CISR Insuring Commerical Property
Calculate how much would be paid to the insured in the loss situation described. Disregard deductibles.After the insured's building is vacant for 95 days, vandals trash the building. The amount of damage is $7,500.
$0
Determine the amount an insured would be paid in the described loss situation. Apply the standard $500 deductible. The insured has a fire loss to a structure. To repair the damage, the cost is $450.
$0
Identify the sub-limit that applies to the following Coverage Extension. Outdoor Property
$1,000 for all outdoor property per occurrence, but not more than $250 for one tree, shrub or plant
Calculate how much would be paid to the insured in the loss situation described. Disregard deductibles.The insured's building is vacant for 56 days. The sprinkler system accidentally discharges and causes $1,500 damage to the walls.
$1,500
Complete the practice problem to make sure you understand these ACV and Replacement Cost. Your insured purchased an item when it was new for $2000. It has since depreciated in value by 10%. The replacement cost today would be $2300. What is the ACV for the fence?
$2,070
Identify the sub-limit that applies to the following Coverage Extension. Personal Effects and Property of Others
$2,500 per premises
Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 The policy is written as a specific limit. Location 1 has a total loss on the Business Personal Property at $40,000 because the company just transferred stock from Location 3. What is the loss payment amount that the insured receives?
$20,000
Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 How much will the policy pay?
$240,000
Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 What amount of insurance is required to comply with the coinsurance provision?
$240,000
What amount of insurance is required to comply with the coinsurance provision, and how much will the policy pay? Building Value (at time of loss) $100,000 Policy Limit $80,000 80% Coinsurance Clause Loss amount $15,000
$80,000; $15,000
Complete the practice problem to make sure you understand these ACV and Replacement Cost. An item of property is damaged by a covered cause of loss. For insurance purposes, the item is valued using actual cash value. It costs $2000 to replace it with like/kind materials at the time of the loss. The item was originally purchased for $1500. Depreciation is calculated at 10%. What amount will the insurance company pay to replace the item?
1800
Which one of these statements best describes Coinsurance?
A contractual promise to carry an amount of insurance equal to, or greater than, a fixed percent of the current value of the property. Failure to comply results in a penalty.
The Special Causes of Loss Form excludes all of the following, except:
A fire that occurs after a steam boiler explodes and sparks.
Select the answer that most closely describes Actual Cash Value (ACV).
A method of establishing the value of property wherein depreciation and obsolescence are deducted from the value of the property.
Select the answer that most closely describes Functional Replacement Cost.
A provision which changes the policy valuation so as to provide for replacement with a different structure which performs the same service or function, but is less costly.
Choose the description that explains best how the Building and Personal Property Coverage Form defines "Vacancy" for a building owner:
At least 31% of the total square footage is rented or is used to conduct customary operations.
Specify which coverage form, if any, includes coverage for the specified peril. An explosion destroys the insured's building.
Basic, Broad and Special
Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Flagpole
Building
Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Patio furniture
Building
Indicate whether the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Improvements and betterments
Business Personal Property
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. The insured leaves a window open; rain comes in, causing damage to the building and some of its contents.
Not Covered
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. Upon taking inventory, the insured notes that several video games are missing. However, the storage room has no indication that a break-in occurred.
Not Covered
Which method of handling changing values is the best method to cover the following situation? "We Love You" Florist Store has an increased inventory from February 1 to February 15, and an increased inventory for the two weeks before Mothers Day?
Peak Season Endorsement
Match the circumstance described to the Commercial Property Condition that applies. The insurance company does not pay for loss to the insureds contents in her London office.
Policy Period, Coverage Territory
The Building and Personal Property Coverage Form gives the insured coverage for which of the following with no additional limit of insurance?
Preservation of property
All of the following are rights and/or responsibilities of the First Named Insured except:
Provide a copy of corporate by-laws to the insurer
Choose the incorrect characteristic of the Optional Coverage - Agreed Value.
Requires an independent appraisal.
Which method of writing commercial insurance would you use when an insured has a list of specifically listed items at two or more locations?
Schedule Insurance
Specify which coverage form, if any, includes coverage for the specified peril. A bucket of paint is spilled on the carpet of the insured's business
Special
Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. The Building and Personal Property Coverage Form, coverage Extensions, are additional amounts of insurance.
TRUE
Indicate whether the following type of Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Animals unless owned by others and boarded by you, or if owned by you, only as "stock" while inside of buildings.
TRUE
Under Business Income (And Extra Expense) Coverage Form CP 00 03 one of the requirements for a covered loss is that damage to property must occur at the premises described in the Declarations.
TRUE
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. The following transit exposures are covered in the Special Causes of Loss Form except for:
The insured's salesperson has $10,000 worth of samples in his truck. Both the truck and the samples are damaged in a collision.
Match the circumstance described to the Commercial Property Condition that applies. The insurer pays an insured for vehicle damage to her building, then seeks reimbursement from the driver of the auto that caused the damage.
Transfer of Rights of Recovery Against Others to Us
Your insured, which has a commercial property policy written on an actual cash value basis, suffers a covered building loss. The actual cash value of the loss is $1,250 and the replacement cost of the loss is $1,900. Assuming that this insured has satisfied all policy conditions, and disregarding deductibles, how much will the policy pay?
$1,900
Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 If the policy is written for blanket limit of $720,000, what would happen in this loss situation? Location 1 has a total loss on the Building for $85,000 and a loss of $40,000 on the business personal property. (They had just transferred stock from Location 2.)
$125,000
Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured never files the first report. It is 115 days into the policy. The insured has a loss in the amount of $200,000.
$150,000
Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured has been reporting his values accurately and on time. He has a covered loss on June 5 in the amount of $150,000. His last report for the month of April, which was received on May 15, showed $100,000 in value.
$150,000
If the policy is written for blanket limit of $720,000, what would happen in this loss situation? Due to extensive remodeling at Locations 1 and 2, the insured moved all inventory to Location 3. A short time later, Location 3 has a covered business personal property loss of $150,000.
$150,000
Identify the sub-limit that applies to the following Coverage Extension. Valuable Papers and Records - (Other than Electronic Data)
$2,500
Identify the sub-limits that apply to the following Coverage Extension. Newly Acquired or Constructed Property
$250,000 per building
Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation? The insured reports $350,000. A loss of $350,000 occurs.
$300,000
Determine the amount an insured would be paid in the described loss situation. Apply the standard $500 deductible. The insured's Business Personal Property was damaged due to the sprinkler leaking. The amount of damage was $850.
$350
Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 How much will the policy pay?
$37,500
Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 What amount of insurance is required to comply with the coinsurance provision?
$400,000
Determine the amount an insured would be paid in the described loss situations. Apply the standard $500 deductible. An uninsured vehicle ran into your insured's building which is insured for $100,000. This insured's Business Personal Property is insured for $75,000. The total cost to repair the building is $40,000, and the vehicle also damaged $30,000 worth of figurines that were in the front window.
$69,500
Location 1 Location 2 Location 3 Store $75,000 Store $200,000 Store $325,000 BPP $20,000 BPP $80,000 BPP $100,000 If the buildings and contents are blanketed, and the insured has 90% coinsurance, what is the blanket limit of the policy?
$720,000
Assume you have a commercial property policy with the Value Reporting Form showing a limit of $300,000. Determine the amount that an insured would be paid for this situation. The insured reports $120,000 but actually had $160,000 worth of inventory. A loss of $100,000 occurs. How much will the company pay?
$75,000
Which of the following statements best defines and summarizes all the features of Agreed Value?
An option in the Commercial Property policy which suspends the coinsurance clause. The insured is required to file a statement of values with the insurance company; the company must agree with the values filed. The policy is written at the agreed value, and then the coinsurance clause is suspended for one year only, not to extend beyond the policy expiration date.
Specify which coverage form, if any, includes coverage for the specified peril. A sprinkler system accidentally discharges, causing severe water damage.
Basic, Broad and Special
After wind totally destroys half of an insured's building, an inspector tells the insured that since more than 40 percent of the building was destroyed, he must tear down the remainder and rebuild to comply with current building codes. That includes the increased cost of making the building handicapped accessible. The insured has purchased an Ordinance or Law Coverage endorsement with all options chosen. The policy will pay for which of the following?
Both A. and B.
Specify which coverage form, if any, includes coverage for the specified peril. Although properly maintained, a frozen pipe bursts, resulting in water damage to all contents.
Broad and Special
Specify which coverage form, if any, includes coverage for the specified peril. Light pole falls onto the roof of a building, causing severe damage.
Broad and Special
Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Business Personal Property Coverage Form. Area rug
Building
Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Permanently installed machinery
Building
Indicate whether each of the following would be covered as building or business personal property under the unendorsed Building and Personal Property Coverage Form. Riding lawn mower
Building
Match the circumstance described to the Commercial Property Condition that applies. The insurance company denies loss payment after the insured confesses to starting the fire at his own premises.
Concealment, Misrepresentation or Fraud
An outdoor sign attached to the side of a building was damaged by vandals. The sign had a value of $4,000 and was not specifically insured. Is there any coverage under an unendorsed Building and Personal Property Form with a Special Causes of Loss Form insuring the building for $200,000 replacement cost coverage? The coinsurance requirement has been met.
Covered but limitation on payment. Vandalism is a covered cause of loss.
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A fire damages a building that is primarily glass windows. The fire damage to the glass is over $40,000.
Covered, No Special Limit Applies for Fire to Glass
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A vandal takes a bat to six panes of glass in the front window. The cost to replace each pane is $300.
Covered, No Special Limit Applies for Vandalism to Glass
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $5,000 worth of lottery tickets were stolen from the insured.
Covered, and Special Limit Applies
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $25,000 fur coat is stolen.
Covered, and Special Limit Applies to Furs
Choose the Correct answer for the described loss. Base your answer on the Special Causes of Loss Form. A $2,000 diamond ring is stolen.
Covered, and Special Limit Applies to Jewelry
Indicate whether each of the following statements about the Building and Personal Property Coverage Form is True or False. The Additional Coverage Debris Removal includes the cost to remove debris that results from a covered loss including all pollution clean up costs.
FALSE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Airborne shipments
FALSE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Cargo Shipments
FALSE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Land
FALSE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Money and securities
FALSE
Match the circumstance described to the Commercial Property Condition that applies. An insured has collected insurance proceeds under the Inland Marine Coverage Part, and the insurer will not accept a claim for the same loss under the Property Coverage Part of the policy.
Insurance Under Two or More Coverages
Select the answer that most closely describes Replacement Cost.
Insurance issued in an amount to cover the property described for a limit that will be adequate to replace the structure at the cost of today's labor and materials.
All of the following statements are true about the Optional Coverage - Inflation Guard, except:
Insured must carry a minimum coinsurance percentage of 90%
Which of the following statements best defines direct loss?
Losses incurred when there is tangible visible damage to the insured's property.
Which one of the following does not have an insurable interest in a property?
Neighboring businesses
Using the values listed below, answer the coinsurance problem. Ignore deductibles. Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 Did the insured comply with the coinsurance provision?
No
Identify the sub-limit that applies to the following Coverage Extension. Property off-premises
None of the above
Specify which coverage form, if any, includes coverage for the specified peril. Floodwaters damage the insured's floor coverings and desks.
None of the above
Which method of handling changing values is the best method to cover the following situation? XYZ Toy Store has an increased inventory from October 1 to December 31 due to the Christmas season.
Peak Season Endorsement
Match the circumstance described to the Commercial Property Condition that applies. An insured has a loss that occurs two weeks after the policy expires.
Policy Period, Coverage Territory
Specify which coverage form, if any, includes coverage for the specified peril. The insured's inventory is stolen.
Special
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Bridges, roadways, walks, patios, or other paved surfaces
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Bulkheads, pilings, piers, wharves or docks
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Fences
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Foundations of buildings, structures, machinery or boilers if their foundations are below the lowest basement floor, or the surface of the ground if there is no basement.
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Retaining walls that are not part of a building
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. The cost of excavations, grading, backfilling, or filling.
TRUE
Indicate whether the following Property Not Covered can be bought back with the CP 14 10 Additional Covered Property Form. Answer True or False. Underground pipes, flues or drains
TRUE
Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. If the insured's property is moved to preserve it from loss by a covered cause of loss, it is covered from ANY direct physical loss or damage for up to 30 days after property is moved.
TRUE
Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. In order for the Coverage Extensions of the Building and Personal Property Coverage Form to apply, the insured must comply with the coinsurance provision of the policy.
TRUE
Indicate whether the following statement about the Building and Personal Property Coverage Form is True or False. The Building and Personal Property Coverage Form includes coverage to extract pollutants from land or water when the pollution results from a covered cause of loss at the described premises.
TRUE
Which method of handling changing values is the best method to cover the following situation? "We Booze You" Liquor Store's inventory changes every week?
Value Reporting Form
Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 Did the insured comply with the coinsurance provision?
Yes
Which of the following is true about the Optional Coverage - Replacement Cost?
You may take an actual cash value settlement and then change your mind subject to certain requirements.
