Unit 2: Property Insurance | Chapter 2-1: Introduction to Property Insurance Flashcards
An insurer agrees to indemnify the insured against loss caused by fire, lightning, windstorm, and other listed perils. This policy would be called _________ policy
a) a named peril
b) an all risk
c) a special risk
d) an all perils
An insurer agrees to indemnify the insured against loss caused by fire, lightning, windstorm, and other listed perils. This policy would be called _________ policy
a named peril
Which of the following would NOT be a function of a Coverage Extension?
a) An extension of a specific exclusion.
b) An extension of coverage to a newly acquired premises.
c) An override of a general exclusion.
d) An extension of coverage to newly acquired property.
Which of the following would NOT be a function of a Coverage Extension?
An extension of a specific exclusion.
An extension of a specific exclusion would not be a function of a Coverage Extension. A Coverage Extension does extend coverage to newly acquired property or a premises and is used as an override of a general exclusion.
The additional cost of staying at the hotel is:
a) an indirect loss
b) a policy condition
c) a direct loss
d) only covered after a $100 deductible.
The additional cost of staying at the hotel is:
an indirect loss
The cost of the hotel would be an indirect loss. The damage to the home is classified as the “direct loss.” The indirect loss (the cost of the hotel stay in this instance) is in consequence of the direct loss.
Jack owns a single-family dwelling he rents out. A fire damaged the house, which will be uninhabitable during the period of restoration. Which of the following would be considered an indirect loss for Jack?
a) The additional costs his renter incurs to reside elsewhere during the period of restoration.
b) The cost to rebuild the home
c) The loss of rental income Jack incurs during the period of restoration.
d) The cost of replacement appliances Jack provides as part of the rental agreement.
Jack owns a single-family dwelling he rents out. A fire damaged the house, which will be uninhabitable during the period of restoration. Which of the following would be considered an indirect loss for Jack?
The loss of rental income Jack incurs during the period of restoration.
The loss of rental income is considered an indirect loss (in consequence of the direct loss). The cost to rebuild the home or the replacement appliances are considered direct losses. The cost the renter has to pay to live somewhere else during restoration is the renter’s problem, not the insured’s.
Additional coverages in property contracts:
a) cost additional premium, but do not provide additional limits
b) are often required as an underwriting recommendation
c) do not cost an additional premium, but provide additional coverage
d) are based on compliance with the coinsurance clause.
Additional coverages in property contracts:
do not cost an additional premium, but provide additional coverage
Additional Coverages are included and not subject to an additional premium requirement.
