FREE RIBO Customer Service and Sales Skills Test 2
The insured's policy is nearing the expiration date. The insurance company doesn't want to continue the insured's coverage, so it sends the insured a notice that the policy will not continue beyond the expiration date of the policy. This is considered which of the following?
Nonrenewal occurs when the insured or the insurer decides to not continue coverage for another policy period after the current policy period expires. Flat cancellation means to cancel a policy on its effective date. Pro rata cancellation means to cancel a policy midterm so that a refund is made of unearned premium.
A heavy snowfall causes the roof over Amaya's living room to collapse. The insurance company asks her to move her belongings out of the living room to protect them from further damage and put a tarp over the roof until it can be repaired. It also asks her to complete a proof of loss form listing the items that were damaged. This is an example of the application of what policy condition?
Most insurance policies include conditions that specify what the insured and insurer must do when a loss occurs. The insured's responsibilities after a loss include giving notice of claim to the agent or company, protecting property from further damage, and completing a proof of loss form.
Walt and Joanna are co-owners of a bagel shop. Both Walt and Joanna are listed in the declarations of the policy that insures the business, with Joanna's name appearing first. The declarations also list First State Bank, which has an outstanding loan on the business. Who is considered a named insured on the policy?
The named insured is the person, business, or other entity named in the declarations to whom the policy is issued. First State Bank has an insurable interest as the mortgagee, but is not a named insured.
An indirect loss is which of the following?
An indirect loss is one that comes as a result, or consequence, of the original loss.
To void a policy, misrepresentation or concealment must be which of the following?
Both material misrepresentation or concealment and intent are typically required for an insurance company to void a policy. Material facts are important information that could impact the insurer's decision to issue a policy or the terms of the policy. Intentional misrepresentation or concealment suggests that the policyholder knowingly provided false information or intentionally hid material facts from the insurer.
Renata's home is demolished in a fire that started when a neighbor misdirected the fireworks he set off to celebrate the Fourth of July. Renata's insurance company pays her for the damage, and then files suit against the neighbor to recover the amount it paid for the loss. This is an example of the application of what policy condition?
The subrogation condition transfers the insured's right to collect from a responsible third party to the insurance company.
Three policies, totaling $300,000 in coverage, apply to an $80,000 loss. Policy A's limit of insurance is $100,000, policy B's limit is $50,000, and policy C's limit is $150,000. Use the pro rata method to determine how much policy C would pay for this loss.
Because total coverage is $300,000 and policy C provides 50% of this amount ($150,000) it is obligated to pay 50% of the loss.
Which of the following would not normally be excluded under a property insurance contract?
Property insurance policies typically exclude nonaccidental losses, losses controllable by the insured, extra-hazardous perils, catastrophic losses, and property covered in other policies.
An agreement between the insured and the insurer that certain conditions will be met is which of the following?
A warranty becomes part of the policy. If it is breached, the insurer can void the policy.
Which one of these statements about the Fair Credit Reporting Act is not correct?
The question asks for the statement that is not correct. Prenotification is required for investigative reports, but not regular reports. The other choices are provisions contained in the Fair Credit Reporting Act.
Consuela's Homeowners policy has an 80% Coinsurance condition. Her home's value is $125,000. What is the minimum amount of coverage she must carry to avoid a coinsurance penalty for partial losses?
A Coinsurance condition requires an insured to carry a certain amount of insurance, which is expressed as a percentage of the insured property's value, in order to avoid a coinsurance penalty for partial losses. In this case, Consuela must carry insurance at least equal to 80% of the home's value, or $100,000, in order to satisfy the requirement.