Property and Casualty Insurance

Question 1

With respect to the tort of negligence, all the following statements regarding the different types of damages are correct EXCEPT:

Answer 1

Compensatory damages is another term for punitive damages.

Question 2

When the city fire department inspects his house after a fire, the inspector tells the insured that city ordinances require him to update the electrical system when he repairs the damage. How will a homeowners policy respond to the costs for updating the electrical system?

Answer 2

It eliminates coverage for the additional costs needed to comply with the new ordinance.

Question 3

A customer slips and falls on a wet floor in a store, and incurs damages consisting of emergency room charges, doctor bills, X-rays, and lost earnings from her job when she couldn’t work for two weeks. All of these are examples of:

Answer 3

special damages

Question 4

All of the following are elements of the tort of negligence EXCEPT:

Answer 4

intent

Question 5

Which legislation prevents a financial institution from disclosing a consumer’s nonpublic personal information to an unaffiliated third party unless it provides notice to the consumer and allows the consumer an opportunity to opt out?

Answer 5

Gramm-Leach-Bliley Act (GLBA)

Question 6

Which of the following statements regarding written and oral binders is correct?

Answer 6

Both types are legally binding, but a written binder is preferable because it reduces the likelihood of a dispute over terms.

Question 7

The CAN-SPAM Act requires businesses to honor opt-out requests within how many days?

Answer 7

10 days

Question 8

Which of the following pieces of federal legislation requires truthful disclosure of certain information to consumers before payment can be accepted?

Answer 8

Telemarketing Sales Rule

Question 9

A notice of policy cancelation will not be effective if?

Answer 9

notice is made only verbally to the insured.

Question 10

All of the following statements regarding property insurance policy endorsements are correct EXCEPT:

Answer 10

The wording in an insurance policy takes precedence over the wording in an endorsement attached to that policy.

Question 11

What are the two types of compensatory damages?

Answer 11

special and general

Question 12

If two or more property or casualty policies covering the same loss exposure do not have identical policy periods, they are said to be:

Answer 12

nonconcurrent