WPCI Washington Property and Casualty Insurance Exam - Set 2 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: After a serious crash caused by a drunk driver's willful misconduct, a court awards the victim money for medical bills and lost wages, additional money for pain and suffering, and a further sum meant to punish the driver and deter others. Which term names that last award?

Special damages

General damages

Compensatory damages

Punitive damages

Question 42: The first page of a property policy identifies the named insured, the address and legal description of the covered property, the policy term, the deductible, and the limits, effectively answering who, what, where, and how much. Which part of the policy is being described?

Insuring agreement

Declarations

Conditions

Exclusions

Question 43: One section of the policy is called the heart of the contract because it describes the covered perils the insurer assumes and summarizes the company's central promise to pay, and for liability coverage it also contains the promise to defend the insured. Which section is this?

Insuring agreement

Declarations

Conditions

Definitions

Question 44: A homeowners policy names flood among the loss causes it will not pay for, removing that peril from what the insuring agreement would otherwise grant. This provision takes coverage away by specifying property or perils not covered. Which policy component performs this function?

Declarations

Insuring agreement

Conditions

Exclusions

Question 45: After a covered loss destroys a five-year-old television, the insurer settles by taking what an equivalent new set would cost today and subtracting an amount for the wear and age accumulated on the old one. Which valuation method does this calculation represent?

Replacement cost

Actual cash value

Agreed value

Market value

Question 46: A commercial building policy contains an eighty percent coinsurance clause. At the time of a partial fire loss the owner had insured the building for far less than eighty percent of its replacement cost. Because he failed to carry the required amount, how is his partial claim affected?

It is paid in full

It is denied entirely

It is reduced by a penalty

The limit is increased

Question 47: After paying its insured for damage caused by a negligent neighboring contractor, the insurer wants to step into the insured's shoes and pursue that at-fault contractor to recover what it paid. The insured signs a release assigning this right. Which condition permits the insurer to do this?

Salvage

Liberalization

Abandonment

Subrogation

Question 48: A policy provision requires the insured to pay a fixed amount out of pocket on each loss before the insurer contributes, which discourages small claims and lowers the premium as that amount rises. Which policy feature does this describe?

Coinsurance

Policy limit

Deductible

Endorsement

Question 49: Two policies cover the same building loss. Company A carries a one hundred thousand dollar limit and Company B a three hundred thousand dollar limit. Under the method that splits the loss in proportion to each policy's limit, how does each insurer's share get determined?

Equal dollar amounts each

By each limit's proportion

The larger policy pays all

Smaller policy pays first

Question 50: A homeowner's roof is destroyed and her policy pays to install a new roof of similar kind and quality with no deduction for the age or wear of the old one. Which loss-settlement basis provides this payment without subtracting depreciation?

Replacement cost

Actual cash value

Market value

Stated amount

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