ARPCI - Arkansas Property and Casualty Insurance

Question 21: A claims adjuster reviews an injury file and totals the exact medical bills, lost wages, and cost of a rehabilitation program, each backed by a receipt or a pay stub. Which term describes this category of damages, distinct from pain and suffering awards?

general damages

punitive damages

special damages

nominal damages

Question 22: A landowner who keeps a dangerous wild animal on the property is held responsible for any injury it causes to a visitor, even though the landowner exercised great care and no defense may be raised to avoid payment. Which liability concept does this situation illustrate?

strict liability

vicarious liability

negligence per se

absolute liability

Question 23: A manufacturer is sued after its product causes injury despite meeting every applicable safety standard, and the court holds the manufacturer liable for the defect without requiring proof of carelessness, though the manufacturer may still raise a limited defense. Which liability concept applies?

strict liability

absolute liability

vicarious liability

comparative negligence

Question 24: A delivery company is sued after one of its drivers negligently strikes a pedestrian while making a scheduled delivery route, even though the company itself did nothing wrong. Which liability concept imposes responsibility on the employer for the employee's negligent act?

strict liability

vicarious liability

absolute liability

contributory negligence

Question 25: Unlike absolute, strict, and vicarious liability, one theory of legal responsibility requires the injured party to prove that the defendant personally owed a duty, breached that duty, and thereby caused the resulting harm and measurable damages. Which theory carries this fault-based, elemental requirement?

strict liability

absolute liability

ordinary negligence

vicarious liability

Question 26: A pedestrian sues a store owner after slipping on a wet floor that was left unmarked and unattended, seeking compensation for a broken wrist rather than criminal punishment against the owner. Which term describes this type of civil wrong for which the law provides a remedy?

a crime

a breach of contract

an intentional misrepresentation

a tort

Question 27: Before any negligence claim can succeed, the injured party must first establish that the defendant owed a recognized legal obligation to act, or refrain from acting, in a way that would avoid unreasonable risk of harm to others. Which element of negligence does this describe?

duty of care

breach of duty

proximate causation

actual damages

Question 28: A jury compares a driver's conduct at an intersection to how a reasonably prudent driver would have acted under the same circumstances and concludes the driver fell short of that standard. Which element of a negligence claim does the jury's finding establish?

duty of care

breach of duty

causation

compensable damages

Question 29: A driver runs a red light, and the resulting collision directly and foreseeably injures a passenger in the other vehicle, with no unrelated event breaking the chain of events between the violation and the injury. Which negligence element does this direct link satisfy?

duty of care

breach of duty

causation

damages

Question 30: A negligence claim fails even though a driver clearly ran a stop sign and violated the duty owed to other motorists, because the other vehicle stopped in time and no injury or property damage ever resulted. Which missing element explains this outcome?

duty of care

breach of duty

causation

damages

Question 31: In a jurisdiction that strictly applies an older common law defense, an injured plaintiff who is found even slightly at fault for causing her own harm is completely barred from recovering anything from the negligent defendant. Which defense produces this all-or-nothing result?

contributory negligence

comparative negligence

assumption of risk

last clear chance

Question 32: An insured's five-year-old roof is destroyed by a covered windstorm, and the insurer calculates payment by starting with the cost to install a brand-new roof of like kind and then subtracting an amount for the roof's age and wear. Which valuation method does the insurer apply?

replacement cost value

actual cash value

functional replacement cost

agreed value

Question 33: A delivery truck suddenly skids on ice and strikes a parked car, an event that is sudden, unexpected, and identifiable at a specific moment in time. Which term most precisely describes this kind of single, sudden event from the standpoint of liability coverage?

an occurrence

a peril

an accident

a hazard

Question 34: An insurer evaluates each applicant's risk characteristics before issuing a policy, aiming to accept a reasonable spread of risks at an adequate premium while avoiding an excessive concentration of poor risks that could threaten the company's financial stability. Which core insurance function does this process describe?

claims adjusting

rate development

reinsurance ceding

underwriting

Question 35: Without careful risk screening, an insurer tends to attract a disproportionate share of applicants who already know they present a higher-than-average chance of loss, while lower-risk applicants seek coverage elsewhere at better terms. Which term describes this tendency working against an insurer that underwrites too loosely?

adverse selection

moral hazard

risk retention

rate suppression

Question 36: A new applicant completes a detailed application, and the underwriter reviews it alongside supporting reports, classifies the risk according to established guidelines, and then decides whether to accept, decline, or modify the terms offered. Which sequence of activities does this describe?

the rate development process

the underwriting process

the claims settlement process

the reinsurance placement process

Question 37: An actuary builds a proposed rate by starting with the amount needed to cover expected losses and loss adjustment costs, then adding an amount for operating expenses, and finally adding a margin for profit and unforeseen contingencies. Which concept describes this layered structure underlying a rate?

the components of loss valuation

the components of coinsurance

the components of rate development

the components of vicarious liability

Question 38: A homeowner chooses a policy with a higher deductible and sets aside personal savings to cover small repair bills instead of filing a claim for every minor incident, accepting that portion of loss personally rather than shifting it elsewhere. Which method of handling risk is the homeowner practicing?

risk avoidance

risk sharing

risk transfer

risk retention

Question 39: An applicant completes and signs an insurance application along with the required premium payment and submits both to a producer, proposing specific terms under which the applicant is willing to enter into a contract with the insurer. Which essential element of a valid contract does this submission represent?

offer

acceptance

consideration

legal purpose

Question 40: An underwriter reviews an application from a business owner in debt and discovers a history of two prior fire claims on properties this same owner controlled, raising suspicion that the owner might intentionally cause or exaggerate a loss to collect insurance proceeds. Which type of hazard concerns the underwriter here?

physical hazard

moral hazard

morale hazard

legal hazard

ARPCI Arkansas Property and Casualty Insurance - Set 4 - Part 2

Question 21: A claims adjuster reviews an injury file and totals the exact medical bills, lost wages, and cost of a rehabilitation program, each backed by a receipt or a pay stub. Which term describes this category of damages, distinct from pain and suffering awards?

Question 22: A landowner who keeps a dangerous wild animal on the property is held responsible for any injury it causes to a visitor, even though the landowner exercised great care and no defense may be raised to avoid payment. Which liability concept does this situation illustrate?

Question 24: A delivery company is sued after one of its drivers negligently strikes a pedestrian while making a scheduled delivery route, even though the company itself did nothing wrong. Which liability concept imposes responsibility on the employer for the employee's negligent act?

Question 26: A pedestrian sues a store owner after slipping on a wet floor that was left unmarked and unattended, seeking compensation for a broken wrist rather than criminal punishment against the owner. Which term describes this type of civil wrong for which the law provides a remedy?

Question 27: Before any negligence claim can succeed, the injured party must first establish that the defendant owed a recognized legal obligation to act, or refrain from acting, in a way that would avoid unreasonable risk of harm to others. Which element of negligence does this describe?

Question 28: A jury compares a driver's conduct at an intersection to how a reasonably prudent driver would have acted under the same circumstances and concludes the driver fell short of that standard. Which element of a negligence claim does the jury's finding establish?

Question 29: A driver runs a red light, and the resulting collision directly and foreseeably injures a passenger in the other vehicle, with no unrelated event breaking the chain of events between the violation and the injury. Which negligence element does this direct link satisfy?

Question 30: A negligence claim fails even though a driver clearly ran a stop sign and violated the duty owed to other motorists, because the other vehicle stopped in time and no injury or property damage ever resulted. Which missing element explains this outcome?

Question 31: In a jurisdiction that strictly applies an older common law defense, an injured plaintiff who is found even slightly at fault for causing her own harm is completely barred from recovering anything from the negligent defendant. Which defense produces this all-or-nothing result?

Question 32: An insured's five-year-old roof is destroyed by a covered windstorm, and the insurer calculates payment by starting with the cost to install a brand-new roof of like kind and then subtracting an amount for the roof's age and wear. Which valuation method does the insurer apply?

Question 33: A delivery truck suddenly skids on ice and strikes a parked car, an event that is sudden, unexpected, and identifiable at a specific moment in time. Which term most precisely describes this kind of single, sudden event from the standpoint of liability coverage?

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