VA P&C Practice Exam Questions & Answers. 100% verified. Graded A

VA P&C Practice Exam Questions & Answers. 100% verified. Graded A Which of the following represents pure risk? A. Purchase of stock in a new company B. An investment in real estate C. Purchase of a lottery ticket ...

VA P&C Practice Exam Questions & Answers. 100% verified. Graded A Which of the following represents pure risk? A. Purchase of stock in a new company B. An investment in real estate C. Purchase of a lottery ticket D. Chance of fire in a dwelling - ✔✔D. Chance of fire in a dwelling WHICH OF THE FOLLOWING IS A PERIL? A. ATTITUDE TOWARDS SAFETY B. FIRE C. DEDUCTIBLE D. AN EXCLUSION - ✔✔B. FIRE Direct loss refers to: A. Fire damage to a dwellings roof B. Cost of increased living expenses due to a fire C. Reduction in the value of in the insured's 401k D. Exclusions - ✔✔A. Fire damage to a dwellings roof When property is unique in value, which of the following may be used to develop premium? A. Actual Cash Value B. Replacement Cost C. Stated Value D. Salvage Value - ✔✔C. Stated Value There is a condition in most property policies that may exclude coverage for certain perils depending on the occupancy of the building at the time of loss. If the insured moved to a new dwelling 60 days before the loss, which of the following conditions might apply? A. Unoccupancy B. Vacancy C. Use limitation D. Protection warranty - ✔✔B. Vacancy There is a condition in most property policies that may exclude coverage for certain perils depending on the occupancy of the building at the time of loss. If the insured has a vandalism claim while they are on vacation, which of the following conditions might apply? A. Unoccupancy B. Vacancy C. Use limitation D. Protection warranty - ✔✔A. Unoccupancy When an individual or business causes harm to another, the injured party will expect their damages to be covered by the person causing the injury. If the individual or business causing harm will be held responsible for the damages regardless of negligence, we say they are: A. Negligent B. Absolutely liable C. Vicariously liable D. Not liable - ✔✔B. Absolutely liable When an insured is held liable for a product they manufactured that caused injury an negligence does not need to be proven, what type of liability is this? A. Negligence B. Vicarious liability C. Not liable D. Strict liability - ✔✔D. Strict liability In a commercial insurance policy, the person with the responsibility of administering the policy, making payments, etc. is the: A. Named insured B. Additional insured C. First named insured D. Lienholder - ✔✔C. First named insured All of the following are duties of the insured as detailed in the Conditions of the policy EXCEPT: A. Make premium payments on time B. Notify insurer of incidents that may lead to a claim C. Cooperate with the insurer D. Assist in selecting an insurance adjuster - ✔✔D. Assist in selecting an insurance adjuster Which of the following is true regarding the insurer's rights to claim settlement? A. The insured must agree to all aspects of the settlement. B. The insurer may not settle a claim unless there is a court order. C. The insurer may settle a liability claim without the insured's permission. D. The insured retains complete rights of claim settlement. - ✔✔C. The insurer may settle a liability claim without the insured's permission. Which of the following statements concerning a proof of loss is NOT true? A. It is the duty of the insured to submit a proof of loss. B. The insurer provides the insured with the proof of loss at the appropriate time C. A proof of loss details the circumstances of the loss D. A proof of loss may be oral - ✔✔D. A proof of loss may be oral A notice of claim to an insurer must include all of the following EXCEPT: A. Insured's name B. Insured's address C. Name of insured's attorney D. Description of how the loss occurred - ✔✔C. Name of insured's attorney John has two homeowner's policies in force. Policy A covers the home for $200,000 and Policy B covers the home for $100,000. The total insurance in force is $300,000. John has a fire that does $45,000 damage to the home. How much will Policy A pay? A. $45,000 B. $0 C. $15,000 D. $30,000 - ✔✔D. $30,000 Select the item that is considered a consumer report: A. Driving record B. Application for insurance C. The agent's knowledge of the applicant D. Inspection of the property - ✔✔A. Driving record If information on consumer reports differs from an applicant's statements and causes the insurer to reject the application, the insurer has made a/an: A. Adverse underwriting decision B. Unfair decision C. Unfair discriminatory decision D. Negative underwriting decision - ✔✔A. Adverse underwriting decision Identify a federal law that protects the privacy of insurance applicants: A. Equal Employment Opportunity Law B. Fair Housing Act C. Financial Modernization Act of 1999 D. Equal Rights Amendment of 1964 - ✔✔C. Financial Modernization Act of 1999 Which of the following is NOT included on a Certificate of Insurance? A. Name of insured B. Policy number C. Effective date D. Premium - ✔✔D. Premium Which HO form provides broad named perils coverage for both the dwelling and its contents? A. HO 2 B. HO 3 C. HO 4 D. HO 5 - ✔✔A. HO 2 The HO3 differs from the HO2 in what manner? A. Liability coverage provided B. Amount of coverage provided for personal property C. Amount of coverage provided for additional living expenses D. Perils insured against for the dwelling - ✔✔D. Perils insured against for the dwelling The only difference between the HO3 and HO5 is: A. Liability coverage provided B. Amount of coverage provided for personal property C. Amount of coverage provided for additional living expenses D. Perils insured against for personal property & valuation of loss - ✔✔D. Perils insured against for personal property & valuation of loss After a torrential rain, Velma discovered her basement was filling up water. If she has an HO5, the loss would be: A. Covered B. Excluded C. Considered a flood loss D. Damage to the house is covered, but the personal property is not - ✔✔B. Excluded Removal is provided in the NFIP for how many days when property is moved to another location and enclosed in a building to protect it from flooding? A. 10 B. 15 C. 30 D. 45 - ✔✔D. 45 How is the deductible required to be paid under the NFIP? A. No deductible is required B. Only one deductible applies to both the building and contents C. A separate deductible applies to the building and contents D. Federal government is responsible for paying the deductible - ✔✔C. A separate deductible applies to the building and contents All of the following are necessary components of a CPP except: A. Common Declarations Page B. Common Conditions C. 2 or more coverage parts D. Commercial General Liability insurance - ✔✔D. Commercial General Liability insurance Which of the following is not a supplementary payment on a CGL? A. Bail bonds up to $250 B. Attorney fees C. Pre-judgment and post-judgement interest D. Medical expenses - ✔✔D. Medical expenses Which of the following losses would be covered by the basic cause of loss form in a Building & Personal Property Coverage Form of a CPP? A. Damage to merchandise being delivered by the insured in a van B. Damage to the building by vandals C. A customer fails to stop, crashing their auto into the front of the insured's building D. Theft of merchandise by a client - ✔✔B. Damage to the building by vandals Which of the following would be covered by the Special Cause of Loss form and not covered by a Broad Cause of Loss form? A. Theft of inventory during a riot B. Collapse of the building cause by hidden termite damage C. An airplane accidentally drops a block of blue ice on building while flying overhead D. Damage to a computer terminal when an employee accidentally hits the computer while buffing the floor - ✔✔D. Damage to a computer terminal when an employee accidentally hits the computer while buffing the floor The Nationwide Marine Definition was written by: A. NCCI B. SACCI C. CAIP D. NAIC - ✔✔D. NAIC What is the most that will be paid for water damage losses covered under Equipment Breakdown? A. $10,000 B. $15,000 C. $20,000 D. $25,000 - ✔✔D. $25,000 Johnny's School Supplies has a special form BOP. Following a fire, Johnny's was closed for 4 months while repairs were made. Which of the following most accurately describes the coverage provided for Johnny's loss of income? A. Provided automatically with no limits B. Available as an endorsement C. No dollar limit for up to 12 months D. An amount not to exceed Coverage A - ✔✔C. No dollar limit for up to 12 months The BOP excludes all of the following perils if the building is vacant for more than 60 days, EXCEPT: A. Vandalism B. Theft C. Sprinkler leakage D. Sinkhole damage - ✔✔D. Sinkhole damage Which of the following is ineligible for a BOP? A. A small office of a local credit union B. A small restaurant with sales of $2M annually C. A clothing store with one location and $1.2M in gross sales annually D. An apartment building with 3 floors and 36 apartment units - ✔✔A. A small office of a local credit union Which of the following is eligible for a BOP? A. Auto repair shop B. A small manufacturing plant C. A restaurant with $2M in gross sales annually D. An office building with 4 floors and 90,000 sq ft of space - ✔✔C. A restaurant with $2M in gross sales annually Every insurer license in VA shall file an annual financial statement with the Commission each year on or before: A. January 1 B. March 1 C. June 30 D. July 1 - ✔✔B. March 1 Any person who unintentionally violates VA insurance law may be punished for violation by a penalty of not more than: A. $500 B. $750 C. $1,000 D. $5,000 - ✔✔C. $1,000 The Insurance Commission has the power and authority to perform an assortment of duties. Which of the following is not a responsibility of the Commission? A. Issuing property and casualty insurance licenses B. Prosecuting agents who break insurance laws C. Delegates examining duties to a deputy D. Regulates insurer for solvency - ✔✔B. Prosecuting agents who break insurance laws Which of the following statements about consultant licensing is CORRECT? A. Consultant licenses can only be issued to individuals B. A consultant's license expires every 3 years C. A consultant is considered an independent contractor D. Attorney and CPAs acting the course of their normal employment must obtain a consultant's license - ✔✔C. A consultant is considered an independent contractor A person who, for a fee, offers advice to the public regarding property and casualty insurance, best describes a/an: A. Agent B. Nonresident agent C. Consultant D. Adjuster - ✔✔C. Consultant An agent who shares his commission with a prospective insured in return for the purchase of a policy has engaged in A. Twisting B. Coercion C. Defamation D. Rebating - ✔✔D. Rebating An applicant for a producer license must: A. have a college degree B. be at least 21 years old C. have been a broker for 3 years D. be at least 18 years old - ✔✔D. be at least 18 years old Which of the following person would need to hold a license to transact insurance in VA? A. A person who provides underwriting services to an insurance company B. A full-time employee of an insurance company who provides loss control services C. A person who job duties are limited to enrolling employees in group health insurance plans D. An employee of an insurance agency who helps customers select policy limits - ✔✔D. An employee of an insurance agency who helps customers select policy limits A licensed agent must report a name change to the Commission within how many days? A. 30 B. 45 C. 60 D. 90 - ✔✔A. 30 All of the following must be included in a notice of cancellation due to material misrepresentation on a policy protecting an owner-occupied dwelling EXCEPT: A. 10 days' written notice B. the specific reason for the action C. the date cancellation will be effective D. information regarding the insured's possible eligibility for coverage under the VA Property Insurance Association - ✔✔A. 10 days' written notice Virginia property cancellation regulations do NOT apply to policies which have been in effect for less than how many days? A. 30 B. 60 C. 90 D. 180 - ✔✔B. 60 Which of the following statements is NOT correct regarding the VA Property Insurance Association? A. The residual marketing facility is responsible for the equitable distribution of risks B. Inspections of property are required C. The purpose of this plan is to assure the stability of the property insurance market in this state D. This plan encourages maximum use of the voluntary insurance market - ✔✔B. Inspections of property are required A policy covering owner occupied dwelling may be cancelled or terminated for all of the following reasons EXCEPT: A. submission of a claim for fire damage B. nonpayment of premium C. discovery of fraud or material misrepresentation D. physical changes to the property that cause the property to become uninsurable - ✔✔A. submission of a claim for fire damage A policy covering owner-occupied dwellings may be cancelled or terminated for each of the following reasons EXCEPT: A. discovery of fraud on the part of the insured B. bodily injury to a person caused by the insured's dog C. reckless act which increases the hazard D. material misrepresentation - ✔✔B. bodily injury to a person caused by the insured's dog An insured who requests cancellation of their fire insurance policy A. is entitled to a pro-rata refund