Property and Casualty Insurance Contracts
KNOWLEDGE EXPECTED OF: CFP® Professionals
Highest Knowledge Level: Awareness
Knowledge Levels and Associated Verbs
Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
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Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
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Application
Ability to put information to use / to use knowledge for relevant, practical purposes
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Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Determine
To ascertain / to come to a decision, such as by investigation or reasoning
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
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Hold cursor over or click on each term to read its definition.
Additional Knowledge Expected of CFP Professionals
- Define parties to a property and casualty insurance contract,1 such as:
- Policy holder
- Insured
- Insurer
- Identify documents forming a property and casualty insurance contract.
- Application
- Policy
- Riders or endorsements
- Identify the outcomes of an application for property and casualty insurance.
- Approval
- Decline
- Define the values that property and casualty insurance policies may use when computing the benefit payable for a loss.2
- Actual cash value
- Replacement cost value
- Salvage value
- Define the terms that property and casualty insurance policies may use when determining the loss covered.
- Specified (or named) perils
- All perils