CPCU 520 ch8 review notes

Question 1

insurable interest

Answer 1

anyone financially harmed by destruction of prop

Question 2

ownership in common

Answer 2

two+ owners, with identifiable fractional financial interest in prop

Question 3

security interests

Answer 3

contractual agreement or by law - secured party generally creditor of prop owner

Question 4

real prop

Answer 4

land/everything attached to it

Question 5

personal prop

Answer 5

everything not considered real prop

Question 6

fixtures are real prop?

Answer 6

how permanently attached to real proprty is fixture? is fixture welladapted to real prop? what intent of owner?

Question 7

most imp type of indirect loss

Answer 7

loss of use of prop

Question 8

complications of verification of causes of loss

Answer 8

gradual causes of loss, ordinance or law, faulty design/construction/material, intentional acts of insd

Question 9

proper estimates for determining replacement cost for bldg damage

Answer 9

specs, materials, labor, overhead, profit

Question 10

main cause of depreciation

Answer 10

obsolescence

Question 11

broad evidence rule

Answer 11

requires adjusters to consider all pertinent factsto determine acv

Question 12

stated amt: in event of loss, insured entitled to lesser of:

Answer 12

prop’s acv, cost to repair/replace, applicable amt of ins

Question 13

agreed amt basis

Answer 13

restore prop to condition before loss or pay agreed amt

Question 14

insured’s duty after loss

Answer 14

provide promt notice, protect prop, asist w/ loss adjustment proc, provide proof of loss, submit to exam under oath

Question 15

procedures to conclude claim

Answer 15

determine cause of loss, determine amt of loss, document cause/amt of loss, determine salvage value/subro rights

Question 16

goals of claim reps handling losses to homes

Answer 16

address ins’s concerns, enforce policy provisions/protect insurer’s rights

Question 17

requirements to prove arson

Answer 17

incendiary fire, motive, opportunity

Question 18

determining business income loss

Answer 18

revenue-cost of goods sold-discontinued operating expenses
or
net profit or loss plus operating expenses that continue

Question 19

liability claim handling steps

Answer 19

determining covg
determining legal liability
determining damages
negotiating/settling claims
litigation process

Question 20

cause of action in negligence requirements

Answer 20

legal duty owed to claimant, breach of duty that causes harm, causal connection btwn breach and harm, and actual bodily injury or damage on claimant’s part

Question 21

comparative negligence laws

Answer 21

claimant’s recovery may be reduced in proportion to share of fault, two primary forms - pure and modified

Question 22

special damages

Answer 22

can be quantified

Question 23

general damages

Answer 23

intangible losses

Question 24

consortium

Answer 24

sex, society and services

Question 25

products liability based on

Answer 25

breach of warranty, strict liability in tort, negligence

Question 26

majority of wc claims covered under

Answer 26

part one of wc and employers liability ins policy (bodily injury claims caused or aggravated by conditions of employment regardless of fault)

Question 27

part 2 of wc claims

Answer 27

employers liability covg part - employee must prove negligence, applies to workers excl from wc laws by employment exemptions, also care and loss of services to fam members of employee

Question 28

medical bill audits

Answer 28

tool by which wc medical expenses are controlled

Question 29

utilization review svcs

Answer 29

controls medical expenses by determining whether med treatment is necessary

Question 30

biggest challenge for wc claim reps

Answer 30

controlling disability expenses - can end pmts only by agreement w/ claimant or order of wc commission

Question 31

prospective settlements

Answer 31

made before prop has been repaired

Question 32

retrospective settlements

Answer 32

made after prop has been repaired and operations resumed

Question 33

business income

Answer 33

sum of net profit/loss that would have been earned or incurred if suspension had not occurred and normal op expenses, including payroll, that continue during suspension

Question 34

bill of lading

Answer 34

acknowledges receipt of goods from shipper, given by carrier including terms of contract of cariage for goods

Question 35

released bill of lading

Answer 35

limits carrier’s liability for cargo loss in ret’n for charging lower freight rate than would be chgd for carrying cargo subject to full valuation

Question 36

contributory negligence

Answer 36

common law principle preventing person who has been harmed from recovering damages if that persons own negligence contributed in any way to the harm