Commercial Chp 2

Question 1

Proof of loss

Answer 1

A statement of facts about a loss for which the insured is making a claim

Question 2

Actual cash value (ACV)

Answer 2

Cost to replace property with new property of like kind and quality less depreciation.

Question 3

Agreed Value optional coverage

Answer 3

Optional coverage that suspends the Coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured.

Question 4

Inflation Gaurd optional coverage

Answer 4

Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.

Question 5

Replacement Cost optional coverage

Answer 5

Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of on actual cash value basis.

Question 6

Subrogation

Answer 6

The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.

Question 7

External exposure

Answer 7

A property outside the area owned or operated by the insured that increases the probability of loss to the insured’s building and its contents.