valuation, deductibles, and coinsurance

Question 1

valuation

Answer 1

figuring out how much an item is worth

Question 2

methods of valuation

Answer 2

actual cash value, replacement cost, stated amount, agreed value

Question 3

Actual cash value

Answer 3

a valuation method that takes into account depreciation

Question 4

acv formula

Answer 4

replacement cost - depreciation

Question 5

replacement cost

Answer 5

method of valuation based on the cost of replacing an item at current market prices

Question 6

depreciation

Answer 6

items estimated value due to wear, tear, and age

Question 7

annual depreciation

Answer 7

replacement cost divided by items useful life

Question 8

accumulated depreciation

Answer 8

the items annual depreciation multiplied by its age

Question 9

Broad evidence rule

Answer 9

takes into consideration any evidence available to determine value

Question 10

obsolesce

Answer 10

when something is no longer used or wanted despite still being able to work most likely cuz of new and improved alternatives

Question 11

valued policy valuation method

Answer 11

assigns an appraised value determined at begging of insurance

Question 12

States amount

Answer 12

property value is stated by the insurer when applying for insurance

Question 13

partial loss

Answer 13

partly damaged and falls within policy limit coverage

Question 14

total loss

Answer 14

when property Is damaged so badly its not worth repairing

Question 15

2 types of total losses

Answer 15

actual total loss and constructive total loss

Question 17

actual total loss

Answer 17

when property is completely destroyed and unrepairable

Question 18

constructive total loss

Answer 18

when the cost of repairing damaged property is higher than the property’s current value
insurer could keep damaged value or if u want to keep it they will subtract what u could possibly get from selling parts

Question 19

deductible

Answer 19

predetermined amount that the policyholder must pay in order to activate the financial benefits of an insurance policy

Question 20

three types of deductibles

Answer 20

fixed, percentage, and franchise

Question 21

fixed deductible

Answer 21

a specific set amount

Question 22

Percentage deductible

Answer 22

insured pays a percentage of the insureds risked value

Question 23

coinsurance

Answer 23

encourages insured to purchase 80% or more of a property value

Question 24

franchise deductible

Answer 24

if losses are less than deducible insured pays it if its more the insurer pays all of it

Question 25

underinsured

Answer 25

when insured property is insured for lass than 80% of value

Question 26

coinsurance penalty

Answer 26

if property is underinsured the insurer will only cover partial percentage loss. insurer determines if they will penalize or not

Question 27

coinsurance penalty formula

Answer 27

“had” coverage/“should” coverage x loss