Insurance Loss Definitions and Examples

Front

What is the definition of an actual total loss?

Back

A loss that occurs when an insured property is destroyed or damaged to such an extent that it cannot be recovered or repaired.

Front

Which of the following is an example of a morale hazard?

Back

An individual being less careful about avoiding injury because they have insurance.

Front

What is an example of an indirect loss?

Back

Loss of rental income due to fire damage to a rental property.

Front

What is the definition of 'Actual Total Loss' in the context of insurance?

Back

A situation where the property is destroyed or damaged beyond use or salvage.

Front

Which of the following best describes 'Constructive Total Loss'?

Back

The property is partly damaged, but further damage is inevitable, making it unusable.

Front

What is 'Actual Cash Value' (ACV) in insurance terms?

Back

The depreciated value of the property at the time of loss.

Front

What does 'Replacement Cost' insurance cover?

Back

The cost to replace the item with a new one.

Front

In the context of car insurance, what does it mean when a car is 'totaled'?

Back

The cost to repair the car is more than its actual cash value.

Front

What is the first step to take after your car is declared a total loss?

Back

File a claim with your insurance company.

Front

How can you negotiate a better settlement for a totaled car?

Back

Provide the claims adjuster with the sticker details of your car.