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C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac
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C12 Property Insurance
Chapters 1–8 Practice
Questions and Answers
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What is property insurance? First-party insurance that indemnifies the owner or user of property for its loss,
or the loss of its income-producing ability, when the loss or damage is caused
by a coverage cause of loss, such as fire or explosion
Property insurance covers events that are sudden and accidental in nature
To recover for loss or damage covered by property Insurable interest
insurance, a person or company must have an ____ _____
What is insurable interest? an interest that the insured must have in the subject matter of insurance
purchased so that if the event insured against occurs, the insured will suffer an
economic loss
The person must stand to benefit from the continued existence of that
property
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,https://www.stuvia.com/user/edupac C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac https://www.stuvia.com/user/edupac
How does property insurance affect the overall 1. Source of revenue and helps to spread risk among a large pool of
economy? policyholders. This allows insurance companies to pay claims in the event of
losses, such as natural disasters, fires and theft
2. Provide financial protection for individuals and business against the impact
of unexpected losses. This helps reduce the financial burden on individuals
and business, allowing them to recover more quickly and get back to normal
operations
3. Encourages investments in property and can boost economic growth
Property insurance is a critical component of both the P&C industry and
economy, providing financial stability and protection in the face of
unexpected losses
How does property insurance work? Insurance is intangible. It is based on exchange of promises: the insured
promises a premium to the insurer in return for the insurer's promise to assume
the insured's risk of loss.
The compensation offered by the policy of insurance is called indemnity - to
return the insured as nearly as possible to the financial position they enjoyed
immediately prior to loss
The loss must also be fortuitous (unexpected, accidental)
Insurance is a _____ contract
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, https://www.stuvia.com/user/edupac C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac https://www.stuvia.com/user/edupac
What are the key elements of a contract? And what are 1. Agreement
the unique elements to an insurance contract? 2. Consideration
3. Capacity
4. Genuine intent
5. Legal
The unique aspects of an insurance contract are:
1. Indemnity
2. Insurable interest
3. Utmost good faith
How does Quebec define a contract? an agreement of wills by which one or several persons obligate themselves to
one or several other persons to perform a prestation (that is, a duty, a payment
or a service)
What is uberrimae fidei? Utmost good faith - the basis of insurance and reinsurance contracts. Both
parties to the contact are bound to exercise good faith and do so by a full
disclosure of all information material to the proposed contract
A contract may be ____ but it is best expressed and most 1. oral
readily enforced in ___ 2. writing
In general, what is an insurance policy? An insurance policy is the document that makes tangible the intent of both
parties to the contract. The intent being the promise made between the
insured and insurer
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C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac
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C12 Property Insurance
Chapters 1–8 Practice
Questions and Answers
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,https://www.stuvia.com/user/edupac C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac https://www.stuvia.com/user/edupac
What is property insurance? First-party insurance that indemnifies the owner or user of property for its loss,
or the loss of its income-producing ability, when the loss or damage is caused
by a coverage cause of loss, such as fire or explosion
Property insurance covers events that are sudden and accidental in nature
To recover for loss or damage covered by property Insurable interest
insurance, a person or company must have an ____ _____
What is insurable interest? an interest that the insured must have in the subject matter of insurance
purchased so that if the event insured against occurs, the insured will suffer an
economic loss
The person must stand to benefit from the continued existence of that
property
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,https://www.stuvia.com/user/edupac C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac https://www.stuvia.com/user/edupac
How does property insurance affect the overall 1. Source of revenue and helps to spread risk among a large pool of
economy? policyholders. This allows insurance companies to pay claims in the event of
losses, such as natural disasters, fires and theft
2. Provide financial protection for individuals and business against the impact
of unexpected losses. This helps reduce the financial burden on individuals
and business, allowing them to recover more quickly and get back to normal
operations
3. Encourages investments in property and can boost economic growth
Property insurance is a critical component of both the P&C industry and
economy, providing financial stability and protection in the face of
unexpected losses
How does property insurance work? Insurance is intangible. It is based on exchange of promises: the insured
promises a premium to the insurer in return for the insurer's promise to assume
the insured's risk of loss.
The compensation offered by the policy of insurance is called indemnity - to
return the insured as nearly as possible to the financial position they enjoyed
immediately prior to loss
The loss must also be fortuitous (unexpected, accidental)
Insurance is a _____ contract
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, https://www.stuvia.com/user/edupac C12 Property Insurance Chapters 1–8 Practice Questions and Answershttps://www.stuvia.com/user/edupac https://www.stuvia.com/user/edupac
What are the key elements of a contract? And what are 1. Agreement
the unique elements to an insurance contract? 2. Consideration
3. Capacity
4. Genuine intent
5. Legal
The unique aspects of an insurance contract are:
1. Indemnity
2. Insurable interest
3. Utmost good faith
How does Quebec define a contract? an agreement of wills by which one or several persons obligate themselves to
one or several other persons to perform a prestation (that is, a duty, a payment
or a service)
What is uberrimae fidei? Utmost good faith - the basis of insurance and reinsurance contracts. Both
parties to the contact are bound to exercise good faith and do so by a full
disclosure of all information material to the proposed contract
A contract may be ____ but it is best expressed and most 1. oral
readily enforced in ___ 2. writing
In general, what is an insurance policy? An insurance policy is the document that makes tangible the intent of both
parties to the contract. The intent being the promise made between the
insured and insurer
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