3.0 Property and Casualty Insurance Basics (15%)
2024-2025. Questions & Correct, Verified Answers.
Graded A
10 - ANSProperty and casualty policies that are going to be cancelled due to non-
payment of premium require __ ¬¬ days' advance written notice.
120 - ANSIn general, a property and casualty policy in effect for more than ___
days may not be cancelled.
120 - ANSIn general, a property and casualty policy in effect for more than ___
days may not be cancelled.
30 - ANSHomeowner's policies that are being cancelled for any reason, other than
non-payment of premium, require __ days' advance written notice.
Abandonment - ANSthe abdication of insured property into the hands of another,
or into the possession of no one in particular
Abandonment of Property - ANSSpecifies that the insurer is not obligated to
accept any property abandoned by an insured.
Absolute Liability - ANSClaimant does not have to prove fault in order to collect
damages.
PG 1
,Absolute Liability - ANSis most often associated with dangerous animal ownership,
abnormally dangerous activities, and employers liability for injuries sustained by
their employees. Dangerous animals include lions, bears, and certain dog breeds
such as pit bulls and rottweilers. Absolute liability applies to the storage of
explosives, highly flammable material and weapons or firearms.
Absolute Liability - ANSLiability that arises from an extremely dangerous situation.
Often found in cases involving explosives. Also known as "strict" liability. For
example, you are absolutely liable if you keep a wild animal as a pet.
Accident - ANSA sudden, unforeseen, unintended, and unplanned event from
which loss or damage results.
Actual Cash Value - ANSthe required amount to pay damages for property loss,
which is calculated based on the property's current replacement value minus
depreciation
Actual Cash Value - ANSToday's replacement cost of an item minus the amount of
depreciation of the item.
Actual Cash Value (ACV) - ANSis the replacement value of property minus
depreciation.
Actual Cash Value (ACV) - ANSThe cost to repair or replace property at its
replacement value, minus depreciation.
Additional Coverage - ANSa provision in an insurance policy that allows for more
coverage for a specific loss expense without an increase in premium
PG 2
,Additional Coverages - ANSare automatically included in property policies without
an additional premium. The type of additional coverages depends upon the type
of policy. Additional coverages are paid in addition to those stated in the insuring
agreement and include debris removal, collapse, and fire department service
charges.
Additional Coverages - ANSAutomatically included in property policies without an
additional premium and include items such as debris removal, collapse, and fire
department service charges.
Additional Insured(s) - ANSA person or organization not ordinarily protected by a
policy but which, through the addition of an endorsement to the policy, is granted
status as an insured. Under a liability policy, an additional insured is often a party
to an indemnification or hold harmless agreement.
Additional Living Expenses - ANSare an indirect loss as they are paid as a
consequence of a direct loss such as a total fire loss to a home.
Aggregate Limit - ANSThe maximum amount payable for loss per location or per
person from all occurrences within a policy period regardless of the number of
separate accidents.
Aggregate Limit - ANSThe most the policy will pay for all losses submitted during
the policy period, regardless of other policy limits. Each loss payment made under
a per occurrence limit or per person limit reduces the aggregate limit of liability.
PG 3
, Aggregate Limit - ANSThe payment for an accident during a policy period reduces
the amount of insurance available for all future accidents that occur for the
remainder of the policy period.
Agreed Value - ANSA property policy with a provision agreed upon by the insurer
and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
Agreed Value - ANSThe insurance company and insured agree to a specific value of
a particular property before the policy is issued. If a total loss occurs, the insurer
will pay the Agreed Value.
Appraisal - ANSAddresses disputes about the amount of a loss. If the insurance
company and insured cannot agree on the amount of a loss, either party may
request an appraisal. Each party selects its own appraiser, and the appraisers
select an umpire. Agreement by any two parties settles the loss. Each party pays
the cost of its own appraiser and shares the costs of the umpire and the appraisal.
Appraisal is a dispute resolution method and is not used to determine whether
the policy provides coverage for a loss.
Arbitration - ANSDuring arbitration a neutral third party decides the outcome of a
claim.
Arbitration - ANSProcess whereby a disputed claim is decided by a neutral third
party. The disputing parties choose the impartial third party and agree in advance
to accept the final decision of the arbitrator, who makes a decision after a hearing
where both parties offer evidence.
PG 4
2024-2025. Questions & Correct, Verified Answers.
Graded A
10 - ANSProperty and casualty policies that are going to be cancelled due to non-
payment of premium require __ ¬¬ days' advance written notice.
120 - ANSIn general, a property and casualty policy in effect for more than ___
days may not be cancelled.
120 - ANSIn general, a property and casualty policy in effect for more than ___
days may not be cancelled.
30 - ANSHomeowner's policies that are being cancelled for any reason, other than
non-payment of premium, require __ days' advance written notice.
Abandonment - ANSthe abdication of insured property into the hands of another,
or into the possession of no one in particular
Abandonment of Property - ANSSpecifies that the insurer is not obligated to
accept any property abandoned by an insured.
Absolute Liability - ANSClaimant does not have to prove fault in order to collect
damages.
PG 1
,Absolute Liability - ANSis most often associated with dangerous animal ownership,
abnormally dangerous activities, and employers liability for injuries sustained by
their employees. Dangerous animals include lions, bears, and certain dog breeds
such as pit bulls and rottweilers. Absolute liability applies to the storage of
explosives, highly flammable material and weapons or firearms.
Absolute Liability - ANSLiability that arises from an extremely dangerous situation.
Often found in cases involving explosives. Also known as "strict" liability. For
example, you are absolutely liable if you keep a wild animal as a pet.
Accident - ANSA sudden, unforeseen, unintended, and unplanned event from
which loss or damage results.
Actual Cash Value - ANSthe required amount to pay damages for property loss,
which is calculated based on the property's current replacement value minus
depreciation
Actual Cash Value - ANSToday's replacement cost of an item minus the amount of
depreciation of the item.
Actual Cash Value (ACV) - ANSis the replacement value of property minus
depreciation.
Actual Cash Value (ACV) - ANSThe cost to repair or replace property at its
replacement value, minus depreciation.
Additional Coverage - ANSa provision in an insurance policy that allows for more
coverage for a specific loss expense without an increase in premium
PG 2
,Additional Coverages - ANSare automatically included in property policies without
an additional premium. The type of additional coverages depends upon the type
of policy. Additional coverages are paid in addition to those stated in the insuring
agreement and include debris removal, collapse, and fire department service
charges.
Additional Coverages - ANSAutomatically included in property policies without an
additional premium and include items such as debris removal, collapse, and fire
department service charges.
Additional Insured(s) - ANSA person or organization not ordinarily protected by a
policy but which, through the addition of an endorsement to the policy, is granted
status as an insured. Under a liability policy, an additional insured is often a party
to an indemnification or hold harmless agreement.
Additional Living Expenses - ANSare an indirect loss as they are paid as a
consequence of a direct loss such as a total fire loss to a home.
Aggregate Limit - ANSThe maximum amount payable for loss per location or per
person from all occurrences within a policy period regardless of the number of
separate accidents.
Aggregate Limit - ANSThe most the policy will pay for all losses submitted during
the policy period, regardless of other policy limits. Each loss payment made under
a per occurrence limit or per person limit reduces the aggregate limit of liability.
PG 3
, Aggregate Limit - ANSThe payment for an accident during a policy period reduces
the amount of insurance available for all future accidents that occur for the
remainder of the policy period.
Agreed Value - ANSA property policy with a provision agreed upon by the insurer
and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
Agreed Value - ANSThe insurance company and insured agree to a specific value of
a particular property before the policy is issued. If a total loss occurs, the insurer
will pay the Agreed Value.
Appraisal - ANSAddresses disputes about the amount of a loss. If the insurance
company and insured cannot agree on the amount of a loss, either party may
request an appraisal. Each party selects its own appraiser, and the appraisers
select an umpire. Agreement by any two parties settles the loss. Each party pays
the cost of its own appraiser and shares the costs of the umpire and the appraisal.
Appraisal is a dispute resolution method and is not used to determine whether
the policy provides coverage for a loss.
Arbitration - ANSDuring arbitration a neutral third party decides the outcome of a
claim.
Arbitration - ANSProcess whereby a disputed claim is decided by a neutral third
party. The disputing parties choose the impartial third party and agree in advance
to accept the final decision of the arbitrator, who makes a decision after a hearing
where both parties offer evidence.
PG 4
