Principles and Practices of Insurance C11 Chapters 9 and 10 Exam | Questions & 100% Correct Answers (Verified) | Latest Update | Grade A+

How are insurance contracts distinguished from other types of contracts? : -Insurable interest. -Utmost good faith. In whose lives does an insured have an insurable interest? : 1. His or her child or grandchild. 2. His or her spouse. 3. Any person on whom he or she is wholly or in part dependent for, or from whom he or she is receiving, support or education. 4. His or her employee. 5. Any person in the duration of whose life he or she has a pecuniary interest. Give examples of insurable interests in property and in liability : -You have insurable interest in property when you stand in such a legal relationship to it that you will be financially prejudiced by its loss or damage and financially benefited by its continued existence. 2 | P a g e -Also have insurable interest in your potential capability to pay damages in the event that you are found responsible for having caused injuries to others or damage to their property. What is the principle of indemnity? : You purchase insurance to protect yourself against loss. Should a loss occur, you expect to be put back into the same financial position you were in before the loss. How do you determine the actual cash value of a property? : Defined as the value of an equivalent piece of property of the same age and condition and subject to the same to wear and tear as the property that was lost or destroyed. What is a replacement cost contra