chapter 4 Anatomy of a Property Policy: Overview Flashcards
In reading a policy, it’s particularly important to distinguish between these two words.
a. And, or
b. Simply, merely
c. Understand, comprehend
d. Cost, fee
a. And, or
What are multi-peril policies covering various classes of business also known as?
a. Homeowners comprehensive policies
b. All-risks forms
c. Named-perils forms
d. Package policies
d. Package policies
What does contra proferentem mean when a policy wording has been drafted by the insurer?
a. Any ambiguity in the policy wording will be interpreted against the insurer.
b. Any ambiguity in the policy wording will be interpreted against the insured.
c. No claims will be paid.
d. An insured’s right to claim would be limited by statute.
a. Any ambiguity in the policy wording will be interpreted against the insurer.
What is a main benefit of having a single-limit policy?
a. One limit of insurance is applied on a blanket basis for all insurance coverages.
b. Perils insured are broader.
c. No deductible applies.
d. It only applies to commercial property policies.
a. One limit of insurance is applied on a blanket basis for all insurance coverages.
What is the key benefit of the IBC standard mortgage clause to a mortgagee?
a. No exclusions apply to coverage applicable to mortgagee.
b. The mortgagee will always receive the full amount of the mortgage.
c. A separate contract is created between the mortgagee and the insurer; this provides the mortgagee with greater protection.
d. Coverage applicable to the mortgagee will be on an ACV basis.
c. A separate contract is created between the mortgagee and the insurer; this provides the mortgagee with greater protection
What is the purpose of the declarations or coverage summary?
Select one:
a. Is only used with personal property policies
b. Is of limited value with subscription policies
c. States the coverage and limits agreed to by the insured and the insurer
d. States the coverage and limits agreed to by the insurer
c. States the coverage and limits agreed to by the insured and the insurer
When may a subscription policy be used?
Select one:
a. When the limits on property are low.
b. When the limits on property are very high.
c. The property risk is well protected by fire hydrants.
d. The property risk is loss free.
b. When the limits on property are very high.
Which of the following clauses potentially limits an insurer’s liability?
a. deductible clause
b. breach of condition clause
c. replacement cost clause
d. The property risk is clause.
a. deductible clause
Which of the following is part of a broker or agent’s main role?
Select one:
a. Accept or reject the application.
b. Assess the risk and determine what coverage the insured will require.
c. Determine whether an endorsement or further coverage is required.
d. Determine whether to pay the loss that has been reported or to deny it.
b. Assess the risk and determine what coverage the insured will require.
Why is there a need for coinsurance?
a. Enables an insurer to spread risk
b. Provides all-risks coverage automatically
c. Encourages insureds to carry adequate limits of insurance since most losses are partial
d. Insured will pay less premium
c. Encourages insureds to carry adequate limits of insurance since most losses are partial
Which of the following is the easiest way for any one insurer to distinguish themselves from another?
a) Layout of the policy documents
b) How quickly they issue policies
c) The number of exclusions
d) The pricing
d) The pricing
Which of the following items insured on a habitational policy would not have a special limit?
a) Jetski
b) Christian Dior Wedding dress
c) John Deere Ride on lawnmower
d) Baseball cards
b) Christian Dior Wedding dress
Which of the following is a distinguishing feature of personal property policies?
a) Co-insurance
b) Plain language format
c) Deductible clause
d) Mortgage clause
b) Plain language format
Which of the following is one of the main sections of the habitational policy?
a) Policy wordings
b) Policy exclusions
c) Definitions clause
d) Statutory conditions
a) Policy wordings
What type of policy would be best for a large, complex risk that is a high hazard?
a) Non-package policy
b) Multiple limit policy
c) Single limit policy
d) Subscription policy
d) Subscription policy
What does the Co-Insurance clause require of the insured? What happens if they don’t comply with the requirements
Insured is required to have a specified minimum amount of insurance in relation to the value of the building insured and if they don’t they will have to share any partial loss with the insurer making them a co-insurer of the loss
What is the Co-insurance Formula?
Amount Carried/Amount Required X Loss = amount recovered
Did/Shoulda X Loss = payment