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Property & Casualty
Chapter 3 Questions
| Question | Answer |
|---|---|
| A person who takes possession of another person's property in order to repair it is called a(n): | Bailee |
| Burglary | The taking of property by a person who forcibly enters or exits he property |
| Robbery | The taking of property by a person who harms someone or threatens to harm someone |
| Theft | Any act of stealing |
| Unoccupied | A property that contains personal property, but does not have occupants |
| Bailee | A person or organization that has taken the property of others into their care, custody, or control |
| Loss of income is an | indirect loss, as it is paid as a consequence of a direct loss, such as a total fire loss to a home. |
| Proximate Cause | The primary cause of loss. The peril could be covered or excluded by the policy |
| Concurrent Causation | Two perils contribute to a loss simultaneously. The loss will be covered if at least one peril is covered by the policy. |
| Inherent Vice | A quality within property that causes its own destruction, such as rusting |
| Direct Loss | A immediate result of a peril, such as bodily injury or physical damage |
| Indirect Loss | A consequence of an immediate loss, such as loss of use or loss of income |
| Named Perils | A type of coverage that explicitly specifies the causes of loss that the policy will cover |
| Open Perils | A type of coverage that covers losses by all perils, except those specifically excluded |
| What calculation is used to determine the actual cash value (ACV) of a loss? | Replacement cost - depreciation = |
| Actual cash value | the cost to repair or replace the damaged property at the time of loss, minus depreciation |
| Replacement Cost | The cost to replace property with property of like kind and quality, without subtracting depreciation |
| Functional Replacement Cost | The cost to replace property with property that is functionally the same, but not of like kind and quality |
| Agreed Value | The cost agreed upon by the insurer and insured, which is paid regardless of the property's actual cash value |
| Stated Value | The cost the insured reports to the insurer, the actual cash value may be paid instead |
| Market Value | The amount a buyer would pay for the property under fair market conditions |
| Salvage Value | The amount for which property can be sold at the end of its useful life |
| The coinsurance penalty | reduces the amount paid for a partial loss |
| The Mortgage clause protects the | financial interest of a mortgagee & does not give the lender all of the rights of a named insured. It allows the mortgagee to pay due premiums submit a proof of loss & receive claim payments even if the insured fails to due their part |
| Coinsurance | If insurance on the property is not maintained to a specified amount, claim payments for a partial loss may be reduced |
| Loss Settlement | The loss valuation basis is specified |
| Right of Salvage | After paying for the loss, the insurer may take possession of the damaged property |
| Abandonment | The insured may not surrender property to the insurer for replacement or repair |
| No Benefit to Bailee | If property is in the care, custody, or control of another person or organization, the insured's policy excludes coverage for that property while in the other person's care |
| Appraisal | If the insurer and insured disagree about the value of lost property, this process settles the dispute |
| Recovered Property | insured or insurer finds lost or stolen property after the insurer has already paid the claim the other party must be notified. The insured may either keep the property and return the claim payment, or keep the claim payment and surrender the property |
| The standard fire policy (SFP) covers | direct loss form fire, lightning, and the removal of property from the covered premises when endangered by fire or lightning. |
Created by:
jcmartinez,jm4
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