Property and Casualty Insurance EXAM || All Questions Answered Correctly.
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Course
Property and Casualty Insurance
Institution
Property And Casualty Insurance
Specific insurance correct answers This type of insurance designates a particular item to be insured
Blanket insurance correct answers This type of insurance covers more than one item of property at a single location or one more items of property at multiple locations.
Speculative correct ans...
Property and Casualty Insurance EXAM || All Questions
Answered Correctly.
Specific insurance correct answers This type of insurance designates a particular item to be
insured
Blanket insurance correct answers This type of insurance covers more than one item of property
at a single location or one more items of property at multiple locations.
Speculative correct answers possibility of both gain and loss. Not insurable.
Pure correct answers only the possibility of loss. Insurable.
What are the 5 methods of managing or handling risk? correct answers avoid, control, retain, and
transfer risk.
Hazard correct answers A condition or situation which increases the chance for loss
Physical Hazards correct answers a hazard that arises from the condition, occupancy, or use of
the property itself.
ex: skateboard left on the steps
Moral Hazards correct answers when an individual through carelessness or by irresponsible
actions can increase the possibly for a loss.
ex: person who drives carelessly just because they know they are insured.
Morale Hazards correct answers when a person might create a loss situation on purpose just to
collect from the insurance company.
ex: Prearranged, faked theft of someone's old vehicle so they can get an insurance payout to buy
a new vehicle.
Replacement Cost correct answers The amount of money it would take to replace a damaged or
destroyed item with one of like kind and quality AT THE TIME OF LOSS. No deduction for
depreciation.
Actual Cash Value (ACV) correct answers Replacement Cost, minus depreciation.
Pair and Set Clause correct answers Loss to one item of a pair or set does not constitute loss to
the entire pair or set.
Appraisal correct answers A method of resolving disputes between insurers and insureds over the
amount owed on a covered loss.
,-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
Subrogation correct answers An insurer's right to recover the amount of its loss payment from
the third party who is legally responsible for the loss.
Arbitration correct answers this condition is similar to the Appraisal Condition but it is not
limited to disputes over the value of the loss. It may also be used to resolve other areas of
disagreement between the insured and the insurance company.
What does WC SHAVVER stand for? correct answers Windstorm, Civil commotion, Smoke,
Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot
What does BIG AFFECT stand for? correct answers Burglar damage, Ice & snow weight, Glass
breakage, Accidental discharge, Falling objects, Freezing of pipes, Electrical damage, Collapse,
Tearing apart.
Insolvency correct answers A financial state that occurs if liabilities are greater than assets.
Law of Agency correct answers Knowledge of the Agents is Knowledge of the Principal
(Insurance Company)
Principal correct answers Insurance Company
What is the ISO? correct answers Insurance Services Office which is an organization established
for the benefit of its member insurance companies. This organization gathers statistics, provides
loss costs, drafts policy forms and coverage provisions and conducts inspections for rate making
purposes.
Coinsurance Clause correct answers Requires the insured to carry a minimum specified amount
(generally 80%) of the replacement cost value of the insured property in order for partial losses
to be paid in full.
Estoppel correct answers A legal bar to changing or denying a fact because of one's own
previous actions or words to the contrary.
ex: If an insurance company representative intentionally or unintentionally gives the impression
that a specific fact exists when it does not and a client relies on that impression and is damaged a
result.
Binder correct answers A temporary contract of insurance, oral or written, offered by an insurer
pending issuance of the policy. Usually written for a period of 30-60 days and remains in force
for that period or until a permanent policy is either issued or denied by the insurer.
, Warranty correct answers A provision in a policy that pledges that a condition does exist or will
exist at some time in the future.
Deposit Premium correct answers Tentative charge made at the beginning of certain policies and
reinsurance agreements to be adjusted when the actual earned charge has been later determined.
Audit correct answers Verification of books or accounts to determine their accuracy.
Occurrence correct answers An accident, including continuous or repeated exposure to the same
harmful conditions, which result in bodily injury or property damage.
Special Damages correct answers type of compensatory damages that reimburse the injured part
for direct and specific expenses involved in the loss. Such as medical expenses, funeral expenses
and loss wages.
General Damages correct answers type of compensatory damages that reimburse the injured
party for such things as pain and suffering and disfigurement.
Punitive Damages correct answers type of damages intended to punish the defendant and make
an example out of her to discourage others from behaving the same way.
Proximate Cause correct answers An act, through an uniterrupted chain of events, that can be
determined to be the immediate or actual cause of a loss.
4 elements of negligence correct answers 1. The existence of a DUTY to act in a certain way
2. A FAILURE to live up to this duty
3. An actual INJURY must occur
4. The failure in duty must be the PROXIMATE CAUSE of the injury.
Negligence correct answers An unreasonable or prudent act, A thoughtless or careless act or one
committed out of ignorance. It may be a non-act or omission, but it is NEVER an intentional act.
Casualty Insurance correct answers Refers to coverage designed to address the liability of
individuals and organizations resulting from negligent acts in their personal, business, or
professional roles.
Overinsurance correct answers Exists if a property or an insurable interest in property is insured
by one or more insurance contracts against the same hazard in excess of the fair value of the
property or of such interest.
Specific Insurance correct answers Coverage on ONE type of property (real or personal) in ONE
location.
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