Property and Casualty Insurance
Terms & Related Concepts questions
with verified answers
What is covered under Basic form ? - answersCoverages included in a typical Basic
Form policy are:
1. Fire
2. Lightning (natural electricity)
3. Windstorm or Hail
4. Explosion (no coverage for bursting pipes or rupture of pressure relief devices)
5. Vandalism or malicious mischief
6. Vehicles or aircraft collision
7. Riot or civil commotion
8. Sinkhole collapse (excludes cost of filling or collapse into man-mad underground
cavities
9. Volcanic Activity (excludes removal of ash or other
Basic Form, as its name suggests, is the least comprehensive of the three coverage
options.
The important thing to note about reading Basic Form policies is that they cover only
named perils.
This means that if a coverage is not specifically named in the policy, there is no
coverage.
What is covered under Broad Form ( Also known as Open Form )? - answersCoverages
included in a typical Broad Form policy ( In addition to what's covered by the Basic
Form) are:
1. Burglary/Break-in damage
2. Falling Objects (like tree limbs)
3. Weight of Ice and Snow
4. Freezing of Plumbing
5. Accidental Water Damage
6. Artificially Generated Electricity (Sudden or Accident damage from electrical
currents )
7. Building Collapse
8. Accidental discharge of liquid or steam
Broad Form coverage is more expansive than Basic Form coverage.
,Like with a Basic Form policy, a Broad form policy covers only named perils.
Again, if a coverage is not specifically named in the policy, that coverage is excluded.
Fortunately, the Broad Form is designed to cover the most common forms of property
damage.
What is covered under Special Form? - answersThe best kind of form on a homeowners
policy.
Everything is typically covered under a Special Form policy, except for these common
exclusions:
1. Ordinance of Law (Coverage for loss caused by enforcement of ordinances or laws
regulating construction and repair of damaged buildings. Older structures that are
damaged may need upgraded electrical; heating, ventilating, and air-conditioning
(HVAC); and plumbing units based on city codes.)
2. Earthquake
3. Flood
4. Power Failure
5. Neglect
6. War
7. Nuclear Hazard
8. Intentional Acts
Special Form coverage is the most inclusive of the three options.
The trick with Special Form policies is that they should be read differently from how you
would read a Basic or Broad Form policy.
In a Special Form policy, instead of the document listing what's covered, all perils are
covered except for the exclusions specifically enumerated in the policy.
In this sense, reading a Special Form policy is kind of like the opposite of reading a
Basic or Broad Form policy.
All unlisted perils are covered perils. This can be extremely beneficial to the insured
since Special Form coverage makes allowances for the kinds of screwball hazards one
might never expect.
However, if something happens to your home or business, and it is on the list, the policy
will provide no coverage.
, Declaration Page - answersThe front page (or pages) of a policy that specifies the
named insured, address, policy period, location of premises, policy limits, and other key
information that varies from insured to insured.
Definition - answersThis defines words that are used on the policy. This you will see in
bold face and italic or in quotation marks.
Insuring Agreement - answersThat portion of the insurance policy in which the insurer
promises to make payment to or on behalf of the insured.
The insuring agreement is usually contained in a coverage form from which a policy is
constructed.
Often, insuring agreements outline a broad scope of coverage, which is then narrowed
by exclusions and definitions. Persona and poetry to be insured.
Policy Conditions - answersThe section of an insurance policy that identifies general
requirements of an insured and the insurer on matters such as loss reporting and
settlement, property valuation, other insurance, subrogation rights, and cancellation and
nonrenewal.
The policy conditions are usually stipulated in the coverage form of the insurance policy.
Exclusions - answersA provision of an insurance policy or bond referring to hazards,
perils, circumstances, or property not covered by the policy.
Exclusions are usually contained in the coverage form or causes of loss form used to
construct the insurance policy.
Endorsement - answersAn insurance policy form that either changes or adds to the
provisions included in one or more other forms used to construct the policy, such as the
declarations page or the coverage form.
They often effect these changes by modifying the existing insuring agreement, policy
definitions, exclusions, or conditions in the coverage form or adding additional
information, such as insured locations, to the declarations page.
Casualty/ Liability - answers- Third-Party contract (policy pays a third party) ***(You,
Insurance Company and the person who got hurt)***
- Legal liability for injury or damage to others.
Property - answers- Two-Party contract between insurer and insured.
- Losses to possessions or assets.
Terms & Related Concepts questions
with verified answers
What is covered under Basic form ? - answersCoverages included in a typical Basic
Form policy are:
1. Fire
2. Lightning (natural electricity)
3. Windstorm or Hail
4. Explosion (no coverage for bursting pipes or rupture of pressure relief devices)
5. Vandalism or malicious mischief
6. Vehicles or aircraft collision
7. Riot or civil commotion
8. Sinkhole collapse (excludes cost of filling or collapse into man-mad underground
cavities
9. Volcanic Activity (excludes removal of ash or other
Basic Form, as its name suggests, is the least comprehensive of the three coverage
options.
The important thing to note about reading Basic Form policies is that they cover only
named perils.
This means that if a coverage is not specifically named in the policy, there is no
coverage.
What is covered under Broad Form ( Also known as Open Form )? - answersCoverages
included in a typical Broad Form policy ( In addition to what's covered by the Basic
Form) are:
1. Burglary/Break-in damage
2. Falling Objects (like tree limbs)
3. Weight of Ice and Snow
4. Freezing of Plumbing
5. Accidental Water Damage
6. Artificially Generated Electricity (Sudden or Accident damage from electrical
currents )
7. Building Collapse
8. Accidental discharge of liquid or steam
Broad Form coverage is more expansive than Basic Form coverage.
,Like with a Basic Form policy, a Broad form policy covers only named perils.
Again, if a coverage is not specifically named in the policy, that coverage is excluded.
Fortunately, the Broad Form is designed to cover the most common forms of property
damage.
What is covered under Special Form? - answersThe best kind of form on a homeowners
policy.
Everything is typically covered under a Special Form policy, except for these common
exclusions:
1. Ordinance of Law (Coverage for loss caused by enforcement of ordinances or laws
regulating construction and repair of damaged buildings. Older structures that are
damaged may need upgraded electrical; heating, ventilating, and air-conditioning
(HVAC); and plumbing units based on city codes.)
2. Earthquake
3. Flood
4. Power Failure
5. Neglect
6. War
7. Nuclear Hazard
8. Intentional Acts
Special Form coverage is the most inclusive of the three options.
The trick with Special Form policies is that they should be read differently from how you
would read a Basic or Broad Form policy.
In a Special Form policy, instead of the document listing what's covered, all perils are
covered except for the exclusions specifically enumerated in the policy.
In this sense, reading a Special Form policy is kind of like the opposite of reading a
Basic or Broad Form policy.
All unlisted perils are covered perils. This can be extremely beneficial to the insured
since Special Form coverage makes allowances for the kinds of screwball hazards one
might never expect.
However, if something happens to your home or business, and it is on the list, the policy
will provide no coverage.
, Declaration Page - answersThe front page (or pages) of a policy that specifies the
named insured, address, policy period, location of premises, policy limits, and other key
information that varies from insured to insured.
Definition - answersThis defines words that are used on the policy. This you will see in
bold face and italic or in quotation marks.
Insuring Agreement - answersThat portion of the insurance policy in which the insurer
promises to make payment to or on behalf of the insured.
The insuring agreement is usually contained in a coverage form from which a policy is
constructed.
Often, insuring agreements outline a broad scope of coverage, which is then narrowed
by exclusions and definitions. Persona and poetry to be insured.
Policy Conditions - answersThe section of an insurance policy that identifies general
requirements of an insured and the insurer on matters such as loss reporting and
settlement, property valuation, other insurance, subrogation rights, and cancellation and
nonrenewal.
The policy conditions are usually stipulated in the coverage form of the insurance policy.
Exclusions - answersA provision of an insurance policy or bond referring to hazards,
perils, circumstances, or property not covered by the policy.
Exclusions are usually contained in the coverage form or causes of loss form used to
construct the insurance policy.
Endorsement - answersAn insurance policy form that either changes or adds to the
provisions included in one or more other forms used to construct the policy, such as the
declarations page or the coverage form.
They often effect these changes by modifying the existing insuring agreement, policy
definitions, exclusions, or conditions in the coverage form or adding additional
information, such as insured locations, to the declarations page.
Casualty/ Liability - answers- Third-Party contract (policy pays a third party) ***(You,
Insurance Company and the person who got hurt)***
- Legal liability for injury or damage to others.
Property - answers- Two-Party contract between insurer and insured.
- Losses to possessions or assets.
