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CPCU 500, Questions Set, Chapters 1 - 8 with verified answers
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CPCU 500, Questions Set, Chapters 1 - 8 with verified answers
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CPCU 500, Questions Set, Chapters 1 - 8 withverified answers
Key quiz
. |What |is |insurable |interest
2. |When |must |insurable |interest |exist
3. |Why |require |insurable |interest
4. |What |is |the |legal |basis |of |insurable |interest
5. |What |happens |when |insurable |interest |overlap
Problems |associated |with |maintain |insurance |to |value |- |correct |answer |-1. |The |amount |of |insurance |
required |to |maintain |insurance |to |value |is |based |on |the |property's |value |at |the |time |of |loss, |but |the |
limit |is |chosen |at |the |time |of |policy |inception
2. |The |insured |often |selects |the |policy |limits |based |on |his |best |guess, |not |on |a |valid |appraisal.
3. |Even |with |an |appraisal, |the |true |insurable |value |at |the |time |of |loss |cannot |be |measured |exactly |
until |the |property |is |actually |repaired |or |replaced
4. |Values |fluctuate |over |time
Insurance |buyers |can |minimize |those |four |problems |by |- |correct |answer |-1. |Using |a |professional |
appraiser |to |determine |the |current |replacement |cost |value |and |then |reappraising |the |property |every |
few |years
2. |Adjusting |the |appraisal |annually |using |indexes |and/or |a |record |of |additions |and |deletions
3. |Reviewing |and |revising |limits |periodically
4. |Using |appropriate |coverage |options |such |as |
| Agreed |value |optional |coverage
| Inflation |guard |protection
| Peak |season |endorsement
Approaches |used |in |property |insurance |to |value |property |- |correct |answer |-1. |actual |cash |value
2. |replacement |cost
3. |agreed |value |approach
, 4. |functional |value
Valuation |of |Liability |Losses |are |typically |based |on |- |correct |answer |-1. |The |relevant |policy |provisions |
and |
2. |The |extent |of |the |bodily |injury |and/or |property |damage |to |others
The |most |the |insurer |will |pay |is |the |lesser |of |- |correct |answer |-1. |The |applicable |policy |limit
2. |The |compensable |amount |of |the |loss
Purposes |of |deductibles |- |correct |answer |-1. |To |reduce |the |insurer's |cost |by |eliminating |the |
inefficiencies |of |dollar |trading |and |eliminating |insurer |loss |settlement |and |other |administrative |
expense |for |loss |under |the |deductable.
2. |To |encourage |risk |control
3. |To |reduce |the |morale |and |moral |hazard |incentive
How |deductibles |are |handled |in |liability |insurance: |the |insurer |- |correct |answer |-1. |Defends |the |claim |
on |a |first |- |dollar |basis
2. |Pays |all |covered |losses
3. |Bills |the |insured |for |the |amount |of |losses |up |to |the |deductible.
Limited |use |of |liability |deductibles |- |correct |answer |-1. |The |insurer |wants |the |insured |to |report |every |
claim |and |not |play |adjuster |and |attorney. |Simply, |the |insurer |wants |to |control |the |claim |settlement.
2. |The |premium |credit |would |be |small
3. |Few |people |sue |for |small |amounts
4. |The |insurer |must |try |to |collect |the |deductible |amount |from |the |insured.
Other |sources |of |recovery |that |affect |amounts |payable |- |correct |answer |-1. |Noninsurance |
agreements, |warranties, |guarantees, |lease |agreements, |service |agreements |etc.
2. |Third |parties
3. |Other |insurance |in |the |same |policy
4. |Other |insurance |in |a |similar |policy
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