IPCI - Indiana Property and Casualty Insurance Exam

Question 21: A business owner discovers that a single fire loss is covered by two separate property policies and asks whether he may collect the full amount of the damage from each insurer. Which principle governs the answer to his question?

Adhesion

Estoppel

Liberalization

Indemnity

Question 22: An applicant for a fire policy lies about two prior claims and later inflates a damage inventory after a small kitchen loss. The conduct springs directly from the applicant's own dishonesty. Which type of hazard does this behavior represent?

Physical hazard

Morale hazard

Moral hazard

Speculative risk

Question 23: An adjuster works through a partial fire loss on a dwelling: he first settles on what the damage is worth under the policy's valuation rules, then reduces that figure by the sum the insured must bear. In what order do these two steps occur?

Deductible first, then valuation

Both applied at the same time

Order is chosen by the insured

Valuation first, then the deductible

Question 24: A producer explains to a client that one measure of worth reflects what a buyer would pay for property under free market conditions, rises and falls with supply and demand, and matters far more to realtors than to property insurers. Which measure is being described?

Replacement cost

Market value

Actual cash value

Agreed amount

Question 25: Two policies each carry a figure chosen before issuance for property that is hard to value later. One promises the insured that exact sum after a covered total loss; the other promises only the lower of that sum or depreciated value. Which statement is accurate?

Both guarantee payment of the figure

Stated amount guarantees the figure

Neither figure binds the insurer

Agreed value guarantees the figure

Question 26: A bank financed a customer's automobile and holds the lien, and a mortgage company holds the note on another customer's residence. Neither company owns or occupies the property, yet both stand to lose money if it is destroyed. What does each hold?

A speculative risk in the property

A morale hazard in the property

An insurable interest in the property

A proximate cause of any loss

Question 27: Three weeks after a producer bound coverage on a warehouse, a fire destroys part of the building. The underwriter had already decided to decline the risk but no cancellation notice had been sent. How does the binder respond to this loss?

The decline voids coverage retroactively

Coverage applies under the binder

Coverage begins only when a policy issues

The producer must pay the claim

Question 28: A single warehouse fire turns out to be covered by two property policies written by two different companies. The insured wants to know how the loss payment will be handled. Which policy condition governs how reimbursement occurs in that situation?

The other insurance condition

The liberalization condition

The abandonment condition

The coinsurance condition

Question 29: A driver with no insurance damages an insured's fence and refuses to pay. The insured's company settles the claim and then pursues the at-fault driver for the money it paid out. Which policy condition allows the company to do that?

Abandonment

Liberalization

Subrogation

Coinsurance

Question 30: A contractor's general liability policy is amended so that the property owner who hired him is also protected under it. The owner's name did not appear when the policy was first issued and is brought in by attachment. Which status does the owner acquire?

First-named insured

Additional insured

Insured by definition

Named insured

Question 31: A married couple buys a dwelling policy and both of their names are printed in the declarations. A study guide asks what to call a person, business or entity listed there as the party to whom the policy is issued. Which term applies?

An additional insured

An insured by definition

A named insured

A third-party claimant

Question 32: After a covered total loss on a home, the outstanding mortgage balance is far smaller than the building limit on the policy. The mortgage company asks how much of the loss payment it may claim. Which rule answers that question?

The lender collects only its debt

The lender collects the full building limit

The lender and insured split evenly

The lender collects nothing on real property

Question 33: A property policy states that a loss will not be covered unless it happens inside the United States, Canada, Puerto Rico and other United States territories and possessions. Most such policies do not extend into Mexico. Which policy element is being described?

The policy period

The policy territory

The policy declarations

The policy endorsement

Question 34: An insurer reviews several applicants for auto coverage and must reject anyone who lacks the legal capacity to enter a binding agreement. Which applicant described below would ordinarily fail the competent parties requirement that every valid insurance contract demands?

An unemployed adult living at home

A retired widow on fixed income

A sixteen year old high school student

An adult with two speeding tickets

Question 35: Following a covered fire, an insurer asks the named insured to submit an official itemized inventory of the damaged property so the claim can be evaluated properly. Which of the insured's duties after loss is the insurer calling on?

Completing a detailed proof of loss

Giving prompt notice of claim

Submitting to examination under oath

Protecting property from further damage

Question 36: An underwriter gathers material about an applicant from motor vehicle records, credit reporting agencies, previous insurers and the company's own claim files. Which single item remains the primary source of the information used to evaluate the risk being offered?

The inspection report

The producer's personal opinion

The completed application

The credit report

Question 37: One section of a property policy states the rules of conduct, the duties and the obligations that both the insured and the insurer must meet, and warns that a claim may be denied if those rules are ignored. Which section is that?

The declarations

The insuring agreement

The exclusions

The conditions

Question 38: A hailstorm damages an insured's roof on a Saturday. The policy conditions require her to take one particular step right away, telling the company or its agent that a loss has occurred. Which duty after loss is that first step?

Giving prompt notice of the claim

Filing a detailed proof of loss

Cooperating in the claim investigation

Making property available for inspection

Question 39: A bank holding a mortgage on an insured home is named on the declarations page. A policy provision spells out that lender's rights and duties, including its right to be paid even if the homeowner acts dishonestly. Which provision is that?

The no benefit to bailee condition

The loss payable clause

The standard mortgage clause

The appraisal condition

Question 40: An insured and her insurer agree that the fire damage is covered but cannot settle on how much the damage is worth. A policy condition lets either side demand a formal process to resolve that disagreement. Which condition is it?

Subrogation

Salvage

Liberalization

Appraisal

IPCI Indiana Property and Casualty Insurance Exam - Set 3 - Part 2

Question 21: A business owner discovers that a single fire loss is covered by two separate property policies and asks whether he may collect the full amount of the damage from each insurer. Which principle governs the answer to his question?

Question 22: An applicant for a fire policy lies about two prior claims and later inflates a damage inventory after a small kitchen loss. The conduct springs directly from the applicant's own dishonesty. Which type of hazard does this behavior represent?

Question 23: An adjuster works through a partial fire loss on a dwelling: he first settles on what the damage is worth under the policy's valuation rules, then reduces that figure by the sum the insured must bear. In what order do these two steps occur?

Question 24: A producer explains to a client that one measure of worth reflects what a buyer would pay for property under free market conditions, rises and falls with supply and demand, and matters far more to realtors than to property insurers. Which measure is being described?

Question 25: Two policies each carry a figure chosen before issuance for property that is hard to value later. One promises the insured that exact sum after a covered total loss; the other promises only the lower of that sum or depreciated value. Which statement is accurate?

Question 26: A bank financed a customer's automobile and holds the lien, and a mortgage company holds the note on another customer's residence. Neither company owns or occupies the property, yet both stand to lose money if it is destroyed. What does each hold?

Question 27: Three weeks after a producer bound coverage on a warehouse, a fire destroys part of the building. The underwriter had already decided to decline the risk but no cancellation notice had been sent. How does the binder respond to this loss?

Question 28: A single warehouse fire turns out to be covered by two property policies written by two different companies. The insured wants to know how the loss payment will be handled. Which policy condition governs how reimbursement occurs in that situation?

Question 29: A driver with no insurance damages an insured's fence and refuses to pay. The insured's company settles the claim and then pursues the at-fault driver for the money it paid out. Which policy condition allows the company to do that?

Question 30: A contractor's general liability policy is amended so that the property owner who hired him is also protected under it. The owner's name did not appear when the policy was first issued and is brought in by attachment. Which status does the owner acquire?

Question 31: A married couple buys a dwelling policy and both of their names are printed in the declarations. A study guide asks what to call a person, business or entity listed there as the party to whom the policy is issued. Which term applies?

Question 32: After a covered total loss on a home, the outstanding mortgage balance is far smaller than the building limit on the policy. The mortgage company asks how much of the loss payment it may claim. Which rule answers that question?

Question 33: A property policy states that a loss will not be covered unless it happens inside the United States, Canada, Puerto Rico and other United States territories and possessions. Most such policies do not extend into Mexico. Which policy element is being described?

Question 34: An insurer reviews several applicants for auto coverage and must reject anyone who lacks the legal capacity to enter a binding agreement. Which applicant described below would ordinarily fail the competent parties requirement that every valid insurance contract demands?

Question 35: Following a covered fire, an insurer asks the named insured to submit an official itemized inventory of the damaged property so the claim can be evaluated properly. Which of the insured's duties after loss is the insurer calling on?

Question 36: An underwriter gathers material about an applicant from motor vehicle records, credit reporting agencies, previous insurers and the company's own claim files. Which single item remains the primary source of the information used to evaluate the risk being offered?

Question 37: One section of a property policy states the rules of conduct, the duties and the obligations that both the insured and the insurer must meet, and warns that a claim may be denied if those rules are ignored. Which section is that?

Question 38: A hailstorm damages an insured's roof on a Saturday. The policy conditions require her to take one particular step right away, telling the company or its agent that a loss has occurred. Which duty after loss is that first step?

Question 39: A bank holding a mortgage on an insured home is named on the declarations page. A policy provision spells out that lender's rights and duties, including its right to be paid even if the homeowner acts dishonestly. Which provision is that?

Question 40: An insured and her insurer agree that the fire damage is covered but cannot settle on how much the damage is worth. A policy condition lets either side demand a formal process to resolve that disagreement. Which condition is it?

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