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? A) Any loss settlement is paid to […]
Date: September 19th, 2020
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 A) insuring agreement provision. B) loss settlement provision. C) other insurance provision. D) coinsurance provision. ANSWER Answer: C
Date: September 19th, 2020
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? A) $42,500 B) $45,000 […]
Date: September 19th, 2020
Property insurance policies contain declarations, conditions, definitions, exclusions, and an insuring agreement. However, some policy terms, such as subrogation, cancellation, other insurance, and assignment do not fall into these categories. The part of an insurance contract in which these provisions can be found is the A) endorsements. B) binders. C) conditions. D) miscellaneous provisions. […]
Date: September 19th, 2020
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? A) $33,333 B) […]
Date: September 19th, 2020
In determining insurance limits and deductibles, an important concept is that insurance should be used to pay big losses rather than small losses. The objective is to insure big losses that could cause financial ruin and to exclude small losses that can be budgeted out of current income. This concept is called the A) law […]
Date: September 19th, 2020
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 […]
Date: September 19th, 2020
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 A) first named insureds. B) second named insureds. C) other insureds. D) additional insureds. ANSWER Answer: C
Date: September 19th, 2020
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? A) $80,000 B) $90,000 C) $101,250 D) $112,500 […]
Date: September 19th, 2020
Which of the following types of families is likely to have the least need for a large amount of life insurance? A) a blended family B) a traditional family C) a single person family D) a sandwiched family ANSWER Answer: C
Date: September 19th, 2020
