If the insured does not agree with the insurer's decision regarding a claim, what process helps decide the outcome?
a. Insurance company conference
b. Arbitration
c. Inspection
d. Consequential hearing
b. Arbitration
Which of the following is attached to the policy to alter or add to the policy provisions?
a. Binder
b. Endorsement
c. Definitions
d. Excess Insurance
b. Endorsement
A person who takes possession of another person's property in order to repair it is called?
a. Assignee
b. Bailor
c. Subrogee
d. Bailee
d. Bailee
Each of the following is a direct loss, except:
a. Loss of income
b. Fire damage
c. Cracked windshield
d. Broken pipe water damage
a. Loss of income
_____________ is the method of loss valuation that values damaged property at the cost to replace with property of like kind and quality, at current prices, and without deduction for depreciation.
a. Functional replacement cost
b. Actual cash value
c. Rep
c. Replacement value
What calculation is used to determine the actual cash value (ACV) of a loss?
a. Market value - depreciation = ACV
b. Replacement cost - depreciation = ACV
c. Market value - original purchase price = ACV
d. Replacement cost - market value = ACV
b. Replacement cost - depreciation = ACV
Which of the following BEST describes a scheduled limit of insurance on a property policy?
a. Insures multiple items of property on multiple policies
b. Insures multiple items of property on a single policy
c. Insures a single item of property on a single
b. Insures multiple items of property on a single policy
The duties and obligations of the insured are found under what part of the insurance policy?
a. Declarations
b. Insuring Agreement
c. Additional Coverages
d. Conditions
d. Conditions
A Liberalization Clause serves which of the following purposes?
a. At each annual renewal, the policy limit automatically increases in value
b. The insurer has the right to recover from any party causing a loss
c. The insured is given permission to bring
d. Broadened coverage applies automatically to all policies without a premium charge
Each of the following is a typical property insurance policy exclusion, except:
a. Ordinance or Law
b. Flood
c. Fire
d. Neglect
c. Fire
Which of the following has the broadest coverage under the insurance policy?
a. Named Insured
b. Insured
c. First Named Insured
d. Additional Insured
a. Named Insured
Which of the following is not true of coinsurance?
a. It is a common policy provision
b. It encourages the insured to maintain insurance to value
c. It applies in the event of total loss
d. The higher the coinsurance percentage purchased, the lower the ra
c. It applies in the event of total loss
When filing a claim, the insured is required to do all of the following, except:
a. Protect property from further damage
b. Cooperate with the insurance company
c. Give notice of loss as soon as possible
d. Hire an appraiser
d. Hire an appraiser
What is the term for continuous exposure to the same harmful conditions?
a. Risk
b. Proximate cause
c. Accident
d. Occurrence
d. Occurrence
Which of the following may broaden the coverage found in an insurance policy?
a. Conditions
b. Declarations
c. Insuring Agreement
d. Endorsements
d. Endorsements
All of the following statements regarding the property policy structure are correct, except:
a. The insuring agreement describes the perils that are covered under the policy
b. The Declarations Page lists other parties having an insurable interest in the
c. Additional coverages are added to the policy for an additional premium
All of the following are true regarding the structure of a property policy, except:
a. The Declarations include the insured's name, policy period, policy limits and the amount of premium
b. The Exclusions itemize the perils not covered
c. The bankruptcy c
d. The insured's duties in case of loss are found in the Insuring Agreement
Which of the following parties may assign a standard property policy?
a. The Insurer
b. The First Named Insured
c. The Bailee
d. The insured with prior written permission of the insurer
d. The insured with prior written permission of the insurer
The part of an insurance contract that varies with each individual policy, but is still a mandatory part of the policy, is the:
a. Exclusions
b. Declarations
c. Conditions
d. Insuring agreement
b. Declarations
Which of the following is attached to a property and casualty insurance policy to amend policy provisions or conditions?
a. Consideration
b. Endorsement
c. Exclusion
d. Warranty
b. Endorsement
If the insured and insurer do not agree on the value of a property loss, what condition would apply?
a. Subrogation
b. Appraisal
c. Arbitration
d. Abandonment
b. Appraisal
A building with no physical contents and no occupants is said to be which of the following?
a. Suspended occupancy
b. Unoccupied
c. Vacant
d. Undetermined occupancy
c. Vacant
Which of the following statements best describes the Other Insurance condition on a standard property insurance policy, when two separate property policies provide coverage for the same loss?
a. Each policy pays its pro rata share of the loss
b. Each poli
a. Each policy pays its pro rata share of the loss
Which clause broadens coverage of an existing policy with no increase in premium?
a. Subrogation
b. Loss payable
c. Liberalization
d. Assignment
c. Liberalization
In addition to the named insured in a property policy, coverage is automatically provided for:
a. Persons who purchase the insured's property
b. Persons who appraise the property
c. The insured's employer
d. The insured's spouse
d. The insured's spouse
The taking of property from inside the premises by a person committing forcible entry defines a:
a. Burglary
b. Mysterious disappearance
c. Borrowing
d. Robbery
a. Burglary
The insuring agreement of a policy describes:
a. Perils that are not covered
b. Perils that are covered
c. Transfer of the rights of recovery
d. The duties of the insured in the event of a loss
d. The duties of the insured in the event of a loss
Which term describes the situation that occurs when two policies covering the same property contain different policy periods?
a. Concurrent causation
b. Coinsurance
c. Nonconcurrency
d. Blanket coverage
c. Nonconcurrency
Which term describes coverage that applies only to loss by the perils stated in a policy?
a. Open peril
b. Special Form
c. All risk
d. Named peril
d. Named peril
All of the following are insured's duties after a loss under a property policy, except:
a. Furnishing inventory of damaged property
b. Giving notice of loss as soon as possible
c. Submitting to examination by insurer
d. Abandoning the property to the insu
d. Abandoning the property to the insurer
When the insured and the insurer fail to agree on the amount to be paid for a property loss, the dispute resolution method is called a(n):
a. Agreement Clause
b. Abandonment
c. Approximate Clause
d. Appraisal
d. Appraisal
Which of the following is true about the right of salvage?
a. The insurer has the right to take possession of damaged property after payment of a loss
b. The insurer is required to take possession of damaged property after a loss
c. Damaged property must
a. The insurer has the right to take possession of damaged property after payment of a loss
All of the following are methods of loss valuation, except:
a. Stated amount
b. Replacement cost
c. Actual cash value
d. Blanket value
d. Blanket value
All of the following statements regarding property insurance are correct, except:
a. A binder is a temporary proof of insurance
b. A property that contains neither occupants nor personal property is deemed vacant
c. The insurer may cancel a policy, after
d. The owner of clothing left in the care of a dry cleaner is called a bailee
The standard policy structure for insurance policies includes all of the following sections, except:
a. Duties
b. Insuring agreement
c. Exclusions
d. Conditions
a. Duties
Which of the following is considered a hostile fire?
a. The fire in the firebox of a furnace
b. The fire in a trashcan being used to burn leaves
c. A fireplace containing a roaring wood fire
d. An uncontrolled campfire in the woods
d. An uncontrolled campfire in the woods
The transfer of the right of recovery from the insured to the insurance company is called:
a. Assignment
b. Indemnity
c. Subrogation
d. Hold harmless
c. Subrogation
All of the following are methods of writing property insurance limits, except:
a. Specific coverage
b. Scheduled coverage
c. Concurrent coverage
d. Blanket coverage
c. Concurrent coverage
What is the term for a dwelling that is uninhabited but has household furniture inside?
a. Vacant
b. Unoccupied
c. Morale hazard
d. Other Structure
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