Ins Exam A - P&C Overview

Question 0

Policy Structure - DICEE

Answer 0

Policy Structure:
> Declarations: 5 Ps
Person/Property, Policy #, Policy Term, Policy Limit, Premium
> Insuring Agreemnt: describes coverage provided & perils covered
> Conditions: obligations of each party to the contract stated ground rules
> Exclusions
> Endorsements (Riders)

Question 1

Property Insurance

Answer 1

Refers to insuring damage to the property people own and have acquired

Question 2

Vacancy vs Unoccupancy

Answer 2

No People/ Activity 
No Property/ Contents 
----------------------------------------------------------------
No People/ Activity 
Yes Property/ Contents 
	- maybe on vacation, will be back

Question 3

Duties After Loss

PPS PPC

Answer 3

> Prompt Notification 
> Protect Damage Property 
> Separate damaged from undamaged 
> Provide written proof of loss 
> Provide inventory of damaged property 
> Cooperate w/ insurer 

• Do not hire an appraiser, Insurance company will do it

Question 4

Subrogation

Answer 4

According to the terms of P&C contracts insureds are required to assign their rights to recovery after loss to the Ins Co

• Insurer has legal right to recover the amount paid for the loss from at fault party & take any further legal action necessary
• Deductible is returned to Insured when or if the loss payment is recovered

Question 5

Appraisal

Answer 5

If the ACV or amount of loss is not agreed to by the Insured & Insurer

• each select a competent appraiser - each pays for disinterested appraiser
• Appraiser select an umpire - share costs
• Appraisers & umpire determine resolution

> Umpire = Appraisal Method

Question 6

Other Insurance

p31

Answer 6

Primary = First
Excess = pay after First 

PRO-RATA LIABILITY = amount paid for a loss is proportionate to the total loss as amount of coverage bears to the total coverage

Question 7

NonConcurrency / NonConcurrent

p32

Answer 7

• 2 policies w/o identical coverage
• loss % is shared, but one will pay for loss as a covered peril; other will not due to an exclusion
• can result in coverage gaps or disputes

Question 8

Partial vs Total Loss

Answer 8

> Total = is one where the damage is so extensive that it would cost more to repair or replace than the normal market value of the undamaged home
Partial = any loss that is not determined to be a total loss

Question 9

Co-Insurance

p33

Answer 9

Ins Carried / Ins Required x Loss - Deductible = Claim Payment

Purpose - encourage Insured to carry as close to full value of property as possible

Insured to Value = claims are paid in full up to policy limits
- Underinsured = partial claims are subject to penalty
Standard Co-Ins Rule = 80% of Replacement Cost