PENNSYLVANIA PROPERTY AND CASUALTY LICENSING EXAM 2024 ACTUAL EXAM COMPLETE 250 QUESTIONS, Exams of Real Estate Management

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PENNSYLVANIA PROPERTY AND CASUALTY LICENSING EXAM 2024 ACTUAL EXAM COMPLETE 250 QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS) ALREADY GRADED A+ What must an insurance company do to employ someone as a producer? - ....ANSWER >>>>File a notice of appointment with the Department. The department then will verify if the producer is eligible for appointment. If ineligible, they will notify the insurer. The insurer pays a fee for every appointment. To boost her insurance sales at the end of the year, Trudy started offering potential clients a $250 cash gift card in exchange for purchasing an insurance policy. Which prohibited sales practice has she committed? - ....ANSWER >>>>Rebating (offering

anything of value in exchange for the purchase of insurance) Within how many days must the Commissioner approve or disapprove rates? - ....ANSWER >>>> The federal Fair Credit Reporting Act protects the rights of: - ....ANSWER >>>>Consumers Larry submitted a claim under his homeowners insurance policy. The insurance company has the burden of proof to show that the loss is excluded; otherwise, it must pay Larry's claim. What causes of loss are contained on Larry's policy. - ....ANSWER

Open Perils Open Peril - ....ANSWER >>>>All perils except those specifically excluded Sara sustains a water damage loss to her home due to torrential rains that flooded her neighborhood. She reports the loss to her agent and says that according to the insuring agreement of her policy, she is insured against risks of direct loss to her

property. Is she covered for this damage to her property? - ....ANSWER >>>>No, this kind of loss is typically excluded. Are losses by flood covered in homeowners policies? - ....ANSWER >>>>No, this type of loss is specifically excluded in homeowners policies. It can be obtained in some cases by endorsement or through the National Flood Insurance Program (NFIP) Which of the following is NOT an example of a peril, or cause of loss? - ....ANSWER >>>>Blocked exit in a burning building delaying entry to firefighters (this is a hazard, not a peril) What is the maximum amount for which the Pennsylvania Property and Casualty Insurance Guaranty Association can be liable for on a covered claim? - ....ANSWER >>>>$300, For a loss to be covered under a property insurance policy, a covered peril must be a(n) - ....ANSWER

Proximate cause of loss (cause that sets in

motion an unbroken chain of events leading to the loss; may or may not be the immediate cause of the loss) If an insurer initiates a midterm cancellation of a commercial property or casualty risk insurance policy, the unearned premium must be returned to the insured within how many business days after the effective date of termination? - ....ANSWER

10 days If an insured initiates a midterm cancellation of a commercial property or casualty risk insurance policy, the unearned premium must be return to the insured within how many business days after the effective date of termination? - ....ANSWER 30 days Martin's Music Shoppe submitted a claim to the insurance company that provides insurance on its building. If the insurance company denies the claim, what is the peril that caused the loss? A. Lightning

B. Hail C. Aircraft D. Flood - ....ANSWER >>>>Flood Which of the following types of liability holds an insured legally responsible if another party is injured or damage because its operations, or other conditions pertaining to the insured, are considered inherently dangerous? - ....ANSWER >>>>Strict Liability The term commercial property and casualty risk insurance does not include insurance issued for - ....ANSWER >>>>Fidelity and Surety Bonds A fire insurance policy may be cancelled at any time at the request of the - ....ANSWER >>>>Insured How much notice must an insurer give when cancelling a fire policy? - ....ANSWER >>>>An insurer

must give the insured five days' written notice of cancellation The Insurance Consultation Services Exemption Act applies to all insurance consultation services rendered incident to property or casualty insurance policies. It does not include services performed by an - ....ANSWER >>>>Insured's Attorney Wanda is governed by the Health Insurance Portability Act (HIPAA), which requires her to protect the privacy of the health information she' given by her clients and individuals applying for insurance. Which of the following types of property and casualty insurance is NOT subject to HIPAA? - ....ANSWER >>>>Fire Insurance Santucci Brothers Grocery employs a high school student to deliver groceries on weekends. When the employee accidentally runs over a customer's dog when pulling into the customer's driveway one Saturday morning, which of the following terms BEST describes Santucci Brothers' legal

responsibility for the employee's action? - ....ANSWER >>>>Vicariously liable Vicarious Liability - ....ANSWER >>>>Legal responsibility placed on one person for the acts of another. Erica's dire financial condition compels her to consider filing for bankruptcy. What type of hazard does her financial condition represent? - ....ANSWER >>>>Moral Hazard Moral Hazard - ....ANSWER >>>>Tendencies or traits of an individual to increase the chance of a loss Cary, an insurance producer, placed on his agency's official web site a statement to the effect that the agency's policyholders were protected by the agency's membership in the Pennsylvania Property and Casualty Insurance Guaranty Association. This statement is - ....ANSWER >>>>Prohibited Advertising

Donaldson Insurance Company had earned premiums of $100 million last year and incurred losses of $75 million in that same time period. What is this insurer's loss ratio? A. 75% B. 25% C. 100% D. 7.5% - ....ANSWER >>>>75% Loss Ration - ....ANSWER >>>>Calculated by dividing incurred losses by earned premiums Which of the following is not a typical provision in a property or casualty insurance policy? - ....ANSWER

Endorsement (Endorsements are added to modify the original policy provisions) The standard mortgage clause in a property insurance policy covering real property gives certain rights to a mortgagee named in the declarations.

Which of the following is NOT one of these rights? - ....ANSWER >>>>Any exclusion that applies to the insured will not apply to the mortgagee What type of endorsement must an insurer allow an insured to buy after the insured's claims-made policy has been canceled? - ....ANSWER

Extended Reporting Coverage Rob submitted a $1,000 claim against Steve's auto insurance policy, alleging Steve was negligent and caused the accident. When Steve's insurer paid Rob's claim, it only paid $800 because it had determined that Rob was 20 percent responsible for the accident. What defense against negligence did the insurer use? - ....ANSWER >>>>Comparative Negligence Prohibited Advertising Donaldson Insurance Company had earned premiums of $100 million last year and incurred losses of $75 million in that same time period. What is this insurer's loss ratio? A. 75% B. 25% C. 100% D. 7.5% - ....ANSWER >>>>75% Loss Ration - ....ANSWER >>>>Calculated by dividing incurred losses by earned premiums Which of the following is not a typical provision in a property or casualty insurance policy? - ....ANSWER >>>>Endorsement (Endorsements are added to modify the original policy provisions) The standard mortgage clause in a property insurance policy covering real property gives certain rights to a mortgagee named in the declarations. Which of the following is NOT one of these rights? - ....ANSWER >>>>Any exclusion that applies to the insured will not apply to the mortgagee What type of endorsement must an insurer allow an insured to buy after the insured's claims-made policy has been canceled? - ....ANSWER >>>>Extended Reporting Coverage Rob submitted a $1,000 claim against Steve's auto insurance policy, alleging Steve was negligent and caused the accident. When Steve's insurer paid Rob's claim, it only paid $800 because it had determined that Rob was 20 percent responsible for the accident. What defense against negligence did the insurer use? - ....ANSWER >>>>Comparative Negligence Comparative Negligence - ....ANSWER >>>>A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party), on the basis of each person's proportionate negligence.

What typically provides temporary coverage for a specified time period until an insurance policy is accepted or denied? - ....ANSWER >>>>Binder What is the threshold for declaring a certified act of terrorism under the Terrorism Risk Insurance Act (TRIA) and its 2005 extension? - ....ANSWER >>>>$ million Exclusions help to keep premiums reasonable and affordable. Which of the following is not a purpose of exclusions? - ....ANSWER >>>>Reducing coverage to sufficiently earn a profit What is the difference between a mortgage clause and a loss payable clause in a property insurance policy covering real property? - ....ANSWER >>>>A loss payable clause usually is not as broad as the mortgage clause and does not give the loss payee any rights other than a right to share in a claim settlement Tabitha lives in a residential neighborhood where most of the homeowners have small children.

Immediately after purchasing her home, Tabitha fenced her back yard because it contains an attractive nuisance. Which of the following structures in Tabitha's back yard could be the attractive nuisance? - ....ANSWER >>>>Swimming Pool Attractive Nuisance - ....ANSWER >>>>A hazardous condition that can attract and injure children For how many days may a binder or other contract for temporary insurance be made? - ....ANSWER

Up to 30 days Donaldson Insurance Company wrote premiums of $100 million last year and incurred expenses of $ million in that same time period. What is this insurer's expense ratio? A. 25% B. 40% C. 75%

D. 66⅔% - ....ANSWER >>>>40%

Expense Ratio - ....ANSWER >>>>Calculated by dividing incurred expenses by written premiums What type of state plan provides access to basic property insurance to individuals who might not be able to obtain coverage because their property is located in high risk areas or there are other high risk problems? - ....ANSWER >>>>FAIR Plan FAIR plans (Fair Access to Insurance Requirements) - ....ANSWER >>>>This plan addresses the issue of property insurance availability. This plan makes insurance available to risks that were previously considered uninsurable because of environmental hazards. this plan states that no application can be denied simply because of environmental factors beyond the applicants control.

Master Care Plumbing Supplies has a standard property insurance policy and operates out of a 100 - year-old building. After the building is almost destroyed by an explosion, the insured is told that he must rebuild with new electrical wiring, masonry construction, and fire walls to comply with current building codes. Although the direct damage caused by the explosion is covered, what exclusion might apply to rule out coverage for the reconstruction costs to get the building up to code? - ....ANSWER

Ordinance or Law Exclusion Ordinance or Law Exclusion - ....ANSWER Eliminates coverage for the extra expenses, over and above the cost of replacing damaged property that might be necessary to comply with such ordinances Which entity protects policyowners and claimants if an insurer cannot perform its contractual obligations because of insolvency? - ....ANSWER Pennsylvania Property and Casualty Insurance Guaranty Association

Sanborn Supplies has a commercial property policy with a causes of loss broad form. In a hurry to deliver an order, a company driver strikes a corner of the warehouse, causing substantial damage to it. Will the company's commercial property policy cover the damage to the building? A. Yes. Damage by vehicles is a covered cause of loss under the broad form commercial property policy. B. No. Although vehicle damage is a covered cause of loss, coverage is excluded when the insured is at fault. C. No. Vehicle damage is not a covered cause of loss in the causes of loss broad form. D. Coverage will apply only if the owner has the cause of loss form that covers collision damage. - ....ANSWER >>>>No, Although vehicle damage is a covered cause of loss, coverage is excluded when the insured is at fault

The land immediately behind Amy's home was being excavated to install underground wiring to her garage. The earth movement resulted in a gas line break and explosion that damaged her home. Which statement is true about coverage for losses due to earth movement under Amy's DP 3 Form? - ....ANSWER >>>>Only damage resulting from the explosion is covered; Earth movement losses are excluded under the DP 3 form. Austin owns a small dry cleaning business and is considering the purchase of a business owners policy (BOP). What must Austin know about his business to determine if he is eligible? - ....ANSWER

Estimated annual sales Dos Ojos Optical insures its business on a BOP. What policy limit of liability applies to losses submitted under coverage for liability, medical expenses, and fire legal liability? - ....ANSWER General Aggregate General Aggregate - ....ANSWER >>>>-bodily injury and property damage occurrence

• personal and advertising, injury occurrence
• damage to property, rented to you
• medical payments Which of the following is NOT a peril of the sea? - ....ANSWER >>>>Wear and tear Perils of the Sea - ....ANSWER >>>>-collision
• sinking of a vessel
• heavy weather
• stranding Darryl borrows formal dinnerware and glasses from his neighbor, Tanya, to use at a large party at his home. While Darryl and his guests participate in an enthusiastic line dance, he accidentally smashes several of Tanya's plates. Will Darryl's homeowners policy cover this loss to Tanya's property? A. Yes, because the provision for Damage to Property of Others covers such loss. B. No, because Darryl doesn't own the property.

C. Yes, as long as Darryl is legally responsible for the loss. D. No, because Darryl intentionally participated in the act that caused the damage. - ....ANSWER

Yes, because the provision for Damage to Property of Others covers such loss Damage to Property of Others - ....ANSWER Provision in Section II of a homeowners policy that pays up to $1000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability Heat and electricity were out for four days at General Aggregate General Aggregate - ....ANSWER >>>>-bodily injury and property damage occurrence - personal and advertising, injury occurrence - damage to property, rented to you - medical payments Which of the following is NOT a peril of the sea? - ....ANSWER >>>>Wear and tear Perils of the Sea - ....ANSWER >>>>-collision - sinking of a vessel - heavy weather - stranding Darryl borrows formal dinnerware and glasses from his neighbor, Tanya, to use at a large party at his home. While Darryl and his guests participate in an enthusiastic line dance, he accidentally smashes several of Tanya's plates. Will Darryl's homeowners policy cover this loss to Tanya's property? A. Yes, because the provision for Damage to Property of Others covers such loss. B. No, because Darryl doesn't own the property. C. Yes, as long as Darryl is legally responsible for the loss. D. No, because Darryl intentionally participated in the act that caused the damage. - ....ANSWER >>>>Yes, because the provision for Damage to Property of Others covers such loss Damage to Property of Others - ....ANSWER >>>>Provision in Section II of a homeowners policy that pays up to $1000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability Heat and electricity were out for four days at Tanner's home due to a city power outage. The lack

-bodily injury and property damage occurrence - personal and advertising, injury occurrence - damage to property, rented to you - medical payments Which of the following is NOT a peril of the sea? - ....ANSWER >>>>Wear and tear Perils of the Sea - ....ANSWER >>>>-collision - sinking of a vessel - heavy weather - stranding Darryl borrows formal dinnerware and glasses from his neighbor, Tanya, to use at a large party at his home. While Darryl and his guests participate in an enthusiastic line dance, he accidentally smashes several of Tanya's plates. Will Darryl's homeowners policy cover this loss to Tanya's property? A. Yes, because the provision for Damage to Property of Others covers such loss. B. No, because Darryl doesn't own the property. C. Yes, as long as Darryl is legally responsible for the loss. D. No, because Darryl intentionally participated in the act that caused the damage. - ....ANSWER >>>>Yes, because the provision for Damage to Property of Others covers such loss Damage to Property of Others - ....ANSWER >>>>Provision in Section II of a homeowners policy that pays up to $1000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability Heat and electricity were out for four days at Tanner's home due to a city power outage. The lack of heat, combined with freezing weather conditions, caused the pipes in Tanner's home to burst. Will his DP 3 policy cover his loss? -

....ANSWER >>>>The freezing loss is covered by DP 3 The ordinance or law coverage endorsement does NOT cover which of the following losses? -

....ANSWER >>>>Income lost during reconstruction or repairs On Halloween night a group of pranksters spray- painted graffiti on Sebastian's garage door. The markings on the door did NOT permanently damage it but the door required cleaning and minor repair work. The peril causing this loss is malicious mischief. Which of the following standard homeowners policies includes malicious mischief as a named peril? - ....ANSWER >>>>HO 2, HO 3, HO 4, HO 6, and HO 8 (all except HO 5) What is the name given to the insured party in an ocean marine policy? - ....ANSWER >>>>Assured The chief accountant for Iroquois Ironworks asks their agent which causes of loss form under the commercial property policy is best. The agent explains that the special form provides the broadest coverage. In addition, the special form - ....ANSWER

covers most types of theft and is less subject to a denial of coverage

Djinn Enterprises rents office space and erects partitions and cabinets within the space. Although these are installed at Djinn's expense, it does not own them. The office sustains a fire and the cabinets and partitions are destroyed. Does Djinn's commercial property policy cover the loss? A. No. Djinn had no insurable interest in them. B. Yes. They are covered as improvements and betterments. C. Yes, because Djinn leased the space they occupied. D. Yes, but only through an endorsement. - ....ANSWER >>>>Yes, they are covered as improvements and betterments Which of the following would NOT be covered under Coverage B "Other Structures" in a homeowners policy? - ....ANSWER >>>>Detached shed from which a tool repair business is operated.

Other Structures excludes structures from which a business is operated The insurance manager at Mohawk Roofing Company is concerned about its exposure to weight of ice and snow and collapse losses. Which cause of loss form(s) under the commercial property policy would the agent recommend to cover these exposures? - ....ANSWER >>>>Either the broad form or special causes of loss form In the National Flood Insurance Program (NFIP), the dwelling form provides building and contents coverage for each of the following eligible properties EXCEPT: - ....ANSWER >>>>Personal contents in a commercial building When selecting a limit of insurance in a dwelling policy, it is important to know how the value of property is determined after a loss. The provision that addresses the value of property is found in - ....ANSWER >>>>The valuation provision of the policy

Donovan's Supply Company is constructing an additional building to house its equipment and supplies. While the building is being constructed, Mr. Donovan wants assurances from his agent that the building, building materials and supplies, and temporary structures used to erect the building, are all covered. What type of insurance should he consider? A. Business income and extra expense coverage B. Businessowners coverage C. Builders risk coverage D. Property off premises coverage - ....ANSWER

Builders risk coverage Chloe moved from a spacious home to a smaller condo unit and stored some of her furniture in an off-premises storage unit. She knows the furniture in her condo unit is covered as personal property under her homeowners policy but wants to know if the stored furniture is also covered and, if so, do

any coverage restrictions exist. What do you tell her? A. Personal property located in a self-storage facility is not covered. B. Coverage for personal property located in a self- storage facility is limited to $5,000. C. Coverage for personal property located in a self- storage facility is limited to 10% of Coverage C D. Coverage for personal property located in a self- storage facility is limited to 10% of Coverage C or $1,000'whichever is greater - ....ANSWER

Coverage for personal property located in a self-storage unit is limited to 10% of Coverage C or $1,000, whichever is greater Heather's distraught next-door neighbor was holding his wife hostage at gunpoint. After several hours, the neighbor's husband still refused to free his wife. The sheriff's department ordered that tear gas canisters be fired into the house. The gas

sparked a fire in the house and the sheriff ordered the fire department to contain the fire from spreading to other homes. Will Heather's dwelling policy cover the damage to her home from this fire containment action? - ....ANSWER >>>>Yes, because a fire containment action ordered by a governmental authority is an exception to the governmental action exclusion Maker Manufacturing submits a claim under its Equipment Breakdown policy for damage to its computer system. If the insurer pays the claim, which of the following occurrences caused the loss?

• ....ANSWER >>>>Electrical arcing The Unoccupancy and Vacancy clause of the Farm Property Other Provisions form (FP 00 90) states that if a building is vacant or unoccupied for more than 120 consecutive days, the limit of insurance is reduced by - ....ANSWER >>>>50% Liam is shipping cargo internationally and buys ocean marine cargo insurance. Applying the law of general average, if a total of $10,000 cargo is in

transit and Liam's cargo is valued at $1,000, he would be responsible for what percentage of any cargo loss that is subject to the law of general average? - ....ANSWER >>>>10% A risk manager for a business wants to know what types of property are included in the term "building property." Which description is most accurate? - ....ANSWER >>>>Buildings and structures, indoor and outdoor fixtures, including signs attached to the building, and personal property used to service the building Special Provisions-Pennsylvania (DP 01 37) modifies a dwelling policy to state that actual cash value applies to the valuation of covered property - ....ANSWER >>>>if there is either partial or total loss of damage Lorna's ex-husband Vince tripped over a lawn sprinkler and fell in her backyard during their son's graduation party. Two weeks later, Vince claimed he sprained his wrist and broke an expensive watch. He threatens to sue Lorna if she doesn't file a claim

with her insurer for his bodily injury and the damage to his watch. If Vince sues, will the insurer defend her? - ....ANSWER >>>>The insurer will defend her even if the suit is without merit or is fraudulent Personal Property Replacement Cost Loss Settlement--Pennsylvania (HO 23 63) is attached to Rhonda's homeowners policy. She knows that her policy covers awnings, but is not sure under what conditions. Which of the following is NOT true? - ....ANSWER >>>>The awnings will be covered only if they are attached to a building Which two types of coverage are considered goodwill coverage and do NOT require the legal liability of an insured? - ....ANSWER >>>>Medical Payments to Others an Damage to Property of Others Whenever it rained, the roof of Jada's home leaked. Although she intended to repair the roof, she never got around to it. A heavy rainstorm exacerbated the leakage problem and damaged furniture in her