property & casualty insurance basics

for how long after the death of a named insured must basic property continue coverage

180 days

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

30,000

an insured owns a building valued at $400k. to comply with 80% coinsurance provision of his insurance policy, how much should he insure the property for

80% of the property's replacement costs or more

Rates that are established based on the similarities of the risk with other risks are known as

Manual risks

the declaration page of the homeowners policy provides all of the following information EXCEPT

a statement that earthquake damage is not covered

for the purpose of insurance, owner-occupied residential dwelling is

a structure of not more than 4 units, one of which is occupied by the owner

what type of liability would a person who owns wild animals have

absolute

if an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

an unfair trade practice

which of the following defenses arrest that if a person recognizes or understands that there is danger involved in an activity and voluntarily chooses to encounter it, he or she may be barred from seeking recovery for injuries due to negligence

assumption of risk

what is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent

comparative neglagence

The part of a property policy that shows the amount of insurance, premium, and policy term is the

declarations

which of the following is a mandatory part of an insurance policy that varies with each individual policy?

declarations they tell who, what, when and where. info is different in each contract

in property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount for the loss above this limit

deductible

which of the following would modify the original insurance contract by either adding or removing coverage?

endorsements

all of the following are found in the declaration section of a policy EXCEPT

exclusions

which of the following is defined as the cost to rep0lace damaged property with less expensive and more modern construction or equipment?

functional replacement cost

the policy conditions define

how parties to a contract must act following a loss

the policy conditions define

how parties to the contract must act following a loss

the pro rata liability clause is designed to protect the principal of

indemnity

all of the following are conditions commonly found in the insurance policy EXCEPT

insuring agreement

the part of the insurance contract that describes the covered perils and the nature of coverage of the contractural agreement between the insurer and insured is called the

insuring agreement

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

it is imposed on the defendants engaged in hazardous activities

an insured has a liability policy that sets the amount from call claims that arise after a single accident at $50k. what type of liability does this insureds policy have?

per occurrence

the policy that pays first in the event of a covered loss is known as the

primary policy

at the time of loss insured against in a property and casualty policy, the insurers claim settlement options include all of the following EXCEPT

replacing the property with other property with a lesser kind or quality

when an insurer cancels, midterm, a commercial property or casualty insurance for an allowable reason, they must

send or deliver a "notice of cancellation" at least 60 days prior to the effective date of cancellation and state the reason for it

which of the following may NOT be included in the insurance companies advertisement

that its policies are covered by State Guaranty Association

the process an insurer uses to evaluate applications and determines if a policy should be issued and on what terms, conditions, and rates is known as

underwriting