Utah Property and Casualty Exam Questions & Answers Graded A+

Bailee - Answer An individual or organization who has taken into its care, custody, and/or control the property of another for servicing, repair, or storage Hazard - Answer Something that increases the chance or likelihood of a loss occuring. (physical or moral or morale) Market Value - Answer A property policy provision that changes the valuation method otherwise applicable (ACV or RV) to a valuation method that allows reimbursement to the insured, according to the price a willing buyer would pay for the property purches from a willing seller Insurable Interest (limit of liability) - Answer Specifies that the insurer will not be responsible for an amount which is greater than the financial interest of an insured person or more that the limit of liability stated on the Declarations Page Actual Cash Value (ACV) - Answer The policy pays for the cost to repair or replace the damaged property at the time of loss, less depreciation Deductible - Answer The amount of money which the insured party must pay before the insurance company's own coverage plan begins. Vacancy - Answer A property that has neither occupants nor personal property is described as vacant. Right of Salvage - Answer The right of the insurer to take possession of damaged property after the loss to the property has been paid. The salvage belongs to the insurer. Inherent Vice - Answer A condition or defect that exists within property itself that causes the property to spoil, break, become defective, or destroy itself. Insurance policies typically exclude inherent vice. Example: The quality of materials used in a painting allows the painting to fade or lose luster with time. Aircraft Hull Insurance - Answer Provides coverage on an open peril basis for physical loss or damage to the insured aircraft, on ground, or in flight. In flight is from the moment it moves forward for takeoff until it completes its landing run. Motor Carrier Act of 1980 - Answer Department of Transportaion (DOT) requires: -Motor carrier must carry an insurance policy of certain minimum limits, or -Post a surety bond representing certain financial stability criteria when transporting passengers or cargo. Contribution by Equal Shares - Answer Under this concept, when 2 or more insurers' policies cover at the same level (Primary or Excess), each insurer contributes an equal amount to the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first. Example: If there are 3 insurers participating, each would pay 33 1/3 percent of the loss; if 4 insurers participating, each would pay 25 percent of the loss; or if 5 insurers participating, each would pay 20 percent of the loss. Certified Act of Terrorism - Answer Any act, certified jointly as terrorism by the Secretary of Treasury, State and Attorney General which is at least one of the following: -Violent/dangerous to human life/property/infrastructure. -Damaging within the U.S. or on U.S. air carrier/vessel/mission. -Committed by persons on behalf of any foreign person/interest to coerce/influence the U.S. civilian/government policy. Nationwide Marine Definition - Answer Wet insurance and Dry insurance are terms that the Nationwide Marine Definition uses in specifying risks that may be written under marine insurance. The National Association of Insurance Commissioners adopted the Nationwide Marine Definition that defines 6 broad classes of property that may be insured under marine contract The classes are: 1. Imports 2. Exports 3. Domestic Shipments 4. Instrumentalities of Transportation or Communication (i.e. bridges, tunnels, antenna towers) 5. Personal Property Floater Risks (as discussed in Chapters 3 and 9) 6. Commercial Property Floater Risks Homeowners (liability) Endorsements (for additional premium) - Answer -Business Pursuits - Extends liability coverage for involvement in business not owned or controlled. -Home Day Care- Extends Section II coverage. -Limited Fungi, Wet or Dry Rot, or Bacteria Coverage- covers insured's liability exposure from claims of others. -Permitted Incidental Occupancies - Necessary and incidental use of premises. -Personal Injury- Defines and adds personal injury to the policy. -Watercraft Liability -Home Business -Worker's Compensation Residence Employee Homeowners Policies - Answer HO Forms: 2,3,5,8 are for owner-occupant of a dwelling that is used principally for private residential purposes HO Forms: 4(tenant) and 6(condominium unit-owner) are written to insure the personal property and liability of occupants, but do not cover the structure Homeowners (property) Endorsements (for additional premium) - Answer Earthquake Home Day Care (children) Personal Property Replacement Cost (increase coverage for full recovery) Scheduled Personal Property (for scheduled property with a specific amount of coverage) Limited Fungi, Wet or Dry Rot, Bacteria Coverage (testing and removal) Permitted Incidental Occupancies (additional coverage when residence used for business) Declarations Page - Answer The basic information about a policy: Who - names of insurer and insured What - description of insured property Where - address and legal description of insured property When - effective and expiration dates. How Much - limits of coverage, deductible, premium Homeowners (property) Exclusions - Answer Ordinance or Law (loss caused during enforsement) Earth Movement (earthquake, landslides, mine substinence, sinking) Water Damage (flood, tidal water, overflow, or back up of sewer/drains/sump) Power Failure (interuption away from premises) Neglect (failure to protect) War (civil, insurrections, rebellions, revolutions) Nuclear Hazard (reaction or radioactive contamination) Intentional Loss (burn your own house) Government Action (during confiscation or seizure) Homeowners (additional) Liability Coverages - Answer Claim Expenses - supplementary payments - reasonable expenses at insurer's request First Aid Expenses - first aid for others, not the insured Damage to Property of Others - replacement costs up to limits Loss Assessment - a homeowners association charge against insured. Watercraft - Answer A craft principally designed to be propelled on or in water by wind, engine power, or electric motor. Truckers Coverage Form - Answer For those firms or persons that are in the business of transporting goods or commodities for another Section I- Covered Autos Section II - Liability Cov Section III- Trailer Interchange Coverage - covers trailer that ind does not own but has in his possession along with a written Trailer Interchange Agreement Section IV - Physical Damage Coverage Section V- Truckers Conditions Section VI- Definitions Personal Watercraft Insurance - Answer Boatowners Policy - similar to HO, covers boats that can be towed, property & liability Outboard Motorboat Policy - inland marine form, covers outboard motors and boats, direct property loss only Yacht Policy - ocean marine form, larger vessels, property & liability Ocean Marine Insurance - Answer Protect against losses to property while being chipped by ocean, or inland waterways. Unregulated in regard to forms and rates Abandonment of Property - Answer Specifies that the insured may not abandon or relinquish ownership of damaged property to the insurer for disposal or repair Unoccupancy - Answer A property that contains personal property or contents but has no occupants is described as unoccupied. Premises - Answer The interior of that portion of a building occupied by the insured to conduct business Endorsements - Answer Written amendments attached to the policy to broaden or restrict coverage, or to further define certain policy provisions. Assumed Name - Answer An insurance agent doing business under any name other than the agent's legal name