Property & Casualty Insurance — Basics & Policy Structure flashcards
10 of 78 cards free to study here · 6 topics · the whole deck is built into Willys
Risk, peril and hazard, insurable risk and interest, insurer types, agents and brokers, residual markets, contract law, policy parts, valuation, deductibles and limits, coinsurance math and the common policy conditions.
Learn deck · part of Property and casualty insurance producer licence (national portion) · written against: Property and casualty concepts common to state producer exams; ISO personal and commercial forms as commonly taught; state law excluded. Updated 2026-10-10.
Study the free sample
10 cards from the deck as they are. Flip, rate yourself, filter by topic; your progress stays in this browser.
Tap the card or press Space to flip
The 10 sample cards as a list
-
A homeowner buys lottery tickets and also owns a house that could burn down. Which of these two risks can be insured, and why?Only the chance of the house burning, because it is a pure risk.Insurance Basics
Why: a pure risk offers only loss or no loss; the lottery is a speculative risk with a chance of gain, which insurance does not cover. -
In property insurance, how does a peril differ from a hazard?A peril is the cause of a loss; a hazard is a condition that makes a loss more likely or more severe.Insurance Basics
Example: lightning and theft are perils; oily rags piled beside a furnace are a hazard. -
A mutual insurer has a terrible year and bills its policyholders for an extra contribution. What kind of policy allows that?An assessable policy.Insurers · Producers & Markets
Why: an assessable mutual may charge members more when losses exceed premiums; a nonassessable policy cannot be charged beyond its premium. -
In a reciprocal insurance exchange, who insures whom, and who runs the operation?The subscribers insure one another, and an attorney-in-fact manages the exchange.Insurers · Producers & Markets
Why: the attorney-in-fact, appointed by the subscribers, handles underwriting, claims and investments for them. -
An insured pays a one-thousand-dollar premium and collects two hundred thousand dollars after a fire in the first month. Which feature of insurance contracts does this show?The contract is aleatory: the values exchanged are unequal and depend on an uncertain event.Contract Law
Why: most insureds pay premiums and collect nothing, while a few collect far more than they paid. -
Why can't a homeowners applicant negotiate the wording of the insurer's form the way two businesses negotiate a lease?Insurance is a contract of adhesion: the insurer drafts it, and the buyer takes it or leaves it.Contract Law
Why: for that reason courts construe ambiguous wording against the insurer that wrote it. -
In policy structure, what does the mnemonic DICE stand for?Declarations, Insuring agreement, Conditions and Exclusions.Policy Structure
Why: most policies also carry a definitions section and any endorsements that modify the form. -
Where in a policy would you find the named insured, the policy period, the limits and the premium?On the declarations page.Policy Structure
Why: the declarations hold the facts unique to this insured (who, what, where, when and how much), while the forms behind them are standard wording. -
How is actual cash value usually calculated?Replacement cost minus depreciation.Valuation · Limits & Coinsurance
Watch out: some states instead use fair market value or the broad evidence rule, which weighs every relevant factor. -
Insurer A covers a building for three hundred thousand dollars and Insurer B for one hundred thousand, and both use pro rata by limits. How is a forty-thousand-dollar loss shared?A pays thirty thousand and B pays ten thousand.Common Conditions
Why: A's limit is 300 of the 400 thousand total (75 percent), and B's is 100 of 400 (25 percent).
Unlock the whole deck
You are studying a free 10-card sample. All 78 cards of Property & Casualty Insurance — Basics & Policy Structure, the other 5 Property and casualty insurance producer licence (national portion) decks, and spaced-repetition scheduling are built into Willys. 14-day free trial, then $14.99 a year.
In Willys, tap Exam Library at the top of your Decks (or Browse Exam Library… under the + button), find the exam on its shelf or by search, tick it and tap Add.
More Property and casualty insurance producer licence (national portion) decks
← All Property and casualty insurance producer licence (national portion) decks, with the study guide and topic outline.
About these cards
Review status: Second-reader reviewed, with corrections applied.
Checked against:
- Policy provisions described from the ISO personal and commercial forms as commonly taught on licensing exams (homeowners, dwelling, personal auto, commercial property, CGL), in our own words; no form text reproduced. Edition differences and state amendatory endorsements vary.
- General insurance and tort principles written from author knowledge; no textbook, prep-course or question-bank text copied. National content only: state insurance law, fees and figures indexed yearly are excluded.
These are independent study notes written for Willys. They are not official exam material, may contain mistakes, and are no substitute for your course, your teacher or the exam owner's own publications. Found an error? Tell us — corrections ship as a new version of the deck.
Not insurance or legal advice. These cards cover the national portion of the producer licensing exam only. State insurance law and your state's exam content are not included; check your state's insurance department and its candidate handbook.
Use of these pages is covered by our Terms of Use.