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Questions and Answers
Which of the following best describes indirect loss in insurance language?
Which of the following best describes indirect loss in insurance language?
- Damage to equipment and furniture
- Physical damage to property caused by a disaster or accident
- Tangible losses that can be seen and touched
- Loss of income and increased expenses resulting from the insured's inability to use the damaged property (correct)
What is the primary focus of insurance loss valuation?
What is the primary focus of insurance loss valuation?
- Helping insurers determine the appropriate compensation to repair or replace damaged property
- Determining the monetary value of a property loss (correct)
- Specifying the amount of money an insured will receive if a covered loss occurs
- Preventing perils from causing direct losses
What are examples of direct losses in insurance?
What are examples of direct losses in insurance?
- Loss of contents due to fire and smoke damage
- Damage to a building, equipment, and furniture (correct)
- Wind damage from a hurricane and shock damage from an earthquake
- Loss of income and increased expenses resulting from the insured's inability to use the damaged property
What term is used in business insurance policies to refer to indirect losses?
What term is used in business insurance policies to refer to indirect losses?
Which valuation method represents the current value of an insured property or asset in the open market at the time of a covered loss?
Which valuation method represents the current value of an insured property or asset in the open market at the time of a covered loss?
What does 'Actual cash value' represent in the valuation methods?
What does 'Actual cash value' represent in the valuation methods?
What does 'Functional Replacement cost' refer to in the valuation methods?
What does 'Functional Replacement cost' refer to in the valuation methods?
What is the characteristic of 'Agreed Value' insurance?
What is the characteristic of 'Agreed Value' insurance?
What does 'Valued Policy Law (VPL)' require insurance companies to do in the event of a total loss?
What does 'Valued Policy Law (VPL)' require insurance companies to do in the event of a total loss?
In 'Replacement cost' valuation method, what amount will the insured receive to repair or replace the damaged property?
In 'Replacement cost' valuation method, what amount will the insured receive to repair or replace the damaged property?
What is the difference between 'Market value' and 'Actual cash value' in the valuation methods?
What is the difference between 'Market value' and 'Actual cash value' in the valuation methods?
What does 'Valued Policy' refer to in insurance?
What does 'Valued Policy' refer to in insurance?
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