Casualty Insurance Terms and Related Concepts

Replacement Cost is defined as

Full replacement of property at it's current cost, new and without reduction for depreciation

A policy condition that stipulates how the amount of damage or lost property will be determined if the insured and the prinipal do not agree is known as

Appraisal

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree is known as

Appraisal

Which of the following definitions best defines the term "accident"?

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended

What is a Certificate of Insurance?

A written document showing the types and amounts of insurance that have been issued to the insured

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy?

Deposit premium audit

All of the following are factors in the determination of actual cash value EXCEPT

Insurance premium paid

All of the following statements describe the concept of strict liability EXCEPT

It is imposed on defendants engaged in hazardous activities

Events or conditions that increase the chances of an insured loss occurring are referred to as

Perils

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society?

Punitive

The policy provision found in property insurance policies that prevents the insured from collecting twice from the same loss is called

Subrogation

Negligence is defined as

The failure to do what a reasonable prudent person would do under given circumstances

Negligence may be defined as

The failure to use reasonable and prudent care

The insured has violated the contract without knowledge of the mortgage holder. After a loss

The insured cannot collect but the mortgage holder will still be paid