PA Appraiser Exam with correct answers

Principle of Indemnity - Correct Answers restoration to approximate previous financial condition; no
more, no less



Insurable Interest - Correct Answers direct financial interest in protecting something or someone



Lender Interest - Correct Answers protects a lender who loans money to a buyer



Risk - Correct Answers potential for financial loss or an insured item



Exposure - Correct Answers is openness to loss or damage



hazard - Correct Answers thing that increases the possibility to loss



moral hazard - Correct Answers results from policyholder's conscious decision



physical hazard - Correct Answers conditions that increase the chance of loss



Peril - Correct Answers the actual cause of loss or damage



Loss - Correct Answers financial loss due to an occurrence or accident



Proximate cause - Correct Answers the primary event or series of events that directly leads to an
insured loss



Direct loss - Correct Answers physical harm to tangible property caused by a peril. Ex: Tree falls on car



Indirect loss - Correct Answers added expenses or lost income because of physical damages. Ex: rental
car

,Occurrence - Correct Answers an event, incident, or condition that causes damage



ACV (Actual Cash Value) - Correct Answers Replacement cost - depreciation



replacement cost - Correct Answers method of valuation based on cost of replacing an item at current
market prices, regardless of depreciation



Functional replacement cost - Correct Answers pays to replace an outdated, obsolete item with a
functionally equivalent item



Stated amount - Correct Answers property value is stated by the insured when applying for insurance



insurance policy - Correct Answers the legal contract b/w the insurer and the insured



cancellation and nonrenewal - Correct Answers insured may cancel at any time, but the insurer is much
more restricted



declarations page - Correct Answers names of both parties

policy #

location and description of insured item

deductible

premium



first named insured - Correct Answers the 1st person or organization listed on the dec page



additional insured - Correct Answers person or org. that is added to the policy at the request of the first
named insured and benefits from policy, but is not allowed to make changed



Loss Payable Clause - Correct Answers lender listed as loss payee if a loss occurs

, policy limits - Correct Answers establish the max payout value of an insurance policy



salvage - Correct Answers the portion or value of property that remains after a loss



abandonment clause - Correct Answers insured is prohibited from forcing the insurer to take possession
of damaged property for the purpose of repair or disposal



subrogation - Correct Answers transfer of rights that allows the insurer to recover its losses after it has
indemnified a policyholder



full release settlement - Correct Answers all damaged paid at once



no release settlement - Correct Answers signing and cashing a check substitutes for the release form



appraiser - Correct Answers writes damage estimates for insurance claims



adjuster - Correct Answers investigates claims and prepares claimant statements



duties of the insured after a loss - Correct Answers -report all accidents

-cooperate with insurer's investigation, settlement, and any court proceedings

-promptly send the insurer copies of all pertinent legal papers

-submit to a physical examination if insurer requests

-submit to examination under oath and verify that your statements are true and accurate

-authorize the insurer to obtain medical reports

-provide proof of loss if insurer requests



burden of proof - Correct Answers this means the must prove the loss to the insurer



annual depreciation - Correct Answers replacement cost / expected life