Property and Casualty Flash cards Insurance

deanna brumfield
Flashcards by deanna brumfield, updated 11 months ago
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Flashcards on Property and Casualty Flash cards Insurance , created by deanna brumfield on 01/16/2019.
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All of the following statements concering Coinsurance are true EXCEPT: The coinsurance Formula Will Also Be applied to total Losses . Reference : In the event of a total loss, the coinsurance clause does not operate and the Face amount of the policy is paid.
All of the follwoing are true regarding physical damage coverage EXCEPT: the limit of liability is greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle Reference: the limit of liability is the lesser of the Actual cash Value of the vehicle at the time of loss or the amount necessary
A Passenger in a freind's is Injured while getting into the car. Which of the following statements would apply if both the Passnger and the driver had medical payments coverage under a personal auto policy? the drivers policy would be primary. Reference: Medical Payments coverage pays all necessary medical and funeral Expenses incurred and service rendered to the insured or passenger in the Insured's vehicle, regardless of fault.
The Reduction, Decrease, or dissapperance of vause of the person or property Insured in a policy by peril insured against is known as : Loss Reference : Loss is the reduction , dercrease, or dissapperance of value of the person or property insured in a policy by a peril insured against.
The common policy condition is a modular part combined with other parts to create the contract. the common policy conditions section contains provisions that are appicable to all lines of coverage that may be included in the policy. Which of the Following provisions would be found in the common policy conditions section of the policy? the first named insured may cancel the policy at any time given written notice to the insurer. Reference: the insured is Granted the right to audit books and records for a period of up to 3 years. the insuere is automatically granted the right to make inspections, surveys, and such relating to the insurance. only the first named insured may make request for any changes in the policy.
in addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT: Employers Liability Reference: The Following conditions apply to the liability coverage in addition to the common policy conditions: bankruptcy,duties in the event of occurancce, claim or suit, legal action against the insurer, and seperaation of insured. Empolyers liability is an exclusion.
the war, military act, and terrorism Exclusion will only apply to an incident of terrorism in which the total of insured danage to all types of property in the united states, its territories and possessions, puerto Rico, and canada exceeds what amount? $25,000,000 Reference : the war, military act, and terrorism exclusion will only apply to an incident of terrorism will only apply to an incident of terrorism in which the total of insured damge to all types of property in the united states, its territories and possessions, puerto Rico and canada exceed $25,000,000.
under the commercercial crime coverage inside the premises- robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, preious and semipercious stones, perals, furs, manuscripts, drawings, or records? $5,000 Reference: A special Limit of $5,000 applies to loss or damgae to precious metals precious and semiprecious stones,pearls, furs, manuscripts, drawing, or records.
on a DP-3 Dwelling Property Special form policy, the coverage provided for personal property is : same as provided on the DP_2 Broad Form. Reference: Although Coverage A and B on a DP-3 are written on an open peril or all-risk basis, the coverage for personal property is written on a named or specified peril.
which of these is defined as the maximum limit of coverage avaliable under a liablity policy during a policy year regardless of the number of claims that may be made or the number of accidents that may occur? Aggregate limit of liabilty Reference: Aggregate Limit is the maximum limit of coverage avaliable under a liablity policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur.
an installation Floater is used to insure: appliances intened to become a permanet part of building. Reference: The Installation Floater covers the inteterest of the owner, seller, or contractor of refriegation system, elevators, or other pieces of large equpiment inteded to become a permanent part of the buliding on location awaiting or in the process of being installed or tested.
agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of twisting Reference : Twisitng is a misrepresentation that persudes an insured or a policyowner, to his or her detriment, to cancel, laspe or switch polices.
commercial policies issued for terrm longer than one year may be cancelled by the insurer by giving notice of cancellation 60 days before any annivesary date date of the policy. Reference : Commercial policies issued for a term longer than one year may be cancelled by the insurer by giving notice of cancellation 60 days before any anniversary date the policy.
a state- issued document empowring an insurance company to write contracts of insurance and perform certain business within that state is called certificate of authority Reference: Before transacting insurance business within a state, each insurer must qualiy for a certificate of autority.
A person employed by an insurance company to investigate claims of physical damage to insured motor vehicles is : A motor vehicle phsical damage appraiser Reference: A motor vheicle pshical damge appraiser is a person employed by an insurance company to investigate claims of physical damage to insured motor vehicles. appraisers must be licenced by the commissioner, but are not appointed by the comissoner.
when doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? Foreign Reference : A foreign insurer is one that is formerd under the laws of another state. A Nonadmitted or unauthorized insurer is an insurance company that has not applied for, or hasapplied and been denied a Certificate of Authority and may not transact insurance.
what is the minimum age for a person seekeing a bail agent's Licence ? 18 Reference: minimum age requirement for a bail agent is 18.
after a written binder becomes effective, one copy must be delievered either in person or by mailing first class to the insured and the insurer providing coverage under the binder within what time period ? within 24 hours Reference: within 24 hours after a written binder becomes effective, one copy must be delivered either in person or by mailing first class to the insured and the insurer providing coverage under the binder.
in Nevada , how long must producers keep records of insurance transaction under their licenses ? 3 years after a policy expires Reference : the records may be kept in an electronic form, and must be open to the commissioner's inspection for at least 3 yearrs after the policy expires.
A bond is written for set limit, and the surety will be liable only for this amount of limit. this limit is known as the penality Reference : a bond is written for a set limit, sometimes called the penality. if the principle's obligation exceeds the limit,surety will be liable only for the amount of the limit.
which of the following is NOT a primary property coverage in a homeowners coverage ? Collaspe Reference: the primary coverages are Coverage A- Dwelling, Coverage B- Structure, Coverage C- Contents and Coverage D- Loss of use. Collapse is an Additonal Coverage, Not a primary property Coverage.
Inland Marine coverage can be written on almost any type of property that is portable,and in transit over land or in the air.
Personal articles Floaters Personal Floaters refers to an inland marine policy designed to cover movable personal property, wherther it may be loacated. personal Floaters may be written on an All Risk, Open Peril or Named Peril Form.
Personal Property Floaters provides coverage to personal property on an all-risk basis anywhere in the world, as long as property is not speciffically excluded by the policy. Property is usually written on an Unscheduled Basis. Certain catigories of property are subject to special limits.
Personal Articles Floater used to insure certain types of personal property on a scheduled Basis. the types of property that may be covered are usually Pre-printed on the form including Jewlery, furs, cameras, musical Insturments , fine arts, etc. other types of property may also be added to the coverage form.
Personal Effects Floater used to Insuer personal effects carried or worn by travelers anywhere in the world, but while the property is at home. coverage is usually limited to $100 for jewlery, watches and furs, and there is no coverage for vehicles, bicycles, currency or travelers checks.
Commercial Property Floaters *Abandonment *Appraisal * Duties of the Insured in the event of a Loss *insurance under 2 or more coverages *Loss payment *Other Insurance- If there is other insurance Covinging the same loss, the policy will be concidered excess *Pair, Set, or Parts *recovered property( Salvage) * Transfer Of rights Of Recovery - (Suborgation) *Privilege to Adjust with the owner- because Inland Marine coverages can cover property Others in the insured's care, custody, or control, this condition says that the Insurer will settles the Actual owners of the property in the event of a loss;
Abandonment the relinquishing of insured property into the hands of another, or into the coverages, of no one particular The abdication of insured property into the hands of another or into the possession of no one in particular.
Boarder A person who Lives with someone else for and agreed upon price, usually for a conciderable amount of time
Breach breaking or failing to observe a law or agreement
counterfit fraudulant limitation, forgery
Debris Remains of anythign Broken down or destroyed.
Incidental something occuring as a minor accompaniment to something else.
Incidental Occurance Minor Uses that are accessory to or support the predominant occupancy (e.g., a piano yeahcer giving lessons in her home).
Mercantile relating to trade or commerce; coommercial.
monoline a policy that covers one type of insurance, for example,workers compensation or commercial auto
Direct Damage Physical Damageto property that results fromthe inhability to use the damaged property.
ordanance a law that must be complied with
Overinsurance when Property insurance exceeds the actual cash value
personal effects privately owend items normally worn or carried on a person
Prepackaged a policy designed to fit the genral need of the business; insureds usually cannot elect ti exclude coverage that is automatically provided in the package.
Vandalism intentional destruction or damage to property.
General form stuctures Agreement - in the insuring , it states that the insurer will provide coverage described in the policy in return for the premium paid and compliance with all applicable policy provisions
Definitions limited in nature
deductabile applies to all covered losses unless noted otherwise in the policy form
coverages , including other coverages define direct and indirect property coverages, and additional coverages included in the premium charge;
perils insured against vary by form and is key differentiator in form selection;
general exclusions perils not covered in all forms; and
conditions specify when coverage will apply.
Form Names/ Number Peril Types *DP-1- named peril *DP-2-amed Peril *DP-3- Open & Named Peril
Absolute Liability A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.
Accident An unplanned, unforeseen event which occurs suddenly and at a specific place.
Actual Cash Value ( ACV) the required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation.
Additional Coverage A Provision in an Insurance policy that allows for more coverage for a specific loss expense without increase in Premium.
Additional Insureds Individuals or business that are not named as insured on the declarations page, but are protected by the policy, usually in regard to specific interest.
Adhesion A contract Offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option it to accept or reject the contract. any ambiguities in the contract will be settled in favor of the insured.
Admitted Insurer An insurance company authorized and licensed to transact business in a particular state.
Adverse Selection The tendency of risks with higher probability of loss to purchase and maintain insurance more often thatn the risk who present lower probability.
Agent An individual who is licenced to sell, negotiate, or effect insurance contracts on behalf of the insurer.
Aggregate Limit The maximum limit of coveragee avaliable under a liability policy during a policy year regardless of the number of claims that may be made or the number of accidents that may occur.
Agreed Value A property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for property at the time of the insurance is written.
Aleatory A contract in which the participating parties agree to exchange unequal amount. insurance contracts are Aleatory in the amount the insured will Pay in premiums is unequal to the amount of Insurer will payin the event of a loss.
Alien Insurer An insurance company that in is incorporated outside the United States.
Apparent Authority Appearance or the assumption of authority based on the actions, words, or deeds of the Principal or because of circumstances the principal created.
Appraisal An Assessment of property to determine either the correct amount of insurance to be written or the amount of loss to be paid.
Arbitration Method of Claim settlement used when the insured and insurer cannot agree upon the amount of the loss.
Assignment The transfer of a legal right or interest in an insurance policy. In property & Casualty insurance, assignments of policies are usually vaild only with the prior written consent of the insurer.
Authoized Insurer An insurance company that has qualified and received and Certificate of Authority from the department of isnurance to transact insurance in this state.
Auto A land Motor vehicle , trailer or semi-trailer designed for use on public roads, including attached machinery or equipment; auto does not include mobile equipment.
Avoidance A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly a plane)
Bailee A person or entity that has possession of personal property entrusted to him/her by the owner. For Example, a televison repair person that has possession of a customer's television would be a bailee
beneficiary the person who receives the proceedsfrom the insurance policy.
Binder A Temporary contract that puts an Insurance policy into force before the premium has been paid.
Blanket Bond A type of Bond that covers losses caused by Dishonest empolyees
Blanket Insurance A single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple Locations.
Bodily Injury Liability Legal Liability arising from death or physical trama to a person as a result of negligent or purposeful act and omission by an insured.
Boycott An Unfair trade practice in which one person refuse to do business with another until he or she agrees to certain conditions
Builder's Risk Coverage Form A commercial Property form that covers building's under construction.
Building And Personal Property Coverages Form A commercial Property Form That Covers Building, and/or their contents.
Burglary The forced Entry Into another premises with Felonious intent.
Cancellation The termination of an in- force policy by either the insured or the Insurer prior to the expiration date shown in the policy.
Casualty Insurance A type of insurance that covers losses caused by injuries to persons or damage to the property of others.
Cease and Desist Order a demand of a person to stop committing an action that is in violation of a provision.
Certificate of Authority document that Authorizes a Company to start conducting business and specifies the kind(s) of Insurance a company can Transact. It is Illegal for an Insurance company to Transact Insurance without this certificate.
Certificate of Insurance A legal Document that Indicates that an insurance policy has been issued, and that states both the amount and types of Insurance provided.
Claim A Demand made by the insured to cover a loss protected by an insurance policy.
Class Rating the practice of Computing a price per unit of Insurance that applies to all applicants possessing a given set of characteristics
Conercion an unfair trade practice in which an insured uses physical or mental force to persuade an applicant to buy Insurance.
Coinsurance An Agreement Between an Insurer and insured in which both parties are expected to pay a certain portion of potential loss and other expenses.
Combined single A single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting for one accident or occurrence.
Commercial Lines Type of Insurance that pertains to business, mercantile or manufacturing establishments.
Commissioner (Superintendent, Director ) The chief executive and administrative officer of a state insurance department.
Common Law An unwritten body of law based on past judicial decisions as well as usages and customs.
Complaint A written statement of a statement of a liability claim given by the claimant; a reason for a lawsuit.
Components Factors that determines rates, including loss reserves, loss adjusting expenses, operating expenses and profits.
Comprehensive Coverage Also Known As other than collision coverage , it covers losses by fire, theft vandalism, falling objects , etc.
Concealment the withholding of known facts which, if material, can void a contract.
Conditional Contract A Type of an agreement in which both parties must perform Certain Duties and follow rules of conduct to make the contract enforceable.
Conditions the section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy.
Consideration the binding force in a contract that requires of Value to be exchanged for the transfer of risk. the consideration on the part of the insured is the representation made in the application and the payment of premium; the consideration on the part of the insurer is the promise to p[ay in the event of loss.
Commercial Property Flaoters Part 2 *Reinstatement of the Limit-
Consultant A person who, for fee , offers any advice, counsel, opinion, or service regarding the benefits, advantages, or disadvantages promised under a policy of insurance.
Consumer Report Written and/ or statements regarding a consumer's credit, character, reputation, or habits collected by reporting agency from employment records, credit reports, and other public sources.
Contract An agreement between two or more parties enforceable by law.
Controlled Business An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees.
Concurrent Causation multiple events leading to one loss
Death Benefit the amount payable upon death of the person whose life is insured.
Declarations the section of an insurance policy containing basic underwriting information, such as the insured's name, address, amount of coverage and premiums, anda description of insured locations, as well as any supplemental representations by the insured.
Deductable the portion of the loss that is to be paid by the insured before any claim benefits may be paid by the isnured.
Defamation An Unfair trade pratice in which one agent or insurer makes injuriuos staement about another with intent of harming the person's or company's reputation.
Deposit Premium Audit A condistion that allows the insurer to audit the Insured's Books or records at the end of the policy term to make sure adequate premium has been collected for exposure.
Depreciation the lessening of value of real and personal Property due to age and wear and tear.
Direct Losses Physical damage to buildings and/or personal property as a result of direct consequence of a particular peril.
Director( commissioner, Superintendent) the Head of the state department of Insurance.
Disability A physical or metal Impairment, either congenital or resulting from an Injury or sickness.
Disclosure An Act of identifiying the name of the producer, representive or firm, limited insurance represetative, or temporary insurance producer on any policy solicitation.
Domestic insurer An insurance company that is incorporated in the state.
Domicile Insurer Insurer's location of incorportation and lega ability to write Business in a state.
Economic Loss The estimated total cost ( both Insured and uninsured) of an accident.
Endorcement A printed addendum to a contract that is used to change the policy's original terms, conditions, or coverages.
Estoppel A legal impediment to denying a fact or restoring a right that has been previously waived.
Excess Policy A Policy that onluy pays for loss after the primary policy has paid its limit.
Exclusions Cause of loss, exposure, conditions, etc. listed in the policy for which the benefits will not be paid.
Exclusive or Captive Agents An Agent who represents only on company and is compensated by commissions.
Experience Rating Method of detemining the Premium Based on the insured's own past loss experiance.
Exposure A unit of measure used to determine rates charged for insurance Coverage.
Express Authority The authority granted to an agent by means of the agent's written contract
Extensions of Coveerage A Provision in some property policies which allows the extention of a major coverage to cetain types of loss to property not specifically insured.
FAIR PLAN fair Access to insurance requirements plan is a state -run program that makes insurance obtainable to those in high risk areas who have been unable to aquire insurance through other channels.
which of the following is other major coverage provided by the buinessowners liability coverage form ? Medical Payments Every Businessowner liabilty coverage form includeds business liability and medical payment (to others) coverage.
with regaurds to A homeowners polciy, which coverage provides for indirect or consequential losses? Coverage D Coverage D provides for loss of use, which is an indirect loss.
which commercial policy condition gives a insurance company the right to seek repayment of a paid claim from the third party who caused the loss? Under Suborgation, An Insured transfers any right to recover damages from a third party to the insurer after the insurer pays the insured for loss.
Which of the following commercial auto coverages provides protection for most commercial auto exposures? Business auto coverage business auto coverage form covers most commercial auto exposures, except truckers, garages, and motor carriers.
which of the following property coverages would provide protection to contents damaged by fire Coverage C coverage C- Personal Property provides coverages for the contents of an Insured Dwelling.
Coverage for all of the following is found in section 1 of a homeowners policy EXCEPT: Personal Injury Personal Injury is an endorcemebt in section 2 -liability, and provides protection in the event an insured is charged with libel or slander.
All of the Following are essential elements of a commercial package policy (CPP) EXCEPT; Settlement provisions. REGARDLESS OF HOW THE POLICY IS WRITTEN , IT WILL BE COMPRISED OF THE FOLLOWING ESSENTIAL ELEMENTS: Declaration Page, Conditions, interline Indorsements, and coverage parts.
Removale coverage in the braod form dwelling policy will cover property temporaily removed from the premises to protect it for the maximum of: 30 Days removal coverage is provided for 30 days in the broad and special form, provided that endangerment by a covered peril made the removal necessary.
Section I of a boatowners policy covers Physical damage section I of a boatowners policy Covers Physical damage.
The Most the insurer will pay for a loss under a businessowners policy is : the limit of insurance after the deductable. for losses covered under a businessowners policy, the insured must pay a deductable, after which the insurer will pay up to the limit of insurance.
which of the following is covered under a dwelling policy ? Fire caused by an earthquake. Freezing plumbing systems and losses cause by Flood , surface water, and earthquake specifically are excluded. However, fire and explosion that result from an earthquake , damage caused by human or animal forces would be covered. structures used for commercial or farm purposes are not eligible for coverage.
A person is required to be lisence to do which of the following? Receive commissions Producers must be licensend in the appropriate line of authority in order to receive commissions for insurance transactions.
the amount and insurer will pay under coverage D ( loss of use) depends on the amount of coverage on the dwelling the loss of use usually is limite to a percentage of the overall dwelling or personal property coverage ( when dealing with HO-4 & HO-6)
coverage for terrtory of the businessowners policy (BOP) Includes all of the following EXCEPT: Mexico coverage territory includes the United states of america , its terriories and possessions, Puerto Rico, and Canada.
Which of the following is NOT An optional coverage avaliable in a BOP? Wokers Copensation wokers compensation is a different type of Insurance.
Coverage C in homeowners policy form offers all of the following EXCEPT: Coverage for loss of use loss of use is covered by Coverage d. All the other listed coverages are available through Coverage C.
The Business pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT: Bodily Injury to the insured. An Insured may Extend the section II liability coverage to certain business pursuits that occur away from the premises. the endorsement would cover the activites of the insured, but would not cover the liability of a business owned by an insured.
a general liability policy will respond to claims against an insured when bodily injury or property damage is cause by An insured's Negligence liability insurance responds to actions claiming an insured's negligence cause by Injury or damage to another.
What type of coverage does a homeowners policy include that a dwelling policy does not? Liability Homeowners policies are very similar to dwelling policies, except that homeowners policies include liability coverage
in a Personal Auto Policy, a covered auto could include all of the following EXCEPT: A van used in the delivery in business. if used primarily for deliveries, a PAP cannot insure the vehicle.
Fiduciary An agent / Broker who handles insurer's funds in a trust capacity.
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