Practice questions: Chapter 3 ADB
What is the correct term for a secondary loss that occurs as a result of a direct loss from
a covered peril? - Answers -Consequential loss
If the insured and insurer do not agree on the value of a property loss, what condition
would apply? - Answers -Appraisal
All of the following are insured's duties after a loss under a property policy, except:
A. Abandoning the property to the insurer
B. Giving prompt notice of loss
C. Submitting to the insurer's examination
D. Furnishing an inventory of damaged property - Answers -A. Abandoning the property
to the insurer
Theft is specifically defined as: - Answers -Any act of stealing
An intruder breaks into a home, threatens the homeowner, and takes the homeowner's
money. This is an example of: - Answers -Robbery
A property purchased 10 years ago for $100,000 has a replacement value today of
$200,000. The property has depreciated by 30% over the course of ownership, and it is
insured on an actual cash value basis. If a loss occurs, what is the actual cash value of
the property today? - Answers -$140,000
The Other Insurance condition on the standard fire policy will use which basis to
coordinate claim payments with other insurance that applies to a covered loss? -
Answers -Pro rata basis
Property insurance policies that apply coverage only to perils that are stated in the
policy are considered to be written on: - Answers -A named peril basis
All of the following are methods of loss valuation, except:
A. Actual cash value
B. Stated amount
C. Replacement cost
D. Blanket value - Answers -D. Blanket value
Which of the following statements regarding deductibles is true?
A. Deductibles help reduce the number of frivolous or small claims
B. Deductibles apply only to larger losses
C. Deductibles reduce the total amount of insurance available
What is the correct term for a secondary loss that occurs as a result of a direct loss from
a covered peril? - Answers -Consequential loss
If the insured and insurer do not agree on the value of a property loss, what condition
would apply? - Answers -Appraisal
All of the following are insured's duties after a loss under a property policy, except:
A. Abandoning the property to the insurer
B. Giving prompt notice of loss
C. Submitting to the insurer's examination
D. Furnishing an inventory of damaged property - Answers -A. Abandoning the property
to the insurer
Theft is specifically defined as: - Answers -Any act of stealing
An intruder breaks into a home, threatens the homeowner, and takes the homeowner's
money. This is an example of: - Answers -Robbery
A property purchased 10 years ago for $100,000 has a replacement value today of
$200,000. The property has depreciated by 30% over the course of ownership, and it is
insured on an actual cash value basis. If a loss occurs, what is the actual cash value of
the property today? - Answers -$140,000
The Other Insurance condition on the standard fire policy will use which basis to
coordinate claim payments with other insurance that applies to a covered loss? -
Answers -Pro rata basis
Property insurance policies that apply coverage only to perils that are stated in the
policy are considered to be written on: - Answers -A named peril basis
All of the following are methods of loss valuation, except:
A. Actual cash value
B. Stated amount
C. Replacement cost
D. Blanket value - Answers -D. Blanket value
Which of the following statements regarding deductibles is true?
A. Deductibles help reduce the number of frivolous or small claims
B. Deductibles apply only to larger losses
C. Deductibles reduce the total amount of insurance available
