AINS 22 A Flashcards
Policy condition providing that if a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing policies of the same type.
Liberalization Clause
Ending of the contractual relationship between the insured and insurer by cancellation, expiration, or nonrenewal.
Policy termination
Portion of a covered loss that is not paid by the insurer.
Deductible
Pays for loss to covered auto or its equipment from any cause not excluded, except collision or overturn.
Comprehensive
Provides named peril coverage.
Specified causes of loss
Covers loss to a covered auto or its equipment by collision with another object or by overturn.
Collision
Provides coverage for towing and labor performed at the place of disablement.
Towing
Additional coverage in the PAP for substitute transportation costs incurred as the result of a covered physical damage loss.
Transportation expenses
Cost to replace property with new property of like kind and quality less depreciation.
Actual Cash Value (AVC)
Method of resolving disputes between insurers and insureds over the amount owed on a covered loss.
Appraisal.
What do two appraisers select?
An “umpire”
Statement of facts about a loss for which the insured is making a claim.
Proof of Loss
Termination of a policy by either the insurer or the insured, during the policy term
Cancellation
Covers motor homes, motorcycles, and other vehicles with fewer than four wheels that are designed for off public road use.
Miscellaneous Type Vehicle Endorsement
Provides coverage for snowmobiles other than vehicles propelled by airplane-type propellers or fans.
Snowmobile Endorsement
Covers trailers or camper bodies, including related facilities or equipment.
Trailer/Camper Body Coverage (Max Limit of Liability)
Provides liability and medical payments coverage for drivers of vehicles furnished or made available for the regular use of the named insured and/or family members.
Extended Non-Owner Coverage
Provides liability, medical payments, uninsured, and underinsured motorists coverages for drivers who do not own an auto but regularly or occasionally drive another person’s vehicle or a rental vehicle.
Named Non-Owner Coverage
Amends physical damage covered for leased vehicles or vehicles with outstanding loan amounts to include an unpaid amount due on the lease or loan.
Auto Loan/ Lease Coverage
Provides excess liability coverage over Mexican auto insurance for an insured who is involved in an accident or loss in Mexico within twenty-five miles of the United States border on a trip of ten days or less.
Limited Mexico Coverage
Increases the $1,000 limit that applies to electronic equipment installed in the vehicle in locations not intended for that purpose by the auto manufacturer.
Excess Electronic Equipment Coverage
Covers each described vehicle for a stated amount of insurance as indicated in the endorsement schedule that applies to collision and OTC losses.
Coverage for Damage to Your Auto (Max Limit of Liability)
Increases the limit for coverage for Transportation Expenses under Coverage D (physical damage)
Optional Limits Transportation Expenses Coverage
Covers the towing of a disabled covered or non-owned auto, including costs for labor performed at the place of disablement.
Towing and Labor Costs Coverage
Company that uses a mobile application or website to connect riders with drivers and arrange transportation in a personal auto for a fee.
Transportation Network Company (TNC)
Coverage that protects the insured from damages owned because of legal liability to another party. For auto policies, it protects insureds against liability arising out of the ownership or operation of automobiles.
Liability Coverage
Coverage that pays necessary medical expenses incurred within a specified period by a claimant for a covered injury, regardless of whether the insured was at fault.
Medical Payments Coverage
Person, corporation, partnership, or other entity identified as an insured party in an insurance policy’s declarations page.
Named Insured
Time frame, beginning with the inception date, during which insurance coverage applies.
Policy Period
A unique number that is assigned to each vehicle and that identifies certain vehicle characteristics.
Vehicle Identification Number (VIN)
Includes name and mailing address of the insured and the name of the insurer issuing the policy and the name and address of the producer, if applicable.
Declarations
Includes a general agreement stating that the insurer is providing the coverage subject to payment of premium and to the terms of the policy.
Agreement and Definitions
Coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn.
Collision Coverage
Coverage for physical damage to a covered auto resulting from any cause of loss except collision or a cause of loss specifically excluded.
Other than Collision (OTC) Coverage
Payment awarded by a court to reimburse a victim for actual harm.
Compensatory Damages
Separate coverage limits that allow one limit for bodily injury to another person, a second, usually higher, limit for bodily injury to all persons in each accident, and a third limit for all property damage in each accident.
Split-Limits Basis
One coverage limit that applies to all damages arising from bodily injury or property damage or both, resulting from a single accident.
Single-Limits Basis
Interest that may accrue on damages before a judgment has been rendered.
Prejudgment Interest
Various expenses the insurer agrees to pay under a liability insurance policy for items such as premiums on bail bonds and appeal bonds, loss of the insured’s earnings because of attendance at trials, and other reasonable expenses incurred by the insured at the insurer’s request.
Supplementary Payments
The act of seizing property to secure a judgment
Attachment
Interest that may accrue on damages after a judgment has been entered in a court and before the money is paid.
Post judgment Interest
In case law, a method of transportation that is indiscriminately offered to the general public, such as a taxi or public bus.
Public or Livery Conveyance
A land motor vehicle or trailer that is not insured for bodily injury liability, is insured for less than the financial responsibility limits, is a hit-and-run vehicle, or whose insurer denies coverage or becomes insolvent.
Uninsured Motor Vehicle
An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding.
Arbitration
Law enacted to ensure motorists have the financial ability to pay for any property damage or bodily injury they might cause as a result of driving or owning an auto. Proof of financial responsibility under these circumstances is produced AFTER an auto accident.
Financial responsibility law
Law that requires the owners/operators of automobiles to carry automobile liability insurance at least equal to certain minimum limits BEFORE the vehicle can be licensed or registered.
Compulsory Auto Insurance Law
The insured in an insurance contract.
First Party
A fund designed to provide a source of recovery for victims of motor vehicle accidents when an at-fault motorist is unable to pay any judgment.
Unsatisfied Judgment Fund
Coverage that provides a source of recovery for occupants of a covered auto or for qualifying pedestrians who are injured in an accident caused by an at-fault motorist who does not have the state minimum liability insurance or by a hit-and-run driver.
Uninsured Motorist (UM) Coverage
Coverage that applies when a negligent driver has liability insurance at the time of the accident but has limits lower than those of the injured person’s coverage.
Underinsured Motorist (UIM) Coverage
Insurance that covers automobile accident victims on a first-party basis, allowing them to collect damages from their own insurers regardless of who was at fault.
No-fault Automobile Insurance
State statutes that require motorists to purchase insurance that provides minimum first-party benefits to injured persons regardless of fault.
No-fault Laws
Places some restrictions on the right to sue an at-fault driver, but do not eliminate the right entirely. Injured motorists can collect economic losses from their own insurers through PIP benefits. Can sue at-fault drivers for nonecomonic losses.
Modified No-Fault Plan
Places no restrictions on the injured person’s right to sue a negligent party for economic/noneconomic damages. Offers insured option of collecting for economic losses through his/her own insurer. Provides PIP benefits to injured victims without regard to fault.
Add-On Plan
In a no-fault system, a dollar limit in total medical expenses an injured victim must exceed before he/she is permitted to sue the other party.
Monetary Threshold
In a no-fault system, the designated criteria that are verbally “set forth in the statute that limit the right to sue.”
Verbal Threshold
Coverage that pays benefits, regardless of fault, for medical expenses, income loss, and other benefits, resulting from bodily injury to occupants of a covered auto.
Personal Injury Protection (PIP) Coverage
Process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from another party which caused the loss or is otherwise legally liable for the loss.
Subrogation
Term referring collectively to insurers and other organizations that make insurance available through a shared rise mechanism to those who cannot obtain coverage in the admitted market.
Residual Market
Plan that allows for lower basic premiums for accident-free driving records and a surcharge for accidents.
Safe Driver Insurance Plan (SDIP)
Plan for insuring high-risk drivers in which all auto insurers doing business in the state are assigned their proportionate share of such drivers based on the total volume of auto insurance written in the state.
Automobile Insurance Plan
Organization that designates servicing insurers to handle high-risk auto insurance business; all auto insurers in the state are assessed a proportionate share of the losses and expenses based on their percentage of the voluntary auto insurance premiums written in the state.
JUA
Assigned proportionate share of high-risk drivers based on total volume of auto insurance written in the state.
Automobile Insurance Plan
A state-wide reinsurance pool to which insurers can assign premiums and losses for high-risk drivers; original insurers service the policies, but all insurers in the pool share the losses and expenses of the facility in proportion to the total auto insurance they write in that state.
Reinsurance Facility
What must regulators rates be?
adequate, reasonable, and not unfairly discriminatory.
Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs.
Loss Exposure
Loss Exposure Equation
Loss Exposure = Asset exposed to loss X Cause of loss X Financial consequence of loss
Actual means by which property is damaged or destroyed.
Cause of loss (peril)
A condition that presents the possibility that a person or an organization will sustain a loss resulting from damage to property in which that person or organization has a financial interest.
Property Loss Exposure
Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land.
Real Property (Realty)
All tangible or intangible property that is not real property.
Personal Property
A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party’s actual damages.
Punitive Damages
Life, health, and retirement related loss exposures.
Personal financial planning loss exposures
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions.
Diversification
A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service.
Insuring Agreement
