Free Property and Casualty Insurance Basics Practice Questions
Colorado Property & Casualty exam — 90 practice questions.
Subtopics: Insurable risk, Adverse selection, Reinsurance, Concealment, Conditions, Duties after loss, Coinsurance, Vacancy, Pro rata other insurance, Salvage, Valued policy, Insurable interest, Loss valuation, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, Actual cash value, Replacement cost, 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, Underwriting, Credit-based insurance scores, Loss ratio, Insureds, Cancellation, Policy territory, No benefit to bailee, Duty to defend, Premium audit, Claim settlement, Appraisal, Abandonment, Retrospective rating, Class rating, Judgment rating
Read the Property and Casualty Insurance Basics study guide
Sample questions & answers
1. Which is a characteristic of a risk that is ideally insurable?
The loss is accidental and measurable
Ideally insurable risks involve losses that are definite, measurable, fortuitous, and predictable across a large pool, and not catastrophic.
2. Adverse selection occurs when:
Higher risks seek coverage more often
Adverse selection is the tendency of higher-risk individuals to seek coverage, which sound underwriting is designed to counter.
3. A Colorado insurer cedes part of a large homeowners book to another company. This arrangement is:
Reinsurance
Reinsurance lets a primary insurer transfer a portion of its risk to a reinsurer, stabilizing results and increasing capacity.
4. Concealment in a property insurance application is:
Hiding a known material fact
Concealment is the intentional withholding of a known material fact, which can void coverage.
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Practice: Property and Casualty Insurance Basics
Answer choices are shuffled every time, and every question comes with an explanation.
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.
