#1
Which of the following types of insurance typically covers damage to property resulting from fire, theft, or vandalism?
Property insurance
ExplanationCovers damage to property from specified events like fire, theft, or vandalism.
#2
What does 'casualty insurance' primarily cover?
Injuries to individuals
ExplanationProvides coverage for injuries or damages to individuals.
#3
What is the purpose of a deductible in insurance policies?
To reduce the insurer's risk exposure
ExplanationDeductibles reduce the amount the insurer pays, minimizing risk exposure.
#4
In property insurance, what does the term 'endorsement' refer to?
An addition or amendment to the policy
ExplanationAn endorsement is a modification or addition to the insurance policy.
#5
What is the purpose of coinsurance in property insurance?
To encourage policyholders to maintain adequate coverage
ExplanationEncourages policyholders to maintain sufficient coverage by sharing costs.
#6
Which coverage form covers damage caused by windstorms, hail, and other specified perils?
Broad Form (DP-2)
ExplanationSpecific coverage for damage caused by windstorms, hail, and other specified perils.
#7
In property insurance, what is 'actual cash value' (ACV)?
The replacement cost minus depreciation
ExplanationACV is the property's value at the time of loss, considering depreciation.
#8
Which type of insurance provides coverage for losses resulting from a lawsuit or legal claim against the insured?
Liability insurance
ExplanationCovers losses from lawsuits or legal claims against the insured party.
#9
What does 'named peril' mean in property insurance?
Only the perils explicitly listed in the policy are covered
ExplanationCoverage is limited to perils specifically mentioned in the policy.
#10
What is 'consequential loss' in property insurance?
A loss of income or profit due to a covered peril
ExplanationCovers loss of income or profit resulting from a covered peril.
#11
Which of the following is not typically covered under a standard homeowners insurance policy?
Flood damage
ExplanationStandard policies usually exclude coverage for flood damage.
#12
Which of the following is true about umbrella insurance policies?
They offer additional liability coverage beyond the limits of underlying policies
ExplanationUmbrella policies provide extra liability coverage beyond other policies.
#13
Which of the following perils is typically excluded from a standard homeowners insurance policy?
Earthquake
ExplanationEarthquake coverage is typically excluded and requires a separate policy.
#14
What does 'umbrella liability insurance' typically provide coverage for?
Additional liability coverage beyond the limits of other insurance policies
ExplanationOffers extra liability coverage beyond other insurance policies.
#15
What is 'business interruption insurance' designed to cover?
Lost income and expenses during a period of interruption caused by a covered peril
ExplanationCovers lost income and expenses during an interruption caused by a covered peril.