Policy Essentials
This number uniquely identifies a policy and is required when making changes or filing claims.
Correct answer: Policy number
True or False: A peril is a condition that increases the likelihood of a loss.
Correct answer: False because peril the event that causes the loss; hazards increase likelihood.
The policyholder submits this to request payment for a covered loss:
Correct answer: Claim
True or False: Actual Cash Value (ACV) includes depreciation.
Correct answer: True
The amount paid to keep a policy active is called:
Correct answer: Premium
It is duration of time a policy is active, usually expressed with effective and expiration dates.
Correct answer: Policy term
A windstorm blows off shingles on a roof. The wind is considered a:
True or False: Deductible is the amount the insurer pays before the policyholder contributes.
Replacement cost differs from ACV because:
Correct answer: It pays to repair or replace property without deducting depreciation.
True or False: A quote is a binding insurance policy.
Correct answer: False because it is only an estimate.
It is when a policyholder wants to continue coverage beyond the current term, this process occurs.
Correct answer: Renewal
Which type of policy covers all causes of loss except those specifically excluded?
Correct answer: Open-peril Coverage
True or False: An endorsement modifies, adds, or removes coverage from an existing policy.
Correct answer: True
A 5-year-old laptop is stolen. Under ACV, the payout is:
Correct answer: The current value of the laptop after depreciation.
A homeowner requests a quote, and the insurer estimates $1,500 annually. Can you give 3 factors might affect this quote?
Correct answers: Location, home age, coverage limits, claims history, roof condition, etc.
If the insurance company decides not to offer coverage after the current term ends, this action is called…
Correct answer: Non-renewal
Theft is listed as a covered event in a policy. This type of coverage is known as:
Correct answer: Named-peril coverage
The insurance company pays for a claim and then seeks reimbursement from the party responsible for the damage. This process is called:
Correct answer: Subrogation
A 10-year-old roof is destroyed by hail. Full replacement of a new roof is covered under:
Correct answer: Replacement Cost
True or False: Reinstatement occurs automatically once a policy lapses.
Correct answer: False because carrier must approve and policyholder usually must pay past-due premiums.
Maria missed her premium payment, and her coverage stopped on March 15. Three days later, she filed a claim for water damage. What is the term for her coverage gap?
Correct answer: Lapsed/Lapse in Coverage
A yard filled with debris increases the chance of property damage. This is an example of a:
Correct answer: Hazard
A policyholder files a claim after a fire and the insurer pays $7,500 after the $2,500 deductible. What type of coverage did they most likely have if the roof is replaced fully?
Correct answer: Replacement Cost
Maria wants full replacement of stolen jewelry above her limit. Which policy adjustment can she use?
Correct answer: Endorsement
A business owner uses a tool to calculate the cost to rebuild their property with similar materials. This tool is called:
Correct answer: Replacement Cost Estimator