SCPCIP - South Carolina Property and Casualty Insurance Producer Exam

Question 21: A fire damages the plaster interior walls of an older building, and the insurer rebuilds them with modern drywall rather than hand-applied plaster. The substitute serves the same purpose just as well. Which loss valuation approach does this settlement illustrate?

Actual cash value

Market value

Agreed value

Functional replacement cost

Question 22: Two property policies written on the same basis cover an identical building loss, and each carries a different limit. The other insurance condition directs the companies to divide the loss according to the share of total insurance each provides. Which method is this?

Primary and excess

Contribution by equal shares

Pro rata sharing

Nonconcurrency

Question 23: A driver with no insurance damages an insured's fence and refuses to pay. The insured's property insurer pays the claim, then pursues the at-fault driver for reimbursement after the insured signs a release and assignment form. Which condition permits the insurer to do this?

Subrogation

Salvage

Appraisal

Abandonment

Question 24: An owner-occupant buys the special form and later learns that the dwelling and detached garage are insured on an open peril basis while her furniture and clothing are not. Which description matches the way the HO-3 form treats personal property?

Open peril, replacement cost settlement

Basic named perils only

No personal property coverage applies

Broad named perils, actual cash value

Question 25: A restaurant owner asks the producer to fold every one of the business's insurance needs into a single commercial package policy, including the coverage that pays employees injured on the job. Which coverage cannot be written as part of that package?

Commercial general liability

Commercial inland marine

Workers compensation

Business income coverage

Question 26: A burglar takes a diamond ring appraised at five thousand dollars from an insured's bedroom. The homeowners policy has never been endorsed to schedule the ring. Which special limit of liability applies to the theft of jewelry, watches and furs?

Two hundred dollars

One thousand five hundred dollars

Two thousand five hundred dollars

Five thousand dollars

Question 27: A tenant installs custom shelving, a built-in desk and new light fixtures in her rented apartment, all at her own expense. Which additional coverage, available only in the tenants form, protects those improvements, and what limit applies to them?

Building additions, ten percent of Coverage C

Ordinance or law, ten percent

Collapse, included in the policy limit

Grave markers, five thousand dollars

Question 28: An insured pays an extra premium to add the extended coverage perils to a basic dwelling policy. His producer notes that one peril in that group takes the place of a peril already present in every dwelling form and widens it. Which pairing is described?

Smoke replaces the fire peril

Hail replaces the lightning peril

Explosion replaces the internal explosion peril

Riot replaces the civil commotion peril

Question 29: A contractor insures a partly built office under the builders risk coverage form and asks whether the foundation poured below the basement level is covered, since the standard building form excludes such foundations. Which statement correctly compares the two forms?

Both forms exclude the foundation

Neither form covers work under construction

Only a separate endorsement covers foundations

Builders risk covers the foundation

Question 30: Two buyers apply for flood insurance on the same day with full premium paid. One is closing on a mortgage loan that requires the coverage; the other simply wants protection before hurricane season. Which statement about when their policies take effect is correct?

Both take effect the following day

The loan purchase avoids the thirty-day wait

Both wait thirty days for coverage

Both take effect immediately upon payment

Question 31: A commercial property policy obligates the insured to carry a minimum amount of insurance measured against the replacement cost of the building, and reduces payment on partial losses if the insured carries less. Which property policy provision imposes that requirement?

Deductible

Appraisal

Abandonment

Coinsurance

Question 32: An insured deliberately sets fire to his own house and is convicted of arson. A bank is listed on the declarations page as the mortgage holder. The insurer denies the insured's claim. Which statement describes the bank's position under the policy?

The bank loses coverage with the insured

The bank must sue the insured first

The bank is paid its remaining debt

The bank collects the full policy limit

Question 33: An underwriter reviews a service business applying for a businessowners policy. The applicant has ninety employees, gross annual sales of four million dollars, and occupies thirty thousand square feet. Which factor would most likely make an applicant ineligible for a businessowners policy?

Employing more than one hundred people

Gross sales of four million dollars

Occupying thirty thousand square feet

Operating as a retail store

Question 34: A fire destroys a coin collection worth three hundred dollars and a set of sterling flatware worth two thousand dollars kept in the same dining room. Neither item was scheduled. Considering how the special limits operate, what does the unendorsed homeowners policy pay?

The full value of both items

Two hundred dollars and the full flatware

Two hundred dollars and nothing more

Three hundred dollars and the full flatware

Question 35: A developer expects a two-year hospital project with a very large final value and wants the limit to rise as construction progresses, filing values with the insurer every thirty days. Which builders risk option fits, and what does it require of the developer?

The reporting form, with monthly value reports

The completed value form, with annual reports

The agreed value option, with a worksheet

The peak season endorsement, with seasonal limits

Question 36: A producer writes a mobile home package policy and compares its built-in limits with those of a homeowners form. The client asks what percentage of the coverage on the home applies to personal property and what percentage applies to loss of use. Which pair is correct?

Fifty percent and thirty percent

Ten percent and twenty percent

Forty percent and twenty percent

Forty percent and thirty percent

Question 37: A town has just applied to join the flood program, and the federal government has not yet finished mapping and rating its flood zones. A homeowner there wants the most flood coverage available. Which program applies now, and what limits it?

Regular program, with full limits available

Emergency program, with lower subsidized limits

Regular program, subject to a waiting list

No program, until mapping is finished

Question 38: A homeowner submits a claim list after a fire that includes a pedigreed show dog, a set of golf clubs, a laptop computer and a garden tractor used only to mow the yard. Which listed item is specifically excluded from Coverage C?

The golf clubs

The laptop computer

The garden tractor

The show dog

Question 39: A dwelling policy includes the windstorm peril. During a gale, wind-driven rain is forced through an intact closed window frame and stains the plaster inside, but no part of the roof or walls is broken open. How does the windstorm peril treat this interior damage?

Not covered, no opening was made

Covered in full with no deductible

Covered only under the special form

Covered after a sixty-day waiting period

Question 40: After a covered fire leaves a repairable building standing, the insured tells the company to keep the structure and send a check for its full value instead of paying repair costs. Which property policy condition prevents that demand from succeeding?

Salvage condition

Pair or set condition

Coinsurance condition

Abandonment condition

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