TX Adjusters Exam | Fundamentals of Property and Casualty Insurance Ken's house has an exterior layer of brick that covers wooden walls supported by wooden studs. What type of construction does Ken's house have? - Correct Answers ✅frame fire resistive C- masonry veneer masonry Peter's office building is badly damaged in a fire. He and he and the other tenants must relocate their businesses. They submit claims to their insurance carriers for their destroyed business personal property, lost business income, and extra expenses associated with relocating. Which of the following describes Peter's lost income? - Correct Answers ✅direct loss partial loss C- indirect loss total loss!Madeline's computer store and repair business is flooded when pipes burst. Carpet, fixtures, and sheetrock must be replaced. Inventory and customers' computers being repaired are lost. The store is closed for six weeks while it is repaired.In terms of loss, how is the store's closing characterized? - Correct Answers ✅secondary loss C- indirect loss direct loss 1 / 4
TX Adjusters Exam | Fundamentals of Property and Casualty Insurance absolute loss Which of the following is not a basic type of construction by which insurers classify buildings and structures? - Correct Answers ✅Masonry veneer C- Steel and glass Frame Masonry Butch's Meat Market loses electrical power during a flood. The business closes for several days, during which time the lack of refrigeration results in the spoliation of a large quantity of meat. Butch's loss of the meat is what type of loss? - Correct Answers ✅-Unavoidable -Direct C- Consequential -Ancillary Eight years ago Sally paid $20,000 for a large oven for her bakery. Its expected useful life was 10 years. Today, a similar large oven would cost $25,000. Ignoring any deductibles that might apply, if Sally's oven is destroyed today, what can Sally expect to recover from if her insurance policy provides actual cash value coverage? - Correct Answers ✅C-$5,000 -> replacement cost of 25k - 80% for depreciation
$20,000 2 / 4
TX Adjusters Exam | Fundamentals of Property and Casualty Insurance
$4,000
$25,000
For an insurer to pay a property insurance claim, when must the policyowner have an insurable interest in the insured property? - Correct Answers ✅C-when the loss occurs -when the claim is paid -when the premiums are paid -when the policy is purchased What is "actual cash value"? - Correct Answers ✅- replacement cost plus physical depreciation C-replacement cost minus physical depreciation -the cost to repair or replace a damaged building with functionally equivalent materials -the value stated in the policy's schedule An owner of a property or casualty insurance policy is required to have an insurable interest in the insured risk at the time of the - Correct Answers ✅C-loss of the insured property or occurrence of the insured event -purchase of the policy -application for the policy -policy delivery 3 / 4
TX Adjusters Exam | Fundamentals of Property and Casualty Insurance Which two items of information are necessary to determine an item's actual cash value? - Correct Answers ✅-original cost and current replacement cost -original cost and expected useful life -replacement cost and current market value C-replacement cost and depreciation All homes in Sherri's development are almost identical.Several recently sold for $400,000. However, because Sherri's five-year-old house is on a premium lot, she believes it can be sold for $500,000, so she insures it for that amount.Similar homes in Sherri's county are currently being built for $350,000, exclusive of the lot. Sherri made the mistake of insuring her house for its - Correct Answers ✅C-market value -functional replacement cost value -actual cash value -replacement cost value Hans wants to insure his old home under a policy that will replace any damaged building components with functionally equivalent components (for example, replace damaged plaster walls with wallboard). On what basis should property losses to Hans's dwelling building be valued? - Correct Answers ✅-replacement cost C-functional replacement cost -stated amount
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