WPCI - Washington Property and Casualty Insurance Exam

Question 21: When a contract is formed, each side must give something of value. For the applicant buying insurance, this contribution consists of paying the premium and making truthful statements on the application, while the insurer promises to pay covered losses. Which contract element does the applicant's contribution satisfy?

Consideration

Acceptance

Legal purpose

Competent parties

Question 22: An insurance policy is drafted entirely by the insurer, and the insured may only accept or reject it as written, with no power to negotiate the wording. Because of this one-sided drafting, any ambiguity in the language is construed in favor of the insured. Which characteristic does this describe?

Aleatory

Unilateral

Conditional

Adhesion

Question 23: An insured may pay modest premiums for years and collect nothing, or pay a single small premium and then collect a large claim after an unexpected loss. This inequality of exchanged values, dependent on an uncertain event, defines which characteristic of the insurance contract?

Aleatory

Conditional

Adhesion

Personal

Question 24: In this insurance contract, only the insurer makes a legally enforceable promise, to pay covered claims, while the insured is not legally compelled to keep paying premiums and may simply stop or cancel. If the insured stops paying, the insurer cancels rather than sues. Which characteristic explains this?

Conditional

Aleatory

Unilateral

Adhesion

Question 25: Before an insurer must pay a claim, the insured has to fulfill certain duties, such as paying the premium and submitting a proof of loss. If those requirements are not met, the insurer may deny the claim. This if-then structure of duties defines which characteristic of the contract?

Aleatory

Unilateral

Personal

Conditional

Question 26: Both parties to an insurance contract are entitled to rely on the reasonable expectation that the other will deal honestly and will not conceal important facts or act deceptively. Violating that expectation can void the offending party's claims. Which characteristic of insurance does this mutual honesty describe?

Adhesion

Utmost good faith

Aleatory

Indemnity

Question 27: An insured wants to sell his car to a friend and simply hand over his auto policy along with it, but the insurer explains that because it evaluated him specifically as a risk, the coverage cannot be transferred to another person without its written consent. Which characteristic explains this?

Conditional

Unilateral

Personal

Aleatory

Question 28: On her application an applicant answers questions to the best of her knowledge and belief, and these answers, unlike statements guaranteed to be absolutely true, are judged only by whether she believed them true. Under most state laws, what are such application statements classified as?

Warranties

Concealments

Fraudulent statements

Representations

Question 29: An applicant states on his application that a fact is true when it is actually false. Considering only that the statement does not match reality, without yet asking whether it influenced the insurer's decision, which term best labels this false representation?

Warranty

Misrepresentation

Concealment

Waiver

Question 30: An applicant falsely denies a history of major fire claims, and the insurer proves that, had it known the truth, it would have charged much more or declined the risk entirely. This kind of false statement, one that determined the insurer's decision, permits which remedy?

Voiding the coverage

Automatic policy renewal

A premium refund only

No remedy at all

Question 31: An applicant knows a material fact that should be volunteered even though the application never asks about it, and he intentionally stays silent to obtain coverage. The insurer later learns of the hidden fact. This deliberate silence about a known material fact is called which of the following?

Warranty

Representation

Concealment

Estoppel

Question 32: A policyholder deliberately sets fire to his own insured warehouse and then files a claim describing the loss as accidental, intending to deceive the insurer into paying money he is not owed. This intentional deception aimed at unjust gain is best described by which term?

Innocent misrepresentation

Fraud

Waiver

Adverse selection

Question 33: A jewelry store owner promises in the policy to keep a burglar alarm operating at all times, and the insurer relies on that statement as guaranteed true. When a theft occurs while the alarm sits disconnected, the broken promise lets the insurer deny the claim. Which term names that promise?

Warranty

Representation

Concealment

Waiver

Question 34: Liability insurance responds to civil wrongs that are unintentional, arising when a person fails to exercise the care a reasonable person would use in similar circumstances and thereby causes harm to another. Which term describes this failure to use reasonable care?

A crime

Absolute liability

Assumption of risk

Negligence

Question 35: To prevail on a negligence claim, an injured party must prove that a legal duty was owed, that the duty was breached, that the breach was the proximate cause of the harm, and that actual damages resulted. How many of these elements must be established?

All four elements

Any two elements

Only duty and damages

Only proximate cause

Question 36: Under one negligence doctrine, an injured claimant who contributed even slightly to her own harm recovers nothing at all from the other party. A student must distinguish this strict all-or-nothing rule from the system that instead reduces recovery by the claimant's share of fault. Which doctrine bars all recovery?

Comparative negligence

Assumption of risk

Contributory negligence

Vicarious liability

Question 37: A recreational hockey player is injured by a hard body check during a game and sues, but the defense argues he voluntarily and knowingly took part in a contact sport whose ordinary dangers he accepted. Which defense to negligence does this argument represent?

Proximate cause

Assumption of risk

Comparative negligence

Intervening cause

Question 38: A driver negligently runs a red light, but before any collision an unforeseeable earthquake collapses an overpass onto the other car, and that independent event, not the driver's error, actually causes the injuries. Which concept, breaking the chain of causation, may relieve the driver of liability?

Proximate cause

Vicarious liability

Assumption of risk

Intervening cause

Question 39: While making deliveries on company time in a company truck, an employee negligently rear-ends another vehicle. The injured motorist sues the employer, arguing the company must answer for the negligent act of its worker acting within the scope of employment. Which liability concept supports holding the employer responsible?

Absolute liability

Assumption of risk

Vicarious liability

Contributory negligence

Question 40: A property owner keeps an exotic and dangerous wild animal that escapes and injures a neighbor, and the law holds the owner liable for the harm even though he took every reasonable precaution and was not careless. Which type of liability, imposed without proving fault, applies here?

Absolute liability

Vicarious liability

Comparative negligence

Contributory negligence

WPCI Washington Property and Casualty Insurance Exam - Set 2 - Part 2

Question 23: An insured may pay modest premiums for years and collect nothing, or pay a single small premium and then collect a large claim after an unexpected loss. This inequality of exchanged values, dependent on an uncertain event, defines which characteristic of the insurance contract?

Question 25: Before an insurer must pay a claim, the insured has to fulfill certain duties, such as paying the premium and submitting a proof of loss. If those requirements are not met, the insurer may deny the claim. This if-then structure of duties defines which characteristic of the contract?

Question 28: On her application an applicant answers questions to the best of her knowledge and belief, and these answers, unlike statements guaranteed to be absolutely true, are judged only by whether she believed them true. Under most state laws, what are such application statements classified as?

Question 29: An applicant states on his application that a fact is true when it is actually false. Considering only that the statement does not match reality, without yet asking whether it influenced the insurer's decision, which term best labels this false representation?

Question 30: An applicant falsely denies a history of major fire claims, and the insurer proves that, had it known the truth, it would have charged much more or declined the risk entirely. This kind of false statement, one that determined the insurer's decision, permits which remedy?

Question 32: A policyholder deliberately sets fire to his own insured warehouse and then files a claim describing the loss as accidental, intending to deceive the insurer into paying money he is not owed. This intentional deception aimed at unjust gain is best described by which term?

Question 34: Liability insurance responds to civil wrongs that are unintentional, arising when a person fails to exercise the care a reasonable person would use in similar circumstances and thereby causes harm to another. Which term describes this failure to use reasonable care?

Question 35: To prevail on a negligence claim, an injured party must prove that a legal duty was owed, that the duty was breached, that the breach was the proximate cause of the harm, and that actual damages resulted. How many of these elements must be established?

Question 37: A recreational hockey player is injured by a hard body check during a game and sues, but the defense argues he voluntarily and knowingly took part in a contact sport whose ordinary dangers he accepted. Which defense to negligence does this argument represent?

Question 40: A property owner keeps an exotic and dangerous wild animal that escapes and injures a neighbor, and the law holds the owner liable for the harm even though he took every reasonable precaution and was not careless. Which type of liability, imposed without proving fault, applies here?

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