PROPERTY AND CASUALTY
INSURANCE EXAMPREP PART ONE
COMPLETE REVIEW GUIDE GRADED A
⩥ Real Property. Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
⩥ Insurable Interest. Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged. Must
exist at the time of loss in P&C insurance.
⩥ Elements of Insurable Interest. Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower), Blood
(Family), Business (Business partners over a company).
⩥ Actual Cash Value. Answer: Replacement cost less than depreciation
(RC-Depreciation=Amount Paid). Reinforces the principal of indemnity.
⩥ Replacement Cost. Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
⩥ Functional Replacement Cost. Answer: Replacing a property with a
more modern and less expensive property.
, ⩥ Market Value. Answer: What a willing buyer is willing to pay a
willing seller.
⩥ Agreed Value. Answer: The amount agreed upon by the insured and
insurer. Amount is stated in the policy.
⩥ Stated Amount. Answer: The amount the insurer says for a particular
property. Amount is written in the policy.
⩥ Proximate Cause of Loss. Answer: A loss is covered only if a covered
peril is the proximate cause. Proximate cause is the event initiating an
unbroken chain of events leading to the loss.
⩥ Named Peril Policy. Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
⩥ Theft. Answer: Taking of property.
⩥ Burglary. Answer: Taking of property using forced entry and exit.
⩥ Robbery. Answer: Taking of property using threatening tactics.
INSURANCE EXAMPREP PART ONE
COMPLETE REVIEW GUIDE GRADED A
⩥ Real Property. Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
⩥ Insurable Interest. Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged. Must
exist at the time of loss in P&C insurance.
⩥ Elements of Insurable Interest. Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower), Blood
(Family), Business (Business partners over a company).
⩥ Actual Cash Value. Answer: Replacement cost less than depreciation
(RC-Depreciation=Amount Paid). Reinforces the principal of indemnity.
⩥ Replacement Cost. Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
⩥ Functional Replacement Cost. Answer: Replacing a property with a
more modern and less expensive property.
, ⩥ Market Value. Answer: What a willing buyer is willing to pay a
willing seller.
⩥ Agreed Value. Answer: The amount agreed upon by the insured and
insurer. Amount is stated in the policy.
⩥ Stated Amount. Answer: The amount the insurer says for a particular
property. Amount is written in the policy.
⩥ Proximate Cause of Loss. Answer: A loss is covered only if a covered
peril is the proximate cause. Proximate cause is the event initiating an
unbroken chain of events leading to the loss.
⩥ Named Peril Policy. Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
⩥ Theft. Answer: Taking of property.
⩥ Burglary. Answer: Taking of property using forced entry and exit.
⩥ Robbery. Answer: Taking of property using threatening tactics.
