SFP Mod B

Under the Standard Fire Policy, how many days advance notice does the insurer have to give before cancelling a policy? A. 5 days. B. 30 days. C. 45 days. D. 15 days

A. 5 days. The insured can cancel anytime, for any reason. The insurer must give a minimum of 5 days' advance notice. However, cancellation of any policy is based on state laws.

Recovery under the Standard Fire policy may be limited by the "pro rata" liability clause. All of the following statements are true about this clause, EXCEPT: A. It allows the insured to collect the full limit of liability under all policies covering the damaged property, in case of a loss. B. It prevents over indemnification of the insured. C. It prevents the moral hazard created in situations of over insurance. D. It allows the insured to collect from each policy covering the damaged property, but only for the percentage of coverage, each policy is liable for, in relationship to the total amount of insurance.

A. It allows the insured to collect the full limit of liability under all policies covering the damaged property, in case of a loss. The purpose of insurance is to indemnify and not permit an insured to collect more than the amount of the loss when multiple policies covering the same risk.

Under the provisions of the 1943 New York Standard Fire Policy, an insured may file a suit to recover for a loss, only if all of the required duties have been met and the period of limitation tolled is ________ from the date of the loss. A. One year. B. Two years. C. Three years. D. Four years.

A. One year.

Which of the following is NOT a loss settlement option under the 1943 New York Standard Fire policy? A. Paying the replacement cost value of the loss. B. Paying the actual cash value of the loss. C. Selling the damaged property for its salvage value. D. Replacing the property with material of like kind and quality.

A. Paying the replacement cost value of the loss.

The "concealment and fraud" provision of the 1943 New York Standard Fire policy permits the insurer to _________ if the insured willfully conceals or misrepresents a material fact before or after a loss. A. Cancel the policy. B. Void only the policy coverage where the misrepresentation or concealment would have made a difference in issuing the policy. C. Void the entire policy. D. Suspend the policy until the insured corrects the misrepresentation or concealed material fact.

C. Void the entire policy..

Payment for a covered loss under the 1943 New York Standard Fire policy must be made within ______ days after a satisfactory proof of loss has been received by the insurer. A. 30 B. 90 C. 60 D. 45

C. 60

Rush is covered under a Standard Fire policy and suffers a loss to his home and personal property. The limit of liability listed on the policy itself is $120,000. The ACV of his loss is $55,000. To repair or replace the property with materials of like kind and quality would cost $72,000. Rush's insurable interest in the property is $42,000 as he has a mortgage and some liens on personal property. What is the amount of the claim settlement Rush will receive? A. $120,000. B. $55,000. C. $42,000. D. $72,000

C. $42,000. The policy pays the smallest of the amount specified in the policy, the actual cash value at the time of the loss, the amount it would cost to repair or replace, and the insurable interest the insured has in the property. This would make Rush's settlement amount $42,000.

All of the following statements are TRUE regarding the cancellation clause of the New York Standard Fire policy, EXCEPT: A. The insured may cancel the policy at any time without prior notice to the insurer. B. If the insurer cancels the policy, they must provide the insured with five days' advance written notice. C. If the insured cancels the policy, there is no financial penalty assessed on the unearned premium. D. If the insured cancels the policy, the unearned premium is returned on a short-rate basis, meaning a small financial penalty is assessed against the insured.

C. If the insured cancels the policy, there is no financial penalty assessed on the unearned premium.

All of the following are extended coverage (EC) perils that can be added to the Standard Fire policy by endorsement, EXCEPT: A. Riot. B. Smoke. C. Lightning. D. Windstorm.

C. Lightning. All of the answer choices are extended coverage (EC) perils except "lightning" which is a covered peril under the policy, no endorsement necessary.

A Standard Fire policy frequently insures both a mortgagee and an insured under the same policy. All of the following statements are true regarding how a property loss will be paid under an SFP when there is a mortgage on the property, EXCEPT: A. The insured's recovery will be an amount that only covers the equity the insured has in the property at the time of the loss. B. The insurance company protects the interest of the mortgagee first. C. The insured receives payment from the insurance company for the entire loss and the insured is responsible for paying the mortgagee their portion of the payment. D. The amount of insurable interest the policyholder has in the property may limit the amount the insurer will pay them for the claim.

C. The insured receives payment from the insurance company for the entire loss and the insured is responsible for paying the mortgagee their portion of the payment..