SCPCIP - South Carolina Property and Casualty Insurance Producer Exam

Question 1: Two neighbors each suffer a covered kitchen fire. One carries a basic form dwelling policy, the other a broad form written for ninety percent of replacement cost. Both lose kitchen cabinets and a twelve-year-old sofa. Which description of the two loss settlements is accurate?

Both policies pay everything at replacement cost

Both settle everything at actual cash value

Only the basic form replaces the sofa

Only the broad form replaces the cabinets

Question 2: A producer compares a businessowners policy with a commercial package policy for a small dry cleaner. The owner wants to know how the two products differ in the way their coverages are put together. Which statement describes that difference?

The package policy bundles coverages automatically

The businessowners policy includes coverages automatically

Both are assembled from a coverage menu

Neither product includes liability coverage

Question 3: The declarations page of a property policy shows the largest sum the insurance company will pay for a covered loss. Producers and adjusters refer to this figure by several interchangeable names. Which of the following is one of the accepted names for it?

Limit of responsibility

Limit of indemnity ceiling

Limit of valuation

Limit of liability

Question 4: A student living at college has a stereo stolen from his dorm room. His parents carry a homeowners policy at their home, and the property was away from the residence premises shown in the declarations. How does the policy limit recovery on that property?

Ten percent of the Coverage C limit

Ten percent of the Coverage A limit

Fifty percent of the Coverage C limit

No coverage away from the premises

Question 5: Two disputes arise from one commercial fire. In the first, the parties differ only over the dollar value of the damage. In the second, two insurers differ over which policy owes coverage. Which statement BEST assigns each dispute to the right condition?

Both belong to the appraisal condition

Both belong to the arbitration condition

Appraisal first, arbitration second

Arbitration first, appraisal second

Question 6: A producer reviews the first page of a commercial package policy and finds the named insured's mailing address, the policy period with beginning and ending dates, a description of the business, and a list of forms with their premiums. Which component is being read?

The common policy conditions

The causes of loss form

The commercial property conditions form

The common policy declarations

Question 7: A retail building insured under the building and personal property form sat empty for seventy-five consecutive days before vandals broke in and damaged the interior fixtures and walls. Under the vacancy condition of that form, how does the insurer treat this vandalism loss?

The loss is paid in full

The vandalism loss is not paid

Payment is reduced by five percent

Coverage continues with no vacancy effect

Question 8: An insured under a dwelling policy owns a detached garage that sits across the yard, connected to the house only by a utility line, and rents part of it to a neighbor for a small engine repair business. How does Coverage B respond to a fire there?

It pays the full Coverage A limit

It pays twenty percent of Coverage A

It covers the garage without restriction

It does not cover commercial occupancy

Question 9: After determining that repairing a fire-damaged item would cost more than the property is worth, an insurer pays the claim as a total loss and then takes possession of the damaged remains to sell them. Which property policy condition gives the insurer this right?

Salvage

Abandonment

Subrogation

Appraisal

Question 10: While helping a friend move, an insured drops and ruins a borrowed television. The friend does not sue, and no one has established that the insured was negligent. Which Section Two additional coverage responds to the ruined television set?

Loss assessment coverage

Damage to property of others

First aid expenses

Coverage F medical payments

Question 11: A small fire at an insured machine shop brings the volunteer fire department, which bills the business for responding. The building and personal property form pays this charge as an additional coverage. Which statement describes how that payment works?

It is paid without a deductible

It reduces the building limit of insurance

It requires a separate optional coverage

It applies only to municipal departments

Question 12: A consulting firm's computer system is infected by malicious code that destroys client files, and the firm pays a specialist to rebuild the data. Which first-party cyber coverage responds to the cost of putting that information back on the system?

Network security liability

Replacement or restoration of electronic data

Website publishing liability

Cyber extortion coverage

Question 13: A farm client wants his prize show cattle and two specific combines listed individually on the policy, while his general inventory of feed, tools and supplies is insured as a single blanket amount. Which farm personal property coverages match those two requests?

Coverage G for both requests

Coverage F listed, Coverage E blanket

Coverage H listed, Coverage J blanket

Coverage E listed, Coverage F blanket

Question 14: A kennel operator insures its building and business personal property under the standard commercial form and asks whether the dogs it boards for paying customers are covered property. Which statement correctly applies the property not covered provision to those animals?

All animals are excluded without exception

Animals are covered only while inside buildings

Boarded animals are covered property

Only animals the insured owns are covered

Question 15: A hailstorm damages an insured's roof on a Saturday. The insured waits four months before telling anyone at the insurance company that anything happened. The insurer objects. Which duty after a loss has the insured most clearly failed to perform?

Cooperate during the claim investigation

Make property available for inspection

Submit a sworn proof of loss

Give prompt notice of the claim

Question 16: A hardware store's building coverage under the building and personal property coverage form is being explained to the owner. Along with the structure itself, which of the following items is included within building coverage rather than treated as business personal property?

Stock held for sale

Tenant improvements made by a renter

Permanently installed machinery and fire extinguishers

Office furniture and file cabinets

Question 17: An insured has an appraisal performed before the policy is written and then selects the figure the declarations page will carry. At the time of a covered total loss, the insurer will pay the lower of that figure or actual cash value. Which basis applies?

Agreed value

Stated amount

Blanket limit

Replacement cost

Question 18: A bakery's compressed air tank ruptures and damages nearby equipment. The producer explains that the equipment breakdown coverage form responds to certain kinds of direct physical loss to covered equipment. Which of the following falls within the policy definition of breakdown?

Leakage at a valve or fitting

Cleaning, alignment or calibration work

Failure of pressure or vacuum equipment

Damage to a glass tube or brush

Question 19: A retail chain wants one commercial contract that combines property coverage on its stores with general liability, and later adds crime and inland marine forms as the business grows. Which commercial product is assembled to order in exactly this way for a business?

The commercial package policy

A monoline crime policy

A pre-packaged homeowners policy

A workers compensation policy

Question 20: A finance company holds a lien on costly movable equipment an insured bought on credit. No real property is involved, so the standard mortgage clause will not work. The producer needs a provision protecting the lienholder's interest. Which provision applies?

Standard mortgage clause

No benefit to bailee condition

Loss payable clause

Abandonment condition

SCPCIP South Carolina Property and Casualty Insurance Producer Exam - Set 2 - Part 1