Chapter 5. Introduction To Property Insurance
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In this chapter we'll review some of the basic features of property insurance, including some of the concepts that apply to property insurance coverages and standard policy provisions.
- 1.Walt and Joanna are co-owners of a bagel shop. Both Walt and Joanna are listed in the declarations of the policy that insures the business, with Joanna's name appearing first. The declarations also list First State Bank, which has an outstanding loan on the business. Who is considered a named insured on the policy?
- A.
Walt only
- B.
Joanna only
- C.
Both Walt and Joanna
- D.
First State Bank
- 2.Renata's home is demolished in a fire that started when a neighbor misdirected the fireworks he set off to celebrate the Fourth of July. Renata's insurance company pays her for the damage, and then files suit against the neighbor to recover the amount it paid for the loss. This is an example of the application of what policy condition?
- A.
Liberalization
- B.
Subrogation
- C.
Abandonment
- D.
Salvage
- 3.Byron sells his car to his friend Annette, but does not notify his insurance company. Assuming that Byron's policy will transfer to her automatically, Annette doesn't buy insurance for the car. When the car is stolen, Annette files a claim with Byron's former insurer. The insurer denies the claim. This is an example of the application of what policy condition?
- A.
Assignment
- B.
No benefit to bailee
- C.
Coinsurance
- D.
Other insurance
- 4.
- A.
The Doctor Dances
- B.
The Long Game
- C.
Rose
- D.
World War Three
- 5.
- A.
$26,640
- B.
$40,000
- C.
$13.280
- D.
$60,000
- 6.An indirect loss is which of the following?
- A.
The cause of a direct loss
- B.
A type of loss that results from a direct loss
- C.
An insignificant property loss
- D.
Not a type of property loss
- 7.Consuela's Homeowners policy has an 80% Coinsurance condition. Her home's value is $125,000. What is the minimum amount of coverage she must carry to avoid a coinsurance penalty for partial losses?
- A.
$125,000
- B.
$100,000
- C.
$80,000
- D.
$75,000
- 8.Jake has two insurance policies on his house. They are issued by different companies, but they are otherwise identical. The term for this is
- A.
Concurrent causation
- B.
Fraud
- C.
Concurrent coverage
- D.
Double indemnity
- 9.
- A.
$400
- B.
$3,000
- C.
$17,000
- D.
$20,000
- 10.Under the Appraisal condition, the insured and the insurance company each chooses an appraiser. If the appraisers do not agree, the dispute is submitted to a third individual agreed upon jointly by the insured and the insurance company. That third party is called the
- A.
Attorney-in-fact
- B.
Judge
- C.
Super-appraiser
- D.
Umpire
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