Property & Casualty Insurance Textbook Student Name Date Class Ended Professional Education Center, Inc P. O. Box 231231 Centreville, Va 20120 703.503.6616 www.proed-center.com e-mail proedcenter@gmail.com
Copyright, 1997-2010 by Ronald A. Wright. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without the prior written permission of the copyright holder. When copyrighted materials are used within this text the author has received prior expressed permission from the copyright holder to do so. The information contained in this book is for the purpose of pre-license training and should not be used to provide professional advice without more specific and appropriate information. Consult with an attorney, accountant, risk manger, tax advisor, financial planner or other professional in situations where professional counsel is appropriate. The author and publisher taken no responsibility for the use or application of any information contained in this book by the consumer or any professional advisor
Introduction This text is written for the purpose of assisting the candidate who is seeking to pass the state insurance agent s or consultant s exam. This text is theoretical in its approach in some areas and in other areas a practical analysis of policy coverage. This is a topical discussion of insurance and risk management and is not intended to be a resource for addressing real life client situations. As a general survey course dealing with concepts at a very basic level this text should not be used as a reference for issues that relate to client strategies and or tactics. Consult with a professional advisor for specific counsel and direction. Chapter one addresses then laws and regulations. Chapter two covers areas of preparation for the licensing exam dealing with the basic concepts of Property and Casualty Insurance. Chapters three and four covers Personal Lines policies. Chapters five though eleven address Commercial Lines policies, I hope that you find the information contained herein to be user friendly and clearly written. Important Study Areas Where you see this magnifying glass throughout the text this signifies a fact or definition that is important to know for the exam. Where you see this light bulb throughout the text this signifies a concept that is important to understand for the exam. Concepts may take extra time to consider in that they have a variety of aspects or implications. I extend to each student my sincere best wishes for great success in you insurance pursuits. Ron Wright
ProEd Center Exam Preparation 3 Areas of Learning Words & Terms Understand the basis meaning of key words and terms. Concepts Recognize the main ideas which relate to important principles. Numbers & Math Memorize numbers which are important to coverage issues and policy terms as well as state regs, and understand how to calculate co-insurance. 3 Sources of Learning Textbook Review Review textbook; study review questions. Audio CDS/Tapes Listen to audio cds/tapes as often as possible; You will hear new things each time.. Practice Exams Do practice exams over and over to improve your score and comprehension. To adequately prepare to pass the exam on the first attemp: 1. Complete at least 20 hrs. to 25 hrs. of study after class has concluded. 2. Listen to the audio tapes at least 3 times. 3. Take all practice tests until you score 100% on each. 4. Do not wait more than three weeks to take the exam!! You are taking a crash course and your after class preparation must also be on a crash timeline. Increase your knowledge don t let it dissipate.
EXAM TIPS 1. Allow yourself adequate time to arrive at the ITC exam location. A rushed feeling is not a good state of mind for taking the exam. 2. Be positive and confident about the exam. A negative or defeated attitude will only encourage you to be hasty in selecting answers and to give up early on tough questions. 3. Read each question then go back and read carefully each word in the question to make sure you understand EXACTLY what the question is asking. Many questions turn on one or two words, and if you miss a word you will most likely miss that question. This happens even when you have a good understanding of the topic or issue which the question relates to. Approximately five to ten percent of questions are missed because of this mistake. Some fail the exam because of this. Also, restate in your mind questions which have been crafted using the rule by exception. In reshaping the question state the question in a manner which asks for the correct answer. An example of this would be: QUESTION All of the following categories of property are covered on the Homeowner's Policy without a specific limit or sublimit of coverage EXCEPT RESTATED QUESTION Which one of the following categories of property is covered on the homeowner's policy but only to a specified (sub limited) amount. This may help you untangle the question. 4. On the first pass only answer questions which you understand. If after you have read a question, then go back and read each word of the question. If you are not sure what the question is asking, SKIP IT. Mark that question for review and go back to it after you have gone though the exam one complete time. Also, the computer will require prior to accepting confirmation that you want to review a question that the question be answered. So just mark those questions with the answer A without reading the answers. Why waste time reading the answers when you don't understand the question? Also, when you do understand the question but you are unsure of the correct answer again SKIP IT following the same review process just mentioned. The last thing you want at this moment is to get bogged down wasting time and mental energy being focused on questions that you are having a problem with while the questions you do know are receiving no attention at all. 5. Don't let this approach rattle you if you find you are skipping over a large number of questions. When you return to the questions marked for review you will be pleasantly surprised to find that while you were answering the questions you immediately knew your subconscious mind has been working on the questions you did not know. This often makes the harder questions easier to handle. I once took an exam which had as a component part a section of 50 multiple choice questions. I passed on the first 17 questions and I then answered the next 15 questions without blinking. I received a score of 86 on that exam. I have found this approach is a good way of
managing the exam process instead of having the exam manages you. However if you are not comfortable with my approach certainly feel free to use your own. If you like these tips read this again just prior to going into the exam location. GOOD PREPARATION & GOOD LUCK Ron Wright Loading Computer Software Questions Software runs on Windows only. Does not work on a MAC The software runs from the ROM, no need to load software onto your computer Place Disk in ROM Drive then click on Quiz folder and go to my computer then click on that drive, Then double click on Student.EXE ProEd Center.lnk The icon is a pencil If you are asked for a password to get into the software just type anything and it will let you in. Do not load onto a network without consulting you network engineer.
How To Take The State Exam? In order to pass the state licensing exam you must score at least 70% on two (2) exams, which are administered at the same time. Your first exam is the General Exam of 100 multiple-choice questions. Once you complete the General Exam the computer will ask you if you are ready for Exam # 2, the 35 or 40 questions Virginia Laws Exam. You should take a break at this point to give yourself a chance to catch your breath calm down and reset your thinking for the new exam. You will also need a score of at least 70% on this exam. You will need to approach the second exam the same way you took the General Exam, which is to do easy simple questions first skipping hard, harder and hardest until the review cycles. Your Test Cycles Should Look Like This GENERAL EXAM Qs Skipped Qs Answered Correct Initial 100 50 50 45 Review 50 30 20 16 Review 30 15 15 7 Review 15 NONE 15 5 Total Score 73 LAWS EXAM Qs Skipped Qs Answered Correct Initial 40 20 20 18 Review 50 20 8 6 Review 30 12 6 3 Review 15 NONE 6 2 Total Score 29 These scores are the minimum scores you will achieve on your exams. Tips For Exam Day Eat light before the test Have the exam address and directions printed the night before Get to the exam site early Do not study the day of the exam Take a Photo ID and Second form of ID ProEd Center s course number is 2028 Relax and be calm while taking your exam. Follow our breadcrumbs and be successful!!
How To Take & Pass The State Exam the First Time There are four types of questions on your exam: 1. East Simple is easy because you understand the question and know the answer. 2. Hard are ones you know the issue the question is addressing but are not sure of the correct answer. 3. Harder are ones need to think through 4. Hardest are ones that you aren t sure you even know. East Simple should be about 50% of your test and you will get at least 90% of those right. Hard ones should be 20% of your exam and you will get 80% of those right on the first review cycle. Harder ones 15% and you will get about 50% of those right on the second review cycle. Hardest ones are 15% and you will get 30 to 40 % of those right on the last review cycles. Question No. 42. Back Mark Next End Question: The capitol of Virginia is A Norfolk B Alexandria C Roanoke D Richmond Mark all questions for review the first time through except the simple ones. Only answer in earnest the simple ones. Then cycle back through and answer the Marked questions as you are able to figure out the correct answer. Make sure you release the Mark button as you select the correct answer The Mark button lets you skip a question and come back and answer that question later. Half of the Questions are simple and easy and the other half needs to be reviewed.