Chapter 4 Types of Casualty Policies, Bonds, and Related Terms

Question 1

What is a method of valuation that recognizes the reduction of value of property as it ages and becomes subjected to wear and tear?

Answer 1

Actual Cash Value
(ACV)

Question 2

This is a term used to describe the breadth of coverage provided under an insurance policy form that insures against “any risk of loss” that is not specifically excluded

Answer 2

All Risk/ Open peril

Question 3

What is aggregate?

Answer 3

The Maximum amount allowed for payment during a policy period.

Question 4

What is Bailee?

Answer 4

someone who is entrusted with possession of another person’s property but has no ownership of it (e.g., a service station having a damaged vehicle for repairs)

Question 5

Proof that one can pay for damages caused, often fulfilled by purchasing insurance shows……

Answer 5

Financial responsibility

Question 6

What is the term for the date at which the insurance policy goes into effect?

Answer 6

Inception (Date)

Question 7

When unable to meet financial Obligations

Answer 7

Insolvent

Question 8

A person granting a lease of a motor vehicle is a…

Answer 8

Lessor

Question 9

Automobile used for private needs rather than for business uses

Answer 9

Private Passenger Vehicle

Question 10

what is SIR?

Answer 10

Self-Insured retention; a deductible that must be paid by an insured in order to access the umbrella policy’s funds when the insured’s underlying coverage will not cover the loss

Question 11

What is a written law passed by a legislative body

Answer 11

A Statue

Question 12

What is PAP?

Answer 12

Personal Auto Policy; an insurance policy for the owners of private passenger vehicles.

Question 13

what are part A-F of a PAP

Answer 13

A) Liability Coverage
B) Medical Payment
C) Uninsured Motorist Coverage
D) Coverage for Damage to your Auto
E) Duties After an Accident /Loss
F) General Provisions

Question 14

MOST PAP parts contain….

Answer 14

The Insuring agreement, exclusions, and limits of liability sections.

Question 15

what are 3 types of of Potential Loss?

Answer 15

*Legal Liability (for injury/property damage to others)
*Injury to the insured or members of the insureds family
*Damage to or loss of the auto itself.

Question 16

What does Bodily Injury mean?

Answer 16

Bodily Harm, sickness of disease, including death that results from the injury

Question 17

What does Property damage mean?

Answer 17

means physical injury, destruction or loss of use of tangible property.

Question 18

What does other-than-collision coverage cover?

Answer 18

Missiles or falling objects; Fire; Theft or larceny; Explosion or earthquake; Windstorm; Hail, water, or flood;
Vandalism or malicious mischief;
Riot or civil commotion; Contact with birds or animals; and Breakage of glass.

Question 19

For Newly acquired autos how soon must the insured tell the insurer?

Answer 19

within 14 days of ownership

Question 20

For suplementary payments how much is paid out for Bail Bonds?,