Liability Types
Type Description
Absolute Liability Liability without fault; strict responsibility
Strict Liability Liability for inherently dangerous activities regardless of fault
Vicarious Liability Liability imposed on one party for actions of another (e.g.,
employer for employee)
Burglary, Robbery, Theft
Term Definition
Burglary Unlawful entry into a building with intent to commit a crime
Robbery Taking property from a person by force or threat
Theft Unlawful taking of property without consent
Loss Valuations Cheat Sheet
Valuation Type Definition Key Points
Actual Cash Value Replacement cost minus Reflects wear and tear; payout is
(ACV) depreciation replacement cost less depreciation
Replacement Cost Cost to replace with new item of No deduction for depreciation; higher
(RC) like kind and quality payout than ACV
Market Value Price property would sell for in Subjective; influenced by supply and
open market demand
Stated Value Value agreed upon by insurer Limits insurer's liability to stated
and insured amount
Salvage Value Estimated value of damaged Insurer may take possession and
property after loss deduct salvage value from claim
Proximate Cause
The primary cause that sets in motion a chain of events leading to loss.
Determines whether loss is covered under policy.
Topic Explanation
, Auto Insurance Coverage for vehicles and liability arising from their use
Contract Law Governs agreements between parties, including insurance
contracts
Damages Monetary compensation for loss or injury
Provisions Specific clauses or conditions in insurance policies
Foreign, Domestic, Alien Types of insurers based on location and licensing
Policy Types
Type Description
Marine Covers loss/damage to ships, cargo, and marine interests
Workers’ Covers employee injuries on the job
Compensation
Commercial Business-related insurance policies
Auto Various types including liability, collision, comprehensive
Personal Property Coverage for personal belongings
Liability Protection against legal claims for injury or damage
Types of Casualty Policies
Casualty insurance covers liability and legal responsibilities for accidents, injuries, and damages. Common
types include:
General Liability Product Liability
Auto Liability Umbrella/Excess Liability
Workers’ Compensation Crime Insurance
Professional Liability (Errors & Omissions) Environmental Liability
Burglary, Robbery, Theft
Term Definition
Burglary Unlawful entry into a building with intent to commit a crime
Robbery Taking property from a person by force or threat
Theft Unlawful taking of property without consent
INSURANCE VALUATION METHODS — MASTER CHEAT SHEET
DWELLING POLICY VALUATION (DP -1, DP-2, DP-3)
Type Description
Absolute Liability Liability without fault; strict responsibility
Strict Liability Liability for inherently dangerous activities regardless of fault
Vicarious Liability Liability imposed on one party for actions of another (e.g.,
employer for employee)
Burglary, Robbery, Theft
Term Definition
Burglary Unlawful entry into a building with intent to commit a crime
Robbery Taking property from a person by force or threat
Theft Unlawful taking of property without consent
Loss Valuations Cheat Sheet
Valuation Type Definition Key Points
Actual Cash Value Replacement cost minus Reflects wear and tear; payout is
(ACV) depreciation replacement cost less depreciation
Replacement Cost Cost to replace with new item of No deduction for depreciation; higher
(RC) like kind and quality payout than ACV
Market Value Price property would sell for in Subjective; influenced by supply and
open market demand
Stated Value Value agreed upon by insurer Limits insurer's liability to stated
and insured amount
Salvage Value Estimated value of damaged Insurer may take possession and
property after loss deduct salvage value from claim
Proximate Cause
The primary cause that sets in motion a chain of events leading to loss.
Determines whether loss is covered under policy.
Topic Explanation
, Auto Insurance Coverage for vehicles and liability arising from their use
Contract Law Governs agreements between parties, including insurance
contracts
Damages Monetary compensation for loss or injury
Provisions Specific clauses or conditions in insurance policies
Foreign, Domestic, Alien Types of insurers based on location and licensing
Policy Types
Type Description
Marine Covers loss/damage to ships, cargo, and marine interests
Workers’ Covers employee injuries on the job
Compensation
Commercial Business-related insurance policies
Auto Various types including liability, collision, comprehensive
Personal Property Coverage for personal belongings
Liability Protection against legal claims for injury or damage
Types of Casualty Policies
Casualty insurance covers liability and legal responsibilities for accidents, injuries, and damages. Common
types include:
General Liability Product Liability
Auto Liability Umbrella/Excess Liability
Workers’ Compensation Crime Insurance
Professional Liability (Errors & Omissions) Environmental Liability
Burglary, Robbery, Theft
Term Definition
Burglary Unlawful entry into a building with intent to commit a crime
Robbery Taking property from a person by force or threat
Theft Unlawful taking of property without consent
INSURANCE VALUATION METHODS — MASTER CHEAT SHEET
DWELLING POLICY VALUATION (DP -1, DP-2, DP-3)
