PPCI - Pennsylvania Property and Casualty Insurance Exam

Question 1: A Pittsburgh investor buys a warehouse and insures it, then sells the building to a developer six months later without cancelling the policy. Fire destroys the warehouse the following week. Which principle explains why the former owner collects nothing?

Coverage ends when a mortgage is repaid

Property policies are assignable at will

Salvage rights belong to the buyer

Insurable interest must exist at the loss

Question 2: A Harrisburg business owner opens her commercial property policy and looks for the named insured, the policy period, the covered locations and the limits of insurance that apply. Which part of the policy contains all of that information in one place?

The declarations

The insuring agreement

The conditions

The endorsements

Question 3: A producer explains to a new client that one section of every property policy contains the insurer's core promise, describing what the company will do and identifying the perils it will respond to. Which policy section is the producer describing to the client?

The declarations

The exclusions

The insuring agreement

The conditions

Question 4: A Scranton contractor adds earthquake coverage to his commercial property policy midterm, and the insurer issues a document that attaches to the policy and changes its terms. Which component of the policy has the insurer just added to the contract?

An endorsement

A binder

A certificate of insurance

An additional coverage

Question 5: A commercial policy lists a parent corporation and three subsidiaries as named insureds, with the parent shown first. The insurer needs to send a cancellation notice and issue a return premium check. Which party does the policy designate for those purposes?

Each named insured individually

The mortgagee shown on the declarations

The producer of record

The first named insured

Question 6: A Reading storeowner returns to find a broken skylight and rain pouring onto her inventory. She calls her insurer, spreads tarps over the stock and keeps every receipt for the materials she buys. Which policy obligation is she satisfying by covering the stock?

The subrogation condition

The appraisal condition

The duty to protect from further damage

The abandonment provision

Question 7: A Bethlehem manufacturer sells its plant and tries to hand the buyer its existing commercial property policy so the new owner can keep the coverage in force without any interruption. What does the assignment condition require before that transfer can be effective?

The insurer's written consent

A signed statement from the mortgagee

Payment of a transfer fee

Approval from the Insurance Department

Question 8: An insurer revises its homeowners form during the policy term to broaden the definition of covered water damage, and it charges no extra premium for the change. Which condition automatically extends that broader wording to policies already in force?

The other insurance condition

The waiver of rights condition

The loss payable condition

The liberalization condition

Question 9: An uninsured driver runs a red light in Allentown and destroys an insured's parked car. The insured's own insurer pays the physical damage claim and then sues the at-fault driver to recover what it paid out. Which insurer right supports that lawsuit?

Salvage

Abandonment

Subrogation

Liberalization

Question 10: A York homeowner and her insurer agree that a kitchen fire is covered but cannot agree on what the repairs are worth. Each side hires its own valuation expert, and the two experts select a third person to break any deadlock. Which policy provision is being used?

The appraisal condition

The arbitration clause

The proof of loss requirement

The salvage provision

Question 11: A lender financing a Lancaster County home is named on the homeowners policy. The insured later sets fire to the house himself and the insurer denies his claim. Which statement correctly describes the lender's position under the standard mortgage clause?

The lender is denied with the insured

The lender may collect the full limit

The lender must sue the insured directly

The lender may collect its debt

Question 12: A Philadelphia dry cleaner accepts a customer's coat, and a covered fire at the shop destroys it. The dry cleaner's property policy covers customer goods in its care. Which condition prevents the dry cleaner from claiming under the customer's own homeowners policy?

The abandonment provision

The liberalization condition

The no benefit to bailee condition

The pair or set clause

Question 13: A commercial insured cancels her Erie property policy in the middle of the term because she sold the business. Her producer explains that the refund will be calculated differently than it would be if the insurer had cancelled. Which statement describes the refunds correctly?

Insured cancellation is always pro rata

Insurer cancellation is short rate

Neither cancellation produces a refund

Insured cancellation is short rate

Question 14: A Pennsylvania business carries two commercial property policies written on the same basis, one for six hundred thousand dollars and one for two hundred thousand dollars, both covering a warehouse. A covered loss occurs. How will the two insurers most likely divide the payment?

Each pays in proportion to its limit

The older policy pays everything first

Each insurer pays an equal dollar amount

The insured selects which policy responds

Question 15: A Pennsylvania auto liability policy shows limits of fifteen thousand, thirty thousand and five thousand dollars, while a commercial policy shows a single figure covering both bodily injury and property damage together. Which pair of terms correctly names these two limit structures?

Aggregate and per occurrence

Split limits and combined single limit

Per person and per accident

Follow form and self-insured retention

Question 16: A Pennsylvania contractor's general liability policy pays two large claims during the policy year, and the second payment exhausts a limit that applies to all claims combined. Which statement correctly describes what happens to that limit going forward?

It restores after each claim payment

It restores after sixty days

It restores when the policy renews

It cannot be restored at all

Question 17: A Pennsylvania building worth four hundred thousand dollars at replacement cost is insured for two hundred thousand dollars under a form carrying an eighty percent coinsurance requirement. A partial fire loss occurs. What effect does the coinsurance condition have on the claim payment?

The claim is denied entirely

The insurer pays the full loss

The limit is automatically increased

The insured shares in the partial loss

Question 18: An adjuster tells a Pennsylvania homeowner that her eight-year-old roof will be settled by taking what a new roof would cost today and subtracting an amount for the years of wear the old roof had already given. Which valuation method is the adjuster applying?

Actual cash value

Replacement cost

Market value

Agreed value

Question 19: A church in a Pennsylvania borough suffers fire damage to a hand-plastered ceiling that no contractor still reproduces. The insurer settles by paying for a modern ceiling that serves the same purpose at a lower cost. Which valuation method has the insurer used?