Intro To Property Insurance

Question 0

What does the insuring agreement consist of?

Answer 0

1. ) property covered
2. ) describes key policy coverages in detail and may also specify that certain additional coverages may apply
3. )perils insured against
4. ) direct loss vs consequential loss

Question 1

What does the declarations section consist of?

Answer 1

1. ) stating who is insured
2. ) describes property to be insured
3. ) policy period
4. ) policy limit (limit of coverage, limit of liability or limit of insurance)

Question 2

What is direct loss?

Answer 2

Financial loss resulting directly for a loss to property

Question 3

What is a consequential loss?

Answer 3

Indirect loss; comes as a result of the original loss

Question 4

What does the exclusions/limitations portion of an insurance contract include?

Answer 4

In a named peril policy, and peril that is not specifically listed as covered is automatically excluded; however they also lost certain exclusions separately to explain/emphasize exclusion

Question 5

What are the five broad categories of most common found exclusions?

Answer 5

1. ) non accidental loss
2. ) losses controllable by the insured
3. ) extra-hazardous period
4. ) catastrophic losses
5. ) property covered in other policies

Question 6

What is concurrent causation?

Answer 6

Refers to a situation where 2+ perils act concurrently to cause a loss. This created a problem when one peril was covered and the other was not. Policy wording has become more specific to avoid this.

Question 7

What does the conditions portion of an insurance contract cover?

Answer 7

1. ) duties following loss
2. ) valuation
3. ) coinsurance
4. ) pair or set
5. ) deductible
6. ) salvage and abandonment
7. ) subrogation
8. ) appraisal and arbitration
9. ) other insurance
10. ) Pro Rata
11. ) liberalization
12. ) assignment
13. ) no benefit to bailee
14. ) mortgage condition
15. ) policy period and policy territory
16. ) vacancy and Unoccupancy
17. )reporting forms

Question 8

What are the insureds responsibilities after a loss?

Answer 8

1. Giving prompt notice of claim to company/agent
2. Protecting property from further damage
3. Completing detailed proof of loss
4. Making property available for inspection by company
5. Submitting to examination under oath if required
6. Assisting the insurer as required during claim investment procedure

Question 9

What is valuation?

Answer 9

Determining adequate identification:

Insured can collect the lesser of: insurable interest, policy limits, actual cash value, cost to repair, replacement cost

Question 10

What is coinsurance?

Answer 10

Encourages policy holders to insure property to value. As long as the insured cares the amount of insurance required by the coinsurance condition at the time of loss, the insurer will indemnify losses up to the limit of the policy

Question 11

What is a pair or set condition?

Answer 11

A loss settlement condition that states that if a part of pair or set is lost or damaged, the loss will be valued at fair proportion to the total value of the set. The insurer is not obligated to pay for loss of the whole set when only one part has been damaged

Question 12

What is a deductible?

Answer 12

Insured pays the first part of every loss up to the deductible

Question 13

What is a salvage condition?

Answer 13

The insurance implant can take possession of the damaged property after payment of a loss

Question 14

What is the abandonment condition?

Answer 14

Insured may not abandon property to the company and ask to be reimbursed at full value

Question 15

What is subrogation?

Answer 15

An insured suffers a no fault loss but the party at fault does not have insurance; the insurance company can indemnify the insured and sue the other party

Question 16

What is an appraisal condition?

Answer 16

Provides that either party (insured and insurance company) can demand an appraisal of a loss

Question 17

What is an arbitration condition?

Answer 17

Similar to an appraisal condition but may also be used to resolve other areas of dispute

Question 18

What is an other insurance condition?

Answer 18

Sets out how other insurance the insured may have on the same property affects reimbursement under the policy in question when a loss occurs

Question 19

What is the Pro Rata condition?

Answer 19

The most common method for handling other insurance is to agree to pay only a portion of any loss that is also covered by other insurance.

Question 20

What is nonconcurrency?

Answer 20

An insured may have two or more policies on the same property that do not provide coverage to the same extent- this can result in coverage gaps or disputed payment

Question 21

What is liberalization?

Answer 21

Provides that if the insurer broadens coverage under a policy form or endorsement without requiring an additional premium, than all existing similar policies or endorsements will be construed to contain the broadened coverage.

Question 22

What is assignment?

Answer 22

Specifies that a policy may not be transferred to anyone else without consent from the insurer unless the insured dies.

Question 23

What is No Benefit to Bailee?

Answer 23

A bailee is a person or organization that has temporary possession of someone else’s personal property and is not covered under the insureds policy

Question 24

What is the mortgage condition?

Answer 24

Specifies the rights and duties of the mortgage or loss payer under the policy

Question 25

What is the policy period and policy territory condition?

Answer 25

Provisions that state that a loss will not be covered unless it occurs in the policy territory while the policy is in effect

Question 26

What is the vacancy and Unoccupancy condition?

Answer 26

Property insurance policies may exclude or limit coverage for losses when a property is vacant or unoccupied

Question 27

What is a reporting form?

Answer 27

Insured pays a deposit premium and periodically submit reports to the insurer showing the states if those factors in which the premium is based.

Question 28

Why is a premium audit?

Answer 28

The insurance company may conduct a premium audit of the insureds records before calculating a final premium or final adjustment