Chapter 15A - Property Insurance

Question 1

Actual Cash Value

Answer 1

Policy pays for the replacement cost of item minus depreciation

Question 2

Deductible

Answer 2

The amount the insured must pay on each loss

Question 3

Direct Loss

Answer 3

Happens suddenly due to a covered peril

Question 4

Indirect Loss

Answer 4

Occurs as a consequence of a direct loss - EX: rental income lost due to a fire

Question 5

Liability

Answer 5

Coverage in case of a lawsuit filed by another claiming bodily injury or damage to property

Question 6

Liability Insurance

Answer 6

Insurance that covers an individual for financial losses arising out of liability issues.

Question 7

Monoline Policy

Answer 7

One line - covers real estate and personal property.

Question 8

Mortgage Cause

Answer 8

Added to policy by lenders - protects their interest in the preservation and reconstruction of property after a loss, covers cost of loan value in a covered loss

Question 9

Package Policy

Answer 9

Real estate and personal property, plus liability and theft.

Question 10

Peril

Answer 10

1) fire
2) aircraft
3) smoke
4) sinkhole collapse
5) sprinkler leakage
6) lightning
7) explosion
8) wind/hail
9) volcano
10) riot/civil commotion
11) damage done by others’ vehicles

Question 11

Property Insurance

Answer 11

Coverage that indemnifies a person with an interest in the property for a loss cause to property by a covered peril

Question 12

Replacement Cost Basis

Answer 12

Policy pays the replacement cost for lost items.

Question 13

Umbrella Policy

Answer 13

Provide very high limits of liability

Question 14

Basic Form 1

Answer 14

11 perils

Question 15

Basic Form 2

Answer 15

11 perils + weight of ice and snow, water damage from plumbing, damage from falling objects, freezing plumbing

Question 16

Special Form 3

Answer 16

Same has Basic Form 2 plus 3 levels of coverage. A - principal dwelling, B - other structures on property (pool houses, barn, garage), C - personal property.

Question 17

Homeowner 1 - 3

Answer 17

Basic 1 -2 and Special Form 3 plus liability and theft

Question 18

Homeowner 4

Answer 18

Rental and coop insurance

Question 19

Homeowner 6

Answer 19

Condo - covers interior space but not building structure or common areas (covered by building policy)

Question 20

Homeowner 8

Answer 20

Modified form for older/ornate homes where replacement cost exceeds market value.