P&C Trivia 2

Question 1

Which type of insurance policy covers the insured's legal liability for bodily injury or property damage caused to third parties?

Accepted Answer

Liability coverage

Answer

First-party coverage

Answer

Physical damage coverage

Answer

Inland marine coverage

Question 2

What does the term 'subrogation' mean in property and casualty insurance?

Accepted Answer

The insurer's right to pursue a third party that caused an insurance loss

Answer

Cancellation of a policy mid-term

Answer

Adding an additional insured to a policy

Answer

Dividing premiums between multiple insurers

Question 3

An insured's home is destroyed by fire. Under a standard homeowners policy, which coverage pays for temporary housing while repairs are made?

Accepted Answer

Coverage D – Loss of Use

Answer

Coverage A – Dwelling

Answer

Coverage B – Other Structures

Answer

Coverage C – Personal Property

Question 4

Which of the following perils is typically EXCLUDED from a standard homeowners policy?

Accepted Answer

Flood

Answer

Fire

Answer

Windstorm

Answer

Theft

Question 5

Under the principle of indemnity, the purpose of insurance is to:

Accepted Answer

Restore the insured to the same financial position as before the loss

Answer

Allow the insured to profit from a loss

Answer

Punish negligent insureds with higher premiums

Answer

Replace all losses regardless of depreciation

Question 6

A personal auto policy's collision coverage pays for damage to the insured vehicle caused by:

Accepted Answer

Contact with another vehicle or object

Answer

Hail or falling objects

Answer

Theft of the vehicle

Answer

Flood damage

Question 7

What is a 'binder' in the context of property and casualty insurance?

Accepted Answer

A temporary agreement providing coverage until a formal policy is issued

Answer

A written summary of policy exclusions

Answer

A fee charged for processing a policy application

Answer

A document listing all insured property values

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