LA Claims Adjuster Property and Causality Practice Exam 1 Questions and Answers 100% Pass

LA Claims Adjuster Property and Causality Practice Exam 1 Questions and Answers 100% Pass Insurable Interest - Answer- ______in the property and would suffer a financial loss if the property were damaged by an insured peril, their family members (names need not be listed in the policy), and others such as a lien holder, for example, the bank that holds the mortgage on a house. Cause of Loss Forms - Answer- ____establish and define the causes of loss (or perils) for which coverage is provided under the form. (Please do not confuse the "cause of loss" forms with the "proof of loss" form, which is the form submitted to the insurance company by the insured when they have a claim.) Basic Cause of Loss Form - Answer- This form is a "named peril" form, that specifies the perils insured against. The perils listed on this form will usually be, as the name implies, the most basic perils. This form will only cover those perils that are specifically named in the form. Broad Cause of Loss Form - Answer- This form is also a "named peril" form and provides coverage for the perils named in the basic form, but adds additional perils and names them on the form. Special Cause of Loss Form - Answer- ___form is an "open peril" or "all risk" form that provides coverage for all risks of loss, from any peril, except those that are specifically excluded in the policy. Remember for your state licensing exam that when coverage is provided under an open peril form, the burden of proof lies with the insurance company to prove that the cause of loss is excluded. Appraisal Clause - Answer- This property insurance provision allows either the insured or the insurance company to demand a binding appraisal of the damaged property in the event of a dispute as to the value of the property. The clause also establishes the required appraisal procedure. Coinsurance Clause - Answer- A provision in property insurance policies stating that the insurance company and the insured will share in the loss incurred by the insured, based on a fixed percentage of the value of the insured property. In addition, the insured will face a penalty, and must pay a higher percentage on the loss if they do not insure the property for a certain percentage of its full value (usually at least 80%). Sometimes, in Dwelling & Homeowners policies this clause is called the "Loss Settlement Clause". Concurrent Causation - Answer- This term, when referring to property insurance, is a doctrine stating that if loss or damage to property occurs as a result of more than one cause, one of which is covered under the policy, while the other cause is not covered, the damages are still likely to be compensated by the insurer. However, this doctrine is being revisited frequently in the courts and a number of recent cases have been decided in favor of denying the claim. Pair or Set Clause - Answer- This policy provision states that if part of a pair or set is lost or damaged, the loss will be valued as a fair proportion of the total value of the set. It gives consideration to the importance of the damaged article to the set. The insurer is not required to pay for the value of the whole set The Standard Mortgage Clause (Mortgagee Rights) - Answer- This provision protects the interests of the bank/financial institution that holds the mortgage on the insured property. This clause also grants coverage to the mortgagee, even if the insured intentionally caused the loss. The bank can also provide a proof of loss or pay the insurance premiums in case the insured cannot, or refuses to do so. The mortgagee must also be advised if the contract has been cancelled or nonrenewed by the insurer broad evidence rule - Answer- which is a combination of "replacement cost minus depreciation" and "fair market value" that a judge determines Replacement Cost - Answer- This is defined as "the current cost to purchase new, the item that was lost or damaged, with no deduction for depreciation". Functional Replacement Cost - Answer- would be used to value of the property at the cost to replace the property that was lost, damaged or destroyed, with property that serves the same function. Valued Policy Law - Answer- a state law requiring insurance companies to pay the full "agreed value" of the policy in the event of a total loss. • Flood (a separate policy must be purchased); • Earthquake (a separate policy must be purchased); • Mold; • Acts of War; • Parts of the property in disrepair, such as worn-out electrical wiring and plumbing, air conditioning, heating units, and roofs. - Answer- perils that are typically not covered under property insurance policies are: Fair Access to Insurance Requirements (FAIR Plans) - Answer- state-mandated insurance programs that provide "fair" access to property insurance for individuals who cannot secure insurance in the standard market. High risk - Answer- FAIR Plans are considered part of the "residual market" of any state. Insurers in the standard market may consider the individual's claims history or the property they are attempting to insure, ___ A liability loss - Answer- ____ occurs when a per