Understanding Two-Party Contracts in Property & Casualty Insurance

In insurance terms, a peril refers to an event or cause of loss, such as fire or wind, that may trigger an insurance claim.

In Basic Perils, Exploding Boilers are the only type of explosions that are specifically excluded from coverage.

A property contract is a type of agreement involving two parties regarding the transfer or possession of a property. The other options - employment contract, marriage contract, and sales contract - also involve agreements between two parties, but they pertain to different contexts or subjects.

When a covered loss occurs, insurers will pay the lower of the loss amount or the policy limit.

Agreed Value is a method of valuation where the value of the item is predetermined and agreed upon by the parties involved before any potential loss occurs.

In a Special Perils policy, the Exclusions Section is where you would find information on what is not covered. The general rule is 'If it's not excluded; It's covered', which means that if something is not specifically listed as excluded in this section, it is typically covered under the policy.

In insurance policies, the items that are covered are typically listed under the Inclusions section, while the Exclusions section lists what is not covered. Remember, under Special Peril coverage, if it's not excluded, it's covered.

The Actual Cash Value is calculated by subtracting Depreciation from Replacement Cost today, taking into consideration the wear and tear of the item being evaluated.

In insurance terms, a 'named peril' policy only covers specific perils listed in the policy, while a 'broad perils' policy covers a wider range of perils. 'Special perils' policies cover all perils not specifically excluded, and 'all-risk' policies cover all perils unless specifically excluded.

A hazard is a potential source of harm or adverse health effect on a person, while the other options do not directly refer to something that increases the chances of a loss occurring.

Moral Hazard refers to the situation where one party engages in risky behavior because it knows it is protected against the risk. Physical Hazard, Financial Hazard, and Environmental Hazard do not specifically relate to the intentional causing of loss by a person.

Collapse coverage is typically included under Broad Peril Coverage as it incorporates a wider range of risks compared to Basic Peril Coverage. Comprehensive and Named Peril Coverage may not always include specific coverage for collapse.

Broad Perils coverage typically includes Falling Objects as part of its protection, while Basic Perils coverage may not encompass such events.

Broad Perils typically cover a wider range of potential risks compared to Basic Perils. Collapse would likely be covered under Broad Perils as it is considered a major risk event that could fall under this category.

Collapse coverage is typically included in the Broad and Special forms of insurance policies, as they provide coverage for a wide range of perils compared to Basic or Named Perils policies.

Basic Perils typically refer to the types of risks covered by insurance policies. Falling Objects is not commonly listed as a Basic Peril in most insurance policies, unlike Fire, Theft, and Water Damage which are more commonly included.

The correct answer is 'Explosion' as the question refers to the basic perils acronym and E in F L E W R V V V S S S stands for Explosion.

Smoke damage is specifically covered under the peril of smoke in most insurance policies, separate from the peril of fire. Water damage would be covered under a separate peril, such as water damage or flooding. Earthquake damage would be covered under the peril of earthquake.

Smoke damage caused by a fire is considered a direct result of the fire itself, hence it is covered under the peril of Fire. Smoke alone would not be covered as it is not the named peril in this scenario. Water damage would be covered under a separate peril such as Water Damage or Flood. Theft is a completely different peril and would not apply in this situation.

Replacement cost is a valuation method where the insurance company covers the cost of replacing an old item with a new one. Actual cash value is the depreciated value of an item, Market value is the current value of an item in the market, and Salvage value is the value of an item after it has been damaged or deemed unusable.

Morale Hazard is the term used when an individual does not take necessary precautions or actions to prevent a loss due to lack of concern or disregard for the consequences.

In insurance terms, coverage for property inside a building being destroyed by a falling object usually depends on whether the object fell from outside to inside the building. This distinction is important to determine coverage in these circumstances.

Special Perils, also known as Open Perils, provide coverage for all perils except those specifically excluded in the policy. Named Perils, Specific Perils, and Limited Perils refer to coverage for only the perils explicitly listed in the policy.

Water from plumbing would not be covered under Basic Perils because it typically falls under separate coverage such as flood insurance or specific plumbing system coverage. Basic Perils typically cover common risks like fire, theft, vandalism, and certain types of natural disasters.

When experiencing a loss, timely notification to the insurance company is crucial to ensure that the claims process can begin promptly and smoothly.

Open Perils and Special Perils are synonymous terms used in the insurance industry to refer to coverage that protects against all risks not specifically excluded. Named Perils, Specific Perils, and Limited Perils refer to insurance coverage that only protects against specific risks named in the policy.

The correct time frame is 14 days. If the pipe has been leaking for longer than 14 days, there will be no coverage for the loss according to the policy. The other time frames provided are incorrect and do not fall within the specified coverage window.

Basic perils typically refer to fundamental risks covered in insurance policies. In this case, 'Water from Plumbing' is not considered a Basic Peril as it falls under a separate category of water damage that may require additional coverage. Firefighter water damage, earthquake damage, and theft of personal belongings are examples of Basic Perils commonly covered in insurance policies.

Broad provides coverage for specific named perils, while Special Perils provides coverage for all risks not specifically excluded.