STUDY 3- PERILS AND HAZARDS EXAM
QUESTIONS AND ANSWERS 100%
LATEST UPDATE
, LO 1: Explain the scope of property insurance in terms of perils and exclusions; the
distinction between named-perils and all-risks coverage; and the concepts of peril,
fortuitous event, and risk - ANSWER*Peril
-Event that may cause injury, loss or destruction.
-May be natural or human-made event
-May or may not be insurable
*Fortuitous Event
-Insurable perils are accidental events
-Property policy not intended to be a maintenance policy
-Intentional acts and expected events are excluded
*Peril and Risk
-Risk is an underwriting term that refers to the subject matter of insurance
-Peril refers to event that causes loss or damage to insured property
*Named-Perils and All-Risks Policies
-Today's policy may insure against a few named perils or against "all risks" or perils that
are not excluded
*Exclusions
-All property policies contain exclusions
-They remove certain losses from the policy's coverage
-Excluded in two ways:
1. They list types of property that are not insured
2. They list perils that are never insured against or sometimes not insured against
Named perils - ANSWERA policy in which the perils insured against are listed, as
opposed to one that insurers "all risks"
Intentional acts - ANSWERArson by the owner
Expected events - ANSWERWear and tear on the property
How has property insurance evolved? - ANSWEREvolved from coverage against the
peril of fire to extended coverage for related perils and through further additional perils
to multi-peril policies
(Named perils vs all risk) Named perils coverage - ANSWERinsures against direct
physical loss or damage caused by only the listed perils
-The onus is on the insured to prove the loss or damage was caused by an insured peril
and that no exclusion applies
QUESTIONS AND ANSWERS 100%
LATEST UPDATE
, LO 1: Explain the scope of property insurance in terms of perils and exclusions; the
distinction between named-perils and all-risks coverage; and the concepts of peril,
fortuitous event, and risk - ANSWER*Peril
-Event that may cause injury, loss or destruction.
-May be natural or human-made event
-May or may not be insurable
*Fortuitous Event
-Insurable perils are accidental events
-Property policy not intended to be a maintenance policy
-Intentional acts and expected events are excluded
*Peril and Risk
-Risk is an underwriting term that refers to the subject matter of insurance
-Peril refers to event that causes loss or damage to insured property
*Named-Perils and All-Risks Policies
-Today's policy may insure against a few named perils or against "all risks" or perils that
are not excluded
*Exclusions
-All property policies contain exclusions
-They remove certain losses from the policy's coverage
-Excluded in two ways:
1. They list types of property that are not insured
2. They list perils that are never insured against or sometimes not insured against
Named perils - ANSWERA policy in which the perils insured against are listed, as
opposed to one that insurers "all risks"
Intentional acts - ANSWERArson by the owner
Expected events - ANSWERWear and tear on the property
How has property insurance evolved? - ANSWEREvolved from coverage against the
peril of fire to extended coverage for related perils and through further additional perils
to multi-peril policies
(Named perils vs all risk) Named perils coverage - ANSWERinsures against direct
physical loss or damage caused by only the listed perils
-The onus is on the insured to prove the loss or damage was caused by an insured peril
and that no exclusion applies
