Property & Casualty Insurance Exam (National Portion)Property and Casualty Insurance BasicsMedium
A business policyholder submits a claim for a loss that occurred six months ago. The policy states that legal action against the insurer must be brought within two years of the loss. However, it also specifies that the insured must provide prompt notice of loss. Which general policy condition addresses the requirement for timely reporting of a loss?
- ASubrogation
- BNo Benefit to Bailee
- CConcealment, Misrepresentation, or Fraud
- DDuties After Loss
Show answer & explanationAnswer & explanation
Correct answer: D. Duties After Loss
The 'Duties After Loss' condition outlines the responsibilities of the insured following a covered loss, which typically includes providing prompt notice to the insurer. Failure to comply can jeopardize coverage.
Why the other options are wrong
- A. Subrogation deals with the insurer's right to recover from third parties.
- B. No Benefit to Bailee prevents a bailee from benefiting from the insured's policy.
- C. Concealment, Misrepresentation, or Fraud addresses dishonest actions by the insured.
Duties After Loss
A policy condition outlining the responsibilities of the insured party immediately following a covered loss, which typically includes giving prompt notice, protecting property from further damage, and providing proof of loss.
- Prompt notice to insurer
- Protect property from further damage
- Cooperate with investigation
- Provide proof of loss
Memory trick: DUTIES after LOSS are a must-do list.