STATE FARM PROPERTY AND CASUALTY EXAM
STATE FARM PROPERTY AND CASUALTY EXAM
GRADED A+ LATEST UPDATE.
duties of the insured ANS >> 1. pay the premium
2. take all reasonable means to save and protect the property from loss
3. give the insurance company immediate notice of loss
4. give the insurance company proof of loss within 60 days of the loss
5. 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
6. 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 ANS >> 1. must indemnify the insured within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the damaged property
3. 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
, STATE FARM PROPERTY AND CASUALTY EXAM
the subrogation clause ANS >> 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 ANS >> 1. transfer of a policy to another person
2. 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 ANS >> 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 ANS >> 1. 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
2. says that no insurance company shall be responsible for any more than its pro rata share of the loss
mortgagee rights ANS >> -if a mortgagee (lender) is named on the declarations page, it acquires 3 rights
in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
salvage ANS >> -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 ANS >> provides that no property can be abandoned to the insurance company
without its consent
vacancy and unoccupancy clause ANS >> 1. usually found only in policies covering commercial (business)
property
STATE FARM PROPERTY AND CASUALTY EXAM
GRADED A+ LATEST UPDATE.
duties of the insured ANS >> 1. pay the premium
2. take all reasonable means to save and protect the property from loss
3. give the insurance company immediate notice of loss
4. give the insurance company proof of loss within 60 days of the loss
5. 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
6. 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 ANS >> 1. must indemnify the insured within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the damaged property
3. 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
, STATE FARM PROPERTY AND CASUALTY EXAM
the subrogation clause ANS >> 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 ANS >> 1. transfer of a policy to another person
2. 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 ANS >> 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 ANS >> 1. 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
2. says that no insurance company shall be responsible for any more than its pro rata share of the loss
mortgagee rights ANS >> -if a mortgagee (lender) is named on the declarations page, it acquires 3 rights
in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
salvage ANS >> -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 ANS >> provides that no property can be abandoned to the insurance company
without its consent
vacancy and unoccupancy clause ANS >> 1. usually found only in policies covering commercial (business)
property
