same property, how is a loss apportioned? - ....ANSWER >>>>Each policy will share proportionately according to the total insurance A secondary loss that occurs as a result of a direct loss from a covered peril is considered:

• ....ANSWER >>>>Consequential loss If the insured and insurer do not agree on the value of a property loss, what condition would apply? - ....ANSWER >>>>Appraisal Which of the following best describes a hostile fire? - ....ANSWER >>>>Fire caused by a spark escaping from a fireplace and igniting a carpet

Which of the following is the board term for an accident that also includes a continuous and repeated exposure? - ....ANSWER

Occurrence Which of the following statements regarding types of property loss is false? - ....ANSWER Direct losses include additional living expenses Loss of income suffered by a store owner after his/her store is destroyed in a fire is considered a(n): - ....ANSWER >>>>Indirect loss All of the following statements about binders are true, except: - ....ANSWER >>>>A binder specifies the premium amount Plaintiff K was injured after losing control of his skis on a slope with well-marked signs

indicating the degree of difficulty. What legal defense is available to the ski resort to avoid liability for the injury? - ....ANSWER

Assumption of risk A liability policy contains a per person bodily injury limit of $25,000 and a per occurrence limit of $50,000. If an accident were to occur and 3 persons have claims of $20,000 each, the total amount paid is: - ....ANSWER $50, Which term best describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first? - ....ANSWER >>>>Contribution of Equal Shares The formal statement that verifies details so the insurer can determine liability is called: - ....ANSWER >>>>Proof of loss

The most a policy will pay for a loss arising out of any one accident regardless of overall policy limits, is known as the: - ....ANSWER

Per occurrence limit Which of the following is a legal liability imposed without demonstrated negligence?

• ....ANSWER >>>>Absolute Liability If other insurance also applies to a loss covered by a policy, which of the following will establish the method for determining how the insurance companies will pay the loss? - ....ANSWER >>>>Pro rata liability Which of the following is not essential in determining if an action is due to negligence?
• ....ANSWER >>>>Insured party must prove the wrongdoer committed a criminal act

Which of the following statements about liability insurance is false? - ....ANSWER

Bodily injury includes personal injury, sickness, and disease A second negligent act that interferes with the chain of events leading to a loss is known as a(n): - ....ANSWER >>>>Intervening cause The provision the establishes the method by which coverage will be applied if other insurance applies to the loss, is sometimes called: - ....ANSWER >>>>The pro rata liability provision A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? - ....ANSWER >>>>Strict liability

The time period in which a lawsuit may be filed after the occurrence of a claim is referred to as: - ....ANSWER >>>>Statue of limitations Which of the following is defined as the failure to act in a reasonable and prudent manner? - ....ANSWER >>>>Negligence K gets a horrible rash after using wrinkle- prevention cream for 2 months. This is considered: - ....ANSWER >>>>An occurrence Water damaged caused by which of the following is a covered loss under the dwelling policy? - ....ANSWER >>>>Discharge caused by a plumbing failure Which is true of the dwelling policy special form? - ....ANSWER >>>>Contents are covered on an actual cash value basis

Which of the following is true regarding coverage of trees, shrubs or plants under the dwelling policies? - ....ANSWER >>>>Damage to plants by wind, hail, weight of ice, snow or sleet is not covered Under which form is the coverage B limit included in the overall policy limit represented by coverage A? - ....ANSWER

DP- 1 Which of the following coverages is not included in the Basic Dwelling Form? - ....ANSWER >>>>Additional living expenses The limited theft coverage endorsement to the DP is used under which of the following circumstances? - ....ANSWER >>>>The insured dwelling is tenant-occupied

Which of the following perils is not covered under the dwelling broad form? - ....ANSWER

Smoke damage from industrial operations Which statement is true concerning dwelling policies? - ....ANSWER >>>>The Special Form insures the dwelling on an open perils basis, and insures the contents against the broad form perils Which of the following is true regarding personal liability supplement? - ....ANSWER It provides coverage for claim expenses, first aid expenses and damage to property of others Under the property removed coverage extension of a dwelling policy, which of the following is incorrect? - ....ANSWER Policy will not provide any coverage

while the insured property is being removed from endangered property All of the following are covered perils under the extended coverage endorsement to the DP-1, except: - ....ANSWER >>>>Weight of ice, snow, or sleet All of the following statements are correct regarding coverage E, except: - ....ANSWER

Coverage E is available under all dwelling policy forms Which form would not insure against external explosion? - ....ANSWER >>>>Unendorsed DP- 1 Policyholder N insurers his owner-occupied home under dwelling property policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what is the limit of

insurance that will apply to Coverage E, additional living expenses? - ....ANSWER

$20,000 or 20% of coverage A All of following are true of the dwelling special form, except: - ....ANSWER >>>>Both the dwelling and contents are covered on an The Special Form insures the dwelling on an open perils basis, and insures the contents against the broad form perils Which of the following is true regarding personal liability supplement? - ....ANSWER >>>>It provides coverage for claim expenses, first aid expenses and damage to property of others Under the property removed coverage extension of a dwelling policy, which of the following is incorrect? - ....ANSWER >>>>Policy will not provide any coverage while the insured property is being removed from endangered property All of the following are covered perils under the extended coverage endorsement to the DP-1, except: - ....ANSWER >>>>Weight of ice, snow, or sleet All of the following statements are correct regarding coverage E, except: - ....ANSWER >>>>Coverage E is available under all dwelling policy forms Which form would not insure against external explosion? - ....ANSWER >>>>Unendorsed DP- 1 Policyholder N insurers his owner-occupied home under dwelling property policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what is the limit of insurance that will apply to Coverage E, additional living expenses? - ....ANSWER >>>>$20,000 or 20% of coverage A All of following are true of the dwelling special form, except: - ....ANSWER >>>>Both the dwelling and contents are covered on an open perils basis (only dwelling is covered on an open perils basis) Of the following boats, which can be added to the homeowners policy for liability protection? - ....ANSWER >>>>20' sailing boat A deer chews a hole in an insured's she's sitting next to a pond. Which of the following forms could cover this damage? - ....ANSWER HO-3 special forms covers everything except what is excluded, a deer is not a listed exclusion

Which of the following is true concerning the Home Day Care coverage endorsement to the homeowners policy? - ....ANSWER

Extends section II coverages to the insured's home day care business Which of the following claims would not be covered under section II of a homeowners policy? - ....ANSWER >>>>$500 a day for insureds loss of earnings while defending a suit Which statement is true concerning Coverage D of the homeowners policy? - ....ANSWER coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living Which of the following coverages is not found under section I of the homeowners policy? - ....ANSWER >>>>Liability

The HO-8 form settles losses to the building on what valuation method? - ....ANSWER

Functional replacement value Which type of liability limit applies to Medical Both the dwelling and contents are covered on an open perils basis (only dwelling is covered on an open perils basis) Of the following boats, which can be added to the homeowners policy for liability protection? - ....ANSWER >>>>20' sailing boat A deer chews a hole in an insured's she's sitting next to a pond. Which of the following forms could cover this damage? - ....ANSWER >>>>HO-3 special forms covers everything except what is excluded, a deer is not a listed exclusion Which of the following is true concerning the Home Day Care coverage endorsement to the homeowners policy? - ....ANSWER >>>>Extends section II coverages to the insured's home day care business Which of the following claims would not be covered under section II of a homeowners policy? - ....ANSWER >>>>$500 a day for insureds loss of earnings while defending a suit Which statement is true concerning Coverage D of the homeowners policy? - ....ANSWER >>>>coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living Which of the following coverages is not found under section I of the homeowners policy? - ....ANSWER >>>>Liability The HO-8 form settles losses to the building on what valuation method? - ....ANSWER >>>>Functional replacement value Which type of liability limit applies to Medical Payments coverage? - ....ANSWER >>>>per person Which of the following is false in regards to the Home Day Care endorsement? - ....ANSWER >>>>A day care employee is covered Liability for use of which of the following vehicles is not covered by the homeowners policy? - ....ANSWER >>>>Dune buggy used on a public beach Which of the following is not covered under coverage A of the homeowners policy? -

....ANSWER >>>>The land on which the dwelling is located Which of the following is eligible to receive medical payments under section II of a homeowners policy? - ....ANSWER >>>>A residence employee All of the following are true of a homeowners policy, except: - ....ANSWER >>>>The HO- 2 provides open perils coverage on the dwelling All of the following are true of section II of a homeowners policy, except: - ....ANSWER

Loss assessment charges against the insured by a property owner's association are excluded

Which statement is true concerning homeowners policies? - ....ANSWER

Section I deductibles does not apply top

property covered under the scheduled personal property endorsement Under a personal auto policy , which of the following is true of liability for bodily injury resulting from the insured's use of a non- owned auto? - ....ANSWER >>>>Coverage is provided on an excess basis Which of these statements is not true about uninsured motorist coverage? - ....ANSWER

Coverage is automatically provided for the damage to the insureds vehicle

A day care employee is covered Liability for use of which of the following vehicles is not covered by the homeowners policy? - ....ANSWER >>>>Dune buggy used on a public beach Which of the following is not covered under coverage A of the homeowners policy? - ....ANSWER >>>>The land on which the dwelling is located Which of the following is eligible to receive medical payments under section II of a homeowners policy? - ....ANSWER >>>>A residence employee All of the following are true of a homeowners policy, except: - ....ANSWER >>>>The HO- 2 provides open perils coverage on the dwelling All of the following are true of section II of a homeowners policy, except: - ....ANSWER >>>>Loss assessment charges against the insured by a property owner's association are excluded Which statement is true concerning homeowners policies? - ....ANSWER >>>>Section I deductibles does not apply top property covered under the scheduled personal property endorsement Under a personal auto policy , which of the following is true of liability for bodily injury resulting from the insured's use of a non- owned auto? - ....ANSWER >>>>Coverage is provided on an excess basis Which of these statements is not true about uninsured motorist coverage? - ....ANSWER >>>>Coverage is automatically provided for the damage to the insureds vehicle Uninsured motorist coverage under a personal auto policy covers which of the following vehicles? - ....ANSWER >>>>A vehicle owned by the names insured Which of the following part D claims would be denied under the personal auto policy? -

....ANSWER >>>>Loss to the covered auto caused by road damage to tires Which of the following coverages under the personal auto policy protects the insured against drivers who do not have adequate auto liability - ....ANSWER >>>>Underinsured motorist coverage Which type of standard policy includes coverage options that would not exclude damage by flood? - ....ANSWER >>>>Personal Auto Which of the following is found in the common policy declarations of the CPP? - ....ANSWER >>>> What is insurance? - ....ANSWER >>>>Transfer of Risk

What is a risk? - ....ANSWER >>>>the uncertainty or chance of loss occuring. What are the three types of hazards? - ....ANSWER >>>>Moral, Morale, and Physical What is a peril? - ....ANSWER >>>>Perils are causes of loss insured against in an insurance policy. What does indemnify mean? - ....ANSWER

(Reimbursement) an insured is permitted to collect only the extent of the financial loss, no financial gain. What is subrogation? - ....ANSWER >>>>the insurer's legal right to seek damages from third parties, after it has reimbursed the insured for the loss.

What is the difference between accident and occurence? - ....ANSWER >>>>Accident is a sudden, unplanned event that is not under the control of the insured. Occurrence is losses caused by continuous or repeated exposure resulting in injury or damage that is neither intended or expected. How are direct and indirect losses related? - ....ANSWER >>>>Direct losses can cause indirect losses. Ex. A house fire that burns a living room = Direct loss The water damage to the kitchen from the fire fighters putting out the fire = indirect loss What is the difference between vacancy and unoccupancy? - ....ANSWER >>>>Vacancy means that a property has no contents, furnishings, or occupants.

Unoccupancy means a property that has contents or furnishings, but it is not being used or lived in. What type of insurance provides coverage for multiple classes of property at one location? - ....ANSWER >>>>Blanket insurance Explain the actual cash value method. - ....ANSWER >>>>It recognizes the reduction of value of property as it ages. When absolute liability is involved, does the injured party need to prove negligence? - ....ANSWER >>>>No, the injured party does not need to prove negligence. If a product is unsafe, what kind of liability applies to the manufacturer? - ....ANSWER

Strict Liability

What is proximate cause? - ....ANSWER

an act or an event considered a natural and reasonably foreseeable cause of damage to property or injuries to a plaintiff. What is certificate of insurance? - ....ANSWER Written evidence showing that an insurance policy has been issued. What are the four elements of an insurance contract? - ....ANSWER >>>>Agreement - offer and acceptance, consideration, competent parties, and legal purpose. What does representation mean and how does it differ from warranty? - ....ANSWER Representation is statements believed to be true to the best of ones knowledge. Warranty is an absolute true statement upon which the validity of the insurance policy depends.

What is a binder? - ....ANSWER

Temporary oral or written agreement issued by an agent or insurer that provides temporary coverage until a policy becomes effective. What information is included in a policys declarations? - ....ANSWER >>>>Basic underwriting information - insured's name, address, amount of coverage and premiums, and descriptions of insured locations. What are additional or supplementary payments? - ....ANSWER >>>>Additional coverage portion of a policy that provides an additional amount of coverage for a specific loss expense, at no additional premium. What is included in the conditions section of a policy? - ....ANSWER >>>>Includes general