WA Surplus Lines - Property Terms Part 1
UPDATED ACTUAL Questions And
CORRECT Answers
Abandonment Clause - CORRECT ANSWER - A clause in fire insurance policies and
other property forms that prohibits the insured from
abandoning partially damaged property to the insurer in order to claim a total loss
Account Premium Modification Plan - CORRECT ANSWER - A rating plan for Fire,
Property Damage and Time Element coverages. The maximum
credit or surcharge is 25%, and it is available to risks which develop a three-year
premium of at least $5,000
Accounts Receivable Insurance - CORRECT ANSWER - Insurance against the loss that
occurs when an insured is unable to collect outstanding
accounts because of damage to or destruction of the accounts receivable records by a
peril covered in the policy
Additional Living Expense Insurance - CORRECT ANSWER - A contract to reimburse
the insured for increased living costs when loss of his property
forces him to maintain temporary residence elsewhere. Examples of these types of
expenses are the cost for a hotel or motel, the extra cost for restaurant meals, and the
cost of using a laundromat. The term Extra Expense Insurance is defined with regard to
additional expenses incurred by businesses. See also Loss of Use
After Charge - CORRECT ANSWER - A charge sometimes included in fire rates for
commercial buildings. It is usually added for
conditions which can be corrected by the insured, such as failure to have the proper
types of fire extinguishers
, Agreed Amount Clause - CORRECT ANSWER - Under this clause, the insured and the
insurer agree that the amount of insurance carried
will automatically satisfy the coinsurance clause. The effect is to eliminate the necessity
of determining whether or not the amount carried is equal to the stated percentage of the
actual cash value indicated in the coinsurance clause
Allied Lines - CORRECT ANSWER - Various insurance coverages for additional types of
losses, and against loss by additional
perils, which are closely associated with and usually sold with fire insurance. Examples
include coverage against loss by perils other than fire, coverage for sprinkler leakage
damage, and business interruption coverage. The fire insurance field consists of
coverages for "fire and allied lines."
Amount Subject - CORRECT ANSWER - The maximum amount which underwriters
estimate can possibly be lost under the most
unfavorable circumstances in any given loss, such as a fire or tornado. Contrast with
Probable Maximum Loss
Appurtenant Structures - CORRECT ANSWER - Buildings on the same premises as the
main building insured under a Property Insurance
policy. Most Dwelling Property Insurance policies cover appurtenant structures under
most circumstances
Arbitration Clause - CORRECT ANSWER - The provision in a Property Insurance
contract which states that if the insurer and insured
cannot agree on an appropriate claim settlement, each will appoint an appraiser, and
these will select a neutral umpire. A decision by any two of the three prescribes a
settlement and binds both parties to it.
UPDATED ACTUAL Questions And
CORRECT Answers
Abandonment Clause - CORRECT ANSWER - A clause in fire insurance policies and
other property forms that prohibits the insured from
abandoning partially damaged property to the insurer in order to claim a total loss
Account Premium Modification Plan - CORRECT ANSWER - A rating plan for Fire,
Property Damage and Time Element coverages. The maximum
credit or surcharge is 25%, and it is available to risks which develop a three-year
premium of at least $5,000
Accounts Receivable Insurance - CORRECT ANSWER - Insurance against the loss that
occurs when an insured is unable to collect outstanding
accounts because of damage to or destruction of the accounts receivable records by a
peril covered in the policy
Additional Living Expense Insurance - CORRECT ANSWER - A contract to reimburse
the insured for increased living costs when loss of his property
forces him to maintain temporary residence elsewhere. Examples of these types of
expenses are the cost for a hotel or motel, the extra cost for restaurant meals, and the
cost of using a laundromat. The term Extra Expense Insurance is defined with regard to
additional expenses incurred by businesses. See also Loss of Use
After Charge - CORRECT ANSWER - A charge sometimes included in fire rates for
commercial buildings. It is usually added for
conditions which can be corrected by the insured, such as failure to have the proper
types of fire extinguishers
, Agreed Amount Clause - CORRECT ANSWER - Under this clause, the insured and the
insurer agree that the amount of insurance carried
will automatically satisfy the coinsurance clause. The effect is to eliminate the necessity
of determining whether or not the amount carried is equal to the stated percentage of the
actual cash value indicated in the coinsurance clause
Allied Lines - CORRECT ANSWER - Various insurance coverages for additional types of
losses, and against loss by additional
perils, which are closely associated with and usually sold with fire insurance. Examples
include coverage against loss by perils other than fire, coverage for sprinkler leakage
damage, and business interruption coverage. The fire insurance field consists of
coverages for "fire and allied lines."
Amount Subject - CORRECT ANSWER - The maximum amount which underwriters
estimate can possibly be lost under the most
unfavorable circumstances in any given loss, such as a fire or tornado. Contrast with
Probable Maximum Loss
Appurtenant Structures - CORRECT ANSWER - Buildings on the same premises as the
main building insured under a Property Insurance
policy. Most Dwelling Property Insurance policies cover appurtenant structures under
most circumstances
Arbitration Clause - CORRECT ANSWER - The provision in a Property Insurance
contract which states that if the insurer and insured
cannot agree on an appropriate claim settlement, each will appoint an appraiser, and
these will select a neutral umpire. A decision by any two of the three prescribes a
settlement and binds both parties to it.
