IPCI - Indiana Property and Casualty Insurance Exam

Question 1: A jury awards an injured claimant a sum of money for the pain, suffering and mental anguish she endured after a crash, listed separately from her medical bills and her lost income. That nonmonetary award belongs to which category of damages?

Special damages

General damages

Exemplary or punitive damages

Damages available only under strict liability

Question 2: A five-year-old delivery van insured under a business auto physical damage coverage is destroyed in a collision. The insurer settles the claim by paying an amount that reflects the van's depreciation and physical condition. Which valuation method has been applied?

Replacement cost

Agreed value

Market value

Actual cash value

Question 3: During a commercial liability inspection the underwriter records several conditions at the insured's warehouse that do not themselves cause a loss but do make an injury claim considerably more likely to happen. Which term names conditions of that kind?

Hazards

Perils

Exposures

Loss costs

Question 4: A producer taking an application for commercial liability coverage orders a report from an outside agency covering the applicant's credit history, character and reputation. Federal law requires that the applicant be told this may happen. Which requirement applies to that notice?

Written consent from the applicant's lender

Approval by the state insurance department

Notice within three days of the request

A signed waiver of privacy rights

Question 5: A restaurant owner completes an application for commercial general liability insurance and answers every question about her operations to the best of her knowledge. Under most state laws, how are the answers she supplied on that application classified?

As warranties binding the applicant absolutely

As representations believed true by the applicant

As conditions precedent to any coverage

As endorsements amending the finished policy

Question 6: A commercial general liability insurer pays the judgment entered against its insured restaurant and the defense costs that came with it. The restaurant ends up where it stood financially before the suit, but no better. Which principle produces that outcome?

Adhesion

Aleatory exchange

Utmost good faith

Indemnity

Question 7: A landscaping company buys general liability coverage that is rated on payroll. At the start of the term the insurer collects an estimated amount based on projected payroll, with the true figure to be settled later. Which term names that initial charge?

Deposit premium

Earned premium

Return premium

Retrospective rate

Question 8: Before allowing a subcontractor onto a job site, a general contractor asks for a document showing that the subcontractor's liability policy is in force and listing its limits, policy number and expiration date. Which document serves that purpose?

A binder

A certificate of insurance

A declarations page

An endorsement

Question 9: A spectator at an amateur baseball game chooses a seat along the first base line, knowing that foul balls regularly land there, and is struck by one. The defense that she voluntarily accepted a known danger carries which name?

Assumption of risk

Last clear chance

Statute of limitations

Intervening cause

Question 10: After a collision, a claimant submits hospital bills, receipts showing lost wages, and a written estimate to repair her damaged car. These direct and specific expenses, all of them provable in dollars, fall into which category of compensatory damages?

General damages

Punitive damages

Supplementary payments under the policy

Special damages

Question 11: A restaurant owner faces the chance that a guest will be injured on her premises and sue her, and separately the chance that opening a second location will either earn or lose money. Which statement sorts these two exposures correctly?

Both are pure risks and therefore insurable

Both are speculative and therefore insurable

The lawsuit is pure; expansion is speculative

The lawsuit is speculative; expansion is pure

Question 12: In some jurisdictions, an injured motorist who was even slightly at fault in causing her own crash is barred from collecting any money at all from the other driver involved. Which defense against negligence produces that harsh all or nothing result?

Contributory negligence

Comparative negligence

Assumption of risk

Intervening cause

Question 13: A court finds that a trucking firm knowingly sent out a rig with failed brakes and adds an award beyond the injured family's proven losses, meant to punish the firm and warn others. Which type of damages is that extra award?

Special damages

General damages

Punitive damages

Compensatory damages

Question 14: A trucking company decides it cannot absorb the cost of a serious injury claim brought by another motorist, so it buys a commercial auto liability policy and pays an annual premium instead. Which method of handling risk has the company used?

Avoidance

Reduction

Retention

Transfer

Question 15: A commercial insured wants physical damage settlements on its newest trucks computed as the cost to acquire comparable new units today at current prices, with no subtraction for age, use or wear. Which loss valuation basis is the insured requesting?

Replacement cost

Actual cash value

Salvage value

Stated amount

Question 16: A homeowner leaves a garden hose stretched across a public sidewalk overnight, and a passerby trips on it and breaks a wrist. Failing to exercise the care a reasonable person would use in similar circumstances is best described by which term?

Assumption of risk by the passerby

Absolute liability imposed by statute

A criminal act prosecuted by government

Negligence by the homeowner

Question 17: A sales representative routinely leaves the company car running with the doors unlocked while she stops for coffee, saying it does not matter because the fleet policy will cover a theft. Which hazard classification does her attitude illustrate?

Moral hazard

Physical hazard

Morale hazard

Occupational hazard

Question 18: An underwriter reviewing a commercial account must set aside any exposure that carries the possibility of gain as well as loss, because such exposures are not insurable. Which of the following should the underwriter set aside on that basis?

A delivery driver causing a collision

A customer slipping in the lobby

A defective product injuring a buyer

Money placed on a sports wager

Question 19: A liability policy pays for bodily injury caused by an occurrence. A tenant develops lead poisoning after years of living in an old apartment, with no single mishap to point to. How does the policy definition reach that harm?

Occurrence includes continuous or repeated exposure

Occurrence covers only sudden mishaps

Occurrence excludes injury developing over time

Occurrence requires a police report filed

Question 20: A commercial insurance instructor tells a class that this term names the possibility that a loss will occur, and that it is the very thing an insured transfers to an insurance company when a liability policy is purchased. Which term is being described?

Hazard

Peril

Retention

Risk

IPCI Indiana Property and Casualty Insurance Exam - Set 5 - Part 1

Question 1: A jury awards an injured claimant a sum of money for the pain, suffering and mental anguish she endured after a crash, listed separately from her medical bills and her lost income. That nonmonetary award belongs to which category of damages?

Question 2: A five-year-old delivery van insured under a business auto physical damage coverage is destroyed in a collision. The insurer settles the claim by paying an amount that reflects the van's depreciation and physical condition. Which valuation method has been applied?

Question 3: During a commercial liability inspection the underwriter records several conditions at the insured's warehouse that do not themselves cause a loss but do make an injury claim considerably more likely to happen. Which term names conditions of that kind?

Question 4: A producer taking an application for commercial liability coverage orders a report from an outside agency covering the applicant's credit history, character and reputation. Federal law requires that the applicant be told this may happen. Which requirement applies to that notice?

Question 5: A restaurant owner completes an application for commercial general liability insurance and answers every question about her operations to the best of her knowledge. Under most state laws, how are the answers she supplied on that application classified?

Question 6: A commercial general liability insurer pays the judgment entered against its insured restaurant and the defense costs that came with it. The restaurant ends up where it stood financially before the suit, but no better. Which principle produces that outcome?

Question 7: A landscaping company buys general liability coverage that is rated on payroll. At the start of the term the insurer collects an estimated amount based on projected payroll, with the true figure to be settled later. Which term names that initial charge?

Question 8: Before allowing a subcontractor onto a job site, a general contractor asks for a document showing that the subcontractor's liability policy is in force and listing its limits, policy number and expiration date. Which document serves that purpose?

Question 9: A spectator at an amateur baseball game chooses a seat along the first base line, knowing that foul balls regularly land there, and is struck by one. The defense that she voluntarily accepted a known danger carries which name?

Question 10: After a collision, a claimant submits hospital bills, receipts showing lost wages, and a written estimate to repair her damaged car. These direct and specific expenses, all of them provable in dollars, fall into which category of compensatory damages?

Question 11: A restaurant owner faces the chance that a guest will be injured on her premises and sue her, and separately the chance that opening a second location will either earn or lose money. Which statement sorts these two exposures correctly?

Question 12: In some jurisdictions, an injured motorist who was even slightly at fault in causing her own crash is barred from collecting any money at all from the other driver involved. Which defense against negligence produces that harsh all or nothing result?

Question 13: A court finds that a trucking firm knowingly sent out a rig with failed brakes and adds an award beyond the injured family's proven losses, meant to punish the firm and warn others. Which type of damages is that extra award?

Question 14: A trucking company decides it cannot absorb the cost of a serious injury claim brought by another motorist, so it buys a commercial auto liability policy and pays an annual premium instead. Which method of handling risk has the company used?

Question 15: A commercial insured wants physical damage settlements on its newest trucks computed as the cost to acquire comparable new units today at current prices, with no subtraction for age, use or wear. Which loss valuation basis is the insured requesting?

Question 16: A homeowner leaves a garden hose stretched across a public sidewalk overnight, and a passerby trips on it and breaks a wrist. Failing to exercise the care a reasonable person would use in similar circumstances is best described by which term?

Question 17: A sales representative routinely leaves the company car running with the doors unlocked while she stops for coffee, saying it does not matter because the fleet policy will cover a theft. Which hazard classification does her attitude illustrate?

Question 18: An underwriter reviewing a commercial account must set aside any exposure that carries the possibility of gain as well as loss, because such exposures are not insurable. Which of the following should the underwriter set aside on that basis?

Question 19: A liability policy pays for bodily injury caused by an occurrence. A tenant develops lead poisoning after years of living in an old apartment, with no single mishap to point to. How does the policy definition reach that harm?

Question 20: A commercial insurance instructor tells a class that this term names the possibility that a loss will occur, and that it is the very thing an insured transfers to an insurance company when a liability policy is purchased. Which term is being described?

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