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A series of questions and answers related to property and casualty insurance. It covers a wide range of topics, including policy characteristics, coverage types, and legal considerations. The questions are designed to test understanding of key concepts and principles in the field of insurance, making it a useful resource for students or professionals preparing for exams or seeking to enhance their knowledge of insurance practices. It includes topics such as liability, property damage, and various insurance policies.
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The one basic characteristic of any type of insurance is that the insured is returned to the same status that existed prior to the loss, but without a chance for gain or profit ✔✔true
which of the following coverages does an open peril policy provide? ✔✔perils other than those specifically named as being excluded
determine the actual cash value in the following situation: original price of office equiptment when purchased 8 years ago- 9,000. depreciated amount at time of fire-5,000 current replacement cost 12,000 ✔✔7,
liquor liability ✔✔need for a dram shot, liquor, or package store
inherent vice or defect ✔✔iron rusting, milk going sour, rubber breaking down are all inherent vices
how is hitting an animal on the road covered? ✔✔other than collision otc
medicare supplement insurance ✔✔aka medical gap insurance. must include core benefits
ordinance or law ✔✔an endorsement for building code upgrades
loss sustained/discovery forms under crime coverage ✔✔loss is for later than the policy period. discovery is for before the policy (loss is later, discovery before)
designated brush fire or civil unrest areas ✔✔qualifying areas under the fair plan
stop loss provision ✔✔used in health insurance to limit the maximum amount of money the insured would have to pay out of pocket on a health claim in any particular claim
shortages of inventory ✔✔under crime insurance the employee dishonesty endorsement never covers
can the mortgagee still collect if the insured burns their house down ✔✔yes, the mortgage clause is a standard provision
otc covers ✔✔earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)
law of large numbers ✔✔the greater the number of insured the more accurately the prediction
where does a driver have coverage? ✔✔U.S. Canada and US possessions eg puerto rico, guam
gap insurance ✔✔pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease
eligibility/enrollment period ✔✔used in life and health group benefits without having to prove insurability
symbol 9 ✔✔non-owned autos
the lender on a home is called ✔✔mortgagee or mortgage holder
multiple employer trust ✔✔a legal entity of small biz owners grouped together to buy insurance
what percentage must vacant for a building to be called vacant? ✔✔70%
size limits for business owners policy ✔✔6 stories, 100,000 sq feet on offices, 25,000 sq feet and 3 million dollars gross sales for mercantile space (store)
Dp-1 covers ✔✔fire, lightning, and internal explosion
dp1, 2, 3 all dwelling forms cover? ✔✔loss of rental income
third party ✔✔the injured party. to whom liability insurance pays claims
Personal property ✔✔property that can move eg furniture, clothes, paintings, etc
why is yacht like ocean marine, even though yacht is a personal line? ✔✔the structure of the policy is the same; hull covers damage to the vessel. P and C covers liability and workers comp. A yacht policy can be used for organized racing while ocean marine cannot.
Medical Payments in boat owners insurance covers? ✔✔covers medical payments and injury for insured and others on a personal boat. does not cover business use or competitive racing.
Protection and Indemnity on Ocean Marine or Yacht ✔✔Liability and workers comp. portion of ocean marine or yacht policies.
code section 770 ✔✔when buying property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker
part of protection and indemnity ✔✔worker compensation in a yacht policy
elimination period ✔✔used in disability income health insurance. that time period benefits are not paid. also called the waiting period
do corporations have absolute liability? ✔✔Yes
What is embezzlement? ✔✔employee dishonesty, which is not covered by a crime policy unless an employee dishonesty form is attatched. (does not cover shortages of inventory).
Deductible ✔✔a specified amount of money that is paid by the insurer; pays money on the claim.
What has a single limit? ✔✔Property Damage
Substandard Risk ✔✔classification of risk that is more than the normal acceptable risk
The fair plan ✔✔Distributes the risk among companies
Commercial Package ✔✔Common Conditions, Common Dec, and two or more modules equal.
What is not considered transacting? ✔✔establishing a list of clients
What has a seperate aggregate limit under commercial general liability? ✔✔products completed
Full tail optional or exteneded coverage on claims made commecial general liability ✔✔unlimited duration for reporting costs extra
Comparative Negligence ✔✔You can file a claim, but damages are reduced based on that party's negligence
Contributory Negligence ✔✔a person cannot file or collect if he/she is at all negligent
Indemnify ✔✔to restore one to there previous financial condition that existed prior to the loss
Mexican Liability Endorsement ✔✔Excess liability for accidents within 25 miles of the U.S. Border (trips of 10 days or less)
Section 2 on Homeowners Policy ✔✔Liability and medical payments. paid to others only
selling price ✔✔market value
where are covered perils listed ✔✔Declarations page
Exclusions ✔✔things that arent covered
where are excluded perils listed? ✔✔exclusions are found in the cause of loss form
pure risk ✔✔chance of loss
any occupation ✔✔definition for being totally disabled in a disability income policy. person cannot perform any occupation he/she is qualified
for what amount can a binder be written for? ✔✔1 million dollars
Minimum limits for low cost auto insurance ✔✔10/20/
what are special damages for? ✔✔time away from work is special. going to the doctor is special.
starr ✔✔share, transfer, avoid, retain, reduce (ways to manage risk)
who needs professional liability insurance? ✔✔doctors, architects, lawyers, and accountants
purpose of insurance ✔✔to transfer the risk
retroactive date ✔✔the first date an occurrence would be covered under a claim made commercial general liability policy
parking lots, dealerships, and repair garages need ✔✔garagekeepers
subrogate ✔✔the insured transfers the right to sue to the insurance company
how much coverage does a dwelling policy give for personal property away from the premises? ✔✔10%
Collision ✔✔colliding with another car, an object or upset (rolling)
peril is ✔✔the cause of loss
pure risk ✔✔the insured only has a chance of loss, never gain
dp1 ho 1 and ho 8 ✔✔basic
in a contract "you" indicates ✔✔the insured
would otc cover a laptop or briefcase stolen from my car? ✔✔personal property is usually not covered
disability income insurance ✔✔type of health insurance that pays a monthly income to the insured if he/she is sick or injured and cannot work. Pays partial portion
a, b, and c in a homeowners policy are? ✔✔a=dwelling, b=other structures, c=personal property
in a contract who is we? ✔✔the insurer
standard risk ✔✔classification of risk that is normal
risk ✔✔uncertainty of loss. a risk must be uncertain to be insurable
raising the deductible ✔✔lowers the premium because small claims are eliminated
is a building under constructin vacant? ✔✔no
repair, replace, acv ✔✔the amount a company pays on a damaged or stolen vehicle whatever is less
insurable interest ✔✔financial interest
a,b,c of commecial liability cgl are: ✔✔a-bodily injury and property damage, b-personal and advertising injury, c-medical payments
underwriter ✔✔a person whos job it is to assess risk and determine classification of the insured. (an agent is a field underwriter)
noncontributory benefits ✔✔a life or health insurance plan that an employer provides for employees in which the employee does not pay any part of the premium
minimum good driver discount ✔✔20%
a vehicle for hire, to transport people eg limo ✔✔livery
dwelling or homeowners which has broader coverage? ✔✔homeowners
acv ✔✔replacement cost-depreciation
pays excess liability amounts ✔✔umbrella after underlying policy or retention is paid. liability only; does not cover property
lowering the deductible ✔✔raises premium bcs small claims are covered
morbidity table ✔✔a table that shows the average number of sickeness's or accidents at various ages
experience rating ✔✔method used to determine rate based on insureds loss experience
will the cost of sandbaggin a home be covered? ✔✔yes the insured does not have to bear the cost