Property and Casualty Insurance EXAM Latest Version 100% Pass

Property and Casualty Insurance EXAM Latest Version 100% Pass Specific insurance This type of insurance designates a particular item to be insured Blanket insurance This type of insurance covers more than one item of property at a single location or one more items of property at multiple locations. Speculative possibility of both gain and loss. Not insurable. Pure only the possibility of loss. Insurable. What are the 5 methods of managing or handling risk? avoid, control, retain, and transfer risk. Hazard A condition or situation which increases the chance for loss Physical Hazards a hazard that arises from the condition, occupancy, or use of the property itself. ex: skateboard left on the steps Moral Hazards when an individual through carelessness or by irresponsible actions can increase the possibly for a loss. ex: person who drives carelessly just because they know they are insured. Morale Hazards when a person might create a loss situation on purpose just to collect from the insurance company. ex: Prearranged, faked theft of someone's old vehicle so they can get an insurance payout to buy a new vehicle. Replacement Cost The amount of money it would take to replace a damaged or destroyed item with one of like kind and quality AT THE TIME OF LOSS. No deduction for depreciation. Actual Cash Value (ACV) Replacement Cost, minus depreciation. Pair and Set Clause Loss to one item of a pair or set does not constitute loss to the entire pair or set. Appraisal A method of resolving disputes between insurers and insureds over the amount owed on a covered loss. -both parties select an appraiser -the two appraisers select an umpire -if the appraisers do not agree, the umpire is consulted -the amount agreed on by 2 out of 3 is the amount that will be paid Subrogation An insurer's right to recover the amount of its loss payment from the third party who is legally responsible for the loss. Arbitration this condition is similar to the Appraisal Condition but it is not limited to disputes over the value of the loss. It may also be used to resolve other areas of disagreement between the insured and the insurance company. What does WC SHAVVER stand for? Windstorm, Civil commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot What does BIG AFFECT stand for? Burglar damage, Ice & snow weight, Glass breakage, Accidental discharge, Falling objects, Freezing of pipes, Electrical damage, Collapse, Tearing apart. Insolvency A financial state that occurs