PROPERTY AND CASUALTY EXAM WITH CORRECT ANSWERS
Bailee ANSWER An individual or organization who has taken
into its care, custody, and/or control the property of another for
servicing, repair, or storage
Hazard ANSWER Something that increases the chance or
likelihood of a loss occuring. ...
Bailee ANSWER An individual or organization who has taken
into its care, custody, and/or control the property of another for
servicing, repair, or storage
Hazard ANSWER Something that increases the chance or
likelihood of a loss occuring.
(physical or moral or morale)
Market Value ANSWER A property policy provision that
changes the valuation method otherwise applicable (ACV or
RV) to a valuation method that allows reimbursement to the
insured, according to the price a willing buyer would pay for the
property purches from a willing seller
Insurable Interest
(limit of liability) ANSWER Specifies that the insurer will not be
responsible for an amount which is greater than the financial
interest of an insured person or more that the limit of liability
stated on the Declarations Page
Actual Cash Value
(ACV) ANSWER The policy pays for the cost to repair or
replace the damaged property at the time of loss, less
depreciation
Deductible ANSWER The amount of money which the insured
party must pay before the insurance company's own coverage
plan begins.
,Vacancy ANSWER A property that has neither occupants nor
personal property is described as vacant.
Right of Salvage ANSWER The right of the insurer to take
possession of damaged property after the loss to the property
has been paid. The salvage belongs to the insurer.
Inherent Vice ANSWER A condition or defect that exists within
property itself that causes the property to spoil, break, become
defective, or destroy itself. Insurance policies typically exclude
inherent vice. Example: The quality of materials used in a
painting allows the painting to fade or lose luster with time.
Aircraft Hull Insurance ANSWER Provides coverage on an
open peril basis for physical loss or damage to the insured
aircraft, on ground, or in flight.
In flight is from the moment it moves forward for takeoff until it
completes its landing run.
Motor Carrier Act of 1980 ANSWER Department of
Transportaion (DOT) requires:
-Motor carrier must carry an insurance policy of certain
minimum limits, or
-Post a surety bond representing certain financial stability
criteria when transporting passengers or cargo.
Contribution by Equal Shares ANSWER Under this concept,
when 2 or more insurers' policies cover at the same level
(Primary or Excess), each insurer contributes an equal amount
to the loss settlement until the loss is paid, or until each insurer
has exhausted its limits of insurance, whichever comes first.
Example: If there are 3 insurers participating, each would pay
33 1/3 percent of the loss; if 4 insurers participating, each
, would pay 25 percent of the loss; or if 5 insurers participating,
each would pay 20 percent of the loss.
Certified Act of Terrorism ANSWER Any act, certified jointly as
terrorism by the Secretary of Treasury, State and Attorney
General which is at least one of the following:
-Violent/dangerous to human life/property/infrastructure.
-Damaging within the U.S. or on U.S. air carrier/vessel/mission.
-Committed by persons on behalf of any foreign person/interest
to coerce/influence the U.S. civilian/government policy.
Nationwide Marine Definition ANSWER Wet insurance and Dry
insurance are terms that the Nationwide Marine Definition uses
in specifying risks that may be written under marine insurance.
The National Association of Insurance Commissioners adopted
the Nationwide Marine Definition that defines 6 broad classes
of property that may be insured under marine contract
The classes are:
1. Imports
2. Exports
3. Domestic Shipments
4. Instrumentalities of Transportation or Communication (i.e.
bridges, tunnels, antenna towers)
5. Personal Property Floater Risks (as discussed in Chapters 3
and 9)
6. Commercial Property Floater Risks
Homeowners (liability) Endorsements (for additional premium)
ANSWER -Business Pursuits - Extends liability coverage for
involvement in business not owned or controlled.
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