Casualty Flashcards
What are the three reasons people buy liability insurance?
- Sometimes required by law
- It protects assets and income should the insured be involved in an accident or and occurrence that was unintended, but would find the insured is legally liable (responsible) for another’s injuries or damages.
- If a claim is a covered claim, a liability policy will provide the insured’s defense.
Is issued as a separate policy or other items it is packaged together with property insurance coverages.
Liability Coverage
Pays all sums for which an insured becomes legally liable (responsible), for bodily injuries and/or property damage to third parties, not to exceed the policy limits of liabilities
Liability Coverage
Damages can be _____ or _______
special ; general
Are damages that are able to be easily determined such as medical bills, lost wages, repair costs and replacement value.
Special Damages
Are damages that cannot be calculated precisely and are subject to judgement and differences of opinion. ______ _______ include compensation for pain and suffering, compensation for permanent disabilities and compensation for scarring and disfigurement.
General damages
Are extra amounts a court orders the insured to pay to the claimant as punishment for doing something particularly reckless, dangerous, grievous or malicious.
Punitive damages
Court orders for punitive damages are generally not covered by _____ ________
liability insurance
A third party claimant must be able to prove he/she has damages either in the form of ___ _____ and or ______ _______
bodily injuries ; property damage
A third party claimant must also prove the monetary value of the _______
damages
Bodily injuries also means
Physical injuries
Bodily injuries include:
a. reimbursement for medical bills
b. reimbursement for lost wages
c. compensation for pain and suffering
d. compensation for permanent disabilities
e. compensation for permanent scaring and disfigurement
Direct or immediate cause is
Proximate Cause
Is when a claimant is entitled to collect from an insured the percentage of damages for which the insured is responsible.
Comparative Negligence
Is the type of legal proceeding through which claims for money or bodily injuries and/or property damage are made. It is also sometimes called CIVIL LIABILITY
Law of torts
What is civil liability also called?
Law of Torts
Is any sudden, unforeseen, unintended event which results in bodily injuries and/or property damage
Accident
Is an accident, or any continuous or repetitious exposure to conditions which results in bodily injuries and/or property damage.
An Occurrence
Both _____ and _______ policies cover claims made after the policy expiration, as long as it happened while the policy was in effect.
accident ; occurrence
Some commercial and/or professional liability policies are written as _____ _____ ______
Claims made policies
Coverage commences on the date specified in the policy as the _______ _____
retroactive date
The ________ must occur sometime after the retroactive date and before the policy termination date
occurrence
Is when the occurrence must be reported by the insured person or business to the insurance company while the policy is in effect during the 60 day reporting period that follows after the policy terminates
mini tail
Is when the claim must be made by the injured person either while the insurance policy is in effect or withing the five year claim reporting period that follows after the policy terminates.
Midi tail
An endorsement can be purchased for the extra premium charge. If added, the occurrence must occur after the retroactive date and before the policy termination date and the occurrence and claim can be reported either while the policy was in effect or any time after the policy terminates.
Supplemental reporting period
What is the Supplemental Reporting Period also called?
Supplemental or full tail
An occurrence policy is not an ________ or _______ policy
accident ; claims
An occurrence policy is not an accident policy - which means it will cover ________ arising out of an accident or any continuous or repetitions exposure to conditions which results in damage
liability
An ______ policy is not a claims made policy - Which means all that is required is that the ________ or ________ occurs while the policy is in effect. It doesn’t matter that the claim isn’t made by the injured claimant until after the policy terminates.
Occurrence ; Accidental ; occurrence
Under some commercial (business) liability policies, the insurance company will charge an estimated premium at the beginning of a policy term. It is called a ____ ______
deposit premium
If an insurance company does an audit of the insured business, and the audit determines that the insured’s liability risks increased during the policy premium, the insurance company will sometimes charge an additional premium at the end of the policy term, if they charge it, it is called an
audit premium
The Personal Auto policy can be used for what vehicles?
- Any two door, four-door, or station wagon type auto which has the least four wheels
- Any pick up or van
a. which is owned by an individual or husband and wife
b. which has a load capacity of less than 10,000 lbs
c. which is not used in the delivery of transportation of goods.
Two exceptions to the delivery and transportation of goods.
- If the pick-up truck or van is used for installing, maintaining or repairing furnishings or equipment (such as construction job or repair service job) it can qualify for a Personal auto policy.
- If the pick-up truck or van is used for farming it can qualify for a Personal auto policy
Business Auto policy can be used for two things:
- Any auto owned by a business firm (partnership or corporation)
- Any truck which does not qualify as a personal auto
What are the 5 auto insurance coverages?
- Liability Coverage
- Physical damage coverage: (comp/coll)
- Medical payments coverage
- Uninsured motorist coverage
- Underinsured motorist coverage
When a policy includes all 5 coverages, it is called ______ coverage
full
When a policy does not include physical damage coverage, it is referred to “________ only coverage”
liability
What pays all sums for which an insured becomes legally liable (responsible)
Liability Coverage
What two things are caused to other parties?
- Bodily injuries
- Property damage
Parties to whom the insurance policy coverage applies (includes 4 items)
- Named insured & spouse
- All relative members of the insured’s household
- Anyone driving the insured auto with permission (express or implied)
- Anyone legally responsible for the use of the auto at the time of the accident (omnibus clause)
Who is all covered as relative members of the insure’s household?
a. whether they have driver’s license or not
b. whether they are named in the policy or not
What is included (covered) while driving the insured auto with permission (expressed or implied)?
a. including liability caused by employees
(It will NOT cover liability to injured employees (Worker’s compensation coverage))
What is it called when one person, such as an employer, can sometimes be held legally liable (responsible) under special circumstances for the actions or accidents or occurrences caused by another, such as an employee?
Vicarious liability
Auto liability coverage applies when it is arising out of _______ autos and _________ _______ autos if reported within _________ days
replacement; newly acquired; 30
Autos to which auto liability applies
- autos in the dec page
- replacement autos (if replaced within 30 days)
- newly acquired autos (if reported within 30 days)
- auto trailers
- temporary substitute autos
- non owned autos not regularly used by the insured (rental car)
Coverage follows the _______ first, the _________ second.
vehicle ; driver
Minimum liability limits required to be carried on all automobiles by state laws are __/__/___
25/50/20
If the insured has the minimum liability limits the insurance company will pay up to $_____ for bodily injuries per person
$25,000
If the insured has the minimum liability limits the insurance company will pay up to $_____ for total (aggregate) bodily injuries per occurrence.
$50,000
If the insured has the minimum liability limits the insurance company will pay up to $_____ for property damage occurrence
$20,000
An alternative to 20/50/25 split limits is minimum singe liability limits of $________
$70,000
It must be kept in all automobiles at all times. It must include the name of the insurance company, effective date and expiration date.
Proof of insurance
It is common to increase liability to _______ levels
Higher
(differences between property insurance coverage (fire policies, dwelling policies, homeowners policies and liability coverages))
Property insurance coverages are ___ _____ coverages because they pay to the insured for damage to the insured’s property. Liability insurance coverages are ______ _____ coverages because they pay to someone other than the insured.
first party; third party
(differences between property insurance coverage (fire policies, dwelling policies, homeowners policies and liability coverages)) property coverages usually have a ________ : Liability coverages usually have __ _________
deductible; no deductible
(differences between property insurance coverage (fire policies, dwelling policies, homeowners policies and liability coverages)) property coverages indemnify by _____ the insured - Liability coverages, on the other hand Indemnify by ______ the insured’s roled (or insured’s position) in the claim.
reimbursing ; assuming
Are amounts which the insurance company will pay in addition to the limits of liability
Supplemental payments
Insurance companies will provide supplemental payments for $_____ for bail bonds required because of an accident which resulted in bodily injuries or property damage
$250
Insurance companies will provide supplemental payments for ________ cost including interest on a judgement resulting from a claim the insurance chooses to defend.
defense
Insurance companies will provide supplemental payments for _____ bonds and other bonds required by the insurance company’s defense of a claim
appeal
Insurance companies will provide supplemental payments up to $____ for loss of earnings because of an attendance at hearings at the insurance company’s request.
$50
Insurance companies will provide supplemental payments for other ________ insured at the request of the insurance company
expenses
Auto liability coverage exclusions are:
- Liability for property owned by or in care/custody/control of the insured (covered under HO)
- Liability of an employer for injuries sustained by employees during the course of employment (workers comp coverage would apply)
- Liability while operating a vehicle for a fee (liability incurred while carpooling is covered)
- Liability incurred by an intended act
- Liability incurred by the insured while driving a non-owned auto while engaged in the auto business (gatekeeper coverage would apply)
- Liability covered under a nuclear energy liability policy
A person would purchase either ____ ____ coverage or ______ coverage, never both
named peril; comprehensive
First party coverage that covers damage to the insured’s vehicle.
Physical damage coverage
Physical Damage coverage named peril coverage includes:
- fire
- lightening
- transportation (towed)
- theft and vandalism
- windstorm and hail
- civil commotion and riot
- explosion
- flood and earthquake
- aircraft
______ coverage is sold more often than ______ coverage
comprehensive; named peril
comprehensive coverage is also named
all risk coverage
What covers all the named perils (plus it is broader) and covers all forms of damage to the insured auto except those excluded?
Comprehensive (all risk coverage
The primary exclusion to comprehensive coverage is damage caused by ______ or ________
collision ; upset
Exception: comp coverage will cover damage caused by collision with a _____ or ______
bird; animal
Upset damage which is excluded under comprehensive coverage is damage incurred by _______ the insured vehicle
rolling
Comp coverage pays up to $____ per day for transportation costs not to exceed $______ after the insured auto has been stolen for ____ hours
15 ; 450 ; 48
Collision or upset coverage has a ____ deductible than comp coverage
higher
collision or upset coverage covers damage to the insured vehicle caused by ____ or ______
collision or upset
Comp coverage usually has a ____ deductible
low
collision coverage usually has a _____ deductible
higher
Autos to which Physical damage coverage applies:
- Autos described in the dec page
- replacement autos ( if reported within 30 days)
- newly acquired autos (if reported within 30 days)
- temp substitute autos (rental car or auto garage gives you loaner)
- Non-owned autos not regularly provided for the insured’s use. (excess to any coverage on auto)
Physical damage coverage exclusions are:
- any auto used as a public or livery conveyance
- war
- Non-owned auto used by the insured while the insured is engaged in the auto business (garagekeeper coverage would apply)
- Another auto owned by the insured upon which the insured has another valid and collectable insurance (Insured cannot stack coverage)
- Damage due to wear, tear, freezing, mechanical, or electrical breakdown or failure unless it results from a theft
- damage to tires, unless the damage was caused by fire, vandalism, or theft
- radioactive contamination
- loss of or damage to sound reproduction equipment not permanently installed and tapes
- loss of or damage to C.B. radios and telephones not permanently installed
- loss of or damage to custom furnishings
It covers medical bills incurred by the insured and household members if injured by any auto anywhere.
Auto medical payment coverage
It also covers medical expenses incurred by passengers of the insured auto if the passengers are injured while they are entering, occupying or alighting from the insured auto.
Auto medical payment coverage
Auto Medical Payments coverage covers medical expenses incurred within _ years of an accident including ambulance an funeral expenses.
3 years
Auto Medical Payments coverage pays whether the insured was ______ _______ for the injuries or not
legally responsible
Auto Medical Payments coverage is usually a per person limit (such as $______) and an aggregate (total) limit in a higher amount (such as $______) per occurrence
$5,000 ; $25,000
What are the Additional Auto coverages?
A. Towing and labor coverage
B. Transportation Expense (Rental Reimbursement) coverage
C. Hired auto coverage
D. Employees Non-Ownership liability coverage
E. Drive other car (DOC) coverage
The additional auto coverages are an extra _______ that can be added to an auto policy for an extra ______ charge
endorsement ; premium
If towing and labor coverage is added, it pays for _____ service, _____ and/or _____ charges
roadside ; labor ; towing
Towing and labor coverage _____ are sometimes $50, $75, $100, $150, $200, or $250
limits
Transportation Expense coverage covers auto rental expenses the insured incurs because the insured auto is unable to be driven due to damage covered under the insured’s ____ _____ coverage
Physical Damage
Transportation Expense coverage covers expenses the insured incurs because the insured auto has been _____.
stolen
Transportation Expense coverage in the case of the insured auto being stolen, coverage starts after the insured auto has been stolen __ hours.
48 hours
Transportation Expense coverage pays up to $___ per day for transportation costs not to exceed $______. This amount can be increased for an additional premium charge. to qualify for this coverage, the insured must carry Auto ______ _______ coverage
$20 ; $600 ; Physical Damage
Hired Auto coverage covers liability arising out of a vehicle rented for leased for less than __ months
12
Hired Auto coverage is coverage needed by a business that _____ rents cars or trucks
occasionally
Employers non-ownership liability coverage protects an employer against legal liability caused by an employee while driving an auto ____ _____ by the employer
not owned
_______ _______ liability coverage is excess to any coverage there may be on the auto being driven by the employee at the time of the accident
Employee non-ownership
______ _______ ______ Coverage is purchased by a business to protect an executive, key employee, or a business owner who is not covered under a personal auto policy.
Drive Other Car (DOC)
Drive Other Car (DOC) Coverage protects only individuals that are _____ (listed)
scheduled
Drive Other Car (DOC) Coverage: Sometimes the scheduled (listed) insured will not have a Personal Auto policy because he/she and his/her family drive only ______ owned vehicles and do not personally own a vehicle
company
Drive Other Car (DOC) Coverage protects the ________ employees against liability incurred to a third party while driving a vehicle the employee does not own other than a company owned vehicle such as a rental vehicle, or some other vehicle the employee does not own.
scheduled
