Study 9

Question 1

inherent vice

Answer 1

A quality within an object that makes it tend to destroy itself.

Question 2

replacement cost value (RCV)

Answer 2

The current market value of the cost to replace the lost or damaged insured property.

Question 3

coinsurance clause

Answer 3

A distinct section or provision in an insurance policy that requires an insured (property owner) to carry separate insurance for a specified amount stated in the policy to be eligible for full coverage. If there is insufficient coverage, the insured must pay part of the loss.

Question 4

statement of values

Answer 4

The information required when a single rate is to cover more than one item or building. To determine a correct average, the rating bureau requires the policyholder to give the value of each separate risk and its contents.