CH. 10 Protecting Your Property

This value is calculated as the difference between the insured asset's replacement cost and the value of its physical depreciation.

Actual cash value

How to Protect Against This Loss? Vandals destroy the shed in his backyard; the damages total $5,800.

Already covered under HO-1

This part defines basic provisions of the policy, including the policy coverage period and the right of termination.

Basic Policy Provisions

How to Protect Against This Loss? An earthquake destroys the deck of the home, causing $20,000 worth of damage.

Buy earthquake insurance

This insurance specialist investigates claims on behalf of an insurance company.

Claims adjustor

What is the term used to describe the dollar amount of a physical damage claim paid by the policyholder?

Deductible

How to Protect Against This Loss? The camera is stolen from inside his car.

Floater policy

This policy is not often recommended because its list of covered perils is relatively limited.

HO-1

This policy is recommended for policyholders living in a rental house, apartment, or other dwelling.

HO-4

This policy is often recommended for older houses whose replacement costs are significantly greater than their market values.

HO-8

Regarding basic homeowners insurance coverage, identify policy modifications that could provide better protection during periods of inflation.

Increase the coverage on the dwelling to 100% of its replacement cost. Add an inflation rider.

Which of the following could potentially reduce the annual premium on your homeowner's policy.

Install smoke and burglar alarms

This part pertains to the duties and responsibilities if you're involved in an accident.

Insured's Duties and Responsibilities

This pays for bodily injury and/or property damage caused by an automobile accident for which you are legally responsible.

Liability Coverage

This type of insurance coverage would protect you against financial losses resulting from your responsibility for someone else's injury or damage to their real or personal property.

Liability insurance

This pays for reasonable and necessary accident-related expenses for up to three years after the accident—provided that those expenses do not exceed the policy's limit.

Medical Payments Coverage

An example of this behavior is speeding and driving erratically during a rainstorm or having a swimming pool that is not surrounded by a lockable fence or other protective device.

Negligence

This refers to the term used to describe the cause of a loss.

Peril

This concept maintains that an insured should not be compensated by an insurance company for an amount greater than his or her economic loss.

Principle of indemnity

This insurance coverage protects real and personal property from catastrophic loss by a variety of causes, such as fire and weather events.

Property insurance

Which of the following describes a strategy that could increase your liability coverage?

Purchase a personal liability umbrella policy

This type of coverage pays the amount necessary to repair, rebuild, or replace an asset at current market prices.

Replacement cost

This coverage is designed to protect policyholders, including the named insured and his or her family, when they are negligently injured by hit-and-run and uninsured drivers .

Uninsured Motorists Coverage

This part in the PAP provides two types of optional protection: comprehensive coverage and collision coverage.

Vehicle Damage Coverage

The purpose of property insurance is to protect policyholders against losses to their _______ property and ________ property due to catastrophe and calamity.

real; personal