Exam 10: Analysis of Insurance Contracts

Reasons why a peril may be considered uninsurable and therefore excluded from insurance contracts include which of the following? I.The losses from the occurrence of the peril may be due to a predictable decline in value. II.The losses from the occurrence of the peril may be incalculable and catastrophic.

Homeowners insurance policies usually cover resident relatives of the named insured who are under age 24 and who are full-time students away from home.Under the homeowners policy,these full-time students are considered

The policy provision requiring the filing of proof of loss with the insurer is an example of a(n)

An insurance policy provision that specifies how a property loss will be settled if more than one property insurance policy covers the loss is the

The purpose of other-insurance provisions is to

Deductibles are not used in which of the following type of insurance?

An elimination (waiting)period is an example of a(n)

XYZ Company insured its building on a replacement cost basis for $450,000 under a property insurance policy that included an 80 percent coinsurance clause.The building had a replacement cost of $500,000 when it sustained a $50,000 loss.How much will XYZ Company receive from its insurer,assuming no deductible applies?

Maria's home was damaged by an earthquake.As Maria has open-perils coverage on her home,she was surprised to learn that her loss was not covered.Which section of a property insurance policy specifies which perils,property,and types of losses are not covered?

ABC Company insured its building on a replacement cost basis for $700,000 under a property insurance policy that included an 80 percent coinsurance clause.The building had a replacement cost of $1 million when it sustained a $40,000 loss.How much will ABC Company receive from its insurer,assuming no deductible applies?

Mark owns a building that he insured for $90,000.The replacement cost of the building is $100,000.Mark's property insurance policy has an 80 percent coinsurance clause.Ignoring any deductible,if Mark's building is destroyed by a covered peril,how much will Mark receive from his insurer?

Mark reviewed his homeowners policy.He learned that his personal property was insured on an actual cash value basis.He would like replacement cost coverage on his personal property.He contacted his agent who said,"I'll simply add an amendment to your contract that changes the basis of recovery to replacement cost." The written provision the agent was referring to is called a(n)

Maggie purchased a life insurance policy.She was concerned that if she became disabled,she would no longer be able to pay the premiums.Her agent added an amendment of the policy stating that if she became disabled,future premium payments would be waived.Such an amendment to a life insurance policy is called a(n)

What information is contained in the insuring agreement of an insurance policy?

Laura's medical insurance policy includes a $500 deductible.Laura is required to pay 20 percent of covered expenses in excess of the deductible,and her insurer will pay 80 percent of covered expenses in excess of the deductible.Laura was hospitalized and her covered medical expenses were $10,500.How much of the $10,500 will be paid by the insurer?

Which of the following statements about "open-perils" coverage is (are)true? I.All losses are covered except those losses specifically excluded. II.The burden of proof is on the insured to prove that a loss is covered.

A special coverage policy is a policy that

Ann Parks and Robert Evans jointly own a grocery store.Ann and Robert are both named insureds on the property insurance covering the store,but Ann is the first named insured.Which of the following statements is true with regard to Ann's status as the first named insured?

The exclusion of flood in a homeowners policy is an example of an

Shauna hurt her back and was unable to work.She filed a claim under her disability income insurance policy.Under terms of the policy,a period of time must pass between when the injury occurred and when the insurer begins to replace lost earnings.This time period is called a(n)