Insurance Terms and Concepts

Which of the following is TRUE concerning Subrogation? a. Allows the insured to collect twice for the same loss. b. Allows the insurer to sue a negligent third party to recover a loss paid. c. Requires 70% co-insurance. d. May allow insurer to divide the interests of the insureds.

B. Allows the insurer to sue a negligent third party to recover a loss paid.

An insured has A SPLIT limit liability policy with 10/20/10 limits. He owes the following people liability bodily injuries claims of: Passenger 1 = $12,000, Passenger 2 = $10,000, Passenger 3 = $18,000. How much liability insurance will his policy pay for these claims? a. $10,000 b. $20,000 c. $30,000 d. $40,000

b. $20,000

To turn partially damaged property over to the insurance company and ask them to pay for a total loss is called: a. morale hazard b. abandonment c. conveyance d. proof of loss

b. abandonment

17) An insured has a home with a replacement cost / value of $100,000, on which he carries an insurance policy for $80,000 with an 80% Coinsurance clause. The insured has a $20,000 partial loss, the insurance company will pay how much for this partial loss of $20,000? (Remember $80,000 is 80% of $100,000: a. $20,000 b. $16,000 c. $80,000 d. 0

A. $20,000

XYZ Insurance Corp. filed its corporate charter in Tallahassee and has its home office in Tampa: a. In Florida, XYZ is a domestic insurer. b. In Florida, XYZ is a foreign insurer. c. In Florida, XYZ is an alien insurer. d. None of the above is true.

A. In Florida, XYZ is a domestic insurer.

An insurer may sever the interests of 2 insureds so that the insurer can protect an innocent party - this is the Doctrine of: a. Division of Interests b. Severability c. Specific Insurance d. Insurability

B. Severability

Liability limits may be expressed as a: a. Aggregate Limit b. Split Limit c. Single Limit d. All of the above

D. All of the above

"Actual Cash Value" ACV means: a. Replacement cost b. Original cost minus depreciation c. Current cost to replace d. Current cost to replace minus depreciation

D. Current cost to replace minus depreciation

If a lender has an insurable interest in an auto, because of the money loaned to finance the auto, the lender would appear on the policy as the: a. Lessee b. Loss payee c. Mortgagor d. Mortgagee

b. loss payee

Firemen caused water damage to a property by spraying water to put out a fire. If the property insurance policy listed "fire" as the only named peril: a. The water damage is not a covered. b. The fire dept. has liability for the water damage. c. The water damage is covered due to the concept of proximate cause. d. The Fire damage is covered but not the water damage due to proximate cause.

c. The water damage is covered due to the concept of proximate cause.