Property Insurance Basics

Question 1

According to standard mortgage clause who has the right to bring a suit in their own name to recover damages?

Answer 1

Mortgagee

Question 2

An insured has a liability policy that sets the amount for all claims that arise from a single accident. Which type of liability does this policy have?

Answer 2

Per Occurrence

Question 3

True or False: Insuring agreements are conditions commonly found in the insurance policy.

Answer 3

False - provides information on the policy coverage.

Question 4

What is the part of the policy that sets forth the rules of conduct and obligations of the parties?

Answer 4

Conditions

Question 5

True or False: The policy conditions define how parties to the contract must act following a loss.

Answer 5

True

Question 6

True or False: (Incurred Losses + Loss Adjusting Expense) / Earned Premium = Correct formula for computing a loss ratio.

Answer 6

True

Question 7

What type of valuation works best for property whose value does not fluctuate much?

Answer 7

Agreed Value

Question 8

A policy that insures all property at multiple locations for a single amount is referred to as what?

Answer 8

Blanket Coverage

Question 9

Rates that are established based on the similarities of the risk with other risks are known as?

Answer 9

Manual Rates

Question 10

True or False: Provisions are considered parts of the policy structure.

Answer 10

False

Question 11

A beauty parlor burns to the ground. What type of loss is this to the owner?

Answer 11

Direct

Question 12

A type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured property has been destroyed is called what?

Answer 12

Valued Policy

Question 13

True or False: The coinsurance formula will also be applied to total losses.

Answer 13

False - The face amount of the policy is paid.

Question 14

What part of an insurance policy that is mandatory that varies with each individual policy?

Answer 14

Declarations

Question 15

An insured owns a house that would cost $150,000 to rebuild if something happened, but when he tried to sell it the best offer he received was $80,000. The insurance company will only insure the house for $80,000. What method of valuation is used to insure the property?

Answer 15

Market Value

Question 16

What part of a policy clarifies terms in the policy?

Answer 16

Definitions

Question 17

What is not found in the declarations section of a policy?

Answer 17

Exclusions

Question 18

A policy that carries $100,000 for the building and $50,000 for property is what type of a policy?

Answer 18

Specific

Question 19

What is the part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called what?

Answer 19

Insuring Agreement

Question 20

True or False: The insuring agreement is a condition commonly found in the insurance policy.

Answer 20

False - This provides information on the policy’s coverages.

Question 21

Which property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property’s appreciation or depreciation?

Answer 21

Agreed Value

Question 22

Losses caused by continuous or repeated exposure to conditions resulting in injury or damages that is neither intended nor expected is the definition of what?

Answer 22

Occurrence

Question 23

If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person?

Answer 23

$50,000 - The first limit