***ALL EXAM FX FLASHCARDS*** QUESTIONS WITH COMPLETE SOLUTIONS

Under absolute liability, does an injured party need to prove negligence? correct answer: No. Absolute liability exists when a condition or conduct is inherently dangerous, so proof of negligence is not required. What insurance principle does pro rata liability protect? correct answer: Indemnity What is the difference between vacancy and unoccupancy? correct answer: Vacancy - refers to an insured structure in which no people have been living or working and no property has been stored for the specified period of time. Unoccupancy - refers to an insured structure in which no people have been living or working within the required period of time, but some property is stored. In commercial property policies, who has control of the policy, and who can cancel it? correct answer: First named insured In property insurance, what is the purpose of a coinsurance clause? correct answer: To encourage insureds to insure property close to its value What is burglary? correct answer: Theft with forced entry into a premises. What are policy limits? correct answer: The maximum amount an insured may collect for a loss under the terms of the policy What is proof of loss? correct answer: A sworn statement from an insured notifying the insurer about a loss. Declarations correct answer: What part of a policy shows the amount of insurance, premium, and policy terms? (Insurance Carried ÷ Insurance Required) × Loss Amount = correct answer: Loss Payment Information about changes to the policy or return of premium can be found in what section of a policy? correct answer: Conditions What are an insurer's obligations in property and casualty insurance? correct answer: Be fair in underwriting, and pay for covered losses. If a manufactured product is unsafe, what type of liabili