Which method of loss valuation is contrary to the basic concept of indemnity?
Replacement Cost
What describes the purpose of a stated value contract?
To pre-establish the amount of coverage available for property items that are difficult to value.
An additional loss that results from a direct loss of property is called a/an
Indirect loss
When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be
The proximate cause
When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written
Stated amount
What is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?
Aggregate limit of liability
In property insurance, actual cash value is defined as what?
Replacement cost at the time of the loss, less depreciation
What is not found in the declarations section of a policy?
Exclusions
Persons covered under an insurance policy, whether named or not, are known as the
Insureds
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
What is not considered a part of the policy structure?
Provisions
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment
What does an insurance policy not have to contain to be legally binding?
Beneficiary's consent
What is a mandatory part of an insurance company that varies with each individual policy?
Declarations
The proof of loss statement must be?
In writing
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within
A specified time
The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the
Exclusions
The Federal Fair Reporting Act
Regulates consumer reports
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
When would a misrepresentation on an insurance application be considered fraud?
If it is intentional and material
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?
Other Insurance
The policy conditions are?
How parties to the contract must act following a loss
The part of a property policy that shows the amount of insurance, premium, and policy term is the
Declarations
Which of the following would modify the original insurance contract by either adding or removing coverage?
Endorsements
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
What is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim?
Arbitration
Who is responsible for filling out a notice of claim form?
The insured
The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to
$250,000
In equipment breakdown coverage, all accidents would be considered a single accident if they occur
At a single location at the same time and from the same cause
What are the maximum eligibility requirements for a business-owners policy?
6 stories high, 25,000 square feet mercantile space in apartment building, 100,000 square feet for the office building, and $3 million gross sales
What are common carriers required to issue to every shipper that it transports goods for?
A uniform bill of landing
An installation floater is used to insure
Appliances intended to become a permanent part of the building
A business income coverage form would not cover what?
A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time
What is not included in the additional coverage's in the builders risk form?
Vandalism
Business personal property coverage does not cover
Automobiles held for sale
When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property?
The carrier
The major portion of the premium for an equipment breakdown policy pays
For inspections and examinations
What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?
$10,000 for all expenses incurred during a 12-month period
What is not settled on an actual cash value basis while covered under the business property coverage form?
Valuable papers and records