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Property and Casualty License in Arkansas Questions and Answers 100% Solved
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Property and Casualty License in Arkansas
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Property and Casualty License inArkansas
What is Insurance? - answer Transfers the risk of loss from individual to insurance co.
What is Risk? - answer Chance of loss occurring
What are 3 types of Hazzard’s? - answer Physical, Moral, Morale
What is a Peril? - answer Causes of loss insured against
What does Indemnify mean? - answer Right for Reimbursement but only to the extent of
the loss. Cannot gain from loss.
Define Subrogation - answer Right to seek damages from 3rd party so that the insured
cannot collect 2xs.
What is an accident? - answer Sudden unplanned event resulting in a loss
What is an occurrence? - answer Repeated action or event that results in a loss
What is a direct loss? - answer Things physically loss. For ex. If a fire burned down a
house that would be a direct loss of the fire.
What is an indirect loss? - answer A loss resulting from the direct loss. For Ex. If a fire
burned down a house and you had to rent a hotel room the added expense of the hotel
would be an indirect loss of the fire.
What is a vacancy? - answer When someone has been absent and no property is
stored on the premises for 60 days consecutively.
What is unoccupied? - answerWhen someone has been absent from the premises for
more than 60 consecutive days but still has property stored there.
What type of insurance provides coverage for multiple classes of property at one
location? - answerBlanket Insurance
Explain the actual cash value method of valuation - answerCurrent replacement cost-
depreciation = ACV
,When absolute liability is involved, does the injured party have to prove negligence? -
answerNo
If a product is unsafe, what kind of liability applies to the manufacturer. - answerStrict
liability
What is proximate cause? - answerA reasonable cause or reason why a loss occurred.
What type of policies may include insurance to value provision? - answerCoinsurance
What is a certificate of insurance? - answerWritten evidence a policy has been written
and is in effect.
What information is included in a policy's declarations? - answer(who, What, Where,
when, how much, why) Name, Address, Location described, Amt of coverage and
premiums and any supplemental representations.
What are the four elements of an insurance contract? - answer1. Agreement (offer and
acceptance)
2. Consideration (the exchange of money for coverage)
3. competent parties
4. Legal purpose
What does Representation mean? - answerSomething that is believed to be true to the
best of ones knowledge but is not guaranteed to be true. Will not void the policy.
What does Warranty mean? - answerSomething that is an absolute truth. If found out to
be false it could void the policy.
What are additional or supplementary payments? - answerA provision that provides add
coverage for a specific loss expense at no additional premium.
What is included in the conditions section of a policy? - answerThe general rules that
the insurer & insured agree to follow under the terms of the policy.
What is the term used to describe printed addendum's to a contract that are used to
change the policy's original terms, conditions, or coverage's? - answerEndorsements
What does the exclusions section of a policy specify? - answerPerils and persons not
insured against
When is an appraisal needed? - answerWhen there is a disagreement between the
insured and insurer on the value of the property.
How is an appraisal requested? - answerEither the insurer or the insured can request
an appraisal by written demand.
, What is proof of loss? - answerA sworn statement made that there was a loss. Must be
done before the policy will pay.
What is cancellation. - answerWhen a policy is cancelled prior to the end of the
coverage period. A written 10 day notice is required before an insurer can cancel an
insureds insurance.
What is nonrenewal - answerWhen an insurer or the insured decides not to continue
coverage at the end of the current coverage period. The policy remains in effect until the
end of that period but will not continue after that.
What is the purpose of the Fair Credit Reporting Act? - answerEstablishes procedures
to make sure information is kept confidential, accurate, relevant, and is used properly.
What are the eligibility requirements for a dwelling property policy? - answerDwelling,
Contents only, or both.
What are extended covered perils? - answerW.C. Shaver.
1. Wind
2. Civil Commotion
3. Smoke
4. Hail
5. Aircraft
6. Vehicle/Volcano
7. Explosion
8. Riot
What Perils are insured against in a special form policy? - answerEverything except
what is excluded.
What does fair rental value include? - answerCoverage A, B,C pays fair rental value
when a property becomes damaged from a peril insured against. It will pay the lost
income minus deductions for expenses not inured.
What is the purpose of removal, and how long does coverage last in a dwelling policy. -
answerRemoval pays for property to be removed from the insured premises when
threatened by an insured against peril. Basic covers for 5 days and Broad/Special
covers for 30 days.
When does worldwide personal property coverage apply? - answerMay elect up to 10%
of personal property limit to pay for losses to personal property away from the premises
while anywhere in the world.
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