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23 Cards in this Set
- Front
- Back
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Define loss settlement valuations.
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Most basic property insurance policies state that direct-losses will be settled based on actual cash value of the property, at the time of the loss, but not more than the amount required to repair or replace the property. Some property is written on a valued policy basis wherein-the insured agrees, in advance, that the coverage limit will be considered the property's value. Most property insurance today is issued subject to replacement cost valuation particularly on buildings.
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Define warranty.
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A policy condition, either based on information in the insured's application or inserted by the insurer
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How would you define a personal contract in property and liability insurance?
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Property and Liability insurance policies cover persons,not property or operations. A loss depends upon the economic loss suffered by the person.
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What are straight deductibles?
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A specific deduction of a flat amount from a loss payment to the insured
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Misrepresentations, omissions, concealment of facts, or incorrect statements shallnot prevent a recovery under an insurance policy unless:
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They are fraudulent, They are material either to the acceptance of the risk or to the hazard assumed by the insured,The insurer would either not have issued the policy, or would not have issued it at the same premium rate, if the true-facts had been known.
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Most policies recognize the insured may have other insurance that applies to thesame loss. What is meant by equal share of the loss?
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The policy will contribute based on the number of policies,without regard to their limits
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Define negligence.
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Negligence is the failure to exercise that degree or care that the law requires to protect others from an unreasonable-risk of harm. Negligence can be described as failure to act as a prudent person would have acted under similar circumstances.
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Most policies recognize the insured may have other insurance that applies to thesame loss. What is meant by pro rata share of the loss?
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The policy will pay the proportion which its limits bear to all-limits
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Define legal liability.
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Legal Liability (paying to others on the insured's behalf)means our rules of law dictate that one must provide reparations to another normally based upon negligence.
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Most policies recognize the insured may have other insurance that applies to thesame loss. What is meant by excess share of the loss?
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The policy will pay after the limits of the other policies are exhausted.
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What are single limits in the liability policy limits?
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A single amount is the maximum liability of the insurer with-respect to any one accident or occurrence.
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What is coinsurance?
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It provides for a method of providing equity in premiums bygranting lower rates to those insured who accept theresponsibility of insuring a higher percentage of the value ofthe property. It expresses the insurer's responsibility as only that portionof a loss, which the limit of insurance bears to the value ofthe property at the time of the loss.Rate credits are generally offered for 90% or 100%coinsurance clauses.
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Which of the following has an insurable interest in a property?
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A mortgage company
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What is meant by the term insurable interest?
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Normally state statutes require several definitions. One clearly defines, "The measure of an insurable interest in property is the extent to which the insured might be-indemnified by loss, injury, or impairment thereof". Any actual, lawful and substantial economic interest in the-safety or preservation of the subject of the insurance free-from loss, destruction, or pecuniary damage or impairment.
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What are some conditions under which the insurer will not be required to performfor a covered claim?
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The insured intentionally causes damage to their own property and generally insurance is not enforceable to support illegal-purposes.
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Define misrepresentation.
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Untrue statement by the insured, made in an application but which does not become a part of the policy
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What are split limits in the liability policy limits?
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The limit of liability is expressed by two figures; for-example one limit may apply to each person injured in an-accident or occurrence and the other limit may apply to all-persons injured in an accident or occurrence.
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Replacement cost less physical depreciation
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Actual Cash Value
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Subrogation may follow which of the following events
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An insured collects from his insurance company for damage caused by third party
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Which of the following best defines a hazard?
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Hazards increase the chance of loss from a peril
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What are "insurance contract characteristics"?
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A contract, which requires that the person insured have an-insurable interest at the time of the insured against-contingency. A contract of indemnity, personal, conditional and contracts of adhesion.
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What is a basis for an insurer to avoid performance of an insurance policy?
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If the insured intentionally caused damage to the property, if the insured was involved in an illegal activity or The concealed or misrepresented information, which was material.
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A deduction from the loss of a percentage of the value ofthe property or a percentage of the policy limits
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Percentage Deductibles
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