Property And Casualty

Question 1

In property insurance, what is actual cash value?

Answer 1

Replacement cost at the time of loss, minus depreciation

Question 2

An insured business is damaged by a fire, and temporarily shut down for repairs. As a result, the insured suffers loss of income. What type of loss is the loss of income?

Answer 2

Indirect or consequential

Question 3

If an insured peril was the proximate cause of loss, what type of loss is it?

Answer 3

Direct

Question 4

What determines an insurer’s responsibility for payment, as stated in and insurance policy?

Answer 4

Limits of liability

Question 5

What is the process that insurers use to determine whether a policy should be issued and on what terms and conditions?

Answer 5

Underwriting

Question 6

In property insurance, when must insurable interest exist?

Answer 6

At the time of loss.

Question 7

What is the difference between cancellation and non renewal?

Answer 7

• Cancellation is the termination of an insurance policy by either party prior to expiration date.
• Non renewal is the termination of a policy at it’s expiration date by not offering a continuation of the existing policy.

Question 8

What sublimit in a liability policy puts a ceiling in the payment for all claims that arise from a single accident?

Answer 8

Per occurrence

Question 9

A policy that covers all causes of loss except for this specifically excluded is known as what type of policy?

Answer 9

Open peril (special) form

Question 10

What type of limits of liability has the limits separately stated for different coverages?

Answer 10

Split limits

Question 11

How are direct and indirect losses related?

Answer 11

Direct losses can cause indirect losses