CPCU 551 - Chapter 8 Questions and Answers
To resolve the disputes between fire underwriters and marine underwriters, insurance regulators in 1933 introduced the Nationwide Marine Definition. It restricted marine insurers to covering the loss exposures included in the Definition. Today, the Defini...
CPCU 551 - Chapter 8 Questions and
Answers
To resolve the disputes between fire underwriters and marine underwriters, insurance
regulators in 1933 introduced the Nationwide Marine Definition. It restricted marine
insurers to covering the loss exposures included in the Definition. Today, the Definition
continues to be used for classification purposes and remains useful in determining the
types of insurance that are exempt from filing requirements. - answer Explain the
historical and modern purpose of the Nationwide Marine Definition.
The nonfiled classes allow more flexibility because the form can contain whatever
provisions the insured and the insurer agree on. In addition, the form does not have to
be filed for approval with the state insurance department. - answer Explain why
nonfiled classes of inland marine insurance offer more underwriting flexibility than filed
classes.
Generally, a filed class of business is one that has a large number of insureds with
similar loss exposures. Filed classes of inland marine insurance are those for which
form or rates of both must be filed with the insurance regulatory officials of a particular
state in order for an insurer to issue policies for that class of business in that state. -
answer Explain what distinguishes filed classes of inland marine insurance from
nonfiled classes.
A. Electronic data processing equipment policies are sometimes extended to cover time
element losses resulting from damage to or destruction of the insured computer system
or its data.
B. Inland marine builders' risk polices are frequently extended to cover time element
losses resulting from damage to or destruction of the insured building during the course
of construction. - answer Explain how some inland marine policies cover loss of
business income and extra expenses in these circumstances:
A. Electronic data processing equipment policies
B. Inland marine builders' risk polices
The open perils coverage provided in inland marine polices is often subject to fewer
exclusions. - answer Identify an advantage to open perils coverage in inland marine
policies compared to the same coverage offered in standard commercial property forms.
A. Invoice value is likely to be used in policies covering property in transit between
buyers and sellers.
B. Agreed value approach is likely to be used when insuring fine arts or other property
that is difficult to value objectively. - answer Under what circumstances is an inland
marine underwriter likely to use each of the following valuation provisions?
A. Invoice Value
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