Property Insurance Policies Flashcards
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Read the first 6 Property Insurance Policies flashcards as text
Which of the following commercial property coverage forms provides the broadest protection, covering all risks of physical loss except those specifically excluded?
Answer: Special Cause of Loss Form
The Special Cause of Loss Form (ISO CP 10 30) provides open-perils (all-risk) coverage for buildings and business personal property, covering all causes of physical loss not specifically excluded.
Under an inland marine insurance policy, which of the following would typically be covered?
Answer: A contractor's equipment and tools at various job sites
Inland marine policies cover moveable or flowing property such as contractors' equipment, scheduled personal property, and goods in transit over land, reflecting its historical roots in covering goods away from a fixed location.
Under a commercial property policy, 'business personal property' (BPP) coverage includes:
Answer: Furniture, equipment, inventory, and other personal property owned by the insured and used in the business
Business personal property (Coverage B) covers personal property owned by the insured and used in the business — furniture, machinery, equipment, stock — located in or within 100 feet of the described premises.
A 'valued policy' in property insurance means:
Answer: A pre-agreed value is stated in the policy, and that amount is paid in full if a total loss occurs, without depreciation or proof of value
A valued policy (common in fine arts, marine, and some personal property floaters) specifies the agreed value upfront; if a total loss occurs, the insurer pays that amount without applying depreciation or requiring additional proof of value.
The 'coinsurance clause' in a commercial property policy is triggered when:
Answer: The insured carries less than the required percentage (typically 80%) of the property's replacement cost, resulting in a reduced claim payment for partial losses
The coinsurance clause penalizes underinsurance: if the insured carries less than the required coverage (usually 80% of replacement cost), partial losses are paid only in proportion to the ratio of insurance carried to insurance required.
Under a commercial property policy, which of the following losses would typically be excluded under the 'flood' exclusion?
Answer: Surface water from a nearby river overflowing and entering the building
Flood exclusions in commercial property policies exclude losses caused by surface water, overflow of bodies of water, and storm surge — the kind of flooding that comes from outside the building.