Chapter 1
Michael has taken his shoes to a shoe repair center. Michael has taken his shoes to a A) Bailor. B) Bailee. C) Retail Shoe Store. D) All of the above.
Answer B is correct. The Property stays with the Bailee. The Customer is the Bailor.
Who has the right to cancel a policy? A) Insured B) Insurer C) Both A & B D) Neither A nor B
Answer C is correct. Either one may cancel a policy.
Which of the following describes actual cash value? A) Replacement cost - depreciation B) Current replacement cost C) Stated value - depreciation D) Replacement cost + depreciation
Answer A is correct. Actual Cash Value (ACV) is determined by taking the property's current replacement cost and subtracting the depreciated value of the destroyed property.
All of the following are methods of loss valuation, except: A) Agreed profit B) Actual cash value C) Replacement cost D) Stated amount
Answer A is correct. There is no valuation called Agreed Profit.
All of the following statements about binders are true, except: A) A binder specifies the perils covered. B) A binder specifies the effective date of coverage and amount of coverage. C) A binder specifies the premium amount. D) A binder specifies the insurer providing the coverage.
Answer C is correct. A binder includes everything, except it does not specify the premium amount. The Declarations of an actual policy would include the premium.
All of the following are true, except: A) When one accepts a larger deductible, the premium may be reduced. B) Fire is considered to be a peril. C) A hostile fire is one that does not break out from where it was intended. D) An insured's rate is reduced by the coinsurance clause.
Answer C is correct. A hostile fire is one that is uncontained or breaks out of its containment.
Which of the following describes the process where disputed claims between insureds and insurers are decided by a neutral third party without a jury trial? A) Liberalization B) Subrogation C) Arbitration D) Assignment
Answer C is correct. A process where disputed claims are decided by a neutral third party between an insured and an insurer. Commonly decided in a Judges chambers without a trial.
When the insurance company chooses to broaden coverage with no increase in premium, the broadened coverage automatically applies to all existing policies without the need for an endorsement. The company is exercising which of the following? A) Generosity clause B) Appraisal clause C) Liberalization clause D) Non Endorsement clause
Answer C is correct. This is the definition of the Liberalization clause. The insurer has liberalized and broadened coverage out of the kindness of their heart.
A binder A) guarantees that the policy will be issued within 30 days. B) has a different effective date than the actual policy, once the policy is issued. C) can only be issued by the writing agent. D) None of the above
Answer D is correct. A binder can be an oral or a written document. If its oral, the written binder is usually provided within a short period of time. The binder provides temporary insurance protection, usually for 90 days or until the policy is issued. The issued policy always has the same effective date as the binder. It does not guarantee the issue of the policy. The agent or the insurance company can issue the binder.
It will cost Gary $5,000 to put a new roof on his home to replace a roof destroyed in a windstorm. Assume that the original roof, which Gary paid $3,500 for 10 years ago, depreciated $300 per year. What was the actual cash value of the roof that was destroyed? A) $5,000 B) $3,500 C) $3,000 D) $2,000
Answer D is correct. ACV-Actual Cash Value is: Current Replacement Cost LESS Depreciation. (R/C is $5,000) minus the (depreciated value of the existing roof is $300 x 10 years = $3,000) = $2,000 ACV.
The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is the A) liberalization clause condition. B) claim settlement condition. C) cancellation condition. D) appraisal condition.
Answer D is correct. The appraisal condition states that either party may demand an appraisal. Each party selects an appraiser and if necessary they jointly hire an umpire. An agreement by any 2 of the 3 parties is binding and is considered settled. Each party pays for their own appraiser and both share the cost of the umpire. This condition is used to settle claims disputes.
All of the following are incorrect, except: A) A peril in insurance terminology is defined as a hazardous situation. B) The purpose of the coinsurance clause is to reduce losses to 80%. C) Under the coinsurance principle, it is the responsibility of the insurer to maintain the requested percentage. D) Fire damage to an insured residence is considered a direct loss.
Answer D is correct. The fire, any resulting smoke damage, or water damage done by the fire department in extinguishing the fire would all be a direct loss. Direct loss must be caused by an insured peril that set the loss in motion.
Actual cash value may be defined as: A) Today's cost to replace or repair, minus depreciation. B) Cost to replace or repair the property when purchased, minus depreciation. C) Cost to replace or repair the property at today's value. D) The depreciated value only.
Answer A is correct. Actual Cash Value is replacement cost at the time of loss, minus depreciation.
Which of the following is correct about the right of salvage? A) The insurer has the right to take possession of damaged property after payment of a loss. B) The insurer is required to take possession of damaged property after a loss. C) The insured has the right to keep damaged property after payment of a loss. D) Neither the insured nor the insurer has the right to take possession of damaged property. It must be disposed of after a loss.
Answer A is correct. After payment for loss, the insurer has the right to the salvage.
Fine arts and antiques are classes of property insured on a: A) Stated amount basis B) Replacement cost basis C) Market value basis D) Actual cash basis
Answer A is correct. Fine arts are typically insured on an stated amount basis, whereby the insured and insurer agree, at time of insuring, on an amount of insurance to be paid in the event of a loss.
What is another name for an Indirect Loss? A) Consequential Loss B) Additional Loss C) Excess Loss D) Excessive Loss
Answer A is correct. Indirect losses are referred to as consequential losses.
If your barbeque pit begins to rust and fall apart or maybe a historic document turns yellow and fades away, these are both losses that would be excluded from coverage because they are considered to be predictable losses that are commonly called a(n) A) Inherent Vice. B) Proximate Cause. C) Concurrent Causation. D) Concurrency.
Answer A is correct. Inherent Vice is a condition or defect that exists within property itself that causes the property to spoil, break, destroy itself, decay, rust, yellow, etc. This is commonly excluded in property policies.
Which term describes coverage that applies only to loss by the perils stated in a policy? A) Named peril B) Open peril C) All risk D) Special Form
Answer A is correct. Named peril policies provide coverage for only the perils listed in the policy.
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy? A) Open peril policy B) Named peril policy C) Content peril D) Special peril
Answer A is correct. Open peril covers any cause of loss that is not specifically excluded in the policy. Therefore it is also referred to as all risk coverage. Named peril specifically names the perils that are covered. There is no such thing as content peril or special peril.
All of the following are true of subrogation, except: A) Allows the insurer to file suit against the insured. B) Gives the insurance company whatever rights the insured possessed against responsible third parties. C) Allows the insurer to attempt collection when paying an insured for a loss. D) Prevents the insured from collecting twice for the same loss.
Answer A is correct. Subrogation is a legal process against a third party, not the insured.
All of the following are false where there are two property policies on the same property, except: A) They will share proportionately according to the total insurance. B) Each policy will pay independently according to the limits of each. C) The first policy will pay up to its limits; then the second policy acts as excess coverage. D) Neither policy will pay because of overinsurance.
Answer A is correct. The Other Insurance clause generally states that two policies covering the same loss will pay proportionally (Pro Rata).
Which of the following is a correct definition of coinsurance? A) A requirement that the insured carry insurance equal to a specified percentage of the property's value to qualify for replacement cost coverage under the policy. B) The portion of the policy that both the insured and the insurer share in the loss, with the insurer bearing the greater potion of the loss. C) A condition that permits the insurer to go after the party that caused the damage and seek recovery of some or all of the damages. D) A situation where there are 2 causes resulting in a loss and 1 cause is excluded while the other cause is not excluded.
Answer A is correct. The coinsurance condition encourages policyholders to insure property for a specified percentage of the full value of the property. If maintained and a loss occurs, the insured is usually allowed the replacement value of the destroyed property.
The insured is required to do all of the following, except: A) Personally make repairs to the property. B) Pay the premium. C) Give notice of loss as soon as possible. D) Protect the property from any more damage.
Answer A is correct. The insured may chose who will make the repairs.
Furniture that is destroyed when a building burns down is an example of what kind of loss? A) Direct B) Indirect C) Additional D) Unexpected
Answer A is correct. There are only two types of losses, Direct and Indirect. A direct loss results from loss to property. An indirect loss occurs as a result of the original direct loss. There is no such thing as additional or unexpected loss.
An unforeseen and unintended event that happens at a known time in a known place is defined as which of the following? A) Accident B) Occurrence C) Inherent Vice D) Proximate cause.
Answer A is correct. This is the definition of an accident. Remember: All accidents are considered to be occurrences but not all occurrences are to be considered to be accidents. Accidents are unintentional.
In determining coverage under an Open Perils policy, the burden of proof is on which of the following? A) Insurance Company B) Insured C) Appraiser D) Contractor
Answer A is correct. When determining coverage under an open perils policy, the burden of proof is on the insurance company to prove whether or not an exclusion under the policy caused the damage. Named perils, the burden of proof is on the insured.
A building owner purchases a property policy in the amount of $60,000 on his $100,000 building. The contract contains an 80% coinsurance clause. If he suffers a covered loss of $10,000, how much will he receive in a settlement disregarding any deductible? A) $5,000 B) $7,500 C) $8,000 D) $10,000
Answer B is correct. 80% of $100,000 = $80,000. This is what the owner should have had at the time of loss. But the owner had $60,000. $60,000 over $80,000 = 6/8 or 3/4 which means the owner only maintained 3/4 of the amount of insurance he should have had. This means he will only receive 3/4 of the amount of loss. Loss of $10,000 x 3/4 = $7,500
When grease pops out and catches a kitchen on fire, it is considered to be a A) Out of control fire. B) Hostile fire. C) Friendly fire. D) Specific Fire.
Answer B is correct. A Hostile fire is an unintended fire.
Which statement is correct? A) Loss of profits because of a fire is a direct loss. B) A spark that jumps from a fireplace and ignites a nearby area rug would be deemed a hostile fire. C) Most property policies include inherent vice as a covered peril. D) Blanket coverage is commonly written when insuring property at a single location.
Answer B is correct. A hostile fire is one that leaves the area in which it was intended to be kept.
Which of the following describes actual cash value? A) Original cost less depreciation. B) Replacement cost less depreciation. C) Original cost with no deduction for depreciation. D) An agreed upon policy limit.
Answer B is correct. Actual Cash Value is defined as replacement cost minus depreciation.
A property purchased 10 years ago for $100,000 has a replacement value today of $200,000. It is depreciated 3% each year. What is today's actual cash value? A) $200,000 B) $140,000 C) $70,000 D) $100,000
Answer B is correct. Current replacement cost of $200,000 minus 30% depreciation = $140,000.
The insured's home is covered by a DP-3. Two years ago, the insured bought the home for $58,000. Today, its replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage? A) $45,000 B) $48,000 C) $58,000 D) $60,000
Answer B is correct. For replacement cost coverage to apply the insured must have at least 80% of the homes replacement value in coverage at the time of loss. $60,000 X 80% = $48,000.
The following are all correct, except: A) Coinsurance applies only in the event of a partial loss. B) Stated amount would be the loss valuation method used to insure agricultural products. C) The Declarations contain statements made by the insured on the application. D) The insuring agreement describes the perils that are covered under the policy.
Answer B is correct. Market value in the loss valuation method used to insure goods and commodities whose value fluctuates with market conditions such as agricultural products.
What is the term used to describe an insurance company terminating an insurance relationship at the end of the policy period? A) Cancellation B) Non-renewal C) Reinstatement D) Grace Period
Answer B is correct. Non-renewal is the term used to describe an insurance company terminating an insurance contract at the end of the policy period.
Which of the following describes the Loss Payment condition regarding how long an insurer has to pay for a loss after receiving the proof of loss and having reached an agreement with the insured. A) Personal lines 30 days and Commercial lines 60 days. B) Personal lines 60 days and Commercial lines 30 days. C) Personal lines 60 days and Commercial lines 90 days. D) Personal lines 90 days and Commercial lines 60 days.
Answer B is correct. Once the insured has provided the proof of loss required after a loss, the insurance company must pay for the loss within 60 days for personal lines and 30 days for commercial lines.
Bill has three policies on the property. Policy A is for $80,000; Policy B is for $100,000; and Policy C is for $20,000. In the event of a loss for $120,000, how much will policy A pay? A) $120,000 B) $48,000 C) $40,000 D) Nothing
Answer B is correct. Policy A's coverage is 40% of the total of all coverages, so they will pay 40% of the loss. $80,000 / $200,000 (80,000 + 100,000 + 20,000) = .4 (40%). .4 x $120,000 = $48,000.
Which part of the policy would you find the insurance company's promise to pay? A) Declarations B) Insuring Agreement C) Conditions D) Exclusions
Answer B is correct. The Insuring Agreement (Clause) is the part of the policy that describes the Insurer's Promise to Pay and the description of covered perils.
If an Insurer has paid for a loss and the item is recovered after the claim settlement. Which procedure is to be followed? A) Insurer can choose to let the insured have the item back or keep the money. B) Insured can choose to keep the item and return the money. C) Insured must return the entire claim and retrieve the recovered item from the insurer. D) Insurer must return the recovered item and allow the insured to retain the full claim settlement.
Answer B is correct. The Recovered Property Condition states: If the lost property is recovered by either the insured or the insurer. The insured ultimately is the one that chooses whether or not to keep the recovered item. If the insured chooses to keep the recovered item, the loss payment will be adjusted based upon the amount the insured received for the recovered property.
Once an insurance company has restored the insured following a covered loss, which of the following has the right of salvage of the destroyed property? A) Insured B) Insurer C) Both A and B D) Neither A nor B
Answer B is correct. The insurance company always retains the right of salvage. They may sell you the right but ultimately the right belongs to the insurer.
All of the following are correct, except: A) The insurer may cancel a policy, to be effective upon meeting statutory requirements of notice. B) The owner of clothing to be cleaned would be a bailee. C) A property that has neither occupants nor personal property is deemed vacant. D) A binder is a temporary proof of insurance.
Answer B is correct. The owner of clothing to be cleaned would be a bailor; the dry cleaner cleaning the clothes is a bailee.
All of the following are included in the Declarations of a Property Policy, except: A) The terms of the policy. B) The perils that are not covered. C) The amount of coverage. D) The amount of premium.
Answer B is correct. The perils not covered are in the Exclusions.
Regarding a property claim procedure, the insured is required to do all of the following, except: A) Give notice of loss as soon as possible. B) Notify police, whether or not a law has been broken. C) Cooperate with the insurance company. D) Separate the damaged and undamaged property.
Answer B is correct. The police only need to be notified in the event that a law has been broken.
All of the following would normally be included with the insureds proof of loss when being submitted to the insurer, EXCEPT: A) The time and cause of loss. B) A signed and authorized estimate by an approved contractor. C) Any other insurance that may cover the loss. D) Any appropriate receipts, evidence, or affidavits to support the loss.
Answer B is correct. When submitting proof of loss, the insured would be required to provide the time and cause of loss, indicate any other insurance that covers the loss, and submit receipts, evidence, or affidavits supporting the loss.
An insured purchased new furniture for $6,000. At the time of a fire loss, it has depreciated $2,000. The same furniture will cost $7,000 to replace. What is the actual cash value of the destroyed furniture? A) $7,000 B) $6,000 C) $5,000 D) None of the above
Answer C is correct. Actual Cash Value (ACV) is determined by taking the property's current replacement cost and subtracting the depreciated value of the destroyed furniture. In this case the current replacement cost of $7,000 - $2,000 depreciated value = $5,000.
An additional loss that results from a direct loss to property is called a/an A) vicarious loss. B) absolute loss. C) indirect/consequential loss. D) general loss.
Answer C is correct. An indirect loss occurs as a result of a direct loss. Ex. A fire on the premises causes a power outage and as a result, meat in a freezer spoils. The fire on the premises is the direct loss and the meat spoilage in the freezer is an indirect loss that occurs as a result of the direct loss.
Insurance binders are A) Valid for 30 days. B) Limited to personal lines risks. C) Temporary or interim insuring agreements. D) required to be written.
Answer C is correct. An insurance binder is considered to be an interim insuring agreement, which is basically a temporary policy. It may be oral or written and is generally valid for up to 90 days. It does not guarantee the issue of the policy and may be cancelled at anytime by the insurer.
Which of the following may broaden the coverage found in an insurance policy? A) Declarations B) Conditions C) Endorsements D) Insuring Agreement
Answer C is correct. Endorsements are used to broaden, as well as restrict coverage.
In Property and Casualty Insurance, when a form is attached to further define certain policy provisions or conditions, it is known as: A) A consideration B) A warranty C) An endorsement D) An exclusion
Answer C is correct. Endorsements are used to modify a policy. They may be used to add or delete coverage, or further define conditions.
The McCoy's own a building that is insured for $200,000 with an 80% Coinsurance Clause. A loss of $12,000 occurs and the actual cash value of the property at the time of loss is $300,000. How much will be recovered? A) $12,000 B) $9,000 C) $10,000 D) $6,000
Answer C is correct. First, determine the amount of coverage there should have been ($300,000 x .8 = $240,000). Divide what was insured by what should have been ($200,000/240,000 = 5/6) times the amount of loss ($12,000) = $10,000.
Apply the coinsurance provision to the following covered loss: property value = $200,000; policy limit = $140,000; coinsurance = 80%; amount of loss = $100,000; deductible = $250. How much would the policy pay? A) $90,000 B) $100,000 C) $87,250 D) $87,500
Answer C is correct. Insured should have had $160,000 (200,000 x .80), but only had $140,000. The policy will pay $87,500 minus deductible. (140,000/160,000=.875; $100,000 x .875 = $87,500; $87,500 - $250 = $87,250)
Which term describes the situation that occurs when two policies covering the same property contain different coverages? A) Coinsurance B) Concurrent causation C) Non-concurrency D) Blanket coverage
Answer C is correct. Non-concurrency means not the same.
What type of policy would you purchase to provide coverage for everything that is not excluded? A) Basic Form B) Broad Form C) Special Form D) Named Form
Answer C is correct. Open perils covers anything that is not specifically excluded in the policy.
All of the following are methods of writing property insurance limits, except: A) Specific coverage B) Scheduled coverage C) Concurrent coverage D) Blanket coverage
Answer C is correct. Specific, Scheduled and Blanket are all methods of writing property insurance limits.
All of the following are correct, except: A) An indirect loss is an additional loss that results from a direct loss. B) The conditions describe the responsibilities and obligations of the insured and the insurer. C) The insuring clause personalizes the policy as to who and what are insured. D) A deductible is a specified amount that an insured must bear.
Answer C is correct. The Declarations personalize the policy. Conditions and Insuring Agreement are standard.
The insuring clause (agreement) section of a policy describes: A) The duties of the insured in the event of a loss. B) Perils that are not covered. C) Perils that are covered. D) Transfer of the rights of recovery.
Answer C is correct. The Insuring Agreement includes the perils covered.
If a home has a mortgage, the lenders insurable interest would be covered under which of the following policy conditions? A) Appraisal B) Subrogation C) Mortgage Clause D) Assignment
Answer C is correct. The condition that specifies and protects the mortgagee's (lender's) financial interests in the property is called the Mortgage Clause condition.
In addition to the named insured in a Property Policy, coverage is automatically provided for: A) Persons who purchase the insured's property. B) Persons who appraise the property C) Persons who are legal representatives of the insured. D) Persons who hold public office.
Answer C is correct. The legal representative of the insured is also an insured under the policy.
Which part of a Property Policy is in the insuring agreement? A) The amount of coverage. B) The name of the insured. C) List of the named perils. D) Specified term of the policy.
Answer C is correct. The perils covered in a property policy are always in the Insuring Agreement.
Which section of an insurance policy lists the rules and procedures to be followed? A) Declarations B) Insuring Agreement C) Conditions D) Exclusions
Answer C is correct. The rules and procedures to be followed by the insurer and insured throughout the policy period are found in the Conditions.
The purpose of a binder is to A) guarantee that the policy will be issued at the premium rate specified. B) allow the insurance company the right to complete a full credit check on the applicant. C) provide permanent protection immediately with no need to actually issue a policy. D) provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires.
Answer D is correct. A binder is not a guarantee that the policy will be issued. It acts as the policy temporarily while the policy is being underwritten. It prevents the insured from being without coverage while the insurance company decides whether it will issue the policy.
An additional loss that results from a direct loss to property is called a/an A) Proximate loss. B) Liability loss. C) Punitive loss. D) Indirect/consequential loss.
Answer D is correct. A consequential loss, Aka: Indirect Loss, is a secondary loss that occurs as a result of a direct loss. Example: A fire causes a power outage causing meat in a freezer to spoil. The meat would be a consequential (indirect) loss.
Which statement is true about a peril? A) It is defined as a risk of financial loss. B) It is a very hazardous situation. C) It is a condition that may increase a loss. D) It is the specific cause of loss.
Answer D is correct. A peril is defined as a specific cause of a loss.
The action which in a natural and continuous sequence, produces a loss is known as the A) primary cause. B) inherent cause. C) direct cause. D) proximate cause.
Answer D is correct. A proximate cause is a cause that sets other causes in motion when multiple causes combine to produce loss or damage. Ex. A fire that causes an explosion to occur. The fire was the proximate cause which caused the explosion to occur, causing the extensive damage.
Which statement is false? A) A direct loss is a loss resulting directly from an insured against peril. B) An indirect loss is the same as a consequential loss. C) Water damage done by firefighters is considered a direct loss. D) Direct losses include additional living expenses.
Answer D is correct. Additional Living Expense is an indirect loss, not a direct loss.
All of the following are true, except: A) The purpose of coinsurance is to encourage one to carry insurance to value. B) Named peril policies cover only stated perils. C) Open peril policies cover all perils, except those excluded. D) Coinsurance costs more.
Answer D is correct. Generally, the higher the coinsurance, the lower the rate.
All of the following are your duties in the event of a loss EXCEPT: A) The insured should give prompt notice of the loss to the insurer. B) The insured should notify the police if a law has been broken. C) The insured should protect damaged property from further loss and separate damaged property from undamaged property. D) The insured should seek legal council and file a law suit against the party that caused the claim.
Answer D is correct. Legal action against the insurer or the claimant is not one of your duties after a loss. Providing prompt notice, notifying the police, protecting property from further loss are all considered to be the insured's duties in the event of a loss.
The Subrogation Clause found in many policies: A) Specifies exactly how much coverage is provided by the policy. B) Spells out conditions that must be complied with before a loss may be settled. C) Provides a means for settling disputes between company and policyholder. D) Helps prevent insured from collecting twice for the same loss.
Answer D is correct. Subrogation is the transfer of the insured's right to collect from an at fault third party. It prevents the insured from collecting twice.
All of the following concerning exclusions are true, except: A) They describe situations that are not covered under the policy. B) They restrict the Insuring Agreement. C) They describe property not covered. D) They are found in the Insuring Agreement.
Answer D is correct. The Exclusions may restrict the Insuring Agreement, but are found under their own heading in the policy structure.
All of the following are true, except: A) An insurance policy that pays only after primary coverage has been exhausted is said to be excess. B) A deductible is a specified amount of loss that is retained by the insured. C) An application is a document that provides information for underwriting purposes. D) The insuring agreement includes the name of the insured.
Answer D is correct. The Insuring Agreement contains the insurer's promises to the insured. The insured's name is found in the Declarations.
When the insured and the insurer fail to agree on the amount to be paid for a property loss, the procedure is specified in the: A) Settlement Clause B) Agreement Clause C) Approximate Clause D) Appraisal Clause
Answer D is correct. The appraisal clause states the procedure to be followed if the insured and insurer disagree on the amount of loss.
Which of the following would NOT be found in the policy declarations page? A) A description of the property to be insured. B) A legal representative in the event of the insureds death. C) Limits of insurance, deductibles, amount of premium. D) Insurers promise of protection.
Answer D is correct. The insurers promise of protection would be found in the policy's Insuring Clause, not the Declarations. Remember, the Declarations describe the: Who, What, Where, When and How Much, parts of the policy. It is the policy cover page providing a quick overview of the policy.
All of the following are insured's duties after a loss under a Property Policy, except: A) Furnish inventory of damaged and undamaged goods and amount of loss claimed. B) Submit to examination by insurer. C) Give notice to loss as soon as possible. D) Abandon the property to the insurer.
Answer D is correct. The policy states that the insured cannot abandon property to the insurer.
All of the following are parts of an insurance contract EXCEPT: A) Insuring Agreement. B) Conditions. C) Exclusions. D) Indirect Loss.
Answer D is correct. The policy structure acronym to remember is D.I.C.E. which consists of the following parts: Declarations, Insuring agreement, Conditions & Exclusions. Indirect loss is NOT part of the policy structure, it defines one of the types of property losses.
An insured may not transfer rights of ownership or interests in an insurance policy to another party A) Without the written demand by a court of law. B) Without the written consent of the policy owner. C) Without the insureds written consent. D) Without the insurers written consent.
Answer D is correct. This is describing the Assignment Condition; whereby an insured may not transfer rights of ownership or interests in a policy to another party without the insurer's written consent.
All of the following are requirements for recovery of a loss under the replacement cost extension, except: A) The value of the property is determined at the time of loss. B) The property must be rebuilt on the same premises. C) Coverage must equal 80% of the cost of replacement. D) A deduction for depreciation is calculated.
Answer D is correct. When property is covered on a replacement cost basis, there is no deduction for depreciation.