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Flashcards in *4 TB - Insurance Concepts & Principles Deck (20)
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Methods of risk management include:

Transfer

Sharing

Avoidance

All of the above

ALL OF THE ABOVE

1

An insured has suffered a fire loss to his/her dwelling. The insured is which party to the claim?

Third Party

First Party

Second Party

Loss Payee

First party!

2

Mr. Jones a pedestrian was injured by Mr. smith while driving his vehicle. Mr. smith is insured by I Am Bogus Insurance Company. The insurance company would be which party to the claim?

First party since they are the one that has to pay

The second party

The third party

Guarantor

The Second Party!

(The insurance company is always the second party!)

3

Which of the following is NOT included in the Declarations section of an insurance contract?

The identity of the insured

The policy period

The covered perils

The policy premium

The covered perils!

(The covered perils are contained in the insuring agreement and do not appear on the declarations page)

4

Which of the following is the section of an insurance contract that contains the provisions, rules of conduct, duties, and obligations of the parties?

The Insuring Agreement

The Conditions

The Exclusions

The Limitations

The conditions!

5

A loss that is a direct consequence of a particular peril is called a(n):

Indirect loss

Peril

Hazard

Direct loss

Direct loss!

6

Which of the following is a clause in property and casualty which states that if policy or endorsement forms are broadened an no additional premium is required, then all existing similar policies or endorsements will be construed to include the broadened coverage?

Liberalization

Assignment

Binder

Coinsurance


Liberalization!!!

7

Which of the following provides written evidence of coverage pending the issuance of a policy?

Cause of Loss form

Assignment

Binder

Blanket coverage

Binder

8

Which of the following is an example of a Loss Evaluation Method?

Liberalization

Cause of Loss Form

Stated Amounts

Conditions

Stated Amount!

(Some types of property are insured on a Stated Amount Basis, this is a value agreed upon by both parties)

9

The cost of replacement minus deprecation is the definition of:

Valued Policy

Market Value

Replacement Cost

Actual Cash Value

Actual Cash Value

10

Which of the following is a method of requiring the insured to insure at least 80% of the value of the covered commercial property?

Cause of Loss Form

Standard Mortgage Clause

Loss Payable Clause

Coinsurance Clause

Coinsurance Clause

11

Which of the following is a basis for insuring property that allows the insured to report the value of the building contents to the insurance company on a monthly basis?

Blanket Basis

Reporting Form

Specific Basis

Agree Value




Reporting Form!

12

Which of the following is not a factor in determining negligence on the part of the insured?

Legal duty is owed

There is a breach of protection

Proximate cause

Damage

There is a breach of protection!

(A breach of protection, failure to carry insurance is not a factor in determining)

13

In liability insurance, policy limits that apply one limit to each person injured, another for bodily injury claims of all persons injured in a single accident, and a separate limit for all property damage arising out of a single accident is:

Aggregate Limits

Split limits

Single limit

Total limits

Split Limits!

14

An insurance contract that contingent on a certain event is referred to as?

Executory

Aleatory

Contractor adhesion

Conditional

Aleatory

15

Mr. Jones is involved in at-fault accident. The other party was also at fault. The method to determine damaged due each party based on a percentage of negligence is known as:

Contributory negligence

Intervening cause

Comparative negligence

Assumption of risk

Comparative Negligence!!!

16

The insured owns a filling station and an employee cause bodily injury to third party. The insured is held legally liable for the employee's acts. This is called:

Contributory negligence

Joint and Several

Contingent liability

Vicarious Liability

Vicarious Liability

17

One characteristic of an insurance contract is that both parties must perform certain acts to make the contract legally enforceable. This is called:

Personal aspect

Aleatory

Executory

Utmost good faith

Executory!

18

A church has hired a painting contractor to stain and varnish the wood work in the building. He leaves the rags and brushes used to apply the painting materials in small storage area. This is an example of:

A peril

A hazard

Assumption of risk

Direct loss

A Hazard!

19

The insurance company is the author of the insurance policy. The insured buys what is offered by the company and accepts it as is. This is called:

Executory

Conditional

Contract of adhesion

Aleatory

Contract of adhesion