PEARSON VUE: CASUALT Y

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PEARSON VUE: CASUALT Y

INSURANCE PRACTICE E XAM

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Question : An insured may cancel a Personal Auto Policy

by taking which of the following actions?

• Paying the insurance company any past due premiums
• Waiting until the policy expiration date
• Giving written notice to the insurance company
• Informing the producer by telephone

Correct answer: C

Question : In insurance, which of the following terms

refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor intended?

• An accident
• An occurrence
• An event

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• A condition

Correct answer: B

Question : Which of the following vehicles is considered

a temporary substitute auto under a Personal Auto policy?

• A neighbor's pickup truck borrowed by an insured to

run an errand

• An auto purchased by an insured to replace a

previously owned vehicle

• An auto rented by an insured when the insured is on

vacation

• An auto rented by an insured when the insured's car is

in a garage for repairs

Correct answer: D

Question : An insurance binder is best described as:

• a large bound volume of rules, rates, and forms
• a rate manual supplied by one of the rating

organizations

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• a temporary agreement to pay a claim pending final

settlement

• temporary short-term evidence of coverage

Correct answer: D

Question : Anything that increases the chance of loss is

known as a(n):

• risk
• hazard
• direct loss
• indirect loss

Correct answer: B

Question : The Fair Credit Reporting Act requires the:

• insurance company to review the applicant's credit

history prior to underwriting a policy

• insurance producer to summarize a policy for the

insured

• insurance producer to review the applicant's credit

history prior to issuing a policy

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• insurance company to inform the applicant a credit

report may be obtained

Correct answer: D

Question : The limits of liability are found in which of the

following sections of a casualty policy?

• Conditions
• Insuring Agreement
• Declarations
• Definitions

Correct answer: C

Question : A policyholder would expect to find which of

the following information in the Insuring Agreement section of an auto policy?

• Bodily Injury limits of liability
• The insurance company's promise to pay on the behalf

of the insured

• Exclusions regarding certain uses of the auto
• The obligations of the insured in the event of a loss