Chapter 7 Flashcards
Explain names perils form
-Generally provide insurance for fire and additional peril named on the policy form
-The property insured can be buildings only, contents only, or both buildings and contents together
Explain broad form policy
Provide insurance on all risk basis, subject policy conditions, limitations, and exclusions
What are the general categories of exclusions on the broad form?
-Generally not insurable-example war
-Loss is not accidental or extraneous
-Losses wholly or partially under the control of the insured
-Wear and tear loss
-Losses excluded because of the particular coverage-example cam be covered under a different policy
What are the property exclusions under commercial broad form?
-Money and other valuable property
-Automobiles
-Aircraft (including drones and other types of flying devices)
-Watercraft
-Furs or jewellery
-Property that’s vacant for more than specified number of days (example 30 days)
What perils are excluded under the commercial broad form?
Flood and earthquake
Sewer back up and Overland water
Bylaws
Inventory shortage
Pollution
Environmental hazards
Terrorism
Equipment breakdown
Cyber risk
Under commercial broad form, what extensions are included?
-Contents at temporary locations
-Newly acquired buildings and/or there contents
-Articles in transit
-Samples from sales representatives
Define inherent vice
Quality within an object that makes it tend to destroy itself
Example rusting of metal
Define actual cash value
The fair market value of property taking to count a factors that might augment or reduce the value of the property question
What are the three ways actual cash value is calculated?
Cost to repair or replace less depreciation
Fair market value
Consideration of all relevant evidence of the value of the damaged property
Define replacement cost
The current market value of the cost to replace the lost or damage insured property
What is the coinsurance equation?
Actual amount of insurance divided by required amount of insurance, multiplied by amount of loss, equals amount the insurer will pay
What are the two main types of business interruption coverage?
Income replacement insurance
Extra expense insurance
Explain income replacement insurance
Subdivided into earnings or profits approach-these forms are designed to reimburse insurance for loss of income while the insured is unable to operate the business.
Explain extra expense insurance
Designed to reimburse insured for additional expenses to resume operations in the shortest possible time without regard to reducing the overall income loss from the interruption