Property Insurance Policies Contain Declarations, Conditions, Definitions, Exclusions, and an Insuring

question 17

Multiple Choice

Property insurance policies contain declarations, conditions, definitions, exclusions, and an insuring agreement. However, some policy terms, such as subrogation, cancellation, other insurance, and assignment do not fall into these categories. The part of an insurance contract in which these provisions can be found is the

• A) endorsements.
• B) binders.
• C) conditions.
• D) miscellaneous provisions.

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Definitions:

Recognize Income

Recognize income refers to the point in time when income is considered earned and must be reported for tax purposes.

Tax-exempt

Income or transactions that are legally excluded from taxation.

Economic Benefit

The advantage or gain received from a financial transaction or situation, which may have tax implications or influence fiscal decisions.

Nontaxable Return of Capital

A payment received from an investment that is not taxed because it is considered a portion of the original investment's cost being returned to the investor.