Policy Provisions and Options Flashcards
6 cards from real P&C practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Policy Provisions and Options flashcards as text
The 'declarations page' (dec page) of an insurance policy contains:
Answer: Specific information about the insured, covered property, policy period, limits, and premium
The declarations page is the personalized section of the policy that identifies the named insured, coverage effective dates, limits of insurance, deductibles, premium, and covered locations or vehicles.
An 'endorsement' to an insurance policy:
Answer: Modifies the terms of the original policy by adding, deleting, or changing coverage
An endorsement (also called a rider) is a written amendment that modifies the base policy — it can broaden coverage, restrict coverage, add covered parties, or make other changes.
What is the purpose of a 'deductible' in an insurance policy?
Answer: To share the risk of loss between the insured and the insurer, reducing the premium and discouraging small claims
A deductible is the amount the insured pays out-of-pocket before the insurer's payment obligation begins; higher deductibles reduce the premium and provide the insured with an incentive to prevent small losses.
Which policy provision requires the insured to notify the insurer of a loss within a reasonable time?
Answer: Prompt notice condition
The prompt notice condition requires the insured to notify the insurer of a covered loss as soon as practicable; late notice can give the insurer grounds to deny coverage if the delay prejudiced its ability to investigate the claim.
The 'appraisal clause' in a property insurance policy is triggered when:
Answer: There is a dispute about the amount of loss (not coverage) between the insurer and the insured
The appraisal provision provides an alternative dispute resolution mechanism specifically for disagreements about the dollar value of a covered loss — each party selects an appraiser, and they select a neutral umpire to resolve differences.
An 'occurrence limit' in a liability policy refers to:
Answer: The maximum amount the insurer will pay for all damages arising out of a single occurrence, regardless of the number of claimants
The occurrence limit (also called the per-occurrence or per-accident limit) is the maximum the insurer will pay for all claims arising from a single event, regardless of how many people were injured or how many claims are filed.