unit4

Question 1

real property

Answer 1

permanent structures and buildings

Question 2

scheduled vs blanket property coverage

Answer 2

scheduled- specific, detailed list of covered items ex: ring

blanket-inclusive
no list
ex: all contents in your house

Question 3

policy limit a.k.a what other 3 names

listed where in the policy

Answer 3

limit of coverage
limit of liability
limit of insurance

listed in declarations section

represents the maximum amount the insurance company will pay for a loss

Question 4

open peril

Answer 4

policy insures against all risks of direct physical loss. a.k.a. all risk, special, or comprehensive coverage.

Question 5

named peril or specified peril

Answer 5

coverage lists the perils ( causes of loss) insured against

Question 6

basic perils

Answer 6

fire, lightning, internal explosion

Question 7

what is the extended coverage (EC) perils

Answer 7

nine additional covered perils
wcshavver v&mm

wind, civil commotion, smoke, hail, aircraft, vehicle, volcano, explosion, riot

vandalism and malicious mischief

Question 8

broad peril coverage

Answer 8

named peril coverage of basic perils
Big Affect

burglary, ice,glass, accidental discharge or water, freezing objects, falling objects, electrical current, collapse, tearing asunder

Question 9

broad form expands coverage for what two perils

Answer 9

vehicles- covers people other than the insured

smoke peril caused by fireplace

Question 10

broad peril exclusions

Answer 10

weight of ice, accidental continuous discharge, flooding from natural source (i.e., river), burglary if property is vacant more than 60 consecutive days

Question 11

special perils coverage

and common exclusions

Answer 11

insures against all risks of direct physical loss unless they are specifically excluded

exclusion
flooding, earthquake, intentional damage, losses due to enforcement, damage caused by power interruption, government seizure

Question 12

direct vs indirect loss

Answer 12

direct-the immediate damage caused by the peril

indirect- loss over time as a result of the direct loss

Question 13

A person’s property can be divided into what two classes

Answer 13

real property and personal property

Question 14

classes of construction

Answer 14

1-frame
2-masonry
3-noncombustible
4-masonry noncombustible
5-modified fire resistive 2hrs or less
6-fire resistive 2hrs or more

Question 15

loss valuation

Answer 15

how the insurance company determines appropriate amount of loss to be paid

Question 16

actual cash value

Answer 16

most common method for reimbursing a loss

replacement cost based on today’s cost

ACV = replacement - deprecation

Question 17

reimbursed on the basis of the item’s repair cost when?

Answer 17

the amount is less than actual cash value

Question 18

claim settlement. insured to collect lesser of what

Answer 18

1. insurable interest
2. policy limit
3. actual cash value
4. cost to repair
5. replacement cost

Question 19

stated amount (value)

Answer 19

the insured determines the value of the property. appraisal required before policy is issued

Question 20

methods of calculating value

Answer 20

1. replacement cost
2. functional replacement
3. market value (seldom used)
4. agreed amount
5. stated- insured up to this amount
6. pair and set

Question 21

class of building determined by what?

Answer 21

types of materials and the roof

Question 22

alternative dispute methods

Answer 22

appraisal-disagreement on the amount

arbitration-disagreement in other areas of the loss

Question 23

coinsurance and equation

Answer 23

meant to encourage property owner to purchase full or nearly full coverage

amount of insurance carried/amount or insurance required * loss= claim payment - deductible

Question 24

example of a bailee

Answer 24

dry cleaner

Question 25

the standard coinsurance clause provides that property must be insured for a specific percentage-usually 80% of what?

Answer 25

replacement cost

Question 26

which peril policy insures a property against all perils specifically listed in the policy

Answer 26

named peril policy

Question 27

art work is typically covered under what type of policy

Answer 27

valued basis

Question 28

jewelry, coin collection, or equipment typically covers under what type of policy

Answer 28

inland marine policy

Question 29

amount not paid by the insurer is what

Answer 29

coinsurance penalty.

coinsurance encourages policyholders to insure their property to value.

Question 30

Actual cash value vs. replacement cost

Answer 30

replacement cost- amount of money required to pay for damage to, or loss of, property

ACV- replacement cost-depreciation

Question 31

under a standard appraisal clause how many parties are involved

Answer 31

3

Question 32

what is a coinsurance policy

Answer 32

a policy provision under which the insurer and the insured share costs incurred after the deductible is met

Question 33

what type of insurance covers roof collapse from the weight of snow after a blizzard

Answer 33

broad peril coverage

Big Affect

Question 34

the deductible does what to the loss claim amount after loss has been valued

Answer 34

deductible reduces any amount after the loss has been valued

Question 35

special (open) peril coverage insures what

Answer 35

all risk of direct physical loss unless they specifically excluded

Question 36

what is the ACV

Answer 36

actual cash value is the current cost of replacing an asses that is damaged with a comparable asset minus accumulated depreciation