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CAIB 2 Full Study Guide / Comprehension Practice Questions / Study Guide Newest Actual Questions & Answers (A+ Guide Solution) Terms in this set (371) _____________Quiz____________? The three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement are: - Answer✓✓ 1) the value of the lost or damaged property (ACV) 2) the interest of the insured in the property (ex. financial interest, home, mortgage) 3) the amount of insurance specified on the "Declarations Page" for the loss or damaged property (least amount|) _____________Quiz____________? Identify the four categories that buildings may fall into: - Answer✓✓ Residential (ex. home) Non-mercantile (ex. hospitals, nursing homes
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Terms in this set (371) _____________Quiz____________? The three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement are: -
Residential (ex. home) Non-mercantile (ex. hospitals, nursing homes)
Mercantile (ex. drycleaners, bakeries) Manufacturing/Industrial (ex. autobody shops) _____________Quiz____________? Three classes of property commercially insured are: -
building, stock, equipment _____________Quiz____________? Identify the two bases that coverage can be provided on: -
Scheduled All property Property of every description _____________Quiz____________? Identify and give an example of each of the five types of property contained in the definition of Building found in the IBC Commercial Property Broad Form -
Actual Cash Value (ACV) Replacement Value Book Value _____________Quiz____________? Which way is NOT an appropriate means of valuing property for insurance purposes? -
Book Value _____________Quiz____________? Identify the one word that can summarize the difference between Actual Cash Value and Replacement Cost: -
depreciation
_____________Quiz____________? A licensed real estate appraiser will generally be consulted to provide an expert opinion when establishing Market Value/Direct Sales Approach. Identify the three items he or she may consider: -
Property before the loss Property after the loss the land _____________Quiz____________? When is the Income Approach method most commonly employed? -
This method of evaluating a loss is commonly used with income producing properties _____________Quiz____________? The Broad Evidence ties together the previous four methods when establishing actual cash value, and the courts will take into account many different factors. Identify any three such factors: -
Market Value - assessed valuation Rental Value - use of building Location - resale success, replacement value less depreciation {any of these}
_____________Quiz____________? Insurers can reduce their amount of exposure on large risks by the use of Reinsurance or Subscription polies. Outline three rules, or guidelines that apply when reinsurance is used to provide insurance coverages: -
to ensure the costs of underwriting the policy can be recouped, at least in part. _____________Quiz____________? Identify the three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement: -
to eliminate minor maintenance types of claims _____________Quiz____________? Insurers agree to 'waive' any co-insurance requirement when a loss meets either of the following conditions: -
2% or
$5,000 (up to) _____________Quiz____________? In order to replace a Co-Insurance Clause with a Stated Amount Co-Insurance Clause, the client must comply with the following: -
properties excluded perils exluded _____________Quiz____________? Identify five reasons why exclusions exist and give an example for each: -
the Insurer may have grounds to deny coverage _____________Quiz____________? Identify two instances when an Insurer may NOT deny coverage when there has been a breach:
The Reinstatement clause provides the insureds shall have as much insurance after a loss as they did before. _____________Quiz____________? Do all Insurers treat the issue of 'unearned premium' the same in the event of a total loss? -
Some insurers are not willing to accept that the insureds should be entitled to a refund premium when they have collected for a loss under the policy.
_____________Quiz____________? Explain the operation of Subrogation: -
it is the right of the insurer to sue the party at fault, after paying the claim to the injured party _____________Quiz____________? Identify two parties against whom the Insurer will NOT exercise Subrogation: -
_____________Quiz____________? Identify three things the Verification of Values clause allows the |Insurer to do: -
UNSOLD: restricted to its "actual cash value at the time of a loss" SOLD: the selling price charged to the purchaser, less any discounts allowed. _____________Quiz____________? Identify three types of discounts that will be considered when adjusting loss on sold stock: -
Facts which are known or which may reasonably be presumed to be known by the Insurer; Facts which the Insurer can discover upon inquiry; Facts which the Insurer has waived the requirement for information; Facts which tend to lessen the risk; Facts which need not be disclosed by reason of a policy condition _____________Quiz____________? Explain the effect of Misrepresentation on an application for insurance: -
if misrepresentation is proved, the insurer is entitled to void the contract _____________Quiz____________? Explain the effect of a 'reported' material change during the term of the policy: -