New Mexico Property and Casualty Practice Test

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• What does a hazard refer to?
• How is a contract of adhesion characterized in insurance terms?
• What term best represents actual physical damage that affects a property owner's asset?
• What is a "broadened form" policy?
• What are "extended replacement cost" policies?
• Which of the following best defines 'risk assessment' in insurance?
• Which term describes damage caused by an unexpected and violent eruption?
• What is a "no-fault" insurance system?
• What does the insurance rate represent?
• What factor is necessary for an act to be considered enough evidence for burglary?
• What differentiates a captive agent from an independent agent?
• What does "excluded peril" mean in the context of property insurance?
• How do insurance premiums typically vary for high-risk individuals?
• What are expediting expenses in property insurance?
• Which type of policy provides coverage for both liability and physical damage?
• What is meant by "peril" in an insurance context?
• What type of authority may not be explicitly stated but gives agents the ability to perform necessary tasks?
• Which of the following is NOT included under real property?
• What best defines a messenger in terms of property custody?
• What factors affect homeowners insurance premiums?
• What type of coverage do Supplementary Payments provide in liability policies?
• What is a defining feature of speculative risks?
• What is the significance of the standard fire policy?
• Which coverage option typically protects against fire, theft, and vandalism?
• What distinguishes robbery from other theft-related crimes?
• What role does a custodian specifically play in property insurance terms?
• What type of liability insurance is usually required for businesses?
• Which type of agency allows agents to work on a commission basis while representing multiple insurers?
• Which statement accurately describes the role of an insurance broker?
• What is the purpose of an insurance policy's "exclusions" section?
• What type of loss is characterized by damages resulting from someone else's vehicle?
• How does Automatic Coverage benefit an insured when moving?
• What limitation does Automatic Coverage have regarding the types of items covered?
• Which scenario is specifically addressed by Supplementary Payments?
• What is the definition of an insurance policy?
• What is a "named perils" policy?
• Which type of coverage is typically included in a homeowner's policy?
• What type of insurance conditions does Automatic Coverage typically include?
• Which of the following is a characteristic of an exclusion in an insurance policy?
• What does "real property" include?
• What is the primary purpose of underwriting?
• What is the purpose of reinsurance?
• What constitutes the act of robbery?
• What does the term "vandalism and malicious mischief" refer to?
• What does experience rating take into account when determining premiums?
• What is an endorsement in an insurance policy?
• What type of insurance covers damages to physical property?
• What characterizes a fraternal benefit society?
• Which situation does "riot" cover in terms of property damage?
• What is the legal definition of safe burglary?
• What natural phenomenon is indicated by the term "W" in insurance contexts?
• What is an "inland marine" policy?
• How is the concept of depreciation relevant to insurance?
• A characteristic of the direct writer system is that agents typically do what?
• What is a liability limit in an insurance policy?
• What does a "comprehensive" auto insurance policy cover?
• How is a stock company defined?
• What does "loss assessment" coverage provide for the insured?
• What does a direct response system imply about the selling of insurance?
• Which of the following best describes the nature of Automatic Coverage?
• What type of insurance is primarily designed to cover physical damage to vehicles?
• What are the primary duties of an insurance agent?
• What kind of hazard is represented by leaving your car running unattended on a cold morning?
• How does mysterious disappearance relate to property loss?
• Who is typically designated as a custodian in an insurance context?
• How often should policyholders review their insurance coverage?
• How is "actual cash value" calculated?
• What is commonly associated with liability policies in regard to Supplementary Payments?
• Which type of loss would NOT typically include the cost of staying in a hotel after a house fire?
• What best describes the relationship between brokers and insurers?
• What typically triggers coverage under a business auto policy?
• Hail is categorized as what type of weather event in property damage terms?
• What additional benefit do Supplementary Payments provide in a liability policy?
• What is one action that an agent does NOT perform?
• What is the purpose of uninsured motorist coverage?
• What is meant by implied authority in an insurance context?
• What is the role of solicitors in the insurance industry?
• In the context of insurance, what are "policyholders" typically entitled to in a mutual company?
• What is an insurer?
• What is the role of a broker in the insurance process?
• What is a key disadvantage of adverse selection in insurance?
• What distinguishes a captive agent from other types of agents?
• What happens to coverage for newly acquired property after the initial coverage period ends?
• What is the main function of workers' compensation insurance?
• Which event includes looting when it occurs during the situation?
• Which insurance provision typically helps a policyholder pay for temporary living arrangements after a loss?
• What does an insurance claim refer to?
• What does "claims made" basis mean in insurance?
• What is defined as any reduction in value, quality, or quantity in an insurance context?
• Which of the following best describes the role of a self-insurer?
• What type of event is included in vehicle-related damages?
• What does Personal Injury Protection (PIP) provide coverage for?
• In what type of policy would you typically find coverage for personal items while they are being transported?
• In the insurance field, what does "broker" refer to?
• What is the primary benefit of the liability risk retention act established in 1981?
• What is a "loss ratio"?
• What types of programs do government insurers typically provide?
• How is theft defined in relation to property insurance?
• What role do actuaries play in insurance companies?
• Which of the following is an example of a physical hazard?
• What type of hazard arises from material, structural, or operational features?
• When does a loss involve a mysterious disappearance?
• What does PAP stand for in insurance terminology?
• Which term describes an insurance system that minimizes litigation between parties in an accident?
• What is the significance of the term 'non-admitted insurer' in insurance?
• What does the deductible mean in an insurance policy?
• What is the difference between actual cash value and replacement cost?
• What is the difference between a primary and an excess insurance policy?
• What is a common characteristic of casualty insurance?
• What does an umbrella policy provide?
• What does the term "excess liability" refer to?
• What does “coverage A” refer to in a homeowners policy?
• What is a "loss of use" provision in property insurance?
• What is the purpose of using individual rating instead of class rating?
• What type of insurance covers flood damage?
• What defines a consultant in the insurance field?
• What characterizes a vehicle-related incident in property damage claims?
• Which of the following best defines loss in insurance?
• What kind of system involves a company hiring its own customer service representatives to work directly for the company?
• What is typically included in property insurance coverage?
• Which coverage provides protection against personal injuries and damages caused to others?
• What is a co-insurance clause in property insurance?
• What type of rating allows insurers to set premiums based on the merit of the exposures in commercial lines?
• What is the focus of individual rating in personal lines of insurance?
• Which rating system is particularly useful for managing risks associated with factories?
• What type of insurance do government insurers often provide?
• What type of authority is described as being specific and written in the agent's contract?
• What is a deductible in an insurance policy?
• What does a "lapse" in an insurance policy mean?
• Which of the following best describes an independent agent?
• Which rating is based on loss control efforts in a factory or business?
• What creates apparent authority for an insurance agent?
• What is the role of an insurance adjuster?
• Who does the term "insured" refer to?
• What does property insurance cover?
• What defines extortion in property terms?
• What phenomenon describes the tendency of higher-risk individuals to seek insurance more than lower-risk individuals?
• What is known as consequential losses, such as having to stay in a hotel due to property damage?
• What type of loss refers to actual physical damage or destruction of property?
• Retrospective rating is based on what during the current policy period?
• In liability policies, what do Supplementary Payments typically cover?
• Which type of rating applies to individuals with similar exposures in personal lines of insurance?
• What are surplus lines insurance?
• What is a "managed care" plan in health insurance?
• What does the term “rider” mean in insurance?
• What does the term "premium" refer to in insurance?
• How is commission defined in the context of insurance sales?
• What is a key characteristic of burglary?
• What is a reciprocal in the context of insurance?
• In an exclusive agency system, what is the primary characteristic of the agents?
• In the independent agency system, what allows agents to operate their business?
• What is the focus of casualty insurance?
• What is the duration of coverage for newly acquired objects under Automatic Coverage?
• What is the primary purpose of liability insurance?
• When is the coverage considered in force for a home insurance policy?
• What does binding authority refer to in insurance terms?
• What does an insurance policy primarily serve as?
• What type of risks does "specialty line" insurance address?
• How does "self-insured retention" function in an insurance policy?
• Who is a watchman in the context of property protection?
• What is the main purpose of Automatic Coverage in insurance policies?
• Which rating system allows for premiums based on the actual loss experience during a specified period?
• What does the term "multi-line insurance" refer to?
• What is the main purpose of state insurance departments?
• How does Automatic Coverage differ from standard coverage?
• What is the function of an "insurance aggregator"?
• Which insurance type is specifically designed for protecting rental property?
• What is the primary risk management strategy utilized in reinsurance?
• Who is primarily responsible for collecting and transmitting insurance premiums?
• Who is considered a self-insurer?
• Which term describes the uncertainty or chance of financial loss?
• What factor is crucial in determining the premium for property insurance?
• What is indicated by the term "primary insurance"?
• What does "subrogation" mean in insurance?
• What distinguishes speculative risk from pure risk?
• Which term is synonymous with theft in a property context?
• Which type of authority is specifically granted in an agent’s contract?
• What is a major component of merit rating in commercial lines?
• Which key factor distinguishes pure risk?
• Define underwriting in insurance.
• What is a morale hazard?
• What is the primary intent of class rating in insurance?
• What is the term for damage caused by an airplane or airplane part falling from the sky?
• Which of the following is NOT a typical feature of Supplementary Payments in liability insurance?
• What must agents in an independent agency system do to successfully operate their business?
• Which of the following is true about Automatic Coverage for personal property?
• What does implied authority allow an insurance agent to do?
• What distinguishes a mutual company?
• What is the primary function of exclusive authority in an insurance agency?
• What type of damages does an auto insurance policy typically cover?
• What is "additional living expenses" coverage?
• Which type of hazard is associated with a person's values or ethics?
• What kind of policy would typically cover damage from windstorms?