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Frank owned a home that was destroyed by a hurricane. Both ABC and
XYZ Banks were listed as additional interests on his homeowner policy.
The insurance company will make a payment to:
A. The first mortgagee, ABC
B. The Insured
C. Jointly to ABC and XYZ
D. All listed interests - 🧠 ANSWER ✔✔D. All listed interests
Remember that the insurer is not responsible to know the degrees of
interest. In the event of a loss, one payment is made by the insurer and it is
up to the additional interests on working out their share.
,Insurance applies separately to each insured as if other insureds did not
exist. This is defined as:
A. Severability
B. Conditional
C. Warranty
D. None of the above - 🧠 ANSWER ✔✔A. Severability
Property insurance policies usually contain a(n) __________ clause,
stating the insured cannot dump damaged property on the insurer and
demand its full value:
A. Pro Rata
B. Abandonment
C. Liberalization
D. All of the above - 🧠 ANSWER ✔✔B. Abandonment
A(n) __________ is one wherein economic loss would be suffered from an
adverse happening to the subject:
A. Conditional Contract
,B. Personal Contract
C. Economic Contract
D. Insurable Interest - 🧠 ANSWER ✔✔D. Insurable Interest
States that if the insurer adopts a revision which would broaden coverage
without additional premium within some period of time prior to the policy
period or during the policy period, the insured receives the benefit of such
broadened coverage.
A. Cancellation Clause
B. Policy Period
C. Pro Rata
D. Liberalization - 🧠 ANSWER ✔✔D. Liberalization
The time frame is typically 60 days.
The __________ states that when there is an unbroken connection
between an occurrence and damage that grows out of the occurrence, then
the resultant damage is all a part of the occurrence.
A. Doctrine of Proximate Cause
B. Doctrine of Perils & Hazards
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, C. Insurance Policy Handbook
D. Doctrine of Property Insurance - 🧠 ANSWER ✔✔A. Doctrine of
Proximate Cause
For example, if a property insurance policy covers the peril of fire but
further damage is caused by smoke, water used to extinguish, and the
process of moving property away - fire is considered to be the *proximate
cause* of all of the damage.
The Loss Settlement Valuation that subtracts an allowance for depreciation
is defined as?
A. Actual Cash Value
B. Replacement Cost
C. "Old for New"
D. None of the Above - 🧠 ANSWER ✔✔A. Actual Cash Value
A policy condition, either based on information in the insured's application
or inserted by the insurer, is defined as:
A. Warranty
B. Misrepresentation