Exam topics

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• Actual cash value in insuranceActual cash value (ACV) is commonly calculated as the cost to replace damaged property with comparable property today, minus depreciation. A policy ma…
• Business income vs. extra expense coverageBusiness income coverage addresses income the business would have earned, plus certain continuing expenses, when a covered property loss interrupts op…
• Insurable interest in property insuranceA person has an insurable interest in property when damage or destruction of that property could cause that person a real economic loss. Legal title i…
• Peril vs. Hazard in InsuranceA peril is the cause of a loss, such as fire, wind, theft, or an accident. A hazard is a condition or behavior that makes a loss more likely or more s…
• Deductibles and Insurance Claim PaymentsA deductible is the portion of a covered loss the insured is responsible for before the insurer pays under the applicable coverage. It may be a fixed …
• Pure risk vs. speculative risk in insurancePure risk has only two possible outcomes from the insured's perspective: a loss or no loss. Speculative risk has three: a loss, no material change, or…
• Equipment breakdown coverageEquipment breakdown coverage is designed for specified sudden and accidental breakdown or explosion involving covered boilers, machinery, or electrica…
• Named-perils vs. open-perils coverageA named-perils policy covers direct loss caused by a peril listed in the policy, subject to its terms and exclusions. An open-perils policy begins wit…
• Flood vs. water damage in homeowners insuranceFlood and water damage are not interchangeable coverage labels. A homeowners policy generally excludes flood, while it may cover sudden and accidental…
• Negligence: Duty, Breach, Causation, and DamagesNegligence is a failure to use the care the law requires in a situation. A typical exam framework asks whether a person owed a duty, failed to meet it…