FUNDAMENTALS, REGULATIONS, DWELLING INS Flashcards
cubic feet in a cubic yard
27
Insurance law recognizes two types of waivers. They are.
Express” and “Implied” waivers
Consideration:
is something of value exchanged between the parties.
Aleatory contract
mutual obligations dependent on uncertain events
Contract of adhesion
A contract that is written by one party and merely accepted by the other party “as is” is known as a “contract of adhesion”
Executory
duties of insured and the insurance company, before contract be fully “executed”
Pro-rata share method
Where we divide Indemnify Insurance’s share of the loss by the total limit of both policies, multiplied by the loss, leaves Indemnify paying 60% of the loss. 60% of the $40,000 loss, is $24,000
Equal shares method
All insurers pay an equal amount until the loss is paid or one of the policy limits is exhausted. Because Insurer 3 has the lowest policy limit of $100,000, all three insurers will each pay equal shares of $100,000. This takes care of $300,000 of the $500,000 loss and exhausts the policy limit of Insurer 3. This leaves Insurers 1 & 2 left to pay $200,000. If they each pay an equal share of the $200,000, they will each pay $100,000 on the remainder of the loss. This means Insurers 1 and 2 pay a total of $200,000 each and Insurer 3 paying $100,000 for a total of $500,000.
Fiduciary
A person who is entrusted with the assets of another.
The law of agency (IMPORTANT)
someone is authorized by contract to represent another party.
Binders
A coverage binder provides temporary coverage while the insurer underwrites and issues the actual policy.
Ambiguous language
A rule that protects the insured from obscurity and inexactness that might be contained in an insurance policy or contract.
Unearned premium (UEP)
UEP must be returned on a short-rate basis.
Pro-rata share method
When the insurer pays the proportion that its policy limit bears to the limits of all policies, this is known as:
Formula: divide limit of coverage by full coverage amount then multiply the loss times the percentage.
THE FRAME THAT HOLDS THE GLASS IN A WINDOW
sash
Which section of the 1943 New York Standard Fire Policy contains the information regarding the policy term?
The Insuring Agreement.
The four main sections of a Standard Fire Policy are:
Declarations, Insuring Agreement, Conditions, and Exclusions.
Which sections of the Standard Fire policy are found on the first page of the policy?
The Declarations page and the Insuring Agreement.
The Standard Fire policy provides coverage for
fire, lightning and removal.
removal coverage Standard fire policy
Under the 1943 New York Standard Fire Policy, how many days of coverage applies to the removal coverage when the insured property is endangered by the perils insured against?
5
Which of the following is the best definition of “fire
Combustion, accompanied by visible light
A “hostile fire” is defined by the Standard Fire policy as:
One that burns beyond its intended boundaries
Under the Standard Fire Policy, how many days advance notice does the insurer have to give before cancelling a policy?
5
What is NOT a loss settlement option under the 1943 New York Standard Fire policy?
Paying the replacement cost value of the loss
Payment for a covered loss under the 1943 New York Standard Fire policy must be made within ______ days after a satisfactory proof of loss has been received by the insurer.
60
Payment for a covered loss under the 1943 New York Standard Fire policy must be made within ______ days after a satisfactory proof of loss has been received by the insurer.
Under the 1943 New York Standard Fire policy, the appraisal clause indicates that each party in a dispute must select an impartial appraiser within:
20 days
Insurance of binder
60 days or less
The DP-1 form
basic or named perils (the Basic Form);
The DP-2 form
covers the broad form perils
The DP-3 form
covers the special form perils.
Coverage Sections DP 1,2,3
NAME COVERAGE A, B, C, D, E
- Coverage A: Dwelling
- Coverage B: Other Structures
- Coverage C: Personal Property
- Coverage D: Fair Rental Value
Coverage E: Additional living expenses
Dwelling Fire” form?
DP-1
The standardized Dwelling forms consider all eruptions of a volcano within a __________ period to be a single “occurrence”.
72
only loss that would be covered by the peril of “internal explosion” under a DP-1 form is
the explosion of the furnace
The DP-3 only provides damage to covered property caused by the burglars.
yes
It provides open peril coverage on the structure and named peril coverage on the personal property
DP-3 special form
“open peril” coverage for dwellings and other structures?
The DP-3 special form.
unendorsed DP-3 dwelling policy
theft no. damage by theft yes
“Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging” broad form peril
structural wall of the covered dwelling or other structure
The DP-2 form, automatically includes
EC perils, V&MM coverage, and the broad form perils.
DP 1,2,3 other coverages all included except:
DP1 tress collapse, glass, ordinance
Payments to A, B, C all ACV except:
A, B - DP2 - Dp3 RCV
Under a standardized Dwelling form, a loss by a covered peril for Improvements, Alterations and Additions is covered for up to:
10% of the Coverage C limit.
Excluded peril under all the dwelling forms
Flood
A standardized Homeowners policy is best described as:
A package policy that provides both property and liability insurance.
