APCI Arizona Property and Casualty Insurance Exam - Set 2 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: An Arizona insurer issues a private passenger automobile policy in April and decides in May that it no longer wants the risk, though the insured has done nothing wrong. Which of the following best describes the insurer's position under Arizona law?

Only for an enumerated ground

Only for nonpayment of premium

Only with the insured's consent

For any reason within sixty days

Question 42: A producer explains to an Arizona client that the amount she agrees to bear herself on each covered loss keeps small nuisance claims out of the system and lowers her premium in exchange. Which policy feature is the producer describing?

The deductible

The coinsurance requirement

The aggregate limit

The self-insured retention

Question 43: An Arizona business carries two commercial property policies covering the same warehouse, one written for six hundred thousand dollars and the other for four hundred thousand. A covered loss occurs. Which of the following describes how a pro rata clause divides it?

The older policy pays first

Each insurer pays half

The insured chooses which policy responds

Each pays its proportion of total insurance

Question 44: Two liability policies covering the same Arizona insured provide that each will contribute the same dollar amount toward a loss until the smaller limit is used up, after which the remaining policy continues alone. Which other insurance provision is that?

Pro rata

Contribution by equal shares

Primary and excess

Nonconcurrency

Question 45: An Arizona commercial auto policy shows one hundred thousand for each person injured, three hundred thousand for each accident and fifty thousand for property damage. A second policy shows a single limit of five hundred thousand for any covered loss. Which pair describes them?

Aggregate and per occurrence

Per person and aggregate

Split limits and combined single limit

Combined single limit and split limits

Question 46: A commercial policy lists a parent corporation and three Arizona subsidiaries as insureds, and the policy gives one of them the right to receive cancellation notice, request changes and receive any return premium. Which of the following describes that party?

The first named insured

The additional insured

The loss payee

The certificate holder

Question 47: An Arizona building worth five hundred thousand dollars at replacement cost carries a coinsurance requirement of eighty percent, but the owner insured it for only three hundred thousand. A partial loss occurs. Which of the following describes the effect on the claim?

The claim is denied entirely

The insured shares in the loss

The insurer pays the full loss amount

The limit is automatically increased

Question 48: An Arizona distributor stores inventory at four warehouses and wants a single limit that floats across all four locations so that a concentration of stock at any one site is fully protected. Which of the following describes the coverage he needs?

Specific insurance

Scheduled insurance

Reporting form insurance

Blanket insurance

Question 49: An Arizona insured's commercial building sits empty with no tenant in place and none of the furnishings, machinery or stock needed to operate the business that formerly occupied it. Which of the following best describes the building's condition for policy purposes?

Unoccupied

Under construction

Vacant

Abandoned

Question 50: An Arizona insurer pays its policyholder in full for damage to a delivery van after an uninsured driver ran a red light in Tucson and caused the collision. The insurer then sues that driver to recover what it paid. Which right is the insurer exercising?

Subrogation

Salvage

Abandonment

Liberalization

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