Quiz
Which of the following is the bases for a claim against an insurance policy
A loss
Insurable interest in a property policy must be proven
At the time of loss
Which of the following does the term proximate cost refer to?
Negligence that leads to injury
Which of the following is used in the formula for calculating the actual cash value of a property
Replacement cost
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
Subrogation
Peril is most easily defined as
The cause of loss insured against
What type of liability would a person who owns wild animals have?
Absolute
A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?
$30,000
Burglary is defined as
Taking of property from within the premises leaving visible signs of forced entry.
All of the following statements concerning coinsurance are true except ?
The coinsurance formula will be applied to total losses
Liability imposed on one party as a result of the actions of another person is known as
vicarious liability
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
What is the purpose of the coinsurance clause found in the property insurance policies?
Encourage the insured to insure the property closer to its full value
Replacement cost is defined as
Full replacement of property at its current cost, new and without reduction for depreciation.
If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person?
$50,000