The insured has violated the contract without the knowledge of the mortgage holder. What will happen after a loss?
The insured cannot collect but the mortgage holder will still be paid
Insurable interest in a property covered in a policy must be proven when?
At time of loss
An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss
Nothing
The process an insurer uses to evaluate application and determine if a policy should be issue and on what terms, conditions, and rates is known as
Underwriting
The loss ratio compares what?
Premium income to losses
What is the correct formula for computing and loss ratio
Incurred losses + lost adjusting expense/earned premium
Rates that are established based on the similarities of the risk with other risks are known as
Manual rates
And using an air cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?
Judgment
A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy what will happen to the premium?
Premiums would go down
What entities protects call the owners insured and beneficiary under insurance contracts when insurers failed to perform contractual obligations due to financial impairment?
Insurance guaranty association
What would modify they original insurance contract by either adding or removing coverage
Endorsements
All of the following conditions are commonly found in the insurance policy except
Insuring agreement
Bobs home is insured for $100,000 under a dwelling policy. Yesterday his home suffered a $20,000 damage from a fire. Today the home was struck by lightning starting another fire that completely destroyed the structure. Bob's policy will pay
$100,000
Which part of an insurance policy covers claims related expenses, reasonable expenses incurred by and insured to protect damage property from further loss or defense expenses
Additional coverage
When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a
Nonrenewal
Which of the following is a mandatory part of an insurance policy that varies with each individual policy
Declaration
The pro rata liability clause is designed to protect the policy of
Indemnity
She bought new furniture cost $9000. Last week there was a fire that damage the furniture. Replacement cost us $10,500. The adjuster told the insured her insurance depreciated $2500, if the insurance is written on an actual cash value basis how much will
$8000. Actual cash value basis = losses paid for the replacement cost - depreciation
A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?
Stated amount
When a parent is required to pay for damages caused by his or her children, this is an example of
Vicarious liability
The part of the policy that sets forth the rules of conduct duties and obligations of the parties is called the
Conditions
What provision in a propertypolicy applies when the insurer broadens coverage but does not increase the premium
Liberalization clause
In insurance terms what are components
The factors that determine rates