Aic 31

Front 1

Custody Interest

Back 1

A right to possession of property due to an obligation to take care of and keep the property for its owner. They may have insurable interest in the property due to services performed and not yet paid for by the owner. They may have a liability interest if they are negligent in fulfilling duties and/or service responsibilities. Ex: bailees, consignees, common carriers, trustees.

Front 2

Insurable Interest

Back 2

A person who has a financial interest in the property to the degree that they would suffer financial loss if an insured event occurs.

Front 3

Joint Owners/Tenants

Back 3

Two or more people who are co-owners and share a full interest in a certain property and both have insurable interest for the full value of the property.

Front 4

Tenancy by Entirety

Back 4

Co-ownership reserved for husband/wife where each has a full, undivided interest in the property.

Front 5

Tenancy in Common

Back 5

Co-ownership by two or more people who have fractional interests in a property and lack survivorship rights.

Front 6

Bailee

Back 6

A person or entity that takes possession of the property of the owner for a specific purpose and for a limited period of time.

Front 7

Consignee

Back 7

A person or business that is holding the property of someone else for the purpose of selling it.

Front 8

Mortgagee

Back 8

A financial institution that has loaned money for the purchase of real property and holds a security interest until repayment of the loan is received.

Front 9

Assignee

Back 9

Person or entity to which property rights are transferred.

Front 10

Purchase Money Security Interest

Back 10

Security interest obtained by a person who helps finance the purchase of property. A lender or property owner who sells property and provides financing can obtain such an interest.

Front 11

What are the 3 purposes of the insurable interest requirement?

Back 11

1. to indemnify the proper people for the proper amount.
2. to prevent wagering on losses.
3. to deter people from committing fraud or intentionally causing a loss.

Front 12

What 5 things can a person do with personal ownership of property?

Back 12

1. use it.
2. change it.
3. sell it
4. rent it
5. dispose of it how they choose.

Front 13

What is the difference in a joint owners and tenants in common insureable interest in a property?

Back 13

Joint owners interest are in the full extent of the property's value. Tenants in common interest are limited to their fractional ownership interest in the property.

Front 14

Who owns the business assets in a corporation? What about proprietorships or partnerships?

Back 14

A corporation is considered a separate legal entity that owns the assets. The individual owners own the business assets in proprietorships and partnerships.

Front 15

What kind of interest do tenanta have in a leased property?

Back 15

They have a"use interest" in the leased property and in any improvements or betterments for the remaining term of the lease.

Front 16

To what extent does a mortgagee have interest in a house?

Back 16

To the extent of the unpaid balance of the mortgage.

Front 17

Real Property

Back 17

Land and anything that is attached to the land. includes structures and vegetation.

Front 18

Personal Property

Back 18

Any form of property that is not real property. ex: furniture, intellectual, machinery, merchandise and personal effects.

Front 19

Fixtures

Back 19

Items of personal property that have been permanently attached to real property thus became a part of the property.

Front 20

What 3 considerations are important in determining if a fixture has become real property?

Back 20

1. Attachment : is physically attached to the building.
2. Adaptation: is part of the use and function of the real property.
3. Intent: specific types of property that are intended for use with a given type of occupancy. If the property is intended for only one type of building occupancy, may make it personal property instead.

Front 21

Improvements and Betterments

Back 21

Changes made to a structure to suit the structure better for its intended purpose. All i's and b's are fixtures since they have been added to the structure after it was originally constructed.

Front 22

What 3 reasons is it important to differentiate real property from personal property for insurance purposes?

Back 22

1. Coinsurance clauses are applied against value of real property and not personal.
2. Valuation methods for real property may be at replacement cost but losses to personal prop might be actual cash value.
3. To lessen possibility of overlapping coverages.

Front 23

What happens to a tenants improvements and betterments at the expiration of a lease?

Back 23

They must be removed by the tenant or they transfer to the property owner.

Front 24

What did insurance policies originally cover?

Back 24

The peril of fire and then later lightning was added as an additional covered peril.

Front 25

What was developed in the late 30s/early 40s that added the perils of windstorm, hail, explosion, riot or civil commotion, vehicles, aircraft, and smoke damage?

Back 25

The Extended Coverage Endorsement

Front 26

Broad Form Coverage

Back 26

Added the perils of vandalism and malicious mischief, sprinkler leakage, sinkhole collapse, volcanic action, falling objects, weight of ice, snow and sleet, and water damage.

Front 27

Special Form Endorsement

Back 27

Provides "all-risks" coverage which pays for a loss unless it is excluded by the policy.

Front 28

Direct Physical Loss

Back 28

Loss with tangible effects that have resulted immediately from an occurence without any intervening cause.

Front 29

Indirect Loss

Back 29

Flows from the loss of the damaged property. most common - loss of use

Front 30

Nonphysical Loss

Back 30

Includes all kinds of financial loss such as loss of value of inventory due to changes in style or fashion or obolescence

Front 31

Specified/Named Perils Policy

Back 31

A loss that is only covered when it caused by a peril listed in as covered on the policy. Burden of proof is on the insured to prove loss caused by a covered peril.

Front 32

Special Form Policy

Back 32

All losses are covered unless specifically excluded. Burden of proof is on the insurer to prove loss is excluded. aka. risk of direct loss policy, all risks policy

Front 33

Moral Hazard

Back 33

Increased probability of loss due to dishonesty, fraud, etc

Front 34

Morale Hazard

Back 34

Increased probability of loss due to carelessness or indifference.

Front 35

Concurrent Causation

Back 35

Two or more perils acting together or successively that produce loss.

Front 36

Efficient Cause Approach

Back 36

Loss is covered if the dominant peril caused the loss. (concurrent causation loss)

Front 37

Liberal Approach

Back 37

The entire loss is covered as long as one of the perils is covered. (concurrent causation loss)

Front 38

Conservative Approach

Back 38

Entire loss is not covered if a covered peril and nomcovered peril combine to produce loss. (concurrent causation).

Front 39

waiver

Back 39

A voluntary reliquinshment of a known right. i.e. when an adjuster agrees to pay a claim without investigating any coverage defenses.

Front 40

estoppel

Back 40

arises in a situation where an insured relies on conduct or statements by the adjuster and, as a result, incurs expense or takes action contrary to the policy conditions.

Front 41

Frame Construction

Back 41

Exterior walls made of wood

Front 42

Joisted masonry construction

Back 42

Exterior walls are made of masonry with wooden joists spanning the exterior masonry walls

Front 43

Noncombustible construction

Back 43

Exterior walls, floors, and ceilings are made of nomcombustible materials including masonry, steel, and other nonburning materials

Front 44

Masonry noncombustible construction

Back 44

Exterior walls are made of masonry and floors and ceilings of noncombustible material

Front 45

Modified fire-resistive construction

Back 45

Exterior walls, floors and ceilings are made of materials that have a one-hour fire-resistive rating or better.

Front 46

Fire-resistive construction

Back 46

Exterior walls, floors and ceilings have a fire-resistive rating of at least two hours.

Front 47

Wet system

Back 47

A sprinkler system that has water in its pipes at all times.

Front 48

Dry pipe system

Back 48

A sprinkler system that does not have water in its pipes until the sprinkler head is activated

Front 49

Deluge system

Back 49

A sprinkler system that keeps the sprinkler heads open all of the time. when water is released, water flows through all open heads.

Front 50

Halogenated system

Back 50

A fire supression system that uses halogen gas as a fire suppresor. The advantage of this system is that water damage is not caused to property. Often used in museums and in places housing computers.

Front 51

Dry chemical system

Back 51

A fire suppressive system that drops a large amount of dry chemical on the fire.

Front 52

Foam systems

Back 52

A fire suppressive system that is used for outside areas, around flammable liquids, and at oil storage facilities and smothers the fire with foam.

Front 53

Carbon Dioxide system

Back 53

A fire suppressive system that uses carbon dioxide to reduce oxygen in the air needed to fuel the fire.

Front 54

Fire resistance rating

Back 54

A measure of a buildings ability to withstand the effects of fire, to sustain damage, to retain its structure, and to avoid collapse from fire.

Front 55

Elements of a scope

Back 55

1. the degree of damage, stated as a method of repair. 2. the quality of materials and workmanship that were utilized in the damaged property. 3. measurements and raw counts needed to calculate quantities.

Front 56

procedure for taking a scope

Back 56

1. conduct initial survey. 2. create diagrams/sketches of the property and damage to it. 3. scope the damage. 4. consider coverage applying to the loss. 5. document the damage and undamaged property with photographs.

Front 57

overhead

Back 57

direct cost that the contractor incurs to produce the finished job but is not a cost of materials or labor. this is added to final estimate

Front 58

special form coverage

Back 58

the type of coverage that provides direct physical loss coverage on fixed real property

Front 59

concrete form

Back 59

amount of lumber needed for this is based on the square footage of the concrete surface. on average - two and a half to three board feet per square foot of concrete

Front 60

mortar

Back 60

18 cubic feet or 2/3rds cubic yards of it is used per 1000 bricks. 40 cubic feet or one and a half cubic yards per 1000 blocks.

Front 61

brick

Back 61

A common brick is 4 x 8 x 2 inches. 21 bricks to one cubic foot of masonry. 100 bricks is a strap. 500 bricks on a pallet.

Front 62

hardwood

Back 62

wood that comes from deciduous, broadleaf trees such as maple and oak. used in finish carpentry

Front 63

softwood

Back 63

wood that comes from coniferous, evergreen trees such as pine and cedar. used in framing

Front 64

plywood

Back 64

subflooring type. typically 32 sq ft. always round up and replace full sheets to save on labor

Front 65

floor framing

Back 65

consists of posts, beams, sill plates, joists and subflooring

Front 66

wall framing

Back 66

includes the studs, sole plates, top plates, and window and door headers on interior and exterior walls

Front 67

wall sheathing

Back 67

outside covering installed over the studs, plates, and window and door headers.