Property Basics

Question 1

occurrence

Answer 1

an accident and includes continuous or repeated exposure to the same general
harmful conditions.

Question 2

pro

rata basis

Answer 2

If an insurer cancels an insurance policy before its expiration date, the refund is made

Question 3

proximate cause.

Answer 3

The primary cause of a loss is referred to as

Question 4

friendly fire

Answer 4

stays within its intended boundaries

Question 5

hostile fire

Answer 5

burns outside its intended

boundaries.

Question 6

endorsement

Answer 6

policy form that alters or adds to the provisions of a property and casualty
insurance contract.

Question 7

deductible

Answer 7

the specified amount of each loss that the insured must bear. A larger
deductible reduces the premium and the submission of small claims.

Question 8

direct loss

Answer 8

causes damage without an intervening cause

Question 9

indirect loss

Answer 9

occurs as the

consequence of a direct loss.

Question 10

named perils

Answer 10

policy specifically lists the covered perils (causes of loss)

Question 11

open perils

Answer 11

policy covers all perils except those specifically excluded.

Question 12

replacement value

Answer 12

property is the cost to replace it with property of like kind and quality,
at current pricing, without a deduction for depreciation.

Question 13

Actual cash value

Answer 13

the replacement value of property minus depreciation.

Question 14

valued policy

Answer 14

equires the insurance company pay the total scheduled limit of insurance for a
total loss.

Question 15

specific limit

Answer 15

insures a single item on a single policy for a single

limit of insurance.

Question 16

A policy insuring property for a scheduled limit

Answer 16

insures one or more items on a single policy and

each item is insured at a scheduled limit of insurance.

Question 17

A policy insuring property for a blanket limit

Answer 17

insures multiple items of property on a single policy

with one limit of insurance applying to all insured property.

Question 18

declarations page

Answer 18

describes basic information about the policy; i.e., the who, what, where,
when, and how much.

Question 19

Insuring Agreement

Answer 19

the insurer’s promise to pay the insured

Question 20

conditions

Answer 20

section states the obligations of the insurer and the insured, as well as any other
conditions of coverage.

Question 21

subrogation

Answer 21

provision states the insured’s obligation to transfer to the insurance company its
right of recovery against any party causing a loss after it accepts payment from the insurer for a
loss.

Question 22

exclusions section.

Answer 22

Perils that are NOT covered by the policy are listed

Question 23

Additional coverages

Answer 23

are automatically included in property policies without an additional
premium and include items such as debris removal, collapse, and fire department service
charges.

Question 24

Coinsurance

Answer 24

is a common property policy provision that requires the insured maintain a certain
limit of insurance coverage in order to avoid a penalty in the event of a partial loss.