Chapter 2 Property Basics Flashcards
A sudden, unforeseen, unintended, and unplanned event from which loss or damage results.
Accident
An accident includes continuous or repeated exposure to the same general harmful conditions.
Occurrence
The termination of an insurance policy before its expiration date. Once cancelled, a policy provides no coverage. A policy may be cancelled by the insured or insurer.
Cancellation
A proportionate cancellation of insurance that refunds premium to the insured based on the precise number of days coverage was in effect
Pro Rata (rate) Cancellation
A cancellation of insurance that incurs a financial penalty
Short Rate Cancellation
A cancellation of insurance that is retroactive to the effective date of the policy. No coverage is provided and the insurer must refund the policy premium paid by the insured.
Flat Cancellation
The termination of a policy at the expiration of its term
Nonrenewal
Proximate Cause -
If more than two perils caused or contributed to the loss, the proximate cause is the peril having the most significant impact in generating the loss or damage.
The primary cause of loss.
A legal agreement issued by an insurance company or a producer that provides temporary proof of insurance until the insurer is able to issue an insurance policy is known as what?
Binder -
Binders contain the name of the insurer, the amount and type of insurance, and the perils insured against.
the insurer has the ability to take possession of damaged property after paying for its loss. What is this known as ?
Right of Salvage
if an auto policy and an umbrella policy are written with the same policy dates, they are considered to be what kind of policies?
Concurrency/Concurrent Policies
What are the responsibilities of a bailee?
A person or any organization to which property has been entrusted, usually for repairs, servicing or storage.
There are 2 types of property losses. What are they and how are they defined?
Direct Loss – A loss that causes direct damage to property without an intervening cause.
Indirect Loss or Consequential Loss – A loss that is not the direct result of a peril.
What calculation is used to determine the actual cash value (ACV) of a loss?
Replacement cost – depreciation = ACV
What does D.I.C.E. stand for?
- Declarations
- Insuring Agreement
- Conditions
- Exclusions
The Declarations Page describes basic information about the policy. there are 5 things. Can you name and explain?
Who – What – Where – When – How Much –
The insurance company’s promise to pay the insured is known as what?
Insuring Agreement
The insureds duties and obligations are spelled out in what section of the policy structure?
Conditions -
The conditions section states the obligations of the parties to the contract, as well as any other conditions of coverage.
name as many common property exclusions as you can?
Ordinance or Law
Earth movement
War
Water Perils that are NOT covered by the policy are listed in the exclusions section.
Utility failure that originates off-premises
Neglect of the insured to protect covered property from further loss
Intentional loss
Nuclear hazard, war, and military action
Governmental action
Fungus, wet rot, dry rot, and bacteria (e.g., mold)
Coinsurance covers total loss? T or F
False - Coinsurance applies only in the event of a partial loss, as total losses typically are paid in accordance with the Valued Policy Law.
The taking of property from the care and custody of a person who has been caused or threatened with bodily harm?
Robbery
A buildings that does not contain sufficient personal property to support intended occupancy or use?
Vacancy
The unlawful taking of property from inside a premises by a person who commits forcible entry into, or exit from, that premises?
Burglary
The unlawful taking of property and includes any act of stealing?
Theft
