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risk insurance > FINAL > Flashcards

FINAL Flashcards

1
Q

liability coverage

A

part of a personal auto policy that pays for you when you mess up and are negligent

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2
Q

Medical Payments coverage

A

Pays for medical expenses of others under a homeowners policy in the event that a person (not an insured) is accidentally injured on the premises, or by the activities of an insured, resident employee, or animal owned by or in the care of an insured.-The policy states the situations under which coverage applies.

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3
Q

Miscellaneous-Type Vehicle Endorsement

A

motorcycles, mopeds, motorscooters, golf carts, motor homes, dune buggies

NOT SNOWMOBILES

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4
Q

underinsured motorist coverage

A

coverage that can be added to auto policy

-pays for damages when negligent driver is underinsured

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5
Q

uninsured motorist coverage

A

That part of the personal auto policy designed to insure against bodily injury caused by an uninsured motorist, a hit-and-run driver, or a driver whose company is insolvent.
-In some states, property damage is also covered

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6
Q

PAP

A

personal auto policy drafted by the Insurance Services Office (ISO)

  • four wheeled motor vehicle
  • owned by the insured
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7
Q

Exclusions

A
  • Intentional injury or damage
  • Property owned or transported
  • Property rented, used, or in the insured’s care
  • Bodily injury to an employee
  • Use as a public livery or conveyance (taxi)
  • Vehicles used in the auto business
  • Vehicles with fewer than four wheels
  • Vehicles furnished for the insured’s regular use
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8
Q

compulsory insurance law

A

This law requires motorists to carry at least minimum amount of liability insurance before the vehicle can be licensed or registered
PS. mandatory insurance does not reduce the number of uninsured drivers

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9
Q

no pay, no play law

A

prohibits uninsured motorists from suing negligent drivers for non-economic damages

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10
Q

no fault insurance

A

This means that after an auto accident involving bodily injury, each party collects from his or her own insurer regardless of fault.
Ps. Enacted because of dissatisfaction and defects in the traditional tort liability system.

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11
Q

joint underwriting association

A

auto insurers in the state participate in providing coverage to high-risk drivers through a common pool.

  • Each insurer pays its pro rata share of pool losses and expenses.
  • The JUA designs the policies and set the rates
  • Underwriting losses are proportionately shared by the companies based on premiums written
  • A limited number of insurers are designated as servicing insurers, but all insurers participate in the pool.
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12
Q

inland marine floater

A

provides broad coverage on property frequently moved from one location to another and on property used in transportation and communications.

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13
Q

personal articles floater

A
  • An inland marine floater that provides comprehensive protection on valuable personal property.
  • This coverage can be written as a stand-alone contract
  • The PAF insures certain classes of personal property on an “open perils” basis
  • The coverage can also be added as a scheduled personal property endorsement to an HO policy.
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14
Q

National Flood Insurance Program

A
  • Flood insurance is purchased from agents or brokers who represent private insurers
  • Private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowance
  • The federal government is responsible for all underwriting losses
  • The program is self-supporting for the average historical loss year
  • In 2012, Congress acted to reform and extend the program for five years
  • Federal law requires individuals to purchase flood insurance if they have federal guaranteed financing to guild, buy, refinance, or repair structures located in special hazard flood areas
  • Buildings and their contents can be covered by flood insurance if the community agrees to adopt and enforce sound flood control and land use measures
  • A flood hazard boundary map shows the general areas of flood losses
  • Residents can purchase limited amounts of insurance at subsidized rates under the emergency portion of the program
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15
Q

personal umbrella policy

A
  • Excess liability insurance is provided in amounts from $1–$10 million
  • Certain minimum amounts of liability insurance must be carried on the underlying contracts
  • Coverage is broad and includes protection against certain losses not covered by the underlying contracts
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16
Q

self-insured retention

A

Deductible. Applies to only to losses covered by the umbrella policy but not by any underlying contract.

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17
Q

umbrella exclusions

A
  • expected or intentional injury
  • certain personal injury losses
  • business liability
  • professional services
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18
Q

errors and omissions insurance

A

liability insurance policy that provides protection against loss incurred by a client because of some negligent act, error, or omission by the insured

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19
Q

Directors and Officers insurance

A

A commercial liability coverage that provides financial protection for the directors, officers, and the corporation if the directors and officers are sued for mismanagement of the company’s affairs.

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20
Q

Insuring agreement

A

The heart of the insurance contract, it is the part of an insurance contract that states the promises of the insurer.

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21
Q

D&O exclusions

A
  • Bodily injury and property injury
  • Libel and slander
  • Personal profit, such as profit from insider trading
  • Certain violation of the Securities Exchange Act of 1934 or similar provisions of state law.
  • Return of salaries or bonuses illegally received without stockholder approval
  • Deliberate dishonesty by an insured
  • Failure to procure or maintain insurance
  • Violation of ERISA law
  • Illegal discrimination
  • Insured vs. insured claims
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22
Q

Homeowners 2

A

covers dwelling, other structures, and personal property on a named perils basis. Fire, lighting, windstorm, hail, explosion

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23
Q

Homeowners 3

A

covers the dwelling and other structures on a risk of direct physical loss basis. All direct physical losses are covered except those losses specifically excluded

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24
Q

Homeowners 4

A

covers a tenant’s personal property on a named perils basis. Ex: tenants who rent apartments, houses, or rooms

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25
Q

Homeowners 5

A

Provides open perils coverage (“all-risks coverage”) on the dwelling, other structures and personal property. All direct physical losses are covered except those losses specifically excluded

26
Q

Homeowners 6

A

covers personal property on a named perils basis. Designed for condominium units and cooperative apartments. A minimum of $5,000 of insurance is also provided on the condominium unit that covers improvements and additions

27
Q

Homeowners 8

A

designed for older homes. Dwelling and other structures are based on the amount required to repair or replace using common construction materials and methods

28
Q

Homeowners 3 A

A

covers the dwelling on the residence premises and any structure attached to the dwelling and Materials intended for construction or repair of the dwelling or other structures are included. The coverage specifically excludes land

29
Q

homeowners C exclusions

A

-Animals, birds, and fish-motor vehicles-aircraft and parts-hovercraft and parts-property of roomers, boarders, and other tenants-property in a regularly rented apartment

30
Q

replacement cost formula

A

(amt of insurance carried/80%replacement cost)loss

31
Q

earthquake endorsement

A

a coverage addition that covers direct physical loss to property covered under section I and caused by an earthquake. Covers earthquakes, landslides, volcanic eruptions, and earth movement

32
Q

personal injury endorsement

A

Injury for which legal liability arises (such as for false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, violation of the right of privacy, and unlawful entry or eviction) and which may be covered by an endorsement to the homeowners policy. Also included in the coverage by a personal umbrella policy.

33
Q

personal property replacement cost endorsement

A

An addition that pays claims on the basis of replacement cost with no deduction for depreciation.-If the cost to repair or replace exceeds $500, the property must actually be repaired or replaced to receive replacement cost. Otherwise only the actual cash value is used.

34
Q

scheduled personal property endorsement

A

Provides additional coverage for nine classes of property (jewelry, furs, cameras, musical instruments, silverware, golfer’s equipment, fine arts, postage stamps, and rare and current coins) and the insurer agrees to pay the stated amount for a scheduled item if a total loss occurs

35
Q

all risk (open perils)

A

coverage by an insurance contract that promises to cover all losses except those losses specifically excluded in the policy.

36
Q

Coinsurance-healthcare

A

reduces premiums

Prevent overutilization of policy benefits

37
Q

coordination of benefits provision

A

Provision in a group medical expense plan that prevents over-insurance and duplication of benefits when one person is covered under more than one group plan. The provision specified the order of payment when more than one group medical expense plan covers the loss.

38
Q

Declaration

A

Statements in an insurance contract that provide information about the property to be insured and used for underwriting and rating purposes and identification of the property to be insured.

39
Q

elimination period

A

Waiting period in health insurance during which benefits are not paid. Also a period of time that must by met before disability benefits are payable.

40
Q

exclusions

A

Provisions in an insurance contract that list the perils, losses, and property excluded from coverage.

41
Q

named perils

A

Coverage by an insurance contract that promises to pay only for those losses caused by perils specifically listed in the policy.

42
Q

pro rata liability

A

A generic term for a provision that applies when two or more policies of the same type cover the same insurable interest in the property. Each insurer pays based on the proportion that its insurance bears to the total amount of insurance on the property.

43
Q

burden of truth

A
  • In open-perils coverage, to deny payment, the insurer must prove that the loss is excluded.
  • In named-perils coverage, the burden of proof is on the insured to show that the loss was caused by a named peril.
44
Q

co-insurance formula

A

Amount of insurance carried/amount of insurance required x Loss - deductible = Amount of recovery.

45
Q

long-term care insurance

A

A form of health insurance that pays a daily benefit for medical or custodial care received in a nursing facility or hospital. Home health benefits may also be provided.

46
Q

total disability

A

A term that varies by insurers and type of policy. In individual disability income policies, total disability can be defined as (1) inability to perform the material and substantial duties of your regular occupation; or (2) inability to perform the duties of any occupation for which you are reasonably fitted by education, training, and experience; or (3) inability to perform the duties of any gainful occupation; or (4) loss-of-income test. In many waiver-of-premium provisions in life insurance, total disability means that, because of disease or bodily injury, the insured cannot do any of the essential duties of his or her job, or any job for which he of she is suited based on schooling, training, or experience.

47
Q

partial disability

A

Inability of the insured to perform one or more important duties of his or her occupation.

48
Q

residual disability

A

that a proportionate disability-income benefit is paid to an insured whose earned income is reduced because of an accident or illness.

49
Q

guaranteed renewable policy

A

Continuance provision of a health insurance policy under which the company guarantees to renew the policy to a stated age, and whose renewal is at the insured’s option. Premiums can be increased for broad classes of insureds.

50
Q

conditionally renewable

A

The policyholder can renew the policy until a specific age;however; the insurer has the right to decline renewal under conditions specified in the contract.

51
Q

grace period

A

Period of time during which a policy can pay an overdue

52
Q

umbrella policy exclusions

A

damages expected or intended by insured.
damages arising out of business or professional pursuits.
liability assumed under contract or agreement.
liability arising out of ownership, maintenance, use, loading or unloading of aircraft.
liability arising out of ownership, maintenance or use of non-traditional watercraft such as jet skis, air boats or air cushions.
liability arising out of ownership, maintenance or use of most recreational vehicles. Only snowmobiles and golf carts are covered.
damages to property you take care of, own or use.
damages covered under a Workman’s Compensation policy.
liability arising out of war or insurrection.

53
Q

subrogation

A

Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

54
Q

contestable clause

A

The portion of a life insurance policy setting forth the conditions under which an insurer may contest or void the policy.

55
Q

actual cash value

A

replacement cost- depreciation

56
Q

probationary period

A

A provision in some disability income policies stipulating that benefits will not be payable for sickness commencing during a specified time period (e.g., 15–30 days) after inception of the policy. The purpose is to clarify that the policy is not intended to cover disability resulting from preexisting disease.

57
Q

collision damage waiver

A

CDW is not insurance as such. It’s actually the rental company agreeing to waive the costs of damage to your rental vehicle if it is involved in a collision.

58
Q

permanent disability

A

it means that because of a sickness or injury, a person is unable to work in their own or any occupation for which they are suited by training, education, or experience.

59
Q

HO-3

A
  • Coverage A- covers the dwelling on the residence premises and any structure attached to the dwelling
  • Coverage B- insures other structures (sheds, garages) on the residence premises
  • Coverage C- insures personal property owned or used by an insured

Coverage D- provides protection when the residence premises cannot be used because of a covered loss

60
Q

HO-3 loss settlement (calculation)

A

(amount of insurance carried/ 80% replacement cost)* Loss

risk insurance (1 decks)

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