Exam FX PROPERTY & CASUALTY
1. Stated value: An amount of insurance scheduled in a property policy that is not subject to
any coinsurance requirements in the event of a covered loss. *scheduled amount is the max
insurer will pay*
2. Salvage value: Estimated value an asset will realize upon its sale at the end of its useful
life. * may be sold as whole or in part*
3. Absolute liability: imposed on defendants engaged in hazardous activitiessuch as
harboring wilding animals, using explosives etc.
4. Which type of liability does not require that the injured party prove negli-gence?:
Absolute liability
5. Strict Liability: Implied warranty that product is safe. The business is then liable for
defective products regardless of negligence. * If a product causes injury& claimant can prove
defect, defendant will be strictly liable
6. What term comes from old English law "respondeat superior?": VicariousLiablility
7. What is vicarious liability?: Being held liable for acts of others. For example:Parents
responsible for negligent act of kids or employers liable for employees.
8. What are Limits of Liability?: The maximum amount of money the insurancecompany
will pay for a particular loss or loss during a period of time.
9. What does "per occurrence" mean?: The sublimit in a liability policy that putsa ceiling on
payment for all claims that arise from a single accident occurrence
10. In commercial general liability, what is a claims-made form?: It is used forspecialty
coverages, malpractice, errors & omissions, employment practices, liability,etc.
11. In commercial general liability, what is an occurrence form?: 1)The mostcommon form
and is used for a wide variety of businesses.
12. If an insured covered under a Mobile Homeowners policy moves the mobilehome to protect
it from a covered peril, the policy will pay up to: $500
13. If the premiums for a policy will be increased by more than 15%, how muchwarning must
the insured get?: 45 days
14. Dwelling property policy: -developed by ISO to be used primarily as propertycoverage
form
*can insure dwelling only, contents only or both
*basic, broad, special
, *Liability not included but can be added
15. DP 00 01: named peril coverage form
* most limited coverage
*no minimum amount of insurance required for basic form
16. Additional coverage (supplementary): A provision in an insurance policy that provides an
additional amount of coverage for specific loss expense at no additionalpremium.
17. Per Person (Limit of Liability): Maximum amount available for payment of bodily injury
to a single person in an accident regardless of policy limits in the policy.25/50 for example
18. Aggregate Limit: maximum limit of coverage available under liability policy during a
policy year regardless of losses. *Limits are restored at the anniversaryof the policy.
19. Split Limits: separately stated limits of liability for different coverages
*per person
*per occurrence
*per policy period
(think of an auto policy)
20. Combined Single: single dollar limit of liability applying to the total of damagesfor bodily
injury & property damage combined resulting from one accident/occur- rence *single limit to
split between injuries and damage to property*
21. Law of Large Numbers: The larger the number of people with a similar exposureto loss,
the more predictable actual losses will be.
22. Insurance: Transfers the risk of loss from an individual or business entity to aninsurance
company
23. The three elements of insurable risk are: 1) Financial 2) Blood (relative) 3)Business
24. Risk: The uncertainty or chance of a loss occurring
25. Types of risks are: 1) Pure risk 2) Speculative risk
26. What type of risk does insurance cover?: Pure risk
27. What is pure risk?: It can only result in a loss or no change
1. Stated value: An amount of insurance scheduled in a property policy that is not subject to
any coinsurance requirements in the event of a covered loss. *scheduled amount is the max
insurer will pay*
2. Salvage value: Estimated value an asset will realize upon its sale at the end of its useful
life. * may be sold as whole or in part*
3. Absolute liability: imposed on defendants engaged in hazardous activitiessuch as
harboring wilding animals, using explosives etc.
4. Which type of liability does not require that the injured party prove negli-gence?:
Absolute liability
5. Strict Liability: Implied warranty that product is safe. The business is then liable for
defective products regardless of negligence. * If a product causes injury& claimant can prove
defect, defendant will be strictly liable
6. What term comes from old English law "respondeat superior?": VicariousLiablility
7. What is vicarious liability?: Being held liable for acts of others. For example:Parents
responsible for negligent act of kids or employers liable for employees.
8. What are Limits of Liability?: The maximum amount of money the insurancecompany
will pay for a particular loss or loss during a period of time.
9. What does "per occurrence" mean?: The sublimit in a liability policy that putsa ceiling on
payment for all claims that arise from a single accident occurrence
10. In commercial general liability, what is a claims-made form?: It is used forspecialty
coverages, malpractice, errors & omissions, employment practices, liability,etc.
11. In commercial general liability, what is an occurrence form?: 1)The mostcommon form
and is used for a wide variety of businesses.
12. If an insured covered under a Mobile Homeowners policy moves the mobilehome to protect
it from a covered peril, the policy will pay up to: $500
13. If the premiums for a policy will be increased by more than 15%, how muchwarning must
the insured get?: 45 days
14. Dwelling property policy: -developed by ISO to be used primarily as propertycoverage
form
*can insure dwelling only, contents only or both
*basic, broad, special
, *Liability not included but can be added
15. DP 00 01: named peril coverage form
* most limited coverage
*no minimum amount of insurance required for basic form
16. Additional coverage (supplementary): A provision in an insurance policy that provides an
additional amount of coverage for specific loss expense at no additionalpremium.
17. Per Person (Limit of Liability): Maximum amount available for payment of bodily injury
to a single person in an accident regardless of policy limits in the policy.25/50 for example
18. Aggregate Limit: maximum limit of coverage available under liability policy during a
policy year regardless of losses. *Limits are restored at the anniversaryof the policy.
19. Split Limits: separately stated limits of liability for different coverages
*per person
*per occurrence
*per policy period
(think of an auto policy)
20. Combined Single: single dollar limit of liability applying to the total of damagesfor bodily
injury & property damage combined resulting from one accident/occur- rence *single limit to
split between injuries and damage to property*
21. Law of Large Numbers: The larger the number of people with a similar exposureto loss,
the more predictable actual losses will be.
22. Insurance: Transfers the risk of loss from an individual or business entity to aninsurance
company
23. The three elements of insurable risk are: 1) Financial 2) Blood (relative) 3)Business
24. Risk: The uncertainty or chance of a loss occurring
25. Types of risks are: 1) Pure risk 2) Speculative risk
26. What type of risk does insurance cover?: Pure risk
27. What is pure risk?: It can only result in a loss or no change
