Exam FX Chapter 1! Questions With Complete Solutions

A policy that covers all causes of loss except for those specifically excluded is known as what type of policy? correct answer: Open Peril (or special) form What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident? correct answer: Per Occurence An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this? correct answer: Indirect or Consequential What is the difference between vacancy and unoccupancy? correct answer: Vacancy completely empty Unoccupied out of town What is subrogation? correct answer: An insurer's legal right to seek damages from third parties after reimbursing insureds for a loss A person who does not lock the doors to his or her house shows an indifferent attitude. What type of hazard does this represent? correct answer: Morale Wagering on a sporting event is knows as what type of risk? correct answer: Speculative In property insurance, what is actual cash value? correct answer: Replacement cost at the time of loss, minus depreciation What term describes a loss caused by continuous exposure to condition? correct answer: Occurence What provision found in property policies prevents an insured from collecting twice for the same loss; once from the insurer and again from the third party? correct answer: Subrog