Unit 13-Commercial Property Insurance

Under the Commercial Property Conditions, if the insured intentionally conceals or misrepresents a material fact, then the insurance company will

• reduce any claim by 15%

• deny coverage

• increase the premium to cover the additional risk

• reinsure the risk with another carrier

Under the Commercial Property policy, an insured may bring legal action against the insurance company within

• 6 months

• 12 months

• 2 years

• 3 years

A commercial building valued at $500,000 is insured under two commercial property policies. The first policy is for $300,000 and the second policy is for $200,000. If a covered loss pf $100,000 occurs, the second company will pay

• $60,000

• $50,000

• $40,000

• nothing

Under the Building and Personal property coverage form, all of the following would be considered as part of the building EXCEPT

• completed additions to the building

• materials used to repair the building that is within 100 feet of the building

• fire extinguishing equipment in the building

• a tenant's equipment which is bolted to the floor of the building

Which of the following types of property would not be excluded from coverage under a Commercial Property policy?

• contraband

• the foundations of the building

• animals that are for sale to the public

• IOUs, cash and currency

Under the Commercial Property policy, which of the following coverages is not a policy addition or extension?

• debris removal

• fire department service charges

• automobile liability

• newly acquired property

Under the Commercial Property policy, the maximum value that the insurance company will pay for any one tree, shrub, or plant it

• $1000

• $500

• $250

• nothing

Assume that a retail store is insured under a Commercial Property policy for its full replacement cost of $100,000. Further, assume that the store is totally destroyed by fire. There was a $2,000 fire department service charge. The Commercial Property policy would pay the owner of the store

• $100,000

• $101,000

• $102,000

• $112,000

Which of the following statements is/are true regarding appraisal under the Commercial Property Policy?

I Appraisals are made by two appraisers and one umpire

II Each party pays the cost of their appraiser and splits the cost of the umpire

III A decision agreed to by a majority of the appraisers/umpire will be binding

• I only

• II only

• III only

• I, II and III

You own a building valued at $100,000 and have it insured under a Commercial Property policy with an 80% coinsurance percentage with a $500 deductible. You have the building insured for $90,000 and suffer a $20,000 fire loss. How much should you collect from the insurance company?

• $22,100

• $20,000

• $19,500

• none