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  4. Property and Casualty Insurance Basics

Free Property and Casualty Insurance Basics Practice Questions

Arkansas Property & Casualty exam — 66 practice questions.

Subtopics: Indemnity, Occurrence policy, Claims-made policy, Valued policy, Vacancy, Per-occurrence limit, Replacement cost, Other insurance pro rata, Indirect loss, Short-rate cancellation, First-party coverage, Insurable interest, Loss valuation, Coinsurance, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, Actual cash value, Pair and set clause, Vacancy provision, Mortgagee rights, Appraisal condition, Proof of loss, Salvage and abandonment, Liberalization clause, Assignment condition, Binder, Sublimit, Named perils vs open perils, Burden of proof, Direct vs indirect loss, Comparative negligence, Strict liability, Vicarious liability, Punitive damages, Special vs general damages, Proximate cause, Absolute liability, Hold harmless, Bailee liability, Attractive nuisance, Res ipsa loquitur, Coinsurance calculation, Actual cash value calculation, Split limits application

Read the Property and Casualty Insurance Basics study guide

Sample questions & answers

1. The principle of indemnity means an insured should be:

Restored to the pre-loss financial position, without profit

Indemnity restores the insured to the pre-loss financial position without allowing a profit from the loss.

2. An occurrence-based liability policy covers claims arising from events that happen:

During the policy period, regardless of when the claim is filed

An occurrence policy covers events that occur during the policy period regardless of when the claim is later filed.

3. A claims-made liability policy generally covers a loss only if:

The claim is first made during the policy period or extended reporting period

A claims-made policy responds when the claim is first made during the policy period or an extended reporting period.

4. Under a valued policy, a total loss is paid:

At the amount stated in the policy

A valued policy pays the agreed amount stated in the policy upon a total loss.

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Practice: Property and Casualty Insurance Basics

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Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.