NEVADA PROPERTY & CASUALTY
EXAM QUESTIONS AND CORRECT
ANSWERS
Agreed value - ans- rr rr rr
Property policy with a provision agreed upon by the insurer and insured as to the amount
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
of insurance that represents a fair valuation for the property at the time the insurance is wr
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
itten. At the time of a loss, the policy pays the agreed value as specific on the policy sched
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ule, regardless of the insured property's appreciation or depreciaion.
rr rr rr rr rr rr rr rr
Absolute liability - ans- rr rr rr
Any conduct that is inherently dangerous (swimming pools, explosives, wild animals) imp
rr rr rr rr rr rr rr rr rr rr rr
oses absolute liability.
rr rr
Actual cash value - ans- rr rr rr rr
A loss valuation method used in many property forms is determined by today's replaceme
rr rr rr rr rr rr rr rr rr rr rr rr rr
nt cost - depreciation for age and obsolescence
rr rr rr rr rr rr rr
Perils - ans-The causes of loss insured against in an insurance policy
rr rr rr rr rr rr rr rr rr rr rr
Speculative risk - ans-Involves the chance of gain or loss and is not insurable
rr rr rr rr rr rr rr rr rr rr rr rr rr
Libel - ans-A type of intentional tort; is NOT an element of negligence
rr rr rr rr rr rr rr rr rr rr rr rr
4 elements of negligence - ans-Duty, breach, injury, unbroken chain
rr rr rr rr rr rr rr rr rr
Actual Cash Value (ACV) - ans-
rr rr rr rr rr
Method of valuation that reinforces the principle of indemnity because it recognizes the re
rr rr rr rr rr rr rr rr rr rr rr rr rr
duction of value of property as it ages. (Depreciation-current replacement cost)
rr rr rr rr rr rr rr rr rr rr
Per occurrence - ans-
rr rr rr
A type of limit liability that sets the amount for all claims that arise from a single incident at
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
a certain number
rr rr
Indemnity - ans- rr rr
Insurance principle that states that the insured can inly collect for the amount of the loss e
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ven if the policy is written with greater benefit limits
rr rr rr rr rr rr rr rr rr
, Agreed value - ans- rr rr rr
Works best for items whose calue does not fluctuate much; when a loss occurs, the policy
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr r
pays the agreed value as specified on the policy schedule, regardless of the insured item'
r rr rr rr rr rr rr rr rr rr rr rr rr rr rr
s appreciation or depreciation
rr rr rr
Deductible - ans- rr rr
The amount of loss retained by the insured (property); retention (liability). Most property c
rr rr rr rr rr rr rr rr rr rr rr rr rr
overages include this; most liability policies do not include retention.
rr rr rr rr rr rr rr rr rr
Stated value contract - ans-Is used to pre- rr rr rr rr rr rr rr
establish the amount of coverage available for property items that are difficult to value. Th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
e value of the insured items is determined at the time the policy is written, not at the time o
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
f loss.
rr
Direct loss - ans-Damage caused by a peril that is insured against
rr rr rr rr rr rr rr rr rr rr rr
Proximate cause - ans- rr rr rr
The reasonably forseeable act ir event that results in an injury or damage AKA direct liabil
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ity
Stated amount coverage - ans- rr rr rr rr
The value of the insured property is determined at the time the policy is written. In the eve
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
nt of a loss, the amount is paid without regard to any coinsurance provision. If the loss is l
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ess than the total, rhe insurer has salvage rights with the insured having first right of refus
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
al of the slavage.
rr rr rr
Pure risk - ans- rr rr rr
Situations that can only reault in a loss or no change; the only type insurance companies
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
are willing to accept
rr rr rr
Consequential loss - ans- rr rr rr
AKA indirect loss, a second financial loss caused by a covered direct loss
rr rr rr rr rr rr rr rr rr rr rr rr
Concealment - ans- rr rr
When a person withholds a material fact that is crucial to making a decision/
rr rr rr rr rr rr rr rr rr rr rr rr rr
underwriting decisions. rr
Duties of the insurer found in property policy conditions - ans-
rr rr rr rr rr rr rr rr rr rr
Return any premiums to the insured, pay covered losses, provide advance notice of canc
rr rr rr rr rr rr rr rr rr rr rr rr rr
ellation, report to the state (not to the policyholders)
rr rr rr rr rr rr rr rr
Assignment - ans- rr rr
The transfer of a legal right or interest in an insurance policy; usually valid only with the pri
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
or written consent of the insurer
rr rr rr rr rr
EXAM QUESTIONS AND CORRECT
ANSWERS
Agreed value - ans- rr rr rr
Property policy with a provision agreed upon by the insurer and insured as to the amount
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
of insurance that represents a fair valuation for the property at the time the insurance is wr
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
itten. At the time of a loss, the policy pays the agreed value as specific on the policy sched
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ule, regardless of the insured property's appreciation or depreciaion.
rr rr rr rr rr rr rr rr
Absolute liability - ans- rr rr rr
Any conduct that is inherently dangerous (swimming pools, explosives, wild animals) imp
rr rr rr rr rr rr rr rr rr rr rr
oses absolute liability.
rr rr
Actual cash value - ans- rr rr rr rr
A loss valuation method used in many property forms is determined by today's replaceme
rr rr rr rr rr rr rr rr rr rr rr rr rr
nt cost - depreciation for age and obsolescence
rr rr rr rr rr rr rr
Perils - ans-The causes of loss insured against in an insurance policy
rr rr rr rr rr rr rr rr rr rr rr
Speculative risk - ans-Involves the chance of gain or loss and is not insurable
rr rr rr rr rr rr rr rr rr rr rr rr rr
Libel - ans-A type of intentional tort; is NOT an element of negligence
rr rr rr rr rr rr rr rr rr rr rr rr
4 elements of negligence - ans-Duty, breach, injury, unbroken chain
rr rr rr rr rr rr rr rr rr
Actual Cash Value (ACV) - ans-
rr rr rr rr rr
Method of valuation that reinforces the principle of indemnity because it recognizes the re
rr rr rr rr rr rr rr rr rr rr rr rr rr
duction of value of property as it ages. (Depreciation-current replacement cost)
rr rr rr rr rr rr rr rr rr rr
Per occurrence - ans-
rr rr rr
A type of limit liability that sets the amount for all claims that arise from a single incident at
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
a certain number
rr rr
Indemnity - ans- rr rr
Insurance principle that states that the insured can inly collect for the amount of the loss e
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ven if the policy is written with greater benefit limits
rr rr rr rr rr rr rr rr rr
, Agreed value - ans- rr rr rr
Works best for items whose calue does not fluctuate much; when a loss occurs, the policy
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr r
pays the agreed value as specified on the policy schedule, regardless of the insured item'
r rr rr rr rr rr rr rr rr rr rr rr rr rr rr
s appreciation or depreciation
rr rr rr
Deductible - ans- rr rr
The amount of loss retained by the insured (property); retention (liability). Most property c
rr rr rr rr rr rr rr rr rr rr rr rr rr
overages include this; most liability policies do not include retention.
rr rr rr rr rr rr rr rr rr
Stated value contract - ans-Is used to pre- rr rr rr rr rr rr rr
establish the amount of coverage available for property items that are difficult to value. Th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
e value of the insured items is determined at the time the policy is written, not at the time o
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
f loss.
rr
Direct loss - ans-Damage caused by a peril that is insured against
rr rr rr rr rr rr rr rr rr rr rr
Proximate cause - ans- rr rr rr
The reasonably forseeable act ir event that results in an injury or damage AKA direct liabil
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ity
Stated amount coverage - ans- rr rr rr rr
The value of the insured property is determined at the time the policy is written. In the eve
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
nt of a loss, the amount is paid without regard to any coinsurance provision. If the loss is l
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ess than the total, rhe insurer has salvage rights with the insured having first right of refus
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
al of the slavage.
rr rr rr
Pure risk - ans- rr rr rr
Situations that can only reault in a loss or no change; the only type insurance companies
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
are willing to accept
rr rr rr
Consequential loss - ans- rr rr rr
AKA indirect loss, a second financial loss caused by a covered direct loss
rr rr rr rr rr rr rr rr rr rr rr rr
Concealment - ans- rr rr
When a person withholds a material fact that is crucial to making a decision/
rr rr rr rr rr rr rr rr rr rr rr rr rr
underwriting decisions. rr
Duties of the insurer found in property policy conditions - ans-
rr rr rr rr rr rr rr rr rr rr
Return any premiums to the insured, pay covered losses, provide advance notice of canc
rr rr rr rr rr rr rr rr rr rr rr rr rr
ellation, report to the state (not to the policyholders)
rr rr rr rr rr rr rr rr
Assignment - ans- rr rr
The transfer of a legal right or interest in an insurance policy; usually valid only with the pri
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
or written consent of the insurer
rr rr rr rr rr
