25. Property Insurance Flashcards
What is DYNAMIC risk? Give an example.
Dynamic risk is defined as the UNINSURABLE risk associated with changes in the economy, income taxes, and supply vs demand issues.
What is STATIC risk? Give an example.
Static risk is defined as INSURABLE risk associated with events such as accident liability, fire, theft, and vandalism.
What does ‘Fire and hazard insurance’ provide coverage against?
The policy provides coverage against direct loss or damage to property from fire on the premises.
Extending standard fire coverage can cover hazards such as:
Windstorm, hail, smoke damage, and civil insurrection.
What does ‘Business interruption insurance’ cover?
The policy covers the loss of income that occurs if the property cannot produce income.
What does ‘Contents and personal property insurance’ cover?
The policy covers building contents and personal property during periods when they are not actually located on the business premises.
What does ‘Liability insurance’ cover?
The policy covers the risks an owner assumes when the public enters the building.
Medical expenses are paid for a person injured in the building as a result of owner/landlord negligence.
What does ‘Casualty insurance’ cover?
The policies include coverage against theft, BURGLARY, vandalism, and machinery damage as well as health accident.
When are casualty insurance policies are usually written?
Casualty policies are usually written on specific risks such as theft, rather than being all inclusive.
What does ‘Surety bonds’ cover?
Surety bonds cover an owner against financial losses that result from an employee’s criminal acts or negligence while carrying out his or her duties.
What does ‘Boiler and machinery insurance’ cover?
The policy covers the repair and replacement of heating plants, central air-conditioning units, and other major equipment.
What is an ‘Umbrella policy?’
An umbrella policy is a type of excess liability coverage with two basic forms; personal and commercial.
Excess liability coverage that provides coverage for those areas that would “fall between the cracks” with other policies are referred to as
Personal umbrella policies.
What is a ‘Monoline policy?’
This type of policy provides only one line or area of coverage and bears greater relevancy to the insurer than to the insured.
What is a ‘Packaged policy?’
This policy provides for a variety of different coverage types.
Proof to a lender that a property is covered by insurance is provided through a
Certificate of insurance.
The two methods used to determine the amount of a commercial claim include
Depreciated cash value of the damaged property and replacement cost.
True or false. Is Safi gay?
True
What is a ‘Deductible?’
A deductible represents the monetary portion of the damages the property owner will bear if and when a covered loss occurs.
What is a ‘Homeowners’ insurance policy?’
This standarized policy insures holders against the destruction of their property by fire or windstorm, injury to others that occurs on the property, and theft of any personal property, on the premises that is owned by the insured or members of their family.
The MOST comprehensive homeowners’ insurance package is
HO-3
Which homeowners’ insurance package covers apartment renters?
HO-4
Which homeowners’ insurance package covers condominium owners?
HO-6
Apartment and condominium polices generally provide fire and windstorm, theft, and public liability coverage for injuries or losses in the unit. They do not extend to cover
losses or damages to the structure.
What are ‘Tax reserves and Insurance Reserves?’
A reserve or impound is a sum of money set aside for later use.
An insurance reserve is usually required on an acquired property when
financing is arranged.
What does the acronym PITI contain?
Principal
Interest
Taxes
Insurance
A loss run schedule shows the history of a schedule’s
previous claims.
