Exam 2 - Property Insurance Values, Coinsurance, Deductibles

Question 1

4 property Valuation methods

Answer 1

replacement cost, ACV, market value, Stated/Agree value

Question 2

Why is RC insurance hard to value?

Answer 2

estimates value at inception, inflation, hard to measure

Question 3

Solutions to property valuation

Answer 3

hire appraiser, review policy limits, home value increase, BUY Agreed Value endorsement

Question 4

Agreed Value Endorsement

Answer 4

Guarantees RC coverage, but only if a home is <30 yrs and high value

Question 5

Requirement of insurance for replacement value?

Answer 5

80%, if your home would cost $200,000 to rebuild, you should have at least $160,000 in coverage.

Question 6

Purpose of the 80% requirement is?

Answer 6

Encourage homeowners to have sufficient coverage for repairs if loss happens

Question 7

Will coinsurance require those insuring <80% of full replacement value pay penalty?

Answer 7

Yes

Question 8

Coinsurance formula

Answer 8

(did) / (should) * LOSS

Question 9

“Should” formula

Answer 9

Coinsurance * Current property RC

Question 10

Stated Value Coverage

Answer 10

In a total loss, jewelry is paid with the stated value, not ACV

Question 11

Personal Articles Floater in HO Policy

Answer 11

Provides stated value coverage and ALL coverage (Open peril)

Question 12

A classic car is covered under…

Answer 12

Auto policy for STATED VALUE

Question 12

What do you need to ensure good coverage for high value items?

Answer 12

Appraisal