APCI - Arizona Property and Casualty Insurance Exam

Question 21: An Arizona jury awards an injured plaintiff the cost of her medical care and her lost wages, and then adds a separate sum intended to punish the defendant for conduct the jury found outrageous. Which of the following labels those two awards in order?

Compensatory and punitive

Punitive and compensatory

General and special

Special and general

Question 22: A Mesa restaurant patron injured by a falling light fixture recovers a sum for her hospital bills and a separate sum for her pain and suffering. Which of the following correctly identifies those two compensatory awards in the order given?

Punitive and general

General and special

Punitive and special

Special and general

Question 23: An Arizona homeowner keeps an exotic animal that escapes and injures a neighbor. The neighbor need not prove that the owner was careless in any way in order to recover. Which of the following describes the basis of that liability?

Absolute liability

Vicarious liability

Comparative negligence

Contributory negligence

Question 24: A delivery driver employed by a Lehi bakery runs a red light while making a scheduled delivery and injures another motorist. The injured motorist sues the bakery rather than the driver. Which of the following supports holding the bakery responsible?

Absolute liability

Strict liability

Contributory negligence

Vicarious liability

Question 25: An underwriter inspecting a Glendale warehouse notes an obstructed fire exit, frayed wiring running through the storage area and a bin of oily rags left near a heat source. Which of the following best describes the conditions the underwriter recorded?

Moral hazards

Physical hazards

Morale hazards

Speculative risks

Question 26: A producer takes an application for commercial property coverage on a Casa Grande packing shed and gives the applicant a document providing temporary coverage while the insurer completes its underwriting review. Which of the following names that document?

A certificate of insurance

A conditional receipt

A binder

A declarations page

Question 27: An Arizona insurer's annual results show that its losses and loss adjustment expenses plus its underwriting expenses together consumed slightly more than every premium dollar the company collected during the year. Which of the following figures does that result describe?

A loss ratio above one hundred

A combined ratio above one hundred

An expense ratio above one hundred

A retention ratio above one hundred

Question 28: A Chandler business owner opens her commercial property policy and looks for the page showing her name, the address of the insured building, the policy period and the limits of insurance she purchased. Which part of the policy is she looking for?

The insuring agreement

The conditions

The declarations

The definitions

Question 29: A producer explains to a new client that one section of every property policy is the part in which the insurer actually promises to pay for covered losses, and that everything else in the contract qualifies that promise. Which section is she describing?

The insuring agreement

The declarations

The exclusions

The endorsements

Question 30: An Arizona insured suffers a covered warehouse loss and discovers that his policy obliges him to give prompt notice, protect the property from further damage and submit a signed proof of loss. Which part of the policy imposes those duties?

The insuring agreement

The exclusions

The definitions

The conditions

Question 31: An Arizona homeowner adds earthquake coverage to her existing homeowners policy in the middle of the term, and the insurer attaches a document to the policy that changes its terms without rewriting the whole contract. Which of the following names that document?

A binder

A rider on the declarations

An endorsement

A certificate of insurance

Question 32: A Reading storeowner compares two property forms. One lists fire, lightning, windstorm and several other causes of loss by name, and the other covers all causes of loss except those it excludes. Which of the following labels those two forms in order?

Named perils and open perils

Open perils and named perils

Basic and broad

Special and broad

Question 33: A covered fire destroys equipment at a Tempe machine shop, and the shop must also close for six weeks while the equipment is replaced, losing income it would otherwise have earned. Which of the following correctly labels the lost income?

A direct loss

An indirect loss

A special damage

A punitive loss

Question 34: An adjuster tells a Payson homeowner that her eight-year-old roof will be settled at what it would cost to replace it today, less an allowance for the wear and age it had accumulated before the storm. Which valuation method is he describing?

Replacement cost

Agreed value

Functional replacement cost

Actual cash value

Question 35: A Gilbert homeowner suffers a covered kitchen fire and her policy pays the full current cost of new cabinets and appliances of like kind and quality, with no deduction for the age of the originals. Which valuation basis applied to her claim?

Actual cash value

Replacement cost

Market value

Stated amount

Question 36: A Scottsdale collector insures a group of antique clocks whose worth would be difficult to establish after a fire, so the insurer and the collector fix a value in advance and the insurer agrees to pay that sum for a total loss. Which valuation basis is this?

Agreed value

Actual cash value

Functional replacement cost

Market value

Question 37: An older stone church in a Yavapai County town has hand-carved interior woodwork that would cost an extraordinary sum to duplicate. Its insurer agrees to rebuild using modern materials that serve the same purpose. Which valuation basis does that describe?

Agreed value

Market value

Actual cash value

Functional replacement cost

Question 38: A burglar takes one of a Tucson insured's matched pair of antique candlesticks, and the remaining piece is worth far less on its own than half the pair was worth together. Which policy provision determines what the insurer must pay?

The coinsurance clause

The other insurance clause

The pair or set clause

The liberalization clause

Question 39: An Arizona store owner leaves a spill on the floor for hours despite several employees noticing it, a customer slips and breaks her wrist, and she incurs medical bills. Which of the following lists the four elements her attorney must establish?

Offer, acceptance, consideration, capacity

Duty, breach, proximate cause, damages

Notice, proof, cooperation, subrogation

Peril, hazard, exposure, loss

Question 40: A pedestrian in Tempe steps into traffic while looking at her phone and is struck by a driver who was speeding. A jury finds her partly responsible and reduces her award in proportion to her share of the fault. Which defense produced that result?

Assumption of risk

Contributory negligence

Comparative negligence

The last clear chance doctrine

APCI Arizona Property and Casualty Insurance Exam - Set 2 - Part 2

Question 21: An Arizona jury awards an injured plaintiff the cost of her medical care and her lost wages, and then adds a separate sum intended to punish the defendant for conduct the jury found outrageous. Which of the following labels those two awards in order?

Question 22: A Mesa restaurant patron injured by a falling light fixture recovers a sum for her hospital bills and a separate sum for her pain and suffering. Which of the following correctly identifies those two compensatory awards in the order given?

Question 23: An Arizona homeowner keeps an exotic animal that escapes and injures a neighbor. The neighbor need not prove that the owner was careless in any way in order to recover. Which of the following describes the basis of that liability?

Question 24: A delivery driver employed by a Lehi bakery runs a red light while making a scheduled delivery and injures another motorist. The injured motorist sues the bakery rather than the driver. Which of the following supports holding the bakery responsible?

Question 25: An underwriter inspecting a Glendale warehouse notes an obstructed fire exit, frayed wiring running through the storage area and a bin of oily rags left near a heat source. Which of the following best describes the conditions the underwriter recorded?

Question 26: A producer takes an application for commercial property coverage on a Casa Grande packing shed and gives the applicant a document providing temporary coverage while the insurer completes its underwriting review. Which of the following names that document?

Question 27: An Arizona insurer's annual results show that its losses and loss adjustment expenses plus its underwriting expenses together consumed slightly more than every premium dollar the company collected during the year. Which of the following figures does that result describe?

Question 28: A Chandler business owner opens her commercial property policy and looks for the page showing her name, the address of the insured building, the policy period and the limits of insurance she purchased. Which part of the policy is she looking for?

Question 29: A producer explains to a new client that one section of every property policy is the part in which the insurer actually promises to pay for covered losses, and that everything else in the contract qualifies that promise. Which section is she describing?

Question 30: An Arizona insured suffers a covered warehouse loss and discovers that his policy obliges him to give prompt notice, protect the property from further damage and submit a signed proof of loss. Which part of the policy imposes those duties?

Question 31: An Arizona homeowner adds earthquake coverage to her existing homeowners policy in the middle of the term, and the insurer attaches a document to the policy that changes its terms without rewriting the whole contract. Which of the following names that document?

Question 32: A Reading storeowner compares two property forms. One lists fire, lightning, windstorm and several other causes of loss by name, and the other covers all causes of loss except those it excludes. Which of the following labels those two forms in order?

Question 33: A covered fire destroys equipment at a Tempe machine shop, and the shop must also close for six weeks while the equipment is replaced, losing income it would otherwise have earned. Which of the following correctly labels the lost income?

Question 34: An adjuster tells a Payson homeowner that her eight-year-old roof will be settled at what it would cost to replace it today, less an allowance for the wear and age it had accumulated before the storm. Which valuation method is he describing?

Question 35: A Gilbert homeowner suffers a covered kitchen fire and her policy pays the full current cost of new cabinets and appliances of like kind and quality, with no deduction for the age of the originals. Which valuation basis applied to her claim?

Question 36: A Scottsdale collector insures a group of antique clocks whose worth would be difficult to establish after a fire, so the insurer and the collector fix a value in advance and the insurer agrees to pay that sum for a total loss. Which valuation basis is this?

Question 37: An older stone church in a Yavapai County town has hand-carved interior woodwork that would cost an extraordinary sum to duplicate. Its insurer agrees to rebuild using modern materials that serve the same purpose. Which valuation basis does that describe?

Question 38: A burglar takes one of a Tucson insured's matched pair of antique candlesticks, and the remaining piece is worth far less on its own than half the pair was worth together. Which policy provision determines what the insurer must pay?

Question 39: An Arizona store owner leaves a spill on the floor for hours despite several employees noticing it, a customer slips and breaks her wrist, and she incurs medical bills. Which of the following lists the four elements her attorney must establish?

Question 40: A pedestrian in Tempe steps into traffic while looking at her phone and is struck by a driver who was speeding. A jury finds her partly responsible and reduces her award in proportion to her share of the fault. Which defense produced that result?

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