[Prop&Cas] Ch2- PropertyBasics

Which of the following methods of writing insurance is used to provide insurance on properties at different locations, using a single policy, and a single limit of insurance?

Blanket

A secondary loss that occurs as a result of a direct loss from a covered peril is considered:

Consequential Loss

What is not found on the Declarations Page?

Exclusions

When filing a claim, the insured is required to do all of the following, except:

Hire an appraiser

The insuring agreement of a policy describes:

Perils that are covered

The following are all found on the Declarations Page, except:

The exclusions

Which of the following is not included in the Declarations of a Property Policy?

The perils that are not insured against

When the insurance company and insured cannot agree upon the amount of the loss, the person selected to help the two hired appraisers is called a(n):

Umpire

actual cash value

the replacement value of property minus depreciation

A spark that jumps from a fireplace and ignites a nearby rug would be deemed a hostile fire (t/f)

true

Which of the following best describes a hostile fire?

A fire caused by a spark escaping from a fireplace and igniting a carpet

All of the following are insured's duties after a loss under a property policy, except:

Abandoning the property to the insurer

All of the following statements regarding the property policy structure are correct, except:

Additional coverages are added to the policy for an additional premium

In Property and Casualty Insurance, when a form is attached to alter or add to policy provisions or conditions, it is known as:

An endorsement, used to modify a policy

If a fire burns the home and property of an insured, what must the insured provide?

An inventory of the damaged property, one of the Duties in the Event of Loss under the Conditions section of a policy

If the insured and insurer do not agree on the value of a property loss, what condition would apply?

Appraisal, a dispute resolution method used when the insured and insurer do not agree on the amount of the loss

Which of the following is used to resolve differences between the insured and the insurer?

Arbitration, provides a method of settling disputes between the insurer and the insured as an alternative to legal action

When property is valued on a replacement cost basis, losses will be paid:

At today's costs, without any deduction for depreciation

The taking of property from inside the premises by a person committing forcible entry defines a:

Burglary

When a loss occurs as a result of two perils, one of which is excluded and the other of which is insured against, the situation is known as:

Concurrent Causation

All of the following are methods of writing property insurance limits, except:

Concurrent coverage, applies to separate policies covering a risk, such as a primary policy and an umbrella policy & It does not indicate a type of insurance limit.

The rules and procedures to be followed by the insured and the insurer are found in which section of an insurance policy?

Conditions

Additional Coverage's part of a property insurance policy provides:

Coverage that supplements the basic coverages in the insuring agreement which is automatically included without an additional premium

The Additional Coverage's part of a property insurance policy provides:

Coverage that supplements the basic coverages in the insuring agreement which is automatically included without an additional premium

The part of an insurance policy that states where the risk is located is the:

Declarations

What regarding deductibles is true?

Deductibles help reduce the number of frivolous or small claims

All of the following are duties of an insured after a loss, except:

Determining the valuation method the insurer will use to pay the loss

Which of the following statements regarding types of property loss is false?

Direct losses include additional living expenses

The standard policy structure for insurance policies includes all of the following sections, except:

Duties

Under the Other Insurance condition, when two property policies cover the same property, how is a loss apportioned?

Each policy will share proportionately according to the total insurance

Which section lists the perils insured against by a property insurance policy?

Insuring Agreement

All of the following are true of subrogation, except:

It allows the insurer to file suit against the insured

Which property insurance condition states that a suit may not be filed by the insured against the insurer under certain circumstances?

Legal Action Against Us

Which property condition requires the insurer broaden coverage during the policy period without an increase in premium?

Liberalization

What term describes coverage that applies only to loss by the perils stated in a policy?

Named peril, provides coverage for only the perils listed in the policy

Which provision specifies that no coverage applies if the loss benefits a person who has care, custody, or control of the insured's property?

No Benefit to Bailee

The termination of an insurance policy at the expiration of its term is known as:

Nonrenewal

The insured is not required to do which of the following in the event of a property claim?

Notify police, whether or not a law has been broken

Which of the following is the broad term for an accident that also includes a continuous and repeated exposure?

Occurrence

When coverage applies to losses from all perils except those specifically excluded, the policy is said to be written on which of the following basis?

Open Perils

For a loss to be covered under a standard property policy, the insured must do which of the following?

Protect property from further damage

All of the following statements regarding property insurance terminology are true, except:

Proximate cause a secondary cause of loss

Which of the following is the best definition of Actual Cash Value in property insurance?

Replacement cost minus depreciation

In property insurance, the principle that gives the insurer the right to take possession of damaged property after paying the loss is known as:

Right of Salvage

The transfer of the right of recovery from the insured to the insurance company is called:

Subrogation

All of the following statements regarding property insurance are correct, except:

The owner of clothing left in the care of a dry cleaner is called a bailee

An insured owns a home with a replacement cost of $300,000 and a market value of $250,000. What is the most a valued policy will pay in the event of a total loss without a deductible?

The policy limit

Which of the following is true of the Insuring Agreement?

The promise to indemnify an insured for a covered cause of loss

What is the term for the first event in the unbroken chain of events, that resulted in a loss?

The proximate cause, the primary cause of loss in a sequence of events resulting in a claim

When a building has physical contents but no occupants, the building is said to be:

Unoccupied

Which of the following best describes the situation when a property has neither contents nor occupants?

Vacancy, s empty of both contents and occupants

endorsement

a policy form that alters/adds to the provisions of a property and casualty insurance contract

occurrence

an accident and includes continuous or repeated exposure to the same general harmful conditions

direct loss

causes damage w/o an intervening cause and an indirect loss occurs as the consequence of a direct loss

All of the following statements regarding coinsurance are true, except:

coinsurance clause increases the policy's deductible amount

Which of the following statements about a property policy is false?

coinsurance clause makes the policy more costly

Short rate cancellation occurs when:

insured cancels the policy mid-term

Which of the following most accurately describes the abandonment condition?

insured cannot abandon damaged property to the insurer

Which of the following is not true about an insurance policy?

insuring agreement includes the name of the insured

All of the following statements regarding a property policy are correct, except:

insuring agreement personalizes the policy, specifying the exact property being insured

proximate cause

primary cause of a loss

conditions

section states the obligations of the insurer and the insured, as well as any other conditions of coverage

friendly fire

stays within its intended boundaries and a hostile fire burns outside its intended boundaries

deductible

the specified amount of each loss that the insured must bear, a larger deductible reduces the premium and the submission of small claims

a policy insuring property for a blanket limit insures multiple items of property on a single policy with one limit of insurance applying to all insured property (t/f)

true