Insurance: Property & Casualty Latest
Exam 2024
'Obligor' or 'principal' - ANSWER A person who is bound to another by contract or other
legal procedure. Deals with bonds and the party who is obligated. With surety bonds, pays the
premium. With fidelity bonds, is usually an employee or company who the employer thinks could be
dishonest.
'Principal' or 'Obligor' - ANSWER In bonds, the party who promises to do (or not to do) a
specific thing.
'Surety' or 'Guarantor' - ANSWER The party (often the insurance company) which agrees to
be responsible for losses which may result if the principal does not keep his promise.
Accident - ANSWER A sudden and unexpected event which occurs at a specific time and
place.
Actual Cash Value (ACV) - ANSWER The cost to replace an item of property at the time of
loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a
loss.
Additional Living Expense - ANSWER A coverage designed to reimburse the insured for an
increase in living expenses necessitated by loss to the dwelling. This indirect loss must be the result
of a direct loss by a covered peril.
Adhesion - ANSWER A characteristic of insurance policies that means the contract is
prepared by the insurer and is non-negotiable or "one-sided".
Admitted Company - ANSWER A company which meets the state insurance department's
standards and is authorized to do business in the state.
Agent - ANSWER The state-licensed professional who represents the insurance company in
the sale and servicing of insurance. The direct link between the insurance company and the
policyholder.
Aggregate Limit - ANSWER A type of policy limit found in liability policies which limits
coverage to a specified total amount for all losses occurring within the policy period.
Aleatory - ANSWER A characteristic of insurance contracts, meaning a contract in which
equal value is not given by both parties to the contract.
Alien Company - ANSWER An insurance company incorporated in a country other than the
United States.
All-Risk - ANSWER A term used to indicate that property is covered against all perils except
those specifically excluded.
Allied Lines - ANSWER Used to insure additional types of losses to property and sold in
conjunction with fire insurance.
Apportionment - ANSWER A method determining how much will be contributed by each
company toward a loss covered under more than one policy.
, Insurance: Property & Casualty Latest
Exam 2024
Appraisal Clause - ANSWER A clause which provides a specific procedure when the insured
and the insurer are in disagreement regarding the amount of a loss.
Appurtenant Structures - ANSWER A structure belonging to the insured and associated with
the insured property. (another name for "other structures")
Binder - ANSWER An acknowledgment (or receipt), usually from the agent, that insurance
applied for is in force regardless of any premium settlement.
Blanket Position Bond - ANSWER Fidelity bond which specifies a single limit of liability
applicable to each employee involved in a loss.
Bodily Injury - ANSWER __________ coverage pays for injuries, sickness, disease, or
required care for death that the policyholder is found legally liable for.
Boiler and Machinery Policy - ANSWER Insurance which covers the insured against loss
(liability and physical damage) arising out of the use of scheduled commercial equipment.
Broker - ANSWER An individual who represents the prospect, instead of the insurance
company, in the insurance transaction. Frequently involved in the placement of very large or unusual
risks.
Burglary - ANSWER The unlawful taking of property by forced entry into the premises while
the premises is closed for business (must be visible evidence of forced entry or exit).
Business Interruption Insurance - ANSWER A Time-Element coverage which reimburses the
insured for loss of earnings due to the inability to operate caused by a covered peril.
Casualty Insurance - ANSWER A broad category of coverage against loss of property,
damage, or other liabilities. Includes auto, liability, theft, elevator, glass, aviation, boiler and
machinery, worker's comp, bonds, and many other types of insurance.
Causes of Loss Form - ANSWER Commercial property insurance forms that establish and
define the perils for which coverage is provided and is combined with one or more coverage forms,
the commercial property conditions form, the common policy conditions form, and the declarations
to make up an ISO commercial property policy. ex: Basic, Broad, Special
Claims-Made Coverage Form - ANSWER Part of the Commercial General Liability coverage
part of the CPP. Provides coverage for bodily injury and property damage if a written claim is made
during the policy period, regardless of when the injury or damage actually occurred.
Coinsurance Clause - ANSWER A clause that requires an insured to pay part of a loss if the
coverage provided under the policy limits is less than a specific percentage of the value of the
property at the time of loss.
Collision - ANSWER A type of physical damage insurance which covers loss due to the
insured object striking another object. Always written with a deductible, and includes overturning of
a vehicle.
Exam 2024
'Obligor' or 'principal' - ANSWER A person who is bound to another by contract or other
legal procedure. Deals with bonds and the party who is obligated. With surety bonds, pays the
premium. With fidelity bonds, is usually an employee or company who the employer thinks could be
dishonest.
'Principal' or 'Obligor' - ANSWER In bonds, the party who promises to do (or not to do) a
specific thing.
'Surety' or 'Guarantor' - ANSWER The party (often the insurance company) which agrees to
be responsible for losses which may result if the principal does not keep his promise.
Accident - ANSWER A sudden and unexpected event which occurs at a specific time and
place.
Actual Cash Value (ACV) - ANSWER The cost to replace an item of property at the time of
loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a
loss.
Additional Living Expense - ANSWER A coverage designed to reimburse the insured for an
increase in living expenses necessitated by loss to the dwelling. This indirect loss must be the result
of a direct loss by a covered peril.
Adhesion - ANSWER A characteristic of insurance policies that means the contract is
prepared by the insurer and is non-negotiable or "one-sided".
Admitted Company - ANSWER A company which meets the state insurance department's
standards and is authorized to do business in the state.
Agent - ANSWER The state-licensed professional who represents the insurance company in
the sale and servicing of insurance. The direct link between the insurance company and the
policyholder.
Aggregate Limit - ANSWER A type of policy limit found in liability policies which limits
coverage to a specified total amount for all losses occurring within the policy period.
Aleatory - ANSWER A characteristic of insurance contracts, meaning a contract in which
equal value is not given by both parties to the contract.
Alien Company - ANSWER An insurance company incorporated in a country other than the
United States.
All-Risk - ANSWER A term used to indicate that property is covered against all perils except
those specifically excluded.
Allied Lines - ANSWER Used to insure additional types of losses to property and sold in
conjunction with fire insurance.
Apportionment - ANSWER A method determining how much will be contributed by each
company toward a loss covered under more than one policy.
, Insurance: Property & Casualty Latest
Exam 2024
Appraisal Clause - ANSWER A clause which provides a specific procedure when the insured
and the insurer are in disagreement regarding the amount of a loss.
Appurtenant Structures - ANSWER A structure belonging to the insured and associated with
the insured property. (another name for "other structures")
Binder - ANSWER An acknowledgment (or receipt), usually from the agent, that insurance
applied for is in force regardless of any premium settlement.
Blanket Position Bond - ANSWER Fidelity bond which specifies a single limit of liability
applicable to each employee involved in a loss.
Bodily Injury - ANSWER __________ coverage pays for injuries, sickness, disease, or
required care for death that the policyholder is found legally liable for.
Boiler and Machinery Policy - ANSWER Insurance which covers the insured against loss
(liability and physical damage) arising out of the use of scheduled commercial equipment.
Broker - ANSWER An individual who represents the prospect, instead of the insurance
company, in the insurance transaction. Frequently involved in the placement of very large or unusual
risks.
Burglary - ANSWER The unlawful taking of property by forced entry into the premises while
the premises is closed for business (must be visible evidence of forced entry or exit).
Business Interruption Insurance - ANSWER A Time-Element coverage which reimburses the
insured for loss of earnings due to the inability to operate caused by a covered peril.
Casualty Insurance - ANSWER A broad category of coverage against loss of property,
damage, or other liabilities. Includes auto, liability, theft, elevator, glass, aviation, boiler and
machinery, worker's comp, bonds, and many other types of insurance.
Causes of Loss Form - ANSWER Commercial property insurance forms that establish and
define the perils for which coverage is provided and is combined with one or more coverage forms,
the commercial property conditions form, the common policy conditions form, and the declarations
to make up an ISO commercial property policy. ex: Basic, Broad, Special
Claims-Made Coverage Form - ANSWER Part of the Commercial General Liability coverage
part of the CPP. Provides coverage for bodily injury and property damage if a written claim is made
during the policy period, regardless of when the injury or damage actually occurred.
Coinsurance Clause - ANSWER A clause that requires an insured to pay part of a loss if the
coverage provided under the policy limits is less than a specific percentage of the value of the
property at the time of loss.
Collision - ANSWER A type of physical damage insurance which covers loss due to the
insured object striking another object. Always written with a deductible, and includes overturning of
a vehicle.
