Property Insurance Basics Flashcards
6 cards from real Property And Casualty Insurance License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property Insurance Basics flashcards as text
Which of the following best describes 'subrogation' in property insurance?
Answer: The insurer's right to recover from a negligent third party after paying a claim
Subrogation allows the insurer to step into the insured's legal shoes and pursue recovery from the party responsible for causing the loss.
What is an 'inland marine' policy primarily designed to cover?
Answer: Goods in transit and movable property
Inland marine insurance covers goods being transported overland or by air, as well as certain types of movable property like cameras, jewelry, and contractor's equipment.
What is the primary purpose of a deductible in a property insurance policy?
Answer: To reduce small claims and encourage loss prevention by the insured
Deductibles reduce small, frequent claims and give the insured a financial stake in preventing losses, thereby lowering overall premiums.
A 'scheduled personal property endorsement' is used to:
Answer: Provide higher limits and broader coverage for specific high-value items
A scheduled personal property endorsement individually lists valuable items (e.g., jewelry, fine art) with their appraised values and covers them on an open-perils basis.
Under a standard homeowners policy, Coverage E (Personal Liability) covers:
Answer: Legal liability for bodily injury or property damage caused to others by the insured
Coverage E pays for claims and defense costs when the insured is legally liable for bodily injury or property damage to a third party.
What is the 'vacancy clause' in a property insurance policy?
Answer: A provision that suspends or limits coverage if the property is vacant beyond a specified period (typically 60 days)
Most property policies reduce or suspend certain coverages if the building has been vacant for more than 60 consecutive days because vacant properties pose higher risks.