Chapter 2 - Property Basics Flashcards
Accident vs Occurence
An accident happens once.
An occurrence happens more than once
Define Proximate Cause
It is the primary cause of loss or the one that had the most significant impact.
Define Inherent Vice
A quality within property that causes it to damage itself. Ex - rust. Not covered by a property policy.
Mediation vs Arbitration
Mediation - is covered. A third party helps the parties make a decision.
Arbitration - not covered. A neutral third party makes a decision for both parties.
Define Concurrent Causation
When two simultaneous perils are considered the proximate cause of loss. Insurer must pay the loss even if one peril is excluded.
Define Bailee
A person entrusted with someone else’s property.
Unoccupancy vs Vacancy
Unoccupancy has personal property and vacancy has nothing in it.
List what the Declarations Page describes
Who, what, where, when, how much
What is the purpose of the Insuring Agreement in a policy?
The insurance companies broad promise to pay the insured. The other sections of a policy get more specific
What does the conditions section of a policy contain?
Contains the obligations of the parties to the contract and includes the duties and obligations of the insured.
In other words, if it’s not in the declarations and it’s not an exclusion, then it’s most likely in the conditions.
What is the liberalization clause in the Conditions Section of a policy?
It states that if the insurer decides to broaden or increase coverage midterm, it will apply to all existing policies without additional premium. At the renewal of the policy, there may be a premium for the endorsement
Example - Nationwide no longer allows $50,000 Auto Liability limits and has increased their minimum to $100,000. All EXISTING policies below $100K will now have a $100,000 liability limit without an endorsement. At renewal, the policy’s premium increased.
What are the obligations of the Insured in the event of a loss (7 total)?
A. Quickly notify the insurer of the loss with a complete description.
B. Call the policy if theft occurred
C. Cooperate with the Insurer
D. Protect your property from further damage
E. Keep an inventory of damaged property
F. Allow the Insurer to inspect your damaged property, books, and records.
G. Submit a proof of loss that shows the time and cause of loss, if other insurance applies, and receipts/evidence to support the loss.
Does coinsurance apply to a total or partial loss?
A partial loss
