Social Science Business Insurance
OH P&C Chapter 3
Save
Students also studied
Personal Automobile Policies (PAP)-... Chapter 1 Exam HO Policies Person
37 terms 12 terms 40 terms 40 terms
HannahCinig Preview renae_sherer5 Preview jonahbae1994 Preview jenn
D) at the time of loss When must insurable interest be present under a property policy?
A) before the agent can make a premium commitment
B) when you close on your mortgage
C) at the time of initial application
D) at the time of loss
B) unoccupancy. When a property is present but there is no occupant, it is an example of
A) vacancy.
B) unoccupancy.
C) a secondary residence.
D) a primary residence, vacated at present.
B) higher than ACV, but lower than the cost of As a method of valuation, functional replacement cost is usually used when
replacement with identical property. functional replacement cost is
QUESTION RATIONALE A) lower than ACV.
Functional replacement cost is an evaluation option (as
opposed to ACV or replacement cost) that covers the B) higher than ACV, but lower than the cost of replacement with identical
cost to replace specifically described property with property.
similar property that performs the same function when
replacement with identical property is impossible or C) both lower than the ACV and the replacement cost with identical property.
unnecessary.
D) lower than the ACV, but higher than the cost of replacement with identical
property.
, C) comparative negligence. Liability determined by each party's contribution to an injury defines
QUESTION RATIONALE A) last clear chance.
Comparative negligence tries to make all parties
accountable for their contributions (if any) to an accident. B) pure negligence.
If a court finds a person is 20% responsible for the
accident, the primary tortfeasor or wrong doer will only C) comparative negligence.
be required to reimburse 80% of their injuries.
D) assumed liability.
C) eliminate small claims. One purpose of a deductible is to
A) allow the insured to ignore physical hazards.
B) prevent catastrophic claims.
C) eliminate small claims.
D) prevent underinsurance.
B) $135,000 Tom purchased a home five years ago for $110,000. Its current replacement cost is
$150,000. If it depreciates two percent per year, what is its current actual cash
QUESTION RATIONALE value?
Actual cash value is replacement cost new ($150,000) less
accumulated depreciation (5 years x 2% per year x A) $150,000
$150,00) or $150,000-$15,000 = $135,000. (RC - D = ACV)
B) $135,000
C) $110,000
D) $99,000
A) physical A dead tree beside a home is best described as what type of hazard?
A) physical
B) moral
C) proximate
D) morale
b. $10,000 Ben Graham purchases a $100,000 commercial fire policy. The value of his building
is $150,000 and the policy contains an 80% co-insurance clause. After suffering a
QUESTION RATIONALE $12,000 loss, the insurer will pay
The co-insurance formula is (Did / Should) x Loss, or
(100,000 / [0.80 x 150,000]) x 12,000; (100,,000) x A) $4,500.
12,000 = 9,999.999 The insurer will pay $10,000.
B) $10,000.
C) $6,666.
D) $8,000.
OH P&C Chapter 3
Save
Students also studied
Personal Automobile Policies (PAP)-... Chapter 1 Exam HO Policies Person
37 terms 12 terms 40 terms 40 terms
HannahCinig Preview renae_sherer5 Preview jonahbae1994 Preview jenn
D) at the time of loss When must insurable interest be present under a property policy?
A) before the agent can make a premium commitment
B) when you close on your mortgage
C) at the time of initial application
D) at the time of loss
B) unoccupancy. When a property is present but there is no occupant, it is an example of
A) vacancy.
B) unoccupancy.
C) a secondary residence.
D) a primary residence, vacated at present.
B) higher than ACV, but lower than the cost of As a method of valuation, functional replacement cost is usually used when
replacement with identical property. functional replacement cost is
QUESTION RATIONALE A) lower than ACV.
Functional replacement cost is an evaluation option (as
opposed to ACV or replacement cost) that covers the B) higher than ACV, but lower than the cost of replacement with identical
cost to replace specifically described property with property.
similar property that performs the same function when
replacement with identical property is impossible or C) both lower than the ACV and the replacement cost with identical property.
unnecessary.
D) lower than the ACV, but higher than the cost of replacement with identical
property.
, C) comparative negligence. Liability determined by each party's contribution to an injury defines
QUESTION RATIONALE A) last clear chance.
Comparative negligence tries to make all parties
accountable for their contributions (if any) to an accident. B) pure negligence.
If a court finds a person is 20% responsible for the
accident, the primary tortfeasor or wrong doer will only C) comparative negligence.
be required to reimburse 80% of their injuries.
D) assumed liability.
C) eliminate small claims. One purpose of a deductible is to
A) allow the insured to ignore physical hazards.
B) prevent catastrophic claims.
C) eliminate small claims.
D) prevent underinsurance.
B) $135,000 Tom purchased a home five years ago for $110,000. Its current replacement cost is
$150,000. If it depreciates two percent per year, what is its current actual cash
QUESTION RATIONALE value?
Actual cash value is replacement cost new ($150,000) less
accumulated depreciation (5 years x 2% per year x A) $150,000
$150,00) or $150,000-$15,000 = $135,000. (RC - D = ACV)
B) $135,000
C) $110,000
D) $99,000
A) physical A dead tree beside a home is best described as what type of hazard?
A) physical
B) moral
C) proximate
D) morale
b. $10,000 Ben Graham purchases a $100,000 commercial fire policy. The value of his building
is $150,000 and the policy contains an 80% co-insurance clause. After suffering a
QUESTION RATIONALE $12,000 loss, the insurer will pay
The co-insurance formula is (Did / Should) x Loss, or
(100,000 / [0.80 x 150,000]) x 12,000; (100,,000) x A) $4,500.
12,000 = 9,999.999 The insurer will pay $10,000.
B) $10,000.
C) $6,666.
D) $8,000.
