Insurance Terms and related concepts focus

Question 1

ACV formula

Answer 1

current replacement cost-depreciation= actual cash value

Question 2

replacement cost

Answer 2

cost to replace damaged prop with like kind and quality at todays price without any deduction of depreciation

Question 3

market value

Answer 3

valuing loss based on the amount a willing buyer would pay for to a willing seller for property prior to loss

Question 4

agreed value

Answer 4

provision agreed upon by insurer and insured as to amount of insurance that represents fair valuation for property at time insurance is written and suspends any coinsurance or other contribution clauses in policy

Question 5

stated value

Answer 5

amount of insurance scheduled in property policy not subject to any coinsurance requirements in event of covered loss

Question 6

salvage value

Answer 6

estimated value an asset will realize upon sale at end of useful life

Question 7

blanket insurance

Answer 7

single property policy providing coverage for multiple classes of property at one location or for one or more classes of property at multiple locations

Question 8

specific insurance

Answer 8

property insurance policy that covers specific kind of unit of property for specific amount of insurance.

Question 9

loss valuation

Answer 9

factor determining premium charged and amount of insurance required

Question 10

limits of liability

Answer 10

insurers liability for payment as stated on insurance policy; max amount of money insurance company will pay for particular loss or for loss during period of time

Question 11

per occurrence

Answer 11

sublimit that puts delinking on payment for all claims that arise from single accident/occurrence

Question 12

per person

Answer 12

max amount avail for payment of bodily injury to single person in accident, regardless of policy limit stated in policy for bodily injury claims

Question 13

aggregate

Answer 13

max limit coverage avail under liability policy during policy year. regardless of number of claims made or number of accidents that occur.
losses paid reduce amount avail for future losses limits restored at anniversary of policy

Question 14

split

Answer 14

limits maybe stated per person, per occurrence, or per policy period basis or can be spilt between bodily injury and prop damage

Question 15

combined single

Answer 15

single dollar limit of liability applying to total of damages for bodily insurance and property combined resulting from one accident or occurrence

Question 16

proximate cause

Answer 16

act or event considered natural and reasonably foreseeable cause of damage or event that occurs and damaged property or injures a plaintiff
negligence must be proximate cause of damage if injured party is to collect for damages
aka direct liability