RMIN 5100S Test 1 Atkinson Questions and Answers Solved 100%

Abandonment - - Insurance company may choose to take damaged property and pay insured the value - Insured CANNOT surrender damaged property to insurance company Active Retention - Identify the loss/risk exposure and really consider the risk itself and all the measures around it. (ex. Should we transfer it, retain it etc.) Admitted (standard or retail) Insurance companies - Regulated by the state, They often must subscribe to rating and form regulations of that state. Agent or Broker - "Intermediary" Facilitates the purchase of insurance. Advises insured. Negotiates with the insurer. Appraisal - If there is a dispute about VALUE of property - Written Demand - Each hires an Appraiser who elect an Umpire - Each pays their own and split the Umpire Broker Forms - When Brokers create their own policy forms that differ from ISO forms. Broker vs Independent Agent - (Brokers) Legally work on behalf of the insurance buyer (Independent Agent) Legally works on behalf of the insurance company Burglary - Theft by forcible entryBurglary/robbery prevention - Security guards, locks, alarms, cameras Businessowners Policy (BOP) - - A multiline policy that includes/combines most of the property and liability coverages needed by small and midsize businesses - Specially designed for such insureds as an economical alternative to regular commercial package policies Captive insurance - SELF INSURED NOT TRANSFER Commercial Package policy (CPP) - - a multiline policy composed of two or more coverage parts, each coverage providing a separate line of insurance - Policy that covers two or more lines of business by combining ISO's commercial line coverage parts Commercial property loss Exposure - The possibility that a business enterprise or another type of organization will sustain a loss resulting from loss of or damage to property in which the organization has financial interest. Common property exposures - Fire Burglary, robbery, and employee theft Explosion Windstorm Flood Earthquake Components of common policy conditions - - Cancellation - Changes - Examination of books and records - Inspections and surveys- Premiums - Transfer of rights and duties under this policy Duties in the event of a loss - - Notify police if law may be broken - Provide prompt notice to insurer as soon as feasible/practical - Description of loss- how, when, etc. - Protect property from further loss - Upon request, provide inventories and allow inspection - Cooperate with insurer - Submit signed, sworn proof of loss within 60 days of request Earthquake Risk control - - Location and Design - Most Design includes a rigid structure - Some modern buildings sway Employee Theft - Employee dishonesty or embezzlement Employee theft prevention - Accounting controls, access, background checks, separation of duties Exclusive Agent - - More frequently used in personal lines and very small businesses - Agents ONLY sell products for this insurance company. Explosion - Extremely rapid combustion Explosion risk control - Low oxygen atmospheres, venting, maintenance Fire - heat, oxygen, fuel, and an unbroken chainFlood - Low Elevation and rising water Flood Risk Control - - avoid locating in flood zones - dams, ,channels, sandbags, water removal equipment - lowest floor above 100 year flood mark - plan to move property to higher ground HARD Market - when profitability is declining, underwriting standards are tightened, premiums increase, and insurance becomes more difficult to obtain. (SELLERS MARKET) Hostile Fire - A fire that leaves its intended place If a building is vacant for more than 60 days, what will happen? - - No coverage for vandalism, breakage of building glass, water damage, theft, attempted theft, or sprinkler damage - All other causes of loss will be reduced by 15% Important things on Common Policy Conditions Form - - Name - Form number - Version date - Number of pages Independent Agent - - The agent has contracts with several to many companies - More frequently used in Commercial P&C Liability Risk - if you could be responsible for damage to SOMEONE ELSE'S stuff or bodily injury or financial loss to SOMEONE ELSE Line underwriter - makes daily decisions concerning the acceptance or rejection of businessMcCarren Ferguson Act of 1945 - Insurance is regulated by the individual states, Federal laws may also apply so long as the legislation specifies that it applies to the business of insurance. Monoline policies - - 1 product line/coverage - Better Suited for large or complex risk Multiline policies - - 2+ product lines/coverages - Fewer gaps in coverage - Convenient - Lower costs - Best suited for Small to mid-sized business