Chapter 22: Property Insurance

Question 1

100-year flood plain

Answer 1

An area where a flood has a 1% chance of being equaled or exceeded each year. Thus, a 100-year flood could occur more than once in a relatively short period of time or even within the same month

Question 2

base flood elevation

Answer 2

The computed elevation to which floodwater is anticipated to rise during a 100-year flood

Question 3

broad form insurance

Answer 3

A named peril policy, which means that a specific peril or hazard that is not named in the policy is not covered

Question 4

casualty insurance

Answer 4

A policy that protects the insured from losses caused by damage to the insured property and the permitted improvements on that property

Question 5

Comprehensive Loss Underwriting Exchange (CLUE)

Answer 5

A report which generally contains up to seven years of personal-auto and personal property claim data used by insurance companies to determine the insurability of a property and/or property owner

Question 6

condition

Answer 6

A limitation on the coverage of a specific insured property.

Question 7

deductible

Answer 7

The dollar amount the insured might have to personally pay before insurance coverage can be applied

Question 8

endorsement

Answer 8

Coverage for specific property or perils that are not covered in the original policy and is sometimes called a rider.

Question 9

exclusion

Answer 9

Some item, or loss due to a specific event, that is not covered by the policy

Question 10

Federal Emergency Management Agency (FEMA)

Answer 10

The federal agency that manages the National Flood Insurance Program

Question 11

flood hazard areas

Answer 11

Areas usually bordering bodies of water, such as oceans, rivers and streams, which are subject to federal floodplain regulations concerning improvements and construction in those areas

Question 12

homeowner’s insurance policy

Answer 12

An insurance policy which insures policyholders against the destruction of their property by named perils, injury to others that occurs on the property, and theft from the premises of any personal property that is owned by the insured or members of the insured’s immediate family

Question 13

insured

Answer 13

The property owner who is reimbursed by the insurance company for losses caused by a covered event

Question 14

insurer

Answer 14

The insurance company, which agrees to reimburse the insured property owner for losses caused by a covered event

Question 15

liability insurance

Answer 15

A policy that protects the insured from losses or damage caused to third parties or their property

Question 16

National Flood Insurance Program (NFIP)

Answer 16

A federal program which aims to reduce the impact of flooding on private and public structures

Question 17

package insurance

Answer 17

A policy protects the insured from both liability from losses caused to third parties or their property and from losses caused by damage to the insured property

Question 18

premium

Answer 18

The consumer’s cost of insurance coverage for a stated term or period of time

Question 19

property insurance

Answer 19

A policy protects the insured from losses caused by damage to the insured property and the permitted improvements on that property