Chapter 1: Property & Liability Insurance Concepts Flashcards
What is not included on the Declaration Page
a) Name insured
b) Location of insured property
c) Expiration date of the policy
d) Exclusions
d) Exclusions
Johnny owns one-third of a $300,000 building that has loss by a covered peril. The other two players did not have insurance, while Johnny did buy insurance on his share. How much is Johnny’s company going to pay?
a) $30,000
b) $15,000
c) Proportionate share
d) Nothing, because it was not fully insured
c) Proportionate share
Johnny and Susie own a home. They went out to dinner, came back, and the house was on fire. All of the following have an insurable interest except:
a) Johnny and Susie
b) ABC financial institution who holds the first mortgage
c) Mr. Smith who holds the second mortgage
d) Their son who will inherit the property when they die
d) Their son who will inherit the property when they die
Johnny and Susie owned a home damaged by fire. Smoke damage accompanied the fire, and water damage also occurred when the fire department had to extinguish the fire. What would be payable on the claim?
a) Fire damage only
b) Fire and smoke
c) Smoke and water
d) Fire, smoke and water
d) Fire, smoke and water
Johnny wanted to buy a car. He did not have enough money to be able to afford to purchase that car, so he went out to get a loan. What is the lender considered under Johnny’s auto policy?
a) Mortgagee
b) Loss Payee
c) Co-insurer
d) Subrogation
b) Loss Payee
Transferring the risk to an insurance company is known as what?
a) Sliding
b) Biggert-Waters Act
c) Insurance
d) Hazard
c) Insurance
When the insured requests to have the company change a condition or provision in an insurance policy, the document attached to the policy is referred to as what?
a) Exclusion
b) Endorsement
c) Condition
d) Insuring Agreement
b) Endorsement
All are the rights under the Lender’s Interest condition EXCEPT:
a) Right of notification if the policy is about to be cancelled
b) Right to pay the premiums if the insured neglects to do so
c) Right to have the lender’s name on the claim check
d) Right to change coverages or limits under the policy
d) Right to change coverages or limits under the policy
What is the most common Loss Settlement Valuation in the property policies?
a) Replacement Cost
b) Actual Cash Value
c) Agreed Value
d) Stated Value
b) Actual Cash Value
The insurance company pays the insured for damages that should have been collected from the at-fault party. Now the insured’s right to seek damages from the at-fault party are transferred to his insurance company. What best describes this concept?
a) Assignment
b) Subrogation
c) Churning
d) Retention
b) Subrogation
