Property Unit 3

Nathan and Allison have two insurance policies on their home. Policy A had a coverage limit of $100,000. Policy B has a coverage limit of $200,000. When Nathan and Allison have a house fire and have a $100,000 claim, Policy A paid $50,000 and Policy B paid $50,000. This is an example of which other insurance provision?

Contribution by equal shares

Glenn's insurance policy was cancelled by the insurer on the effective date. This is called

a flat cancellation

Brady and his wife Julie had an insurance policy that was cancelled by the insurer before the effective date. They will receive a portion of their premium back on

a prorated basis

The penalty for early cancellation of an insurance policy by the insured is applied on

a short-rated basis

All of the following statements about cancellation and nonrenewal of an insurance policy are true

an insurance policy can be canceled by the insured before the expiration date, when an insured cancels a policy, the insurer is entitled to keep a percentage of the unearned premium, and when an insurer cancels a policy, any unused premium must be prorated and returned to the insured

Factors that determine premium rates

cost of handling claims, operating expenses, loss reserve, and profits

The declarations section of a policy contains

current address, policy deductibles, and the name of the insured

According to the Gramm-Leach Bliley Act, anyone who has an ongoing relationship with a financial institution is considered to be a

customer

An insurance binder

does not guarantee that policy will be issued, is a temporary insurance agreement, must be backed up in writing as soon as possible IF it is an oral binder

Natalie has an insurance policy that specifically does NOT cover flood damage. This information can be found in which of the following sections of the policy?

exclusions section

The lower the deductible, the ___________ the premium.

higher

Casualty insurance is often known as

liability insurance

All of the following are included in the duties after loss provision

make the property available for inspection, cooperate with the insurer as required during the claim investigation, prompt notice of claim to the insurer or agent, and prevention or further damage

Which of the following is NOT an example of an insurable interest?

person's interest in property she hopes that her grandparents will leave to her in their will

Property insurance

provides protection on damage to your belongings from a theft, pays the insured for covered losses to a property, and provides protection on belongings

The Fair Credit Reporting Act states that

reports on consumers are prohibited unless the consumer is made aware that an investigative consumer report may be made, the maximum penalty for obtaining consumer infomration reports under false pretenses is $5,000, imprisonment for 1 year, or both, consumers that feel something in their files is inaccurate may dispute the information, and a notice to the applicant must be sent within 3 days after the report is requested

If an insured's insurance company steps in and pays for damages that were caused by an uninsured person, the insurance company may file suit or claim on the insured's behalf. This is also known as

subrogation

Which of the following states that a policy may not be transferred to anyone else without the written consent of the insurer?

the assignment condition

Which part of the policy states the rules of conduct, duties, and obligations that are required for coverage?

the conditions section

The amount of money that the insurance company makes by providing insurance for a designated period is called

the earned premium

The person that is listed first on the declarations page when there is more than one person insured in a policy is known as

the first-named insured

A promise to pay and perils covered is described in

the insuring agreement

Randall has an insurance policy that states that his policy began on January 17, 2016 at 2:30 pm CST and ends on January 17, 2017 at 2:30 pm CST. These details are known as

the policy period

The provision that states where a loss must occur for it to be covered is known as

the policy territory provision

The department of an insurance company that is concerned about the risk that an applicant for insurance poses is

the underwriting department