LA Claims Adjuster Property and
Causality Practice Exam 1 2025/2026
Exam Questions and Verified Answers |
Already Graded A+
Insurable Interest - 🧠ANSWER ✔✔______in the property and would suffer a
financial loss if the property were damaged by an insured peril, their family
members (names need not be listed in the policy), and others such as a lien holder,
for example, the bank that holds the mortgage on a house.
Cause of Loss Forms - 🧠ANSWER ✔✔____establish and define the causes of loss
(or perils) for which coverage is provided under the form. (Please do not confuse
the "cause of loss" forms with the "proof of loss" form, which is the form
submitted to the insurance company by the insured when they have a claim.)
,Basic Cause of Loss Form - 🧠ANSWER ✔✔This form is a "named peril" form,
that specifies the perils insured against. The perils listed on this form will usually
be, as the name implies,
the most basic perils. This form will only cover those perils that are specifically
named in the form.
Broad Cause of Loss Form - 🧠ANSWER ✔✔This form is also a "named peril"
form and provides coverage for the perils named in the basic form, but adds
additional perils and names
them on the form.
Special Cause of Loss Form - 🧠ANSWER ✔✔___form is an "open peril" or "all
risk"
form that provides coverage for all risks of loss, from any peril, except those that
are
specifically excluded in the policy. Remember for your state licensing exam that
when coverage is provided under an open peril form, the burden of proof lies with
the insurance company to prove that the cause of loss is excluded.
,Appraisal Clause - 🧠ANSWER ✔✔This property insurance provision allows either
the insured or the insurance company to demand a binding appraisal of the
damaged property in the event of a dispute as to the value of the property. The
clause also establishes the required appraisal procedure.
Coinsurance Clause - 🧠ANSWER ✔✔A provision in property insurance policies
stating that the insurance company and the insured will share in the loss incurred
by the insured, based on a fixed percentage of the value of the insured property. In
addition, the insured will face a penalty, and must pay a higher percentage on the
loss if they do not insure the property for a certain percentage of its full value
(usually at least 80%). Sometimes, in Dwelling & Homeowners policies this clause
is called the "Loss Settlement Clause".
Concurrent Causation - 🧠ANSWER ✔✔This term, when referring to property
insurance, is a doctrine stating that if loss or damage to property occurs as a result
of more than one cause, one of which is covered under the policy, while the other
cause is not covered, the damages are still likely to be compensated by the insurer.
However, this doctrine is being revisited frequently in the courts and a number of
recent cases have been decided in favor of denying the claim.
Pair or Set Clause - 🧠ANSWER ✔✔This policy provision states that if part of a
pair or set is lost or damaged, the loss will be valued as a fair proportion of the
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, total value of the set. It gives consideration to the importance of the damaged
article to the set. The insurer is not required to pay for the value of the whole set
The Standard Mortgage Clause (Mortgagee Rights) - 🧠ANSWER ✔✔This
provision protects the
interests of the bank/financial institution that holds the mortgage on the insured
property.
This clause also grants coverage to the mortgagee, even if the insured intentionally
caused the loss. The bank can also provide a proof of loss or pay the insurance
premiums in case the insured cannot, or refuses to do so. The mortgagee must also
be advised if the
contract has been cancelled or nonrenewed by the insurer
broad evidence rule - 🧠ANSWER ✔✔which is a combination of
"replacement cost minus depreciation" and "fair market value" that a judge
determines
Replacement Cost - 🧠ANSWER ✔✔This is defined as "the current cost to purchase
new, the item that was lost or damaged, with no deduction for depreciation".
Causality Practice Exam 1 2025/2026
Exam Questions and Verified Answers |
Already Graded A+
Insurable Interest - 🧠ANSWER ✔✔______in the property and would suffer a
financial loss if the property were damaged by an insured peril, their family
members (names need not be listed in the policy), and others such as a lien holder,
for example, the bank that holds the mortgage on a house.
Cause of Loss Forms - 🧠ANSWER ✔✔____establish and define the causes of loss
(or perils) for which coverage is provided under the form. (Please do not confuse
the "cause of loss" forms with the "proof of loss" form, which is the form
submitted to the insurance company by the insured when they have a claim.)
,Basic Cause of Loss Form - 🧠ANSWER ✔✔This form is a "named peril" form,
that specifies the perils insured against. The perils listed on this form will usually
be, as the name implies,
the most basic perils. This form will only cover those perils that are specifically
named in the form.
Broad Cause of Loss Form - 🧠ANSWER ✔✔This form is also a "named peril"
form and provides coverage for the perils named in the basic form, but adds
additional perils and names
them on the form.
Special Cause of Loss Form - 🧠ANSWER ✔✔___form is an "open peril" or "all
risk"
form that provides coverage for all risks of loss, from any peril, except those that
are
specifically excluded in the policy. Remember for your state licensing exam that
when coverage is provided under an open peril form, the burden of proof lies with
the insurance company to prove that the cause of loss is excluded.
,Appraisal Clause - 🧠ANSWER ✔✔This property insurance provision allows either
the insured or the insurance company to demand a binding appraisal of the
damaged property in the event of a dispute as to the value of the property. The
clause also establishes the required appraisal procedure.
Coinsurance Clause - 🧠ANSWER ✔✔A provision in property insurance policies
stating that the insurance company and the insured will share in the loss incurred
by the insured, based on a fixed percentage of the value of the insured property. In
addition, the insured will face a penalty, and must pay a higher percentage on the
loss if they do not insure the property for a certain percentage of its full value
(usually at least 80%). Sometimes, in Dwelling & Homeowners policies this clause
is called the "Loss Settlement Clause".
Concurrent Causation - 🧠ANSWER ✔✔This term, when referring to property
insurance, is a doctrine stating that if loss or damage to property occurs as a result
of more than one cause, one of which is covered under the policy, while the other
cause is not covered, the damages are still likely to be compensated by the insurer.
However, this doctrine is being revisited frequently in the courts and a number of
recent cases have been decided in favor of denying the claim.
Pair or Set Clause - 🧠ANSWER ✔✔This policy provision states that if part of a
pair or set is lost or damaged, the loss will be valued as a fair proportion of the
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, total value of the set. It gives consideration to the importance of the damaged
article to the set. The insurer is not required to pay for the value of the whole set
The Standard Mortgage Clause (Mortgagee Rights) - 🧠ANSWER ✔✔This
provision protects the
interests of the bank/financial institution that holds the mortgage on the insured
property.
This clause also grants coverage to the mortgagee, even if the insured intentionally
caused the loss. The bank can also provide a proof of loss or pay the insurance
premiums in case the insured cannot, or refuses to do so. The mortgagee must also
be advised if the
contract has been cancelled or nonrenewed by the insurer
broad evidence rule - 🧠ANSWER ✔✔which is a combination of
"replacement cost minus depreciation" and "fair market value" that a judge
determines
Replacement Cost - 🧠ANSWER ✔✔This is defined as "the current cost to purchase
new, the item that was lost or damaged, with no deduction for depreciation".
