RMI 4224 Exam 1
A condition commonly found in commercial property coverage forms: - answer a pro
rata "other insurance" provision applies when two or more policies cover the same
property
What is not an example of Your Business Personal Property? - answer the building or
structure described in the declarations
Joe owns an appliance repair shop. He just finished repairing a customer's washing
machine at a cost of $125 ($50 for a part and $75 in labor). Before the customer could
pickup their repaired washing machine, a fire swept through Joe's shop and destroyed
the washing machine. The washing machine was worth $500 at the time of this loss.
How much money is Joe entitled to collect for this u=loss under his B&PP? -
answer$125
Why are bridges, roadways, walks, patios, foundations, pilings and piers typically
deemed Property Not Covered under the b&PP? - answerthey have a low susceptibility
to covered causes of loss & most insureds don't want the values of such items
considered in determining compliance with the policy's coinsurance clause
The additional coverage for preservation of property provides coverage for covered
proerty removed from the covered premises to avoid being damaged by a covered
cause of loss. How many days from the time the property was moved does this
coverage extend? - answer30 days
T/F according to the coverage extension under the coverage form: Up to $1,000 can be
paid for a loss or damag of a satellite dish due to fire - answerTrue
statement concerning coverage for Fire Department Service Charges: This coverage is
treated as additional insurance and not subject to the limit of insurance specified in the
Declarations - answerTrue
The process available to an insured and their insurance company to resolve disputes
concerning the valuation of lost or damaged property is: - answerappraisal
Duties of an insured in the event of a covered loss: - answer-protect covered property
from further damage
-cooperate with insurance company's investigation of the loss
-provide prompt notice of loss to the insurance company
A building is valued at $250,000 and insured for its full value. A fire completely destroys
this building and the insured is paid $250,000 for the destroyed building. The cost to
, remove the debris is $40,000. What amount, if any, can be paid to the insured for the
cost of debris removal? - answer$250,000
Hazard - answer-condition increasing probability and severity of a loss
-building a home in a remote, arid area increases the probability of a loss due to
wildfires. In this example, the decision to build in this area is the hazard that leads to a
greater probability of loss due to wildfires.
-hazard is not synonymous with peril
Joe doesn't want the liability associated with over-serving patrons alcohol. He sells the
bar to another person. What risk management technique is Joe using? -
answerAvoidance
Legally binding contract includes: - answeroffer/acceptance, competent parties, legal
purpose, legal consideration
insurance contract with "take it or leave it" characteristic. - answercontract of adhesion
Shavon's home is insured for loss under a standard HO-3 policy. She reports theft of
her 5 year old tv to her insurance company. Although shavon paid $1,500 for the TV 5
years ago, she was only paid the ACV of her TV &$750) by her insurer. What principle
of insurance does this illustrate? - answerindemnity
T/F
1) the insurance company's duty to defend is broader than its duty to pay covered
losses
2) endorsements always provide additional coverage - answerT,F
Not an example of an insurable interest - answerROger wants to purchase an HO-5
policy to insure against loss to his next-door neighbor's home
False concerning insurance policy provisions - answermost property insurance policies
have provisions that allow an insured to abandon damaged property they no longer
want to the tinsurance company
Tommy has a personal auto policy with bodily injury limits of $50K per person and
$100K per accident. Tommy was recently involved in an auto accident causing the
following bodily damages:
Steve = $60K
Barbara = $10K
Valerie = $25K
What is the total amount of money all three claimants collectively will receive from
Tommy's insurance company? - answer$85K
T/F
A condition commonly found in commercial property coverage forms: - answer a pro
rata "other insurance" provision applies when two or more policies cover the same
property
What is not an example of Your Business Personal Property? - answer the building or
structure described in the declarations
Joe owns an appliance repair shop. He just finished repairing a customer's washing
machine at a cost of $125 ($50 for a part and $75 in labor). Before the customer could
pickup their repaired washing machine, a fire swept through Joe's shop and destroyed
the washing machine. The washing machine was worth $500 at the time of this loss.
How much money is Joe entitled to collect for this u=loss under his B&PP? -
answer$125
Why are bridges, roadways, walks, patios, foundations, pilings and piers typically
deemed Property Not Covered under the b&PP? - answerthey have a low susceptibility
to covered causes of loss & most insureds don't want the values of such items
considered in determining compliance with the policy's coinsurance clause
The additional coverage for preservation of property provides coverage for covered
proerty removed from the covered premises to avoid being damaged by a covered
cause of loss. How many days from the time the property was moved does this
coverage extend? - answer30 days
T/F according to the coverage extension under the coverage form: Up to $1,000 can be
paid for a loss or damag of a satellite dish due to fire - answerTrue
statement concerning coverage for Fire Department Service Charges: This coverage is
treated as additional insurance and not subject to the limit of insurance specified in the
Declarations - answerTrue
The process available to an insured and their insurance company to resolve disputes
concerning the valuation of lost or damaged property is: - answerappraisal
Duties of an insured in the event of a covered loss: - answer-protect covered property
from further damage
-cooperate with insurance company's investigation of the loss
-provide prompt notice of loss to the insurance company
A building is valued at $250,000 and insured for its full value. A fire completely destroys
this building and the insured is paid $250,000 for the destroyed building. The cost to
, remove the debris is $40,000. What amount, if any, can be paid to the insured for the
cost of debris removal? - answer$250,000
Hazard - answer-condition increasing probability and severity of a loss
-building a home in a remote, arid area increases the probability of a loss due to
wildfires. In this example, the decision to build in this area is the hazard that leads to a
greater probability of loss due to wildfires.
-hazard is not synonymous with peril
Joe doesn't want the liability associated with over-serving patrons alcohol. He sells the
bar to another person. What risk management technique is Joe using? -
answerAvoidance
Legally binding contract includes: - answeroffer/acceptance, competent parties, legal
purpose, legal consideration
insurance contract with "take it or leave it" characteristic. - answercontract of adhesion
Shavon's home is insured for loss under a standard HO-3 policy. She reports theft of
her 5 year old tv to her insurance company. Although shavon paid $1,500 for the TV 5
years ago, she was only paid the ACV of her TV &$750) by her insurer. What principle
of insurance does this illustrate? - answerindemnity
T/F
1) the insurance company's duty to defend is broader than its duty to pay covered
losses
2) endorsements always provide additional coverage - answerT,F
Not an example of an insurable interest - answerROger wants to purchase an HO-5
policy to insure against loss to his next-door neighbor's home
False concerning insurance policy provisions - answermost property insurance policies
have provisions that allow an insured to abandon damaged property they no longer
want to the tinsurance company
Tommy has a personal auto policy with bodily injury limits of $50K per person and
$100K per accident. Tommy was recently involved in an auto accident causing the
following bodily damages:
Steve = $60K
Barbara = $10K
Valerie = $25K
What is the total amount of money all three claimants collectively will receive from
Tommy's insurance company? - answer$85K
T/F
