Property Concepts - B

Hamish has covered his antique automobile with a loss settlement amount that is stated in the policy of $55,000. The ACV of the vehicle is $32,000, but Hamish insured it for more because of his emotional attachment to the car. The policy deductible is $1,000. Hamish is driving his beloved automobile to an antiques car show one afternoon, when he is distracted by another antique vehicle and crashes into a brick retaining wall. Hamish's antique car is a total loss. Which of the following is the amount he should receive for his claim?

31,000

A method of replacing damaged property with something not exactly like the damaged item, but performs in a similar fashion is known as

Functional replacement cost

Dana lives in a state that has passed a valued policy law (VPL). This means that all insurers issuing policies in the state must pay the ______ of the policy in the event of a total loss.

Must pay the full limit of the policy (the face amount), stated on the Declarations page, in the event of a total loss

Aiden is reimbursed by his insurance company for the cost of a new sofa, after a 10-year-old sofa is destroyed by fire. Which of the following best describes the loss settlement method used in this situation?

Replacement cost

When loss settlement under a policy is the "agreed value", which of the following is true?

The insurer will pay the value that was agreed upon and scheduled in the policy

A structure made of modified fire resistive materials has a fire resistive rating of:

at least one hour

The ACV settlement under a property insurance policy may be determined by using the "broad evidence rule" which means that the loss is valued

by establishing the value of the property using nay evidence a court finds relevant

Many states amend property insurance coverage additions and extensions by statute due to insufficient coverage amounts or time limits. All of the following are property insurance additions or extensions that are frequently amended by state statute, EXCEPT: a) ordinance or law b) newly acquired property c) other structures d) debris removal

c) other structures

Patrice has received a reduced payment for her insurance claim and the explanation states that the reduction was due to the "obsolescence" of the damaged property. Which of the following best describes the reason for the reduction in the claims payment? a) the property that was destroyed was obscure b) the property that was destroyed has suffered a reduced market value due to a recent market flood of similar products c) Patrice was obstinant and refused to produce the damaged property for examination by the insurer d) the property that was destroyed was obsolete

d) the property that was destroyed was obsolete

Monique's house is covered in brick veneer. Monique's house what types of construction that insurers use to set insurance premiums?

frame

An insured's property claim payment is reduced by depreciation. Why?

the loss was settled on an actual cash value basis

A FAIR Plan is created in a state

to provide coverage in residual insurance market of any state that was created to provide insurance to insureds who are "high risk" and cannot obtain insurance in the usual markets.