Property and Casualty Practice

Kylie lives in a condominium. A storm causes the brick façade of the building to collapse. If Kylie has a Homeowners policy, which of the following would represent the amount of her policy benefit?

1,000

All but which of the following require coverage under a hired auto insurance policy?

A vehicle borrowed from an employee

Fran's Furniture shop, an insurance client of your agency, often runs ads attacking her competitor, Frank's Furniture. Frank's Furniture claims that Fran's Furniture's catalog falsely claims that Frank's products are cheaply made with sawdust and are worthless, which causes a loss of business for Frank's Furniture. If Frank's Furniture sues Fran's Furniture, which coverage will protect Fran's Furniture?

Advertising liability

Which coverage that is sometimes provided by policies will cover all losses unless specifically noted as being an excluded loss?

All risks

Insured owns many properties, vehicles, and commercial properties. He has several policies to cover his many exposures. If he suffers a loss to a property and more than one policy covers the loss, what will the carriers do to determine which policy will pay?

Arbitration

Lisa filed a claim with her Homeowners insurance following a major storm. Her carrier wants to deny her claim on the basis that she did not do enough to secure her property prior to the storm. If they can't come to an agreement and wish to not proceed through the court system, what is another means they could determine fault?

Arbitration

Under which type of arbitration is the decision final?

Binding arbitration

Insured owns a convenience store that is damaged by a fire. The building suffers extensive damage and it takes weeks to repair. Once the building was repaired, it still took a few days to get the store up and running again. Assuming the loss is covered by insurance, which specific coverage would extend to pay for the loss suffered during the few days until repairs were complete but the store was still unable to open?

Business income coverage

A group of businesses with similar exposures that get grouped together for rating purposes is a(n):

Class

Which provision requires the policyholder to maintain a specific amount of insurance in order to obtain full payment for a loss?

Coinsurance

In addition to coverage for the building itself, commercial property coverage also covers all the losses below EXCEPT:

Commercial property coverage only covers loss to the building.

What does the agent apply to an insurance policy in order to validate it?

Countersignature

Which term refers to the agent's requirement of reviewing and signing new insurance policies?

Countersigning

ACV is determined by subtracting which value from the RCV of a specific piece of property?

Depreciation value

Which two types of claims would be covered under employer's liability coverage but not workers' compensation coverage?

Dual capacity claims and third-party-over claims

Your client Empire Financial Company discovers that an employee stole several thousand untraceable shares of the company's stock. Unfortunately, they cannot solve the crime and Empire has no insurance coverage for the loss. What type of coverage would you recommend for the future?

Employee Dishonesty Coverage

Under which exception to the exclusive remedy approach are employees required to prove negligence on the part of their employer to receive compensation for an injury at work?

Employer's liability

Which type of policy is designed to cover property in motion, regardless of the location?

Inland marine policies

Which portion of an insurance policy states that the insurance company will make payment in the event a covered loss occurs?

Insuring agreement

Name ways an insured can interfere with subrogation

Interfere with investigation, impair investigation, withhold vital details about the loss.

A dwelling policy does not cover:

Mobile homes situated on cinder blocks

Carol's house is destroyed by a fire and considered a total loss. He contacts his carrier to assess the damage and hopefully receive a check for the damages. He gave the carrier of all damaged personal property lost. He knew his computer was undamaged and in his vehicle but included it on the list of lost property. What kind of hazard is this?

Moral hazard. He knew it was wrong but lied for profit.

Michael was running late when he realized he forgot to lock his car. He decides not to turn back because he thinks if anything is stolen, his carrier will cover it. Which type of hazard is he creating by not going back to lock the vehicle?

Morale Hazard

Wanda was injured while performing her duties at work. Under worker's comp laws, will she have to prove her company was at fault for her injuries?

No, in the majority of cases, injury claims at work will be paid without proving fault.

Does non binding arbitration always result in a winner?

No, the losing party doesn't have to accept the arbitrator's decision.

What is the name of the provision in an insurance policy that requires the insured to notify the carrier of a loss for which a claim for reimbursement is made?

Notice of claim

An oil company fails to repair its pipeline despite the development of large cracks and is found to have recklessly caused an oil spill. The govt. requests that the company be punished with a large damages award against it. What is the name of the type of damages that were requested?

Punitive

The likelihood or chance of injury, damage or loss to a person or thing is called ______________.

Risk

The theft of property accompanied by the use or threat of physical force is called ________________.

Robbery

Sharpie rents out his home to a tenant, pursuant to a 2 year lease. An electrical fire occurs due to faulty wiring. What coverage type would allow a payout to Sharpie?

Schedule D: Loss of use

What must an insurance company provide an applicant if it orders an investigative credit report?

Send the applicant an initial written notice within 3 days

Can a warranty be valid and enforced if not specifically written out in the contract?

Sometimes a warranty only need be expressed or implied.

Name a way strict liability differs from negligence.

Under strict liability, the nature or type of the product is the issue for the claim.

What is the name of the insurance principle that refers to an insurer giving up its right to recover money or damages paid out to the insured from another party?

Waiver of subrogation

Howard was watching a tv commercial that advertised, " A household cleaner which could get rid of any type of grease stain." He purchased the product for a stain on his garage floor. After many attempts, the grease stain remained. Could he file a claim against the company because its product didn't work?

Yes, because express warranty exists

Under employer's liability coverage, can an employee sue an employer in addition to collecting through a workers' compensation claim?

Yes, under a dual capacity claim.

The roof on Randy's t-shirt store collapsed following a heavy snowstorm. A lot of the inventory was damaged, but some merchandise was salvageable. While the store is repaired, he rents a storage unit to store the saved merchandise. This expense may be paid by which part of commercial property insurance?

extra expense coverage

When informing the carrier of a claim, does the insured need to submit notice on a specific form/document?

no, a form, letter, or lawsuit can notify.

Costs that are covered by liability insurance, aside from costs paid for any injuries or damages, are:

supplemental costs