Exam 10: Structure and Analysis of Insurance Contracts

_____ refers to losses caused by characteristics of the insured property.

The _____ receipt provides interim coverage while your application is being processed, whether or not you are insurable.

A(n) _____ policy was formerly called "all risk" policy.

Identify the policy that covers losses caused by all perils except those excluded.

In property/casualty insurance, an agent who has this authority can create a contract between the insurance company and the insured.Two factors influence the granting of such authority.First, some companies prefer to have underwriting decisions made by specialists in the underwriting department, so they do not this binding authority to the agent.Second, some policies are cancelable; others are not.The underwriting errors of an agent with this authority may be corrected by cancellation if the policy is cancelable.Identify this authority.

The exclusions in a named-perils policy are more definitive of coverage than in an open-perils policy.

The comprehensive glass policy insures against all glass breakage except those caused by:

Two factors influence the granting of binding authority by the insurers to the agents.List these factors.

Losses due to wear and tear are excluded because they are accidental rather than inevitable.

More insurance is bought rather than sold.

In an insurance policy, it states that the "insurer promises to pay…." This general description of the insurer's promises is the essence of:

A binder cannot be oral because it becomes very difficulty to prove its existence in case of a dispute.

One form of the homeowner's policy, HO-2, insures for direct loss to the dwelling, other structures, and personal property caused by eighteen different perils.Only losses caused by these perils are covered.Riot or civil commotion is listed, so a loss caused by either is covered.On the other hand, earthquake is not listed, so a loss caused by earthquake is not covered.Identify the perils policy of HO-2.

When a(n) _____ is incurred in an insurance contract, coverage is terminated.

Policies written on a named-perils basis cannot cover all possible causes of loss because of "_____ peril."

Whether the policy is open-perils or named-perils, the coverage it provides cannot be ascertained without considering the _____, which are those perils, risks, losses, and properties that are not covered in an all-risk policy.

Liability policies usually cover damage to or loss of others' property in the care, custody, or control of the insured because these properties are considered as the insured's properties.

Insuring clauses do not vary greatly from policy to policy.

The estate tax repeal rider, which exemplifies the need to modify policies as tax laws change, was created in response to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA 2001).

Which of the following statements is true about open-perils policy and named-perils policy?