PROPERTY AND CASUALTY CHAPTER 3 EXAM PREP QUESTIONS AND ANSWERS 2024

Property Insurance Covers my stuff (buildings and personal belongings). First party losses Property insurance pays the insured for covered losses to the property Third party losses occur when a person claims to have been injured by an insured, or when a person's property has been damaged by the insured's actions Casualty Insurance - Casualty = Liability - Always pay the other guy, never me - Third party losses: --First party: me (insured) --Second party: my insurer --Third party: other guy Declerations Section Information relative to who, what, when, and where is found on the first page. Insuring agreements the "heart" of the policy, state in general what is to be covered or, in other words, the losses for which the insured will be indemnified. This section also describes the type of property covered and the perils against which it is insured. Conditions section states the policy provisions, rules of conduct, duties, and obligations required for coverage Endorsements add, modify, or take away coverage Exclusions take coverage away from the insuring agreement by describing property, perils, hazards, or losses arising from specific causes which are not covered by the policy definitions section Clarifies the meanings of certain terms used in the policy. Additional/Supplementary Coverage -Payment for additional expenses not normally covered -May have separate limit of insurance policy period Duration of the policy Policy Territory Defines the location where coverage will be provided. unearned premiums The portion of written premiums that corresponds to coverage that has not yet been provided. Must be returned to the insured upon cancellation. Prorated Basis The insured will receive a portion of the premium back, depending on when the policy is canceled short-rated basis When an insured cancels a policy before the expiration date, the insurer is entitled to retain a larger percentage of the unearned premium flat cancellation The cancellation of a policy on the date the policy becomes effective. nonrenewal process when insurer may choose to not renew a policy for another term or the insured chooses to end their coverage and not pay the premium Deductible Amount you must pay before you begin receiving any benefits from your insurance company indemnity restore to the insured's original pre-loss condition, no better, no worse noncurrency result of two or more policies covering same property but providing different or non-identical coverage Primary Insurance attaches immediately upon the occurrence or loss Excess coveraged pays whatever is not paid by the primary coverage up to the amount of the loss or excess limit. pro rata each company will pay part of the loss according to the percentage of the total amount of insurance the policy provides contribution by equal shares each insurer shares equally in the loss until the share paid by each insurer equals the lowest limit of liability under any policy, or until the full amount of the loss is paid Duties after loss PROMPT notice of claim to the insurer or agent PROTECT the property from further damage COMPLETE detailed proof of loss (official inventory of damages) MAKE the property available for inspection by the company SUBMIT to examination under oath if required COOPERATE with the insurer as required during the claim investigation procedure. Assignment Specifies that the insured may not transfer rights of ownership without the insurer's prior written consent. Abandonment condition states that the insured cannot abandon damaged property to the insurer and demand to be reimbursed for its full value. Salvage Condition states that the insurance company can take possession of damaged property after payment of loss Liberalization Condition States that if the insurer broadens coverage under a policy form or endorsement without requiring an additional premium, then all existing similar policies or endorsements will be construed to contain the broadened coverage. subrogation Insurer has the right to sue an at-fault party for damages the insurer had to pay to the insured. Common when at-fault party does not have insurance. Insurable Interest something of value that, if lost, would cause you financial harm