Assignment 9 - Property Policy Provision Underwriting Considerations

Which one of the following is true about insurable interest in property insurance? Select one: A. The most common interest in property comes from outright ownership. B. Insurable interest is the primary policy provision that determines the amount paid. C. An insured's recovery is limited to the amount of its insurable interest at the time the insurance is purchased. D. No more than one entity may have an insurable interest in a given property at a given point in time.

A. The most common interest in property comes from outright ownership.

Underwriters may encourage insurance to value to provide better policyholder protection against total loss, and to Select one: A. Recognize the effects of depreciation on the property's value. B. Generate premiums that properly reflect loss exposures. C. Eliminate the coinsurance classes. D. Reflect the market value of the property.

B. Generate premiums that properly reflect loss exposures.

Which one of the following statements is true? Select one: A. Adequate limits of insurance on new business ensure ongoing insurance to value. B. The coinsurance clause in a property policy encourages insurance to value through premium discounts. C. The insurable value of a building is the same as the building's book value. D. Insurers benefit from insurance to value because it promotes higher limits of property insurance.

D. Insurers benefit from insurance to value because it promotes higher limits of property insurance.

Which one of the following statements is correct? Select one: A. Most property losses are total losses so insurance to value is needed to cover most losses. B. Having adequate limits of insurance on new business ensures ongoing insurance to value. C. Insisting on insurance to value can damage an insurer's competitive position in the market. D. It is preferable to insure to value with rates that reflect the loss exposure than to underinsure property at inflated rates.

D. It is preferable to insure to value with rates that reflect the loss exposure than to underinsure property at inflated rates.