Policy Analysis & Evaluation Flashcards
7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Policy Analysis & Evaluation flashcards as text
When analyzing a commercial general liability (CGL) policy, which coverage trigger determines when bodily injury must occur for coverage to apply under an occurrence form?
Answer: During the policy period
An occurrence-trigger CGL policy requires the bodily injury or property damage to occur during the policy period, regardless of when the claim is made.
Which ACORD form is used to document a certificate of insurance for property and casualty coverage?
Answer: ACORD 25
ACORD 25 is the standard Certificate of Liability Insurance form used to summarize P&C coverage for third parties.
A policyholder claims damage from a slow water leak discovered three years after it began. Under a property policy with a 'manifestation' trigger, coverage would be tied to:
Answer: When the damage first became apparent
A manifestation trigger attaches coverage to the policy in effect when the damage first became apparent or visible.
What does the 'other insurance' clause in a policy primarily address?
Answer: How multiple policies sharing the same loss coordinate payment
The 'other insurance' clause establishes whether a policy is primary, excess, or contributes pro-rata when another policy also covers the same loss.
Under a commercial property policy, which valuation method reimburses the cost to replace damaged property with new property of like kind and quality without a deduction for depreciation?
Answer: Replacement cost value (RCV)
Replacement cost value pays to repair or replace damaged property with new materials without subtracting depreciation.
When evaluating a workers' compensation policy, the experience modification factor (EMR) is primarily used to:
Answer: Adjust premium based on an employer's actual loss history compared to industry average
The EMR compares an employer's actual losses to expected industry losses, modifying premium up or down accordingly.
A policy contains a 'liberalization clause.' What is its effect?
Answer: Automatically extends broader coverage to existing policyholders when the insurer broadens the policy form
A liberalization clause automatically grants existing policyholders any broadened coverage the insurer introduces mid-term without additional premium.