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Property insurance > Wrong FC > Flashcards

Wrong FC Flashcards

1
Q

If a manufactured product is unsafe, what type of liability applies to the manufacturer?

A

Strict Liability

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2
Q

What are the two types of compensatory damages?

A

Special and general

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3
Q

What is subrogation?

A

An insurer’s legal right to seek damages from third parties after reimbursing insureds for a loss

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4
Q

What term describes a loss caused by continuous exposure to a condition?

A

Occurrence

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5
Q

What are the three types of hazards?

A

Physical, moral, and morale

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6
Q

(Insurance Carried ÷ Insurance Required) x Loss Amount =

A

Loss Payment

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7
Q

What type of limits of liability has the limits separately stated for different coverages?

A

Split Limits

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8
Q

What provision found in property policies prevents an insured from collecting twice for the same loss: once from the insurer and again from a third party?

A

Subrogation

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9
Q

What determines an insurer’s responsibility for payment, as stated in an insurance policy?

A

Limits of Liability

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10
Q

What type of policy insures all property at multiple locations for a single amount?

A

Blanket Policy

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11
Q

What law protects consumers from the circulation of inaccurate or obsolete information?

A

The Fair Credit Reporting Act

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12
Q

The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?

A

Loss

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13
Q

What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident?

A

Per occurrence

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14
Q

What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident?

A

Per occurrence

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15
Q

What term defines an exact, direct, and uninterrupted cause of loss?

A

Proximate Cause

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16
Q

How is the actual cash value of a property calculated?

A

Current replacement cost minus depreciation

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17
Q

An insured’s business is damaged by a fire, and temporarily shut down for repairs. As a result, the insured suffers loss of income. What type of loss is the loss of income?

A

Indirect or consequential

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18
Q

If an insured peril was the proximate cause of loss, what type of loss is it?

A

Direct

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19
Q

What is a risk?

A

Uncertainty of loss

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20
Q

What provision states that if a policy allows for greater benefits than the financial loss incurred, the insured may be compensated only for the amount lost?

A

Indemnity

21
Q

A tornado that destroys a property would be an example of what?

A

Peril

22
Q

In property insurance, when must insurable interest exist?

A

At the time of loss

23
Q

What provision defines how a policy will respond if there is more than one insurance policy written on the same risk?

A

Other Insurance

24
Q

In commercial property policies, who has control of the policy, and who can cancel it?

A

First named insured

25
Q

What are the four elements of an insurance contract?

A

Agreement (offer and acceptance), consideration, competent parties, and legal purpose

26
Q

What is proof of loss?

A

A sworn statement from an insured notifying the insurer about a loss

27
Q

What part of an insurance policy indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy?

A

Conditions

28
Q

In property and casualty policies, what is required for an assignment to be valid?

A

A written consent of the insurer

29
Q

What are an insured’s duties after loss?

A

Protect the damaged property from further damage, prepare an inventory of damaged property, cooperate with the insurer in settling a loss, notify police in case of theft; and submit proof of loss

30
Q

Who is an insured in property and casualty insurance?

A

Anyone covered under the policy, even if not specifically named

31
Q

What is consideration on the part of the insurer?

A

A promise to pay in the event of a loss

32
Q

In insurance contracts, when is the offer usually made?

A

When the insurance application is submitted

33
Q

What section personalizes an insurance policy?

A

Declarations

34
Q

Information about changes to the policy or return of premium can be found in what section of a policy?

A

Conditions

35
Q

What process is used to settle a casualty claim when the insured and the insurer cannot agree?

A

Arbitration

36
Q

In insurance contracts, when does acceptance usually occur?

A

When the insurer approves a prepaid application

37
Q

When is an appraisal needed and how can it be requested?

A

If an insured and an insurer disagree about the value of a property loss, either party can make a written demand for an appraisal.

38
Q

What does the term unilateral contract mean?

A

A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise.

39
Q

What is consideration in an insurance contract?

A

Consideration is something of value that each party gives to the other. Consideration on the part of the insurer is binding.

40
Q

A Businessowners policy is sold as a package. What Does that mean?

A

Coverage includes both property and liability

41
Q

What are some of the exclusions found in all 3 dwelling forms?

A

Earth movement, water damage, power failure ,neglect, war, nuclear hazard, intentional loss, freezing of plumbing, ordinance or law, and government action

42
Q

What HO form covers condo unit owners

A

HO-6 ( Condo unit owners)

43
Q

In dwelling policies, what is the purpose of the automatic increase in insurance endorsement that increases the amount of insurance by an annual percentage?

A

To offset the effects of inflation

44
Q

Which dwelling form is called the broad form?

A

DP-2

45
Q

Commercial property coverage can be written with one of 3 causes of loss forms, what are they?

A

Basic, Broad, and Special

46
Q

What are the major coverages included in a homeowners policy?

A

Coverage A- Dwelling
Coverage B- Other structures
Coverage C- Personal Property, and coverage
Coverage D- Loss of Use

47
Q

What are the 5 coverages of dwelling policies?

A

Coverage A - Dwelling
Coverage B - Other Structures
Coverage C - Personal property coverage
Coverage D - Fair rental value
Coverage E - Additional living expenses

48
Q
A

Property insurance (3 decks)

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