4/11/25, 9:19 WEBCE Property and Casualty Insurance Flashcards |
PM
WEBCE PROPERTY AND CASUALTY INSURANCE
EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
Save
Terms in this set (76)
includes land and the buildings and other items attached to it (trees, shrubs,
real property
patios)
personal property any tangible item other than real property; appliances, jewelry, cameras
frame: home with interior and exterior walls of combustible material including
wood, plaster on wood, or aluminium or plastic **higher premium for fire
masonry veneer: combustible frame and interior walls but an outside veneer of
brick or stone; this veneer is cosmetic and does not support the building besides
fire protection
4 types of construction
masonry construction: walls support the house and are constructed out of adobe,
brick, concrete, stone, or similar noncombustible materials **hire premium for
earthquake
superior construction: most durable and fire resistant including 3 main types:
noncombustible, masonry combustible, and fire resistive **mostly commercial
buildings
direct loss loss to insured property
refers to loss that are related to direct loss; may incur additional living expenses
indirect loss
if house burns down
consequential loss losses related to equipment failure such as food spoiling from fridge failing
Any financial interest in life or property such that, if the life or property were
insurable interest
lost or harmed, the insured would suffer financially.
Replacement Cost
Functional Replacement
Actual Cash Value
loss valuation methods (6)
Market Value
Agreed
Value Stated
Value
The cost to replace damaged property with like kind and quality at current price,
replacement cost
without any deduction for depreciation.
used with older buildings that have components no longer found in modern
functional replacement cost buildings; cost to repair a damaged building with common (and less costly)
construction materials
actual cash value replacement cost minus depreciation
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6
, 4/11/25, 9:19 WEBCE Property and Casualty Insurance Flashcards |
PM
rule of valuation that deviates from the principle that the traditional measure of
actual cash value (ACV) (replacement cost less depreciation) is the sole measure
of value at the time of loss.
broad evidence rule
under this rule, the insurance company examines every standard of value
bearing on the property under consideration, such as age of property, the profit
likely to accure, and tac value
used in establishing the value of cars and other personal property; not used for
market value
houses or real property
the insured items and their values are listed in a schedule that is made part of
the policy; the insurer agrees to pay the lowest of the following three amounts if
the covered property is damaged or stolen:
stated amount
- the property's actual cash value at the time of loss
- the cost to repair or replace the property with similar property
- the dollar amount of insurance specified in the policy schedule
typically covers paintings, sculptures, antiques, or one of a kind items for which
agreed value
it is difficult to determine a value
hazard condition that increases the likely occurrence of a peril or the severity of a loss
individual's tendencies or traits that increase the chance of a loss
moral hazard
- bad credit
also individual tendencies but they arise from an attitude or indifference to loss
morale hazard
- not locking car because the insurance will cover it
physical conditions that increase the chance of loss
physical hazard
- icy sidewalk
peril cause of loss
a covered peril must be the cause that sets in motion an unbroken chain of
events leading to a loss
proximate cause of loss
- an earthquake breaks a gas main that results in a fire that destroys a building;
proximate cause would be earthquake
a list of description of covered perils; most policies cover a variety of perils such
named perils (specified perils) as fire, expulsion, smoke, or theft
crime: theft, bulglary, robbery
open perils (special perils) perils that are not covered; excludes causes of losses like war, wear and tear etc
if a loss involves two or more perils simultaneously, and at least one is
concurrent causes of loss covered peril, then the loss is covered - even if the policy specifically excludes
another cause of the loss
policy purchased in addition to commercial property policy to obtain coverage
differences in condition
for perils that the commercial policy does not cover
liability insurance/ casualty insurance/ tort protects against claims alleging that an insured person or organization is
law responsible for another party's injury or damage
2/
6
PM
WEBCE PROPERTY AND CASUALTY INSURANCE
EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
Save
Terms in this set (76)
includes land and the buildings and other items attached to it (trees, shrubs,
real property
patios)
personal property any tangible item other than real property; appliances, jewelry, cameras
frame: home with interior and exterior walls of combustible material including
wood, plaster on wood, or aluminium or plastic **higher premium for fire
masonry veneer: combustible frame and interior walls but an outside veneer of
brick or stone; this veneer is cosmetic and does not support the building besides
fire protection
4 types of construction
masonry construction: walls support the house and are constructed out of adobe,
brick, concrete, stone, or similar noncombustible materials **hire premium for
earthquake
superior construction: most durable and fire resistant including 3 main types:
noncombustible, masonry combustible, and fire resistive **mostly commercial
buildings
direct loss loss to insured property
refers to loss that are related to direct loss; may incur additional living expenses
indirect loss
if house burns down
consequential loss losses related to equipment failure such as food spoiling from fridge failing
Any financial interest in life or property such that, if the life or property were
insurable interest
lost or harmed, the insured would suffer financially.
Replacement Cost
Functional Replacement
Actual Cash Value
loss valuation methods (6)
Market Value
Agreed
Value Stated
Value
The cost to replace damaged property with like kind and quality at current price,
replacement cost
without any deduction for depreciation.
used with older buildings that have components no longer found in modern
functional replacement cost buildings; cost to repair a damaged building with common (and less costly)
construction materials
actual cash value replacement cost minus depreciation
1/
6
, 4/11/25, 9:19 WEBCE Property and Casualty Insurance Flashcards |
PM
rule of valuation that deviates from the principle that the traditional measure of
actual cash value (ACV) (replacement cost less depreciation) is the sole measure
of value at the time of loss.
broad evidence rule
under this rule, the insurance company examines every standard of value
bearing on the property under consideration, such as age of property, the profit
likely to accure, and tac value
used in establishing the value of cars and other personal property; not used for
market value
houses or real property
the insured items and their values are listed in a schedule that is made part of
the policy; the insurer agrees to pay the lowest of the following three amounts if
the covered property is damaged or stolen:
stated amount
- the property's actual cash value at the time of loss
- the cost to repair or replace the property with similar property
- the dollar amount of insurance specified in the policy schedule
typically covers paintings, sculptures, antiques, or one of a kind items for which
agreed value
it is difficult to determine a value
hazard condition that increases the likely occurrence of a peril or the severity of a loss
individual's tendencies or traits that increase the chance of a loss
moral hazard
- bad credit
also individual tendencies but they arise from an attitude or indifference to loss
morale hazard
- not locking car because the insurance will cover it
physical conditions that increase the chance of loss
physical hazard
- icy sidewalk
peril cause of loss
a covered peril must be the cause that sets in motion an unbroken chain of
events leading to a loss
proximate cause of loss
- an earthquake breaks a gas main that results in a fire that destroys a building;
proximate cause would be earthquake
a list of description of covered perils; most policies cover a variety of perils such
named perils (specified perils) as fire, expulsion, smoke, or theft
crime: theft, bulglary, robbery
open perils (special perils) perils that are not covered; excludes causes of losses like war, wear and tear etc
if a loss involves two or more perils simultaneously, and at least one is
concurrent causes of loss covered peril, then the loss is covered - even if the policy specifically excludes
another cause of the loss
policy purchased in addition to commercial property policy to obtain coverage
differences in condition
for perils that the commercial policy does not cover
liability insurance/ casualty insurance/ tort protects against claims alleging that an insured person or organization is
law responsible for another party's injury or damage
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6
