Teleperformance chap 1-2

Contract of Indemnity

A contract that allows an insured to be restored to the same financial condition as prior to the loss is considered:

replacement value

_______ is the method of loss valuation that values damaged property at the cost tp replace with property of like kind and quality at current prices and without deduction for depreciation

vacant

a building with nor physical contents and no occupants is said to be

Unilateral Contract

a contract that binds only one party to future performance is a...

misrepresentation

a false statement in the application for insurance is called a

misrepresentation

a false statement in the application of insurance is called a

something that increases the chance of loss

a hazard is best defined as

b.

a liberalization clause serves which of the following purposes: a. the insurer has the right to recover from any party causing a loss. b. broadened coverage applies automatically to all policies without a premium charge c. the insured is given permission to bring suit against the insurer. d. at each annual renewal the policy limit automatically decreases in value.

it is the specific cause of loss

a peril is defined as

bailee

a person who takes possession of another persons property in order to repair it is called

today's current price, minus depreciation

actual cash value is best defined as

concurrent coverage

all are methods of writing property insurance limits except blanket coverage concurrent coverage specific coverage scheduled coverage

d.

all of the following are producer responsibilities except: a. solicit and accept applications and forward the to the insurer b. represent the insurer c. provide quotes and collect premiums d. issue policies

c.

all of the following statements regarding financial rating services are correct except: a. the ratings are available to the public. b. rating codes are assigned to show financial strength or weakness of each company rated. c. agents and producers must place business through an insurer with the lowest rates. d. independent rating services evaluate and rate the financial ability of insurance companies.

independent agent may represent many insurers at the same time.

an agent that enters into agreements with more than one insurer is which of the following?

each party assumes that they can rely on the statements of the other party.

an insurance contract is said to be a contract of utmost good faith because:

the policy limit

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

foreign

an insurer organized in another state other than the state in which it is authorized to do business is known as which type of insurance?

domestic

an insurer organized in the state it is authorized to do business in

alien

an insurer organized to do business in another country other than the US is

conditional contract

because the insurance company must pay claims and the insured must comply with the policy terms, the insurance contract is considered which of the following types of contracts: contract of adhesion conditional contract aleatory contract unilateral contract

stockholders

dividends issued by stock insurers are paid to:

torando

during a tornado a factory is destroyed when the roof blows off causing electrical wires to short and start a fire burning down the building the proximate cause of loss is

b.

each of the following is a direct loss except a. cracked windshield b. loss of income c. broken pipe water damage d. fire damage

fire

each of the following is a typical property insurance policy exclusion except: ordinance law fire flood neglect

is individually liable for each risk the assume

each participant of a Lloyds association:

did/should X loss = amount paid

formula used when a penalty is applied to partial losses

appraisal

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

arbitration

if the insured does not agree with the insurer's decision regarding a claim what process helps decide the outcome

right of salvage

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

indirect loss

loss of income suffered by a storeowner after his/her store is destroyed in a fire is considered a

blanket

method of writing insurance that is used to provide insurance on properties at different locations using a single policy and a single limit of insurance

an agreement between the insurance company and the reinsurer

policyholder A's insurer is providing coverage on too many homes subject to wind losses. As a result the company decides to reinsure these policies to share the high risk of wind loss. the insurance contract can be best described as

an unbroken chain of events leading to a loss, that were initiated in a negligent act of wrongdoing

proximate cause refers to

file and use

rates are referred to as which of the following when the insurance company files for approval and then implements the rates: open competition prior approval file and use mandatory

prior approval rates

rates that cannot be used until the department or division of insurance approves them are referred to as

uncertainty or chance of loss

risk is defined as:

retaining the risk

self insurance is an example of which type of risk management.

the policy will be voided if there is material concealment, misrepresentation, or fraud on the insured's part

the concealment and fraud condition in a property insurance policy states

the principle of indemnity

the concept that the insured should not profit from an insurance transaction is called

conditions

the duties and obligations of the insured are found under what part of the insurance policy

a.

the following are found on the declarations page except a. the exclusions b. amount of deductible c. expiration date of the policy d. location of the insured property

b.

the insured is not required to do which in the event of a property claim a. give a notice of loss as soon as possible b. notify the police whether or not a law has been broken c. cooperate with the insurance company d. protect property from further damage

Mysterious Disappearance

the loss of property when the cause of loss is not known

purchasing insurance

the most common method of managing risk is:

assignment

the provision that the insured's interest in a property insurance policy many not be transferred to another person without the consent of the insurance company is called

the reasonable expectations of policyowners will be honored even if the strict terms of policy do not support these expectations.

the reasonable expectation doctrine states that

is entitled to coverage that a reasonable and prudent buyer can expect

the reasonable expectations doctrine states that the insured:

burglary

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

each policy will share the proportionately according to the total insurance

under the other insurance condition, when two property policies cover the same property how is a loss apportioned

the insured will receive less than the full amount of the unearned premium

what best defines short rate cancellation

replacement cost-depreciation= ACV

what calculation is used to determine the actual cash value (ACV) of a loss?

cancellation

what is the name for the termination of an insurance policy before the expiration date?

establishing privacy protection for consumers

what is the purpose of the Gramm-Leach-Bliley Act?

a peril

what is the term for a cause of loss, such as the theft of a car?

proximate cause

what is the term for the first event in the unbroken chain of events that resulted in a loss

b.

what is true about the right of salvage a. the insured has the right to keep damaged property after payment of loss b. the insurer has the right to take possession of damaged property after payment of a loss c. the insurer is required to take possession of damaged property after a loss d. damaged property must be disposed of after a loss

independant

what kind of agent enters into agreements with more than one insurer?

pure

what kind of risk shows there is no possibility for gain only loss.

commercial property and causality

what type of insurance is provided by the terrorism insurance program established by TRIA.

Concurrent Causation

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

Functional Replacement Cost

when a property insurance policy states that damaged property will be replaced with other property that performs the same function with similar efficiency but is not identical to the damaged property the policy is written on which bases

concealment

when an applicant intentionally fails to make a material fact known, it is known as:

concealment

when applicant P fails to disclose all of his motor vehicle violations in an application for automobile insurance he may be guilty of:

open perils

when coverage applies to a property loss by all perils except those specifically excluded, the policy is written on which basis

nonrenewed

when the insurer elects to end coverage at the end of the policy period the policy is said to be

residual market

where can you find insurance coverage after being rejected by voluntary market insurers?

b.

which accurately describes the abandonment condition a. abandoned property must be protected from further damage b. the insured cannot abandon damaged property to the insurer c. the insured must cooperate with the company in the investigation of a claim d. the insured must make reasonable and necessary repairs to protect the property.

c.

which best describes a scheduled limit of insurance on a property policy? a. insures a single item of property on a single policy for a specific limit b. insures multiple items of property on multiple policies c. insures multiple items of property on a single policy. d. insures a single item property at a blanket limit

when an insurer issues a binder

which constitutes the acceptance of an offer

department of treasury

which federal entity administers the terrorism insurance program created by TRIA?

endorsement

which is attached to the policy to alter or add to the policy provisions

contract of adhesion

which is the correct term to describe a contract prepared by one party and submitted to the other party on a "take it or leave it" basis without regulations?

arbitration

which is used to resolve differences between the insured and insurer

named insured

which of the following has the broadest coverage under the insurance policy? named insured first named insured additional insured insured

underwriter

which of the following has the primary responsibility of determining acceptable risk? auditor underwriter adjustor producer

c.

which of the following is not included in the declarations of a property policy a. the amount of premium b. the expiration date of the policy c. the perils that are not insured against d. the amount of coverage

b.

which of the following is not true about a reciprocal insurance company? a. each subscriber assumes a share of the risk of all other subscribers. b. reciprocal coms may only transact liability insurance. c. it allows individuals and corporations to exchange insurance on one another risks. d. if funds are insufficient to pay claims the subscribers are assessed for additional premium.

b.

which of the following is not true of coinsurance: a. it encourages the insured to maintain insurance value. b. it applies in the event of total loss c. it is a common policy provision d. the higher the coinsurance percentage purchased the lower the rate the insured pays.

a.

which of the following might be considered a physical hazard? a. the storage of flammables near a furnace b. the insureds attitude that good house keeping is not important. c. the storage of flammable material in a fireproof container. d. dishonesty on the part of the insured

b.

which of the following parties may assign a standered property policy a. the insurer b. the insured with prior written permission of the insurer c. the first named insured d. the bailee

Insuring Agreement

which part of a property insurance policy describes the perils

exclusions

which policy provision omits certain risks from coverage?

liberalization

which property requires the insurer broaden coverage during the policy period without an increase in premium

No Benefit to Bailee

which provision specifies that no coverage applies if the loss benefits a person who has care custody or control of the insureds property.

No Benefit to Bailee

which provision stipulates that coverage will not benefit a party that is holding storing or moving insured property for a fee

pure risk

which risks may be protected against insurance

named peril

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

named peril

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

Nonconcurrency

which term describes the situation that occurs when two policies are covering the same property contain different policy periods.

modified fire-resistive

which type of construction material has a fire- resistance rating between one and two hours for walls floors and roofs?

implied

which type of producer authority is not spelled out in the contract, but is necessary for carrying out the producers duties?

speculative

which type of risk involves the possibility of loss or gain?

the insurer

who do producers represent when transacting the business of insurance?