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Property/Casualty > All Chapters > Flashcards

All Chapters Flashcards

1
Q

What is insurance?

A

It is a contract

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2
Q

Define Indemnity

A

Restore a loss, no better and no worse

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3
Q

What is insurable Interest?

A

Financial interest in the preservation of the property

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4
Q

Two types if risks

A

Pure- no chance of gain

Speculative- can gain or lose (gambling)

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5
Q

Define Loss

A

Reduction in value of asset

Types:
Property
Liability
Human

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6
Q

Define a peril

A

Cause of a loss

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7
Q

3 named peril form

A

Basic
Broad
Earthquake

(Specifically named perils are covered and nothing else)

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8
Q

2 Open peril form types

A

Special

All Risk

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9
Q

3 types of hazards

A

Physical - Structural
Moral - Lying/Cheating
Morale- Carelessness/Indifferent

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10
Q

Who is the first party to an insurance contract?

A

The Insured (person buying insurance)

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11
Q

Who is the second party to an insurance contract?

A

The insurerer

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12
Q

Agent vs. Broker

A

Insurance agent works for a company and paid commission

Broker is hired by a client to find insurance

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13
Q

What type of loss exposure would include land and property attached to it?

A

Liability loss exposure (the other guy insurance)

Land is not covered by property insurance but someone being injured on your land can be covered by Liability insurance

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14
Q

What type of insurance or loss covers injury to another person or another persons property?

A

Liability Loss and insurance

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15
Q

The possibility if financial loss from ownership of property is called…

A

Insurable interest

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16
Q

Bill and Bob share ownership of a company worth $100,000. Bill is insured for $100,000 and Bob has none. In a settlement how much would each collect?

A

Bill would get his share of the company worth $100,000. So he would get $50,000 and is therefore over insured with his current policy. Bob gets nothing since he didnt buy insurance

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17
Q

Any exposure related to an individual, human or family is called

A

Personal loss exposure

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18
Q

Any exposure of loss related to a key person in a bussiness is called…

A

Personnel loss exposure

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19
Q

Where do policy forms come from?

A

ISO and NAIC

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20
Q

Where do you file policy forms?

A

The Insurance Department

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21
Q

Parts of a Contract

A

Competent Parties
Legal Objective
Offer and Acceptance
Consideration

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22
Q

Parts of a policy

A

Declaration page (named insured, premium amount, what is covered)
Insuring agreement (what the insurer promises to do, provide coverage)
Conditions (what needs to happen before the insurance company will pay a claim)
Exclusions

Definitions
Endorsements

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23
Q

Split limit for liability auto coverage

A

25/50/25

One Person, people total and property of others (for the other guy)

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24
Q

Uninsured and underinsured motorists limit in Ohio

A

Max coverage is $7,500 and is subject to a $250 deductible for your car

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25
Q

Two types of physical damage for auto

A

Collision - you hit something

Other than Collision - something hits you (including animals)

26
Q

What is tort law?

A

Civil wrong that causes a loss

Examples: Intentional and unintentional negligence or Worker’s compensation

27
Q

Rating factors for Liability insurance for auto

A

Driving record
Miles driven annually
Number of years driving

28
Q

Rating factors for auto property damage

A

Year
Make
Model

29
Q

Define pro-rata or pro-rate Cancellation

A

Insurance company cancels policy

Insurance company keeps earned premiums and returns unearned premiums

30
Q

Short Rate Cancellation

A

Insured cancels

Returns unearned premium but also charges a small cancellation fee for early cancellation

31
Q

Flat rate or recission Cancellation

A

Refund all premiums, policy never existed

32
Q

What does PAP stand for?

A

Personal Auto Policy

ISO PAP and Unendorsed PAP are all the same thing

33
Q

How are fraud charges calculated?

A

$150,000 or double the amount of fraud, whichever is higher (add all charges up and times by 2)

34
Q

What perils are insured against during a period of removal on a homeowners policy?

A

Aka “additional coverage - property removed”

All Perils are covered!

35
Q

Standard Fire Policy (SFP)

A

Fire
Lightning
Removal

36
Q

Dwelling basic policy (DP-1)

A

Fire
Lightning
Internal explosion

37
Q

6 parts of a homeowners policy

A 
Section 1: 
Dwelling
Other structures
Personal property 
Loss of use

Section 2:
Personal Liability
Medical payments to others

38
Q

What type does HO-4 cover?

A

Renters

39
Q

What does HO-6 cover?

A

Condo

40
Q

What types of Homeowners policies cover regular home owners (not renters or condo)

A

HO-2
HO-3
HO-5

41
Q

SFP/Dwelling policy parts

A 
Dwelling
Other structures
Personal property
Loss of use
Rental income
Additional living expenses
42
Q

Co-insurance Equation

A

Insurance you have / Insurance you should have had X the total loss

This gives you the claim amount and will need a deductible payment made by insured

43
Q

Define Replacement Cost

A

How much something is worth with no deductions for depreciation

Or value in new condition

44
Q

Define Actual Cash Value (ACV)

A

Replacement cost with deductions for depreciation

45
Q

Define market value

A

Value of a piece of property can be sold at before the loss occurred

46
Q

Fair Claims Practice

A 
Notice of loss - Immediately in writing
  - Acknowledge
  - Investigate
  - Claim forms 
Proof of loss provides within 60 days from insured
Payment of claims
47
Q

Loss settlement types

A

Liability has an arbitrator

Property has an appraisal

48
Q

Parts of a Commercial General Liability policy

A

Coverage A: Bodily Injury and Property
Coverage B: Personal and Advertising Injury
Coverage C: Medical Payments

49
Q

What is typically not covered by a standard dwelling policy?

A

Floods, earthquakes and sewer backup

50
Q

What precent of the dwelling policy covers other structures?

A

10% of the dwelling

51
Q

What is a bailee?

A

Someone who temporary has possession of someone else’s property

52
Q

Name all 9 Auto Symbols

A

1: Any auto
2: Owned only
3: Owned private passenger autos only
4: owned autos other than private passengers
5: Owned autos subject to no fault (garaged)
6: Owned autos subject to uninsured motorist law
7: specifically described autos
8: Hired autos only (rented/leased)
9: Nonowned autos only (employees)

53
Q

A tort

A

A civil wrong that causes damage to another person or business

54
Q

Parts of an auto policy

A

Part A: liability
Part B: medical payments
Part C: uninsured/underinsured motorists
Part D: physical damage coverage

55
Q

What is the Surety party?

A

They are fiscally responsible if the principal defaults on the bond

56
Q

What is a bond?

A

A contract between 3 parties

57
Q

Define obligee

A

The party to whom the principal makes a promise. And for whose protection the bond is written for

58
Q

Who is the principal in a bond contract?

A

The person who makes the promise

59
Q

Define assumption of risk for workers comp

A

Employer is not at faults because the employee knew the risk before employment

60
Q

Define Contributory negligence

A

If the injured party is at fault they cannot collect from the party being sued

61
Q

Define Fellow Servant Rule

A

If the injury was caused by another employee the employer is not at fault

62
Q

8 sections of the worker’s compensation policy

A 
A: What the insurance covers
B: What the insurance company pays
C: The right to defend claims
D: Additional things paid
E: When other insurances apply
F: What the employer must pay
G: The right of recovery
H: Legal stuff

Property/Casualty (2 decks)

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