Wrong FC

Question 1

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

Answer 1

Strict Liability

Question 2

What are the two types of compensatory damages?

Answer 2

Special and general

Question 3

What is subrogation?

Answer 3

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

Question 4

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

Answer 4

Occurrence

Question 5

What are the three types of hazards?

Answer 5

Physical, moral, and morale

Question 6

(Insurance Carried ÷ Insurance Required) x Loss Amount =

Answer 6

Loss Payment

Question 7

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

Answer 7

Split Limits

Question 8

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?

Answer 8

Subrogation

Question 9

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

Answer 9

Limits of Liability

Question 10

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

Answer 10

Blanket Policy

Question 11

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

Answer 11

The Fair Credit Reporting Act

Question 12

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

Answer 12

Loss

Question 13

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

Answer 13

Per occurrence

Question 14

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

Answer 14

Per occurrence

Question 15

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

Answer 15

Proximate Cause

Question 16

How is the actual cash value of a property calculated?

Answer 16

Current replacement cost minus depreciation

Question 17

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?

Answer 17

Indirect or consequential

Question 18

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

Answer 18

Direct

Question 19

What is a risk?

Answer 19

Uncertainty of loss

Question 20

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?

Answer 20

Indemnity

Question 21

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

Answer 21

Peril

Question 22

In property insurance, when must insurable interest exist?

Answer 22

At the time of loss

Question 23

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

Answer 23

Other Insurance

Question 24

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

Answer 24

First named insured

Question 25

What are the four elements of an insurance contract?

Answer 25

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

Question 26

What is proof of loss?

Answer 26

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

Question 27

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?

Answer 27

Conditions

Question 28

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

Answer 28

A written consent of the insurer

Question 29

What are an insured’s duties after loss?

Answer 29

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

Question 30

Who is an insured in property and casualty insurance?

Answer 30

Anyone covered under the policy, even if not specifically named

Question 31

What is consideration on the part of the insurer?

Answer 31

A promise to pay in the event of a loss

Question 32

In insurance contracts, when is the offer usually made?

Answer 32

When the insurance application is submitted

Question 33

What section personalizes an insurance policy?

Answer 33

Declarations

Question 34

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

Answer 34

Conditions

Question 35

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

Answer 35

Arbitration

Question 36

In insurance contracts, when does acceptance usually occur?

Answer 36

When the insurer approves a prepaid application

Question 37

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

Answer 37

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

Question 38

What does the term unilateral contract mean?

Answer 38

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

Question 39

What is consideration in an insurance contract?

Answer 39

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

Question 40

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

Answer 40

Coverage includes both property and liability

Question 41

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

Answer 41

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

Question 42

What HO form covers condo unit owners

Answer 42

HO-6 ( Condo unit owners)

Question 43

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

Answer 43

To offset the effects of inflation

Question 44

Which dwelling form is called the broad form?

Answer 44

DP-2

Question 45

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

Answer 45

Basic, Broad, and Special

Question 46

What are the major coverages included in a homeowners policy?

Answer 46

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

Question 47

What are the 5 coverages of dwelling policies?

Answer 47

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