Chapter 3 Flashcards
(39 cards)
Property insurance is _________________ with the insured as the first party and the insurer as the
second party.
first-party insurance
Property coverage provides protection for damage or loss to _____________ (fixed
property) and ______________.
*real property
* personal property
It is sometimes referred to as fire insurance because protection
against _____________ (a fire that burns outside of its intended bounds) is an essential coverage.
hostile fire
This
is provided for by the _____________________, which is the basis of property policies written in North
Carolina.
standard fire policy (SFP)
As determined by the SFP, all property policies issued in the state begin and expire at
_______ on inception and expiration dates listed on the Declarations page.
12:01 a.m.
The insured may
cancel the policy at any time, and insurers must provide at least _______ advance written notice.
5 days
The SFP covers direct loss to property immediately resulting from ______________ that are specified in
the policy.
named perils
Other policies may have ________________ coverage that would provide insurance for all causes
of loss the policy does not exclude.
open perils
The covered perils on the SFP are fire, lightning, and the ___________________ from premises endangered by fire or lightning.
removal
of property
Removed property is covered for _______.
It does not cover indirect loss, or consequential loss, that results from a ______________.
*5 days
* direct loss
When a property policy determines if a loss was covered, they often look for the direct or most
important cause of loss, known as the ___________________, which must be covered by the policy for the
insurer to pay the claim.
proximate cause
In some cases that involve ____________________ by multiple perils that are
all the proximate cause, the loss may be covered even if the policy excludes one of the perils.
concurrent causation
For example, some policies may deny coverage for __________ property that contains no personal
property or occupants.
vacant
However, policies may still allow coverage for _______________ property that
contains no personal property.
unoccupied
Some policies may protect specifically against _________, when
property is stolen from property with signs of forced entry or exit.
burglary
Some policies may protect against
_____________, when property is stolen from someone who was threatened with harm or harmed.
robbery
Some
policies may protect against ____________ broadly, which includes all acts of stealing.
theft
Under the _________________________, if only part of a set suffers a loss, the insurer must consider the value of the lost part
individually and how that partial loss affects the value of the set as a whole.
Pair or
Set clause
The SFP usually settles losses on an _______________ basis, which is the cost at the time of loss to
repair or replace damaged property minus depreciation, but other property policies may use another
loss valuation basis.
*actual cash value (Think of actual crap value)
*ACV
Valued policies will use an ______________ basis to cover property for an agreed-
upon amount, regardless of the actual cash value of the property.
agreed value
_________________ is the cost to
replace property with property of like kind and quality, at current pricing, without a deduction for
depreciation.
Replacement cost
Policies using this basis usually require the insured to maintain insurance to value
under a ___________ clause.
Coinsurance
If the insured does not maintain insurance to a specified percentage,
then a proportionate penalty will be applied when the insurer pays for _____________.
partial losses
Disputes
about the amount that can be paid to the insured will be settled by __________.
appraisal
