In property insurance actual cash value is defined as which of the following
Replacement cost at the time of the loss, less depreciation
Peril is most easily defined as
the cause of loss insured against
What is a leading factor in the determination of actual cash value
replacement cost
Replacement cost is defined as
full replacement of property at its current cost, new and without reduction for depreciation
Property insurance that provides 100k coverage for a building and 50k coverage for personal property at a single location is called
Specific coverage
Which of the following is used in the formula for calculating the actual cash value of a property
replacement cost
What is the purpose of the coinsurance clause found in property insurance policies?
Encourage the insured to insure the property closer to its full value
An insured has a liability policy that sets the amount at 50k for all claims that arise from a single incident. which type of limit of liability does this insured’s policy have?
per occurrence
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 as
stated amount
What is stated amount coverage
In stated amt coverage the value of the insured property is determined at the time the policy is written.
in the event of a loss, that amount is paid without regard to any coinsurance provision.
However, if the loss is less than the total, the insurer has salvage rights with the insured having first right of refusal of the salvage.
What type of liability would a person who owns a swimming pool have?
Absolute
What is absolute liability
Any conduct that is inherently dangerous imposes absolute liability. the claimant does not have to prove anything
Insurable interest in the property covered in a policy must be proven
at the time of loss
Which of the following is NOT an element of negligence
breach, unbroken chain, libel, duty
libel
what is libel
a type of intentional tort
With respect to the business of insurance, a hazard is
any condition or exposure that increases the possibility of loss
What are the four essential elements of all legal contracts
offer and acceptance, consideration, competent parties, and legal purpose
In forming an insurance contract, when does acceptance usually occur?
when an insurer’s underwriter approves coverage
Who is responsible for filling out a notice of claim form
insured
what is a notice of claim
a form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred
If a property is covered by comp a for 20k and comp b covers the same property for 40k, how much will comp a pay on a 24k loss?
8000
pro rata liability applies
each policy pays a percentage of the loss based on the percentage of coverage that policy provides.
comp a carries 1/3 of the total coverage (20k + 40k = 60k)
Therefore 1/3 of the 24k loss is 8,000
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
What are considered parts of the policy structure
conditions, exclusions, insuring clause
A homeowner sells his house to a friend. the friend wants to keep the homeowners current policy in effect. under the assignment provision which of the following is most likely?
the homeowner will need to get written consent from the insurer before the policy can be reassigned
What is consideration?
something of value that is transferred between the two parties to form a legal contract
What are endorsements
change the policy’s original terms, conditions, or coverages. endorsements can add or delete coverage or merely correct items such as the insured’s name and address etc
Termination of an inforce insurance policy prior to the expiration date shown in the policy is known as
cancellation
When would a misrepresentation on the insurance app be considered fraud?
if it is intentional and material
What is true about single dwellings that are insured to at least 80% of the replacement value
they are automatically provided with replacement cost coverage
If more than one person has an insurable interest in the property covered under a dwelling policy
The insurer will be liable for only the insured’s interest in the damaged property
Johanna purchased a national flood insurance policy 10 days after her community entered an emergency program. when would her coverage be effective?
1201 am the day after the application and premium payment are mailed
a commercial property special form covers property in transit up to
5k
when a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property
The carrier
A person who is not named as an insured on the dec page of a policy but is protected by the policy is known as the
additional insured
The policy conditions define
how parties to the contract must act following a loss
The part of the insurance contract that describes the covered perils and the nature of the coverage of the contractual agreement between the insurer and the insured is called the
insuring agreement
What is the insuring agreement
is the part of the policy structure that describes the insured perils and the method of indemnification
Before an insurer will pay any loss under a policy, what is usually required from the insured?
proof of loss
All of the following are conditions commonly found in the insurance policy EXCEPT
insuring agreement
In return for premium, an insurance company
be fair in underwriting and pay covered losses
An insurer neglects to pay for legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated
consideration
duties of the insured
- pay the premium
- take all reasonable means to save and protect the property from loss
- give the insurance company immediate notice of loss
- give the insurance company proof of loss within 60 days of the loss
- separate the damaged property from the undamaged property and allow the insurance company to inspect the undamaged property as well as the insured’s books and records
- the insured cannot sue the insurance company unless all of these requirements have been satisfied and then he/she must sue within 12 months of the loss
duties of the insurance company
- must indemnify the insured within 60 days of proof of loss
- may either pay the appraised ACV of the loss or repair or replace the damaged property
- if the insured and insurance company disagree as the ACV of the loss and the damaged property cannot be repaired or replaced, they each can select an appraiser. if the appraisers disagree, they select an umpire appraiser who will make the final determination
the subrogation clause
states that the insurance company can require the insured to assign (transfer) to it any legal rights which the insured has against third parties to the insurance company at the time of loss
assignment clause
- transfer of a policy to another person
- assignment clause of property insurance policy says no assignment of the policy is valid unless signed by an officer of the insurance company
the other insurance clause
states that the insurance company can either prohibit other insurance or can limit the amount of other insurance by adding an endorsement to the policy
pro rata liability clause
- applies when there are concurrent policies. concurrent insurance is when 2 or more policies cover the same property. it is sometimes done when insuring high value property. the policies should be identical in all respects except face amounts
- says that no insurance company shall be responsible for any more than its pro rata share of the loss
mortgagee rights
-if a mortgagee (lender) is named on the declarations page, it acquires 3 rights in the policy:
- 10 days notice of cancellation
- to have the loss paid to the mortgagee
- to provide proof of loss should the insured fail to
salvage
-salvage is when an insurance company pays a claim, and then the insurance company has the right to assume ownership of the damaged property to repair it and sell it to recover part or all of the loss
-salvage value is the amount for which the insurance is able to sell the damaged property and the amount of loss the insurance company is able to recover
abandonment clause
provides that no property can be abandoned to the insurance company without its consent
vacancy and unoccupancy clause
- usually found only in policies covering commercial (business) property
- if included, it states that coverage is terminated after the insured property has been left vacant or unoccupied for 60 consecutive days
-vacant: either completely empty or empty to the point where the insured can no longer engage in the purpose for which the property is insured
-unoccupied: means there are furnishings in the building. but nobody living in it or working in it
the vacancy and unoccupancy permit
an extra endorsement for an extra premium charge. it extends coverage beyond 60 days of vacancy or unoccupancy
property excluded
-the standard fire policy excludes types of property that are mostly indirect value
- money
- accounts (including bookkeeping records)
- valuable papers
a. securities certificates
b. legal documents
c. manuscripts (such as blueprints)
perils excluded
- war- it will cover fire damage resulting from a riot or violent demonstration
- theft
- neglect to save and protect from loss (morale)
- loss caused by an order of a civil authority (legal authority) – except loss caused by fire
2 types of property and casualty insurance policies:
- personal lines property/casualty insurance
includes homeowner insurance, dwelling insurance and personal auto insurance - commercial lines property/casualty insurance
includes commercial property insurance, commercial package policies, commercial general liability insurance, commercial crime insurance and business auto insurance
PROPERTY INSURANCE POLICIES:
EXTENDED COVERAGE (E.C.) ENDORSEMENT
perils covered – W.C. Shaver
perils covered – W.C. Shaver
-windstorm
-civil commotion
-smoke damage
-hail
-aircraft
-vehicle and volcanic
-explosion
-riot
PROPERTY INSURANCE POLICIES:
EXTENDED COVERAGE (E.C.) ENDORSEMENT
perils excluded
-nuclear reaction
-earth movement
-flood, sewer backup and water below the surface
-power interruption away from the premises
PACKAGE POLICIES:
coverage A – dwelling
the dwelling is protected against loss up to a limits of liability stated in the policy. except for the H.O. 8 modified form, the limits of liability are determined by the replacement cost of the dwelling
coverage B – other structures
automatic additional 10% of coverage A, or specified amount
coverage C – personal property
automatic additional 50% of coverage A. for an extra premium charge personal property can be covered for replacement cost. without the extra premium, personal property is protected against loss up to ACV
coverage D – loss of use
automatic additional 10% of coverage A on H.O. 1 and H.O.8. it is 30% of coverage A on all others
coverage E – personal liability coverage
- pays all sums for which an insured person becomes legally liable for bodily injuries and/or property damage caused to third parties on or away from the insured premises not to exceed the policy limits of liability. minimum limit is $25,000
- it does not cover personal injury, liability such as libel, slander, defamation of character, wrongful entry or eviction, or false arrest or illegal detention
- an insured is any member of the insured household who is a relative or who is under age 21
coverage F – medical payments
- protects anyone other than the insured or a member of his/her household
- pays all medical expenses incurred within 3 years of an accident on the insured premises or caused by the activities of the insured, his animal or a resident employee away from insured premises including ambulance and funeral expenses
- it pays whether the insured was legally responsible for the injuries or not
- there is usually a per person limit (such as $5,000) and an aggregate (total) limit in a higher amount (such as $25,000) per occurrence
- having medical payments coverage will usually avoid having a liability claim made against the insured
unfair marketing practices: boycotting
to boycott is to stop buying or using the goods or services of a certain company or country as a protest. boycotting in insurance is to stop buying from a particular business to force them to buy insurance from a particular source
unfair marketing practices: intimidation
to force into or deter from buying insurance by inducing fear
unfair marketing practices: misappropriation of funds
misappropriation of funds means the intentional, illegal use of the funds of another person for one’s own use or other unauthorized purpose. it is a punishable offense
unfair marketing practices: rebating
returning a portion of the premium or the agent’s/broker’s commission on the premium to the insured or other inducements to place business with a specific insurer
unfair marketing practices: redlining
redlining is a discriminatory practice in which insurance companies refuse or limit insurance within certain geographic areas, especially inner-city neighborhoods
Abandonment Condition
A condition often contained in property insurance policies that states that the insured cannot abandon damaged property to the insurer and demand to be reimbursed for its full value.
Accident
A loss that occurs at a specific time and place
Actual Cash Value (ACV)
Today’s replacement cost minus depreciation. Depreciation from wear and tear, or obsolescence.
admitted insurer; authorized insurer
Company that meets a state insurance department’s standards and is allowed to do business in that state.
Adverse Selection
the tendency of insureds with a greater than average chance of loss to purchase insurance
Annual Transit Policy
Nonfiled commercial inland marine transportation form that insures a property owner’s incoming or outgoing shipments of goods during a year
Appraisal Clause
A survey of property to determine the insurable value of the property or the value of the loss sustained.
Appraisal Condition
Policy condition that outlines a procedure for when the insured and insurer disagree on the amount of a loss
Assignment
The legal transfer of one’s interest in an insurance policy to another person.
Aviation Hull Insurance
Provides coverage for physical damage to an aircraft.
Bailee’s Customers Policy
Nonfiled commercial inland marine form obtained by a bailee to cover loss or damage to customers’ property in the bailee’s custody without regard to liability.
Appurtenant Structures
Buildings of lesser value that are on the same premises as the main building insured under a property policy; they are usually covered by the policy.
Assignment Condition
Condition in insurance policies that specifies that the policy cannot be transferred to another unless the company consents to the transfer in writing.
Bailee
A person or organization that has temporary possession of someone else’s personal property.
Basic Perils in Homeowners Policy
There are 14 perils. Fire, lightening, riot, explosion, vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism, malicious mischief, theft.
Basic Property Policy Structure (DICEE)
D – Declarations
I – Insuring agreement
C – Conditions
E – Exclusions
E – Endorsements
Blanket Insurance
Type of insurance policy that covers more than one item of property at a single location or one or more items of property at multiple locations
Builders Risk Coverage Form
Commercial property coverage forms that covers commercial, residential, or farm buildings that are under construction or during remodeling.
Cargo Insurance
Type of ocean marine insurance that covers goods while they are in transit over water.
Binder
Oral or written statement that provides immediate insurance protection for a specified period; designed to provide temporary coverage until a policy is issued or denied.
BOP
Package policy designed to provide broad property and liability coverage for small businesses; eligibility requirements are stricter than the CPP.
Business Income Policy
Pays for loss of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations until the property can be repaired, rebuilt, or replaced with reasonable speed; available with or without extra expense coverage.
Causes of Loss Form
Separate form used with the commercial property coverage part of the commercial package policy that lists covered perils and exclusions. Several different versions provide increasingly broader coverage from basic to broad to special.
Condominium Association Coverage Form
Commercial Property coverage form that covers the buildings in a condominium complex. Does not cover condominium owner’s personal property.
Coverage D on a HO Policy – Loss of Use
If property loss makes the residence premises uninhabitable, the additional living expenses are covered; or if a covered loss to the insured’s property makes a part of the residence premises uninhabitable that is rented to others or held for rental by the insured, this coverage will pay the fair rental value.
coverages excluded on dwelling policy
Theft, vandalism, and malicious mischief excluded on basic policy. Liability excluded on all policies.
Coverage B of homeowners policy
Other structures; covers building and structures on the premises other than the dwelling set apart by a clear space from the dwelling; 10% of Coverage A.
Coverage D on a dwelling policy
Fair rental value is covered on a dwelling policy.
Coverage limit on money in HO
$200 limit on personal property with special limits
Coinsurance Clause on Property
Insurance carried/Insurance required X amount of loss
Coverage F on homeowners policy
Medical payments to others; pays all necessary medical expenses for up to three years after an accident.
Deductible
The amount of expenses that must be paid out of pocket before an insurer will pay any expenses from a covered loss.
Direct Loss
Financial loss resulting directly from a loss to property
Equipment Breakdown Coverage; boiler and machinery coverage
Part of the commercial package policy that covers a loss due to breakdown of business equipment due to direct or indirect loss.
Excess Insurance
When two or more policies or coverage apply to the same loss, the one that applies only after the limits of the primary coverage have been exhausted.
Difference in Conditions Insurance (DIC)
Type of commercial property policy that covers most insurable perils but excludes basic fire and extended coverage perils.
Eligible for Dwelling Policy
Provides coverage for the following:
-Up to five boarders
-Up to four apartments
-Mobile home
-Residence rented to others
-Vacation home
-Townhouse/rowhouse
-Home under construction
Estoppel
Principle that states that if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is injured as a result, the guilty party may be legally prohibited from asserting that the fact does not exist
Extra Expense
Commercial property coverage form that covers additional expenses incurred by the insured business to continue operations following a direct loss by a peril insured against.
Fair Access to Insurance Requirements (FAIR)
Program established by law that makes property insurance available to insureds who might otherwise be uninsurable in the standard market.
Fiduciary
Someone who has undertaken to act for and on behalf of another in a particular matter in circumstance which give rise to a relationship of trust and confidence
Flood
- an overflow of inland or tidal waves
- usual and rapid accumulation of runoff of surface water from any source, unless general flooding exists
- mudslides caused by accumulations of water on the ground or underground
- collapse of land as a result of excessive erosion due to flood
Freight Insurance
Type of ocean marine insurance that protects the insured against the loss of shipping costs
Farm Policy Coverages
Farm property
Coverage A – dwelling
Coverage B – other structures non-farming
Coverage C – household personal property
Coverage D – loss of use
Farm Property Coverages
Coverage E – scheduled farm personal property
Coverage F – unscheduled farm personal property
Coverage G – barns, outbuildings, other farm structures
Farm Liability Coverages
Coverage H – BI and PD
Coverage I – personal and advertising injury
Coverage J – medical payments to others
Floater
An insurance policy, or an addition to another insurance policy, covering personal property deemed to be easily moveable. It covers property lost, damaged, or destroyed (e.g. jewelry, electronics, and furs.)
Fraud
A deliberate misrepresentation that causes harm; an all out effort by one party to deceive and cheat the other, must have intent.
Functional Replacement Cost
Damaged property is repaired or replaced with less expensive, but functionally equivalent, materials
HO-3 Policy Perils
Dwelling covered for open perils and personal property covered for broad perils in this HO policy.
HO-4 Policy
Renters policy. Personal property covered for broad perils.
Indemnity
Restores an insured to the approximate conditions before the loss, no better or worse.
Inherent Vice
Characteristic in property itself causing it to depreciate, spoil, break, become defective, disintegrate, or destroy itself.
Implied Warranties
In ocean marine insurance, warranties that are not written into the policy, but have become a part of the policy by custom.
Indirect Loss
Loss that is the result or consequence of a direct loss
Inland Marine Insurance
Property insurance coverage designed to insure exposures that cannot be conveniently or reasonably confined to a fixed location or insured under a standard form. Includes coverage for property in transit, overland, moveable property, instruments of transportation and communication (bridges, roads, and television/radio towers), legal liability for bailees coverage, and computerized equipment.
Insuring Agreement
Section in the policy that describes what property is covered and the perils the policy insures against.
Jettison
A voluntary action to rid a ship of cargo to prevent further damage or peril.
Liberalization Clause
Condition found in property insurance contracts that provides that if the insurer broadens coverage under a policy form or endorsement without requiring an additional premium, then all existing similar policies or endorsements will be construed to contain the broadened coverage
MCS-90
Endorsement attached to the truckers coverage form to provide public liability coverage.
Intervening Cause
An independent action that breaks the chain of causation and sets in motion a new chain of events; when this occurs, it became the new proximate cause.
Legal Liability
Commercial property coverage form that covers the insured for liability arising out of negligent damage to the property of others while it is in the insured’s care, custody, or control.
Market Value
The amount property could be sold for at the time of of loss. May be used to determine the amount of reimbursement for a loss.
Messenger
In a crime policy, defined as an insured , partner, or employee who has care and custody of insured property outside the premises.
Morale Hazard
Hazard created by an individual’s tendency to contribute to a loss through his own irresponsible actions or carelessness.
Motor Truck Cargo Policy
Commercial inland marine policy that protects a carrier against its liability for damage to domestic shipments in its custody.
Named (specified) Peril Policy
Insurance policy that insures only against perils specifically listed in the policy.
National Flood Insurance Program (NFIP)
Program run by the federal government that makes flood insurance available to eligible communities at subsidized rate; includes coverage for both building and personal property with separate deductible for each.
Motor Carrier Coverage Form
commercial auto coverage form that is an alternate to the truckers coverage form; it can be used to cover anyone who transports property by auto in a commercial enterprise
Mysterious Disappearance
Loss of property due to unknown cause; theft must be ruled out.
Named Insured
Person, business, or other entity named in the declarations to whom the policy is issued.
Nonconcurrency
Situation that exists when the same property is covered by more than one policy, but the policies are not identical as to the extent of coverage provided.
Ocean Marine
Insurance designed to provide broad coverage for cargo and ships in transit over sea; includes cargo insurance, hull insurance, freight insurance, and protection and indemnity insurance.
Pair and Set Provision
Found in some property and inland marine policies stating the company will pay for loss of part of a set by either repairing or replacing the damaged article or paying the difference between the ACV of the intact set and the ACV of the articles remaining after the loss.
Parts of a legal contract (CLOC/CLAC)
Competent parties
Lawful objective
Offer and acceptance
Consideration
Personal effects form
Inland marine form that covers an insured’s personal belongings, such as baggage, while traveling.
Open Peril; all risk; special coverage
Insurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the policy
Parts of a Homeowners Policy
Coverage A – dwelling
Coverage B – other structures
Coverage C – personal property/contents
Coverage D – loss of use/additional living expenses
Coverage E – personal liability
Coverage F – medical payments to others
Personal Articles Form
Inland marine form that provides scheduled coverage for nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.
Primary Insurance
When two or more coverage or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is less.
Pro Rata Basis
Insurance company cancels the policy; unearned premium is returned to the insured. No penalty is applied to this method of cancellation.
Protection and Indemnity
Form of ocean marine liability insurance that covers a variety of types of liability, such as a damage to cargo through negligence and damage to other property or another boat resulting from collision.
Pure Risk
A risk in which there in no chance of gain, only loss; only risk that is insurable.
Repair Cost
The cost to fix a damaged or destroyed item of property; may be the basis of reimbursement for a loss.
Pro Rata other insurance; contribution by limits
Method of handling insurance when more than one coverage applies to a loss; each coverage pays a portion of the loss in proportion to the relationship its limit of liability bears to the total limit of liability under all applicable insurance
Proximate Cause
An action that, in a natural and continuous sequence produces a loss. “If it had not been for⦔
Recovery Clause
In a property form, if the property is recovered after the insured have received payment for the loss the insured must notify the insurance company. The insured must make a decision either to keep property or the settlement amount but not both.
Replacement Cost
The cost to replace the lost or damaged property with property of like, kind, and quality without a deduction for depreciation
Representation
Statements on an insurance application that the applicant believes are true; not considered a matter to which the parties contract, so a policy cannot be voided on this basis.
Scheduled Coverage
Property that is specifically listed in the declarations and covered for a specific amount; also called specific insurance.
Short Rate
When an insured cancels a policy before the expiration date, the insurance company keeps the premium for insurance already provided (called earned premium), but also keeps an allowance (called penalty or surcharge) for expenses on the unearned premium.
Subrogation
Prevents double recovery by assigning or substituting the right of one party (insured) to another (insurer) to collect damages from another party.
Salvage
Insured property that is damaged by a covered peril; the insured is paid by the insurance company who may take possession of the property.
Self-insurance
alternative to purchasing insurance where a company or individual assumes the risk of paying for its losses and sets aside the necessary funds to pay for such losses
Stated-value Policy
Insurance contract written to insure property or a piece of property for specific amount. Fine arts, collectibles, and other hard-to-value assets may be valued this way.
Terrorism Risk Insurance Act (TRIA)
Federal law designed to ensure that insurance coverage for terrorism losses under commercial line policies will be available and affordable; it requires insurers to pay a specified amount for terrorism losses in a given calendar year; once that limit is reached, the federal government will reimburse insurers 85% of insured losses that exceed the limit.
Act of terrorism to be certified by the Secretary of the Treasury in concurrence with Secretary of State and Attorney General of the United States.
Time Element Coverage
Coverage for the loss of business income over a period of time that results from direct physical loss.
Unilateral Contract
A type of contract that is one-sided; an insurance policy is one-sided because only the insurer is bound to perform its part of the agreement.
Vacancy
Absence of both people and property from the insured premises – no contents/no activity
Warranty
A specific agreement between the insured and the insurer that becomes a part of the insurance policy; a breach of warranty can void the policy.
Trip Transit Policy
Nonfiled commercial inland marine policy that covers a single shipment of goods.
Unoccupied
Absence of people from the insured premises – contents with no activity.
Value Reporting Endorsement
Endorsement used with the commercial property coverage part to provide coverage based on the actual values of property at certain locations at specific times.
Watercraft Policy
Package policy that provides property liability and medical payments coverage for losses arising out of the ownership maintenance or use of a watercraft.
Absolute Liability
Type of liability imposed by law on those participating in certain activities that are considered especially hazardous; a person involved in such operations may be held liable for the damages of another even though the individual was not negligent
Advertising Injury
Coverage in the CGL that covers losses caused by oral or written material that slanders or libels, violates privacy rights or infringes on copyrights, titles or slogans.
Assigned Risk Plan; Automobile Insurance Plan
A state-sponsored plan that provides automobile insurance to those who are uninsurable under standard auto insurance policies.
Bid Bond
Type of surety bond that if a contractor’s price is accepted, the contractor will enter into a contract and provide the required performance bond.
Additional Coverage; Coverage Extensions; Extended Coverages; Other Coverages
Supplement insurance coverage that apply only in certain circumstances, have reduced or separate limits of liability, or require the insured to meet certain requirements before they are applicable
Aggregate Limit
Type of policy limit found in liability policies that limits coverage to a specified total amount for all losses occurring within the policy period
Assumption Risk
Defense against liability based on the common law principle that a person who knowingly exposes themselves to danger or injury takes on the risk of loss and cannot hold another person responsible for the loss.
Bodily Injury (BI)
Defined in most policies to include injury sickness disease and death resulting from any of these at any time.
Burglary
The taking of property by a person unlawfully entering or leaving the premises as evidenced by visible signs of forced entry or exit
Claims-made Form
CGL coverage form that pays off bodily injury (BI) or property damage (PD) losses for which a claim was first made against the insured during the policy period
Comparative Negligence
Law that allows an injured party to collect from another party for a loss, even when the injured party contributed to her own loss. Damages are reduced to the extent of the injured party’s negligence.
Blanket Position Bond
Fidelity bond that covers losses arising from the dishonesty of one or more employees acting separately or in collusion; provides a single limit of liability applicable to each employee involved in a loss.
Certificate of Insurance
Written form that verifies a policy has been written. Provides a summary of the coverage provided under the policy.
Collision
Type of physical damage coverage that covers loss that occurs when the insured auto strikes another object or vehicle; may also include upset or overturn of the insured auto.
Compensatory Damages
Damages that reimburse an injured party for losses that were actually sustained.
What are Special Limits of Liability?
These limits do not increase the Coverage B limit. The special limit for each of the following categories is the total limit for each loss for all property in that category:
money, coins and medals, including any of
these that are a part of a collection, and bank notes;
$200
property used or intended for use in a business, including merchandise held as samples or for sale or for delivery after sale
$1,000 – This coverage is limited to $250 on
such property away from the residence premises.
securities, checks, cashier’s checks, traveler’s
checks, money orders and other negotiable
instruments
$1,000
watercraft of all types and outboard motors,
including their trailers,
$1,000
trailers not used with watercraft;
$1,000
stamps, trading cards and comic books,
including any of these that are a part of a collection;
$2500
loss by theft of firearms
$2500
Silverware & goldware
$2500
electronic data processing system equipment
and the recording or storage media
$5000
loss by theft of any rug, carpet (except
wall-to-wall carpet), tapestry, wall-hanging or other
similar article.
$5000 on any one item ; $10,000 in aggregate
Credit Card, Bank Fund Transfer Card, Forgery and
Counterfeit Money.
We will pay up to $1,000 for: the legal obligation of an insured to pay because of the theft or unauthorized use – loss to an insured caused by forgery or alteration of any check or negotiable instrument – loss to an insured through acceptance in good faith of counterfeit United States or Canadian paper currency. No deductible applies to this coverage.
Power Interruption
The power interruption must be caused by a Loss Insured occurring on the residence premises. The power lines off the residence premises must remain energized. This coverage does not increase the limit applying to the damaged property
Arson Reward
We will pay $1,000 for information which
leads to an arson conviction in connection with a fire loss to property covered by this policy. This coverage may increase the limit otherwise applicable. However, the $1,000 limit shall not be increased regardless of the number of persons providing information
Locks.
We will pay the reasonable expenses you incur
to re-key locks on exterior doors of the dwelling located on the residence premises, when the keys to those locks are a part of a covered theft loss.
No deductible applies to this coverage.
The formula for determining the area of a trapezoid is:
Select the single best answer:
A. [(Base1 + Base2) Γ· 2] x Height
B. Β½ Base x Height
C. Base x Height
D. ππππ (pi r squared)
[(base1+base2) / 2] * height
The formula for determining the area of a triangle is:
Select the single best answer:
A. ππππ (pi r squared)
B. [(Base1 + Base2) Γ· 2] x Height
C. Base x Height
D. Β½ Base x Height
D. Β½ Base x Height
The formula for determining the area of a circle is:
Select the single best answer:
A. Β½ Base x height
B. ππππ (pi r squared)
C. [(Base1 + Base2) Γ· 2] x Height
D. Base x Height
B. ππππ (pi r squared)
“On-center” is a term to describe the distance from the center of one framing member to the center of the next framing member, i.e., studs, joist, rafters.
TrueFalse
True
Select the False statement:
Select the single best answer:
A. Plywood, oriented strand board (OSB), fiberboard, and rigid insulating panels are widely used for sheathing.
B. Wall sheathing reinforces the wall framing.
C. Sheathing adds rigidity, strength and some insulating qualities to the wall of a structure.
D. Sheathing provides a flat surface backing for other products, such as siding.
E. The thickness of the sheathing has no affect on the cost of the material.
b. Wall sheathing reinforces the wall framing.
Which of the following components is not a part of a roof truss?
Select the single best answer:
A. Top Chord
B. Bottom Chord
C. Web
D. Bird’s Mouth
E. Gussets
Birds Mouth
Spaced (open) sheathing is normally used with composition shingles.
TrueFalse
Composition shingles can be purchased in bundles which could be β
square or ΒΌ square.
TrueFalse
True
Blanket insulation is an uncut roll of insulation cut to length at the job site. It is used in walls and attics, and may or may not have a backing material.
TrueFalse
True
Select the false statement.
Select the single best answer:
A. Composition shingle weights range from 120 lb. to 480 lb. per square.
B. Composition shingles are made of fiberglass or asphalt saturated roofing material embedded with mineral granules.
C. Wood roofing is generally divided into two categories, wood shingles and wood shakes.
D. Rigid roofing materials include clay, concrete, metal, and slate.
E. All of the above are true.
Composition shingle weights range from 120 lb. to 480 lb. per square.
Non-masonry siding products such as wood, aluminum, vinyl, steel, and vinyl clad siding are usually measured by the square foot, but the materials are typically sold by the square (100 SF) or by the piece.
TrueFalse
True
Select the false statement.
Select the single best answer:
A. Vinyl clad siding is steel siding with a vinyl coating over it. It is more dent-resistant than steel.
B. Vinyl siding is made of a rigid polyvinyl-chloride (PVC) compound. It is tough, durable, and economical.
C. Aluminum siding has a baked-on enamel factory finished and can provide an appearance closely resembling painted wood siding.
D. Vinyl clad siding is aluminum siding with a vinyl coating over it. It is more dent resistant than aluminum and has less tendency to crack than vinyl.
E. Steel siding is more durable than vinyl, aluminum, or vinyl clad siding. Like aluminum siding, it has a baked-on enamel factory finish.
Vinyl clad siding is steel siding with a vinyl coating over it. It is more den-resistant than steel.
How many trusses (16″ o.c.) are in a 35′ 6″ long gable roof with no overhang on the gable ends?
Select the single best answer:
A. 28
B. 27
C. 26
D. 29
28
According to the “Average Size Door Opening Guideline,” a missing wall measuring 3’0″ wide x 6’8″ high would generally be subtracted from the quantity of drywall needed for that room.
TrueFalse
False
A room is 15′ 3″ long, 13′ 5″ wide with a ceiling height of 8′, and the following openings:
Patio door 6’0″ wide x 6’8″ high
Entry door 2’6″ wide x 6’8″ high
Window 1 5’0″ wide x 6’0″ high
Window 2 3’0″ wide x 6’0″ high
How many square feet (SF) of drywall are on the walls and ceiling?
Select the single best answer:
A. 388.70 SF
B. 458.72 SF
C. 593.36 SF
D. 588.75 SF
B. 458.72 SF
A room is 15′ 3″ long, 13′ 5″ wide with a ceiling height of 8′, and the following openings:
Patio door 6’0″ wide x 6’8″ high
Entry door 2’6″ wide x 6’8″ high
Window 1 5’0″ wide x 6’0″ high
Window 2 3’0″ wide x 6’0″ high
How many LF of baseboard are in the room?
Select the single best answer:
A. 51.34 LF
B. 57.34 LF
C. 50.00 LF
D. 48.83 LF
A. 51.34 LF
In the Price List, the paint code, PNT P, does not allow for removal of switch and outlet covers, dropping light fixtures or moving items away from walls.
TrueFalse
False
In the Price List, the price to remove and replace a turbine type roof vent is:
Select the single best answer:
A. $61.75
B. $60.39
C. $57.50
D. $66.95
66.95
In the Price List, the price to replace a roof mount power attic vent is:
Select the single best answer:
A. $206.35
B. $220.82
C. $217.66
D. None of the above.
206.35
There is a 6″ x 6″ water stain on the acoustic ceiling (popcorn) texture of a 15′ x 15′ bedroom. The drywall and texture are undamaged. Which of the following best describes the repair to the ceiling?
Select the single best answer:
A. PNT SP the entire bedroom ceiling.
B. PNT S (4 SF), then PNT P the entire bedroom ceiling.
C. PNT S (4 SF), then PNT AC the entire bedroom ceiling.
D. PNT ACS (2 SF), PNT ACP (6.25 SF) then PNT ACP the entire bedroom ceiling.
PNT ACS (2 SF), PNT ACP (6.25 SF) the PNT ACP the entire bedroom ceiling
In the Price List, the code to seal then paint the exterior is:
Select the single best answer:
A. PNT X2
B. PNT XS, then PNT X1
C. PNT XSP2
D. PNT XSP
C. PNT XSP
What is the category and selector code for a 3’0″ x 5’0″, single hung, vinyl window with double glazing and heavy duty vinyl frame?
Select the single best answer:
A. WDV S+
B. WDV S>+
C. WDV S<+ D. WDV S>
WDVS>+
In the Price List, which of the following statements is true regarding the remove unit price?
Select the single best answer:
A. It includes the labor to put the item in a container (truck, dumpster, etc.) within a reasonable distance from the structure.
B. It includes labor to remove the item from the structure.
C. It includes the material cost of the item.
D. A and B only.
D
In the Price List, 15″ x 36″ exterior wood shutters would be replaced using the following code:
Select the single best answer:
A. SDG SHTRW
B. SDG SHTR>
C. SDG SHTR<
D. SDG SHTR
SDG SHTRW
When estimating to replace wood gates, the price includes fence slats, rails, staples, hinges, latch, hardware, cement mix, all posts and installation labor:
TrueFalse
False
What is the category and selector code for 3ΒΌ” stain grade baseboard?
Select the single best answer:
A. FNC B
B. FNC B3+
C. FNC B3
D. FNC B3H
FNC B3+