Insurance Flashcards
FAIR Plan Violation
1 - 2k
2 - 5k
Unfair Method of Competition Violation
1 - 5k
2 - 10k
Pretext interview
Attempts to gain information by pretending to be someone else
1 - Misrepresentation
2 - Falsely representing a person
Physical damage covered by PAD
Events of total loss, adjust made for physical damage
Persona Liability Endoresement
Coverage does apply to expenses occurred by residence employee but not named insured, regular residents of the named tenants
Covers:
First aid
Medical payments
Defense costs
Watchperson
Watch insured property while inside the property
Custodian
Watch property on the premises as a result of duty - inside or out
Principal / Obligor
Contractor
Obligee
Customer
Surety / Guarantor
Insruance company issue bond
Compensatory damages
Reimburse injured party for actual loss sustained
P&C 2 or 3 party contract
Property - two party contract
Casualty - three party contract
P&C Excluded losses
Catastrophic
Predictable
Covered elsewhere
Producing agent - what does the public think authority is
Apparent
Garagekeepers covers what
Covers damage to vehicles in the insureds care for service, storage, parking
Collapse - how to get coverage
Additional
DP2 characteristics
Named perils
Dwelling - Replacement costs
Contents - Actual cash value
DP 2 Covers
Damage by burglars
Falling objects
Weight of ice, sleet, snow
Accidental discharge of water
tear, cracking, bulging
Freezing
Artificial electricity
DP 1 Characteristics
Named
All on actual cash value
DP1 Covers
Basic - Fire, lightning, internal explosion
EC
External explosion
Smoke
Vehicles
Riot
Windstorm / hail
Volcanic Eruption
BOP for building and business personal property characteristic
Replacement cost
Auto Medical Payment covers
You and your resident relatives as occupents in any vehicle & as pedestrians injured by auto
Yacht
Greater than 26 feet with cooking and living quarters
Contractual Liability Definition
Enters into contract such as sharing property
BOP General Aggregate and Products completed operations are what
2x the occurrence limit
Fire Department Charges
Commercial - $1k
Home - $500
NEVER A DEDUCTIBLE
Workers Comp Primary or Secondary
ALWAYS PRIMARY
Conditional Loss
Provide proof of loss and respond in certain timeframe
PAP Family Member
Related by blood, marriage or adoption including foster children
Utmost good faith definition
Both parties want it to work
Reasonable expectations
It should work as expected
BOP Does not cover what
No cars, bars, banks or manufactures
PAP defense cost limit
NO DEFENSE COST LIMIT
Operations Liability
You are on someone else’s property during work and make a mistake
FCRA Requires how much notice
3 days and investigates customer reports
BOP Coinsurance
No coinsurance requirement
80% = Replacement cost
Less than 80% = Actual cash value
FOB Destination
Seller is responsible for property being transported until it has been delivered
POB Point of Shipping
Buyer interests begin at the start of the shipment and they will be responsible for loss or damage to cargo
Persona floater recieve what perils
Open Perils
Unfair trade practice in NJ how many days before hearing
10 days
Preservation of proerpty covered under
Again open perils for 30 days
Business coverage form - what perils
Open Perils
Service Carrier under PAIP
Accept PAIP Assignments from another issuer
Advisory Organization
Assist insures in making their own rule
Valuation of loss under building and property form
Method of evaluating losses, valuation and treats valuation of unsual property as stock that has been sold
Valuation of loss under building and property form
Commercial Building Risk Coverage Form Liability
No Liability in included
Part F 2 or more policies covering same auto
Max limit is equal to the limit of the policy with higher limits of liability
Workers comp assigned risk plan
Coverage for employees who are unable to purchase coverage in the volunteer market
Strict Liability Definition
Applies to products and their manufacturing
Held liable if product caused injury
Watercraft Liability
Watercraft, their trailers, furnishing, equipment, engines motes are subject to 1.5k limits
Per occurrence Limit
The most a policy will pay for a loss arising out of any one accident
Watercraft Liability Endorsement on Homeowners Policy Covers and not Cover
Covers - damage to others not done by them
Not Cover - Rented, Employee use, Insured, USed for racing
Personal and advertising injury liability in CGL Covers
False Arrest
Malicious prosecution
Copy right infringement
Bailee and Bailor
Bailor = Owner of item
Bailee = Servicer
BOP if coverage for 100% for 12 months auto increased by
25%
Commercial medical payment
Does not auto apply to BAP - Added by endorsement
Libralization
Provides change which favor the policy owner become effective immediately.
Changes that affect the policy owner negatively don’t become effective until the policy is renewed.
Subrogation
Subrogate = To go in place of another
States the insured must transfer to the insurance company its right of recovery against any party causing a loss after it accepts payment from the insurer for a loss.
Allows insurer to recover from the party that caused a loss any amount paid.
Prevents insured from collecting twice on the same loss
Helps the insurer control expenses and premiums
Holds the responsible third party accountable for the loss
Commercial and Personal Lines Rankings
Commercial Lines = First Named Insured
Personal Lines = Named Insured
Blanket Insurance
May be written on all property of a single type,
All property at one location
Multiple types of property at multiple locations
Nonconcurrent
Multiple companies should be sued to insure one property.
The peril power should match.
Where do you find the terms and phrases in an insurance contract
Definitions
Agreed Value
Insurer and the insured specify specific values of items before policy is issued
Impossible to replace (arts antiques)
Agreed Value
Insurer and the insured specify specific values of items before policy is issued
Impossible to replace (arts antiques)
Valued Policy
Provides payment of the full poliyc amount on the declarations page in the events of a total loss without ACV or depreciation
General Damages
Noneconomic damages, humiliation
Expressed
Written contract
Unilateral Contract
Contract says the insurer pays only after a loss.
Doctrine of reasonable expectations
Resolve any ambiguity in policy wording in favor of the insured
b/c the insurer has legal advice and writes the policy language, any ambiguity which means uncertainty in the contract will benefit the insured
Consideration
One element of a legal contract
Payment of premium by the insured in return for the promise to pay covered claims
Both parties to the contract must be present for contract to be valid.
Aleatory
Unequal exchange of value
Contract of Adhesion
Insurance company wrote it, they must stick to it
Unilateral Contracts
One Promiser = Unilateral
One Auther = Adhesion
Residual Market
When the private market does not ordinarily furnish the coverage, the residual market then steps in to provide that unavailable coverage. Example - Flood insurance
US Territorial Possession
Guam, Puerto Rico, US Virgin Island and the Norhtern Mariana Islands.
Surplus Line Transcation
When you need insurance that is unavailable in your state, you may go Through SURPLUS LINES PRODUCRS to purchase insurance from a non-admitted company.
Surplus Line Transaction
When you need insurance that is unavailable in your state, you may go Through SURPLUS LINES PRODUCRS to purchase insurance from a non-admitted company.
Subject to loss
Exposure = Risk
Homeowners earthquake endorsement - how long until earthquake shocks considered a single earthquake
72 hours
Commerical lines earthquake endorsement = 168 hours
Homeowners earthquake covers losses due to earthquake and what else
Volcanic eruption
Earthquake endorsement homeowner’s deductible
Use a % deductible instead of the flat dollar deductible
Homeowners Limits for Coverage E (personal liability) & Coverage F (Med pay to others) is?
Liability = 100k
Med pay = 1k
Damage to property of others will respond:
To losses committed intentionally or unintentionally by children who have not yet reached 13 years old
Homeowners liability limits are expressed
per occurence
Homeowners Medical Payments Cover
Resident Employees / Per person basis
Homeowners Limits
Detached garage = 20,000
Auto = 0
Personal Prop = 100k
Additional exp = 60k
Homeowners Audo and Visual Coverage C
Not subject to a special dollar limit
H/O Cover A Dwelling Coverage Limit
Chosen by policy owner
H/O Coverage B Other Structures Limit
10% of A
H/O Coverage C Personal Property Limit
50% of A
Coverage D Loss of use limit
30% of A
H/O Tree debris removal cost
Fall tress = 500 and 1,000 per occurrence
Fire Dept Service Charge H/O & Commercial
H/O = 500
Comm = 1000
Transporation expenses cover under Part D of the personal auto policy after a collision
Rental Reimbursement of $20 a day up to $600
Collision and Other Collision Open/Named
Collision is named peril (upset and collision)
Other Than Collision is open peril
when is Collision triggered
Collision Coverage applies to the impact of a covered auto with an object or another vehicile or upset of a covered auto.
Which Personal Auto Policy coverage would pay to repair a car if it was damaged by a hit and run driver
Collision
Other Than Collision losses include
Missiles
Falling object
Fire
Theft or Larceny
Earthquake
Windstorm
Hail
Water
Flood
Malicious mischief or vandalism
Riot
Animal
Glass damage
Monoline Policy
Covers Commercial Auto ONLY
What is the garage coverage form designed for
Dealership
Under a commercial auto policy, liability coverage includes
Supplementary payments - first aid, bonds, reasonable travel expenses
Farm Broad Cover
Drowning of a covered livestock
Electrouction of covered livestock
Accidents involving loading and unloading
Farm Special Form Covers
Voluntary parting with property
Commercial Article Floater
Provides open peril coverage for fine arts, cameras, musical instruments and there related equipment when used for business or commercial use.
Theft is covered
BOP and Homeowners - how to get Replacement cost
80% of coinsurance value of building
Commerical Property Policy you can get replacement cost how
Purchase a replacement cost endorsement
Earthquake will treat all losses within what time period as a single occurent
Commerical - 168
Personal - 72
Equipment Breakdown coverage pays losses
Replacement cost
When will written notice for suspension of coverage on an objected covered by equipment breakdown coverage become effective
Immediately
When does the coverage for a BUILDERS RISK FORM being
At the time the insured becomes legally responsible for the property if that date occurs after the policy’s effective date
Period of restoration beings after X hours after the physical loss for business income
72 hours
Business Income
Designed to replace income lost when a business must close temporarily following a covered loss
Cause of loss form
Shows the perils the property is insured against
Commercial Vacancy
If vacant for 60 days and coverage is continued, the perils of SPRINKLER LEAKAGE, WATER DAMAGE, VANDALISM, GLASS AND THEFT ARE NOT COVERED
Commercial Broad Form
Covers Plumbing
Commercial common policy declaration
Who
What
When
Where
How much
Coinsurance equation
(Did / Should)
* (loss-deductible)
What is the purpose of commercial package policy
Eliminates redundancy by streamlining the various policy form into the package policy
Commercial Package Policy that modifies several of the coverage parts
Interline Endorsement
Fire Legal Liability
Provides coverage for a business that leases its premises and then causes negligent fire damage to those rented premises
Strict Liability
Sets a higher bar than negligence.
Negligence - it must be established that the defendant had a duty to the Plaintiff
Strict Liability that is not necessary. The legal theory simply says that if you make, sell, distribute a product that hurts people, you are responsible
What is included in the commercial liability policy limit of insurance
Medical
General Aggregate
Personal and Advertising injury
Businessowners policy (BOP_ covers)
BOP insurers small and medium size businesses with one location for property, liability and other coverages as a singe policy similar to a homeowners policy
Small and low risk
BOP CANNOT be sold to
Amusements.. bowling alley, theatres, amusement parks
will not cover cars,-bars, entertainment, manufacturers, banks
BOP true statements
Open or named peril
Purchase the property coverages of a BOP, casualty, coverages of a BOP, or both
Workers comp can be added by an endorsement
DOES NOT HAVE CO INSURANCE REQUIREMENTS
BOP Valuation feature
BOP feature is the REPLACEMENT COST LOSS SETTLEMENT on building and building personal property
BOP covers losses of income up to how much
Provides business income and/or extra expense coverage for 12 full months following the loss
General Aggregate limit and the products and completed operations aggregate limit
two times the occurrence limit
What is the minimum deductible in the regular flood insurance program
$1000
How many days after an application is received does flood coverage begin
Flood coverage begins 30 days after your application is received
What is an optional coverage that can be added to a mobile home policy
Loss from collision damage
Umbrella policies that are excluded
Business pursuits
What is covered under an umbrella policy
Cover incidents over and above the coverage of underly`ing policies.
Personal injury is excluded from homeowners policies therefore an umbrella is necessary to provide coverage for the insured
Which policy could pay claims over and above the limits of the commercial general liability policy
Both the:
1) Commercial Umbrella
2) Excess Liability Policies
What is a self insured retnation
Deductible
What is true regarding excess liability policies and commercial umbrella policies
Both excess liability and umbrella policies are designed to pay over and above the limits of the underlying liability policies
IF there is no underlying coverage:
1) Excess liability does not pay
2) Umbrella will pay AFTER the policyowner pays a predetermined amount called a retention limit.
Umbrella = retention
Liability = No retention
What is a principal in a fidelity bond
Employee covered
Obligee in a fidelity bond
Employer
Surety in a fidelity bond
Insurance Company
Principal/Obligor in a contract bond
Contractor
Obligee in a contract bond
Customer
Surety / Guarantor in a contract bond
Insurance company
Surety Bond
Promises payment if the principal defaults on an obligation
Employment practices liability
Covers wrongful employment behavior, such as
1) Discrimination
2) Harassment
3) Wrongful termination
What liability is covered by a commercial general liability policy
The CGL covers
1) Contractual Liability
What is the purpose of the homeowners policy
Provide both property and liability coverage in one policy designed to avoid overlaps or gaps in the coverage
What Commerial Property Policy allows you to pay over and above its limits
Coverage additions like Fire Department service charge and debris removal benfit increase the amount paid followin a loss
What is a pure no fault system
Abolish use of the tort system for bodily injuries resulting from auto accidents
What forms the basis of a loss under an insurance policy
A loss
What is the purpose of the causes of loss form that lists specific exclusions
To state which perils are insured against
Without a replacement cost endorsement,
Personal Property losses on all H/O forms are paid on actual cash value basis
Fire Legal Liability Provides
Coverage for a business that leases its premises and then causes negligent fire damage to those rented premises
Homeowners Limit of Liability
Dwelling (chosen by policyowner)
B Other structure - 10%
C - Personal Prop - 50%
D - Loss of use - 30%
Arbitration and Appraisal
Part c uninsured - Arbitration
Part d damage to your auto = Appraisal
Pair & Set Calculations
Value before the loss
MINUS
Value following the loss
HO-5
An HO5 policy is the Premier Homeowner Policy, which includes everything included in an HO3 policy. It provides replacement cost coverage. It covers the structure and all of the property inside the home. It is the most comprehensive policy available. However, coverage for earthquakes or floods is excluded. HO5 policies are usually limited to dwellings built within the last 30 years or renovated within the last 40 years.
H01 is the Basic Homeowner Policy, which covers the home’s structure and the property inside. It also covers structures located on the property due to damage caused by:
Windstorm/hail
Fire/lightning
Vandalism/criminal mischief
Vehicles/aircraft
Explosions/riots
Glass breakage
Smoke
Volcanic eruption
Personal liability
Damage from flooding and earthquakes is excluded from coverage in HO1 policies. Coverage is provided on a replacement cost basis, so the insured receives the cost of rebuilding or repairing damage to the dwelling with materials of similar quality.
HO2 Homeowners policies provides more coverage than an HO1 policy. It is also called a broad form policy. In addition to the events covered under a basic policy, HO2 policies also cover:
Falling debris/objects
Freezing
Collapses due to the weight of ice, snow or sleet
Accidental discharge or overflow of water or steam
Sudden and accidental destruction, burning, cracking or burning
Accidental damage caused by surges of electrical current
HO2 policies are available with replacement cost or actual cash value coverage. Be aware that an HO2 policy does not cover water damage caused by a water backup and foundation or slow leaks. It also does not cover open perils, including earthquakes or floods. However, they may provide mechanical breakdown coverage with respect to heat and air conditioning systems or water heaters, but not for kitchen or laundry appliances, computers, televisions, sound equipment or systems.
An HO3 policy is one of the most comprehensive Homeowners policies available. It covers the dwelling’s structure from all perils unless specifically excluded. It does not cover the contents inside. The contents can be covered with a named perils policy. Some typical exceptions to HO3 dwelling coverage include:
Laws/ordinances
Earth movement
Water damage
Power failure
Animals owned by insured
Neglect
War/nuclear hazards
Intentionally caused loss
Government action
Collapse of structure
Theft of property from an under construction dwelling
Vandalism/Malicious mischief if the property is vacant for over 60 days
Mold/fungus/rot
Wear and tear or deterioration
Mechanical breakdown
Smog, rust, corrosion
Smoke caused by agricultural smudging or industrial operations
Discharge, dispersal, seepage of pollutants
Settling/shrinking/bulging/expansion
Birds/vermin/rodents/insects
Some HO3 insurance plans have a named perils policy, which means it specifically lists what is covered. Regardless of the type of coverage, HO3 insurance typically does not include floods and earthquakes in its perils coverage, according to the NAIC.
An HO4 policy is also called the contents broad form. It is the tenant’s or renter’s form that provides named peril protection for the personal property of tenants. The coverage is meant for residents who rent and do not own a property, including single-family homes, apartment units/condominiums and mobile homes. The HO4 policy provides coverage similar to an HO-2 policy, though it covers personal property only and not any structures.
An HO6 is an insurance policy for condominium owners and is similar to a renter’s insurance policy. An HO6 insurance policy only covers the condominium’s interior, including property, walls, ceilings, floors and property from the same perils covered in HO2 home insurance policies. The exterior of the condominium building is typically covered through a policy purchased by the Homeowners association or management company community manager. An HO6 policy may also provide coverage for reimbursement for additional living expenses. Additionally, HO6 policies provide personal liability protection, in the event a person is injured on the insured property and the insured is liable for the injury. The personal liability coverage pays for the cost of an attorney, court costs, medical expenses and any money awarded to the injured party.
An HO8 policy covers special risks, such as unique properties and older properties whose market values are much lower than the replacement costs. It provides peril coverage to dwellings and personal property and may provide extended coverage for certain perils. It may also cover vandalism and criminal mischief. Payouts are made on an actual cash value basis.
Which of the following dwelling types is not eligible for a Homeowners policy?
Dwellings eligible for a Homeowners policy include second homes/vacation residences, life estate and trustees occupied homes, under construction dwellings, properties that are subject to installment contract payment plans and mobile homes that have been purchased. A farm is not a dwelling for Homeowners insurance eligibility purposes.
For Homeowners coverage, the only eligible parties are the owner and occupants of a residential only dwelling, along with eligible residential renters. Both property and casualty lines must be purchased, unless the property is rented out. Additionally, there can be no more than four family units in the dwelling.
Sharpie rents out his home to a tenant, pursuant to a 2 year lease. An electrical fire occurs due to faulty wiring. What coverage type would allow a payout to Sharpie?
Coverage D provides coverage for loss of use. The insured receives a payout if the insured dwelling is rendered uninhabitable as the result of a covered loss. The two possible methods of reimbursement are: 1) additional living expense, which allows the insured to maintain their standard of living if the insured loses use of the residence dwelling; and 2) Fair rental value, which covers lost rental payments if the dwelling is rented to another person.
Rating a policy refers to calculating the premium amount for an insurance policy. There are three primary rating methods:
-Judgment rating: This is the simplest method. The underwriter uses their personal, expert judgment to determine the premium, instead of using rate tables. It is the oldest rating method.
-Manual rating (a/k/a class rating): This is the most common premium rating method. Rates are grouped into categories and listed on a table. The underwriter analyzes the risk and classifies it according to the table categories. A premium is selected based on the corresponding category and then calculated by multiplying the rate by the amount of insurance units. For example, if $100,000 of insurance is purchased at a listed rate of $5 per $1,000, the total premium would be $500. $100,000 / $1,000 = 100 units x $5 = $500.
-Merit rating is used for risks with unusual or unique characteristics. First, the manual rating is calculated and it is adjusted, in accordance with the specific risk involved. Types of merit rating include experience rating, schedule rating and retrospective rating. Experience rating analyzes the insured’s own loss history, so the premium will be higher for an insured with a loss experience greater than the average loss experience. However, if the loss experience is below the average loss experience, the premium will be less than the manual rate. Schedule rating utilizes a system of debits and credits, based on the insured’s own characteristics. Retrospective rating takes into account any losses occurring over the policy period.
A business operating in a dwelling that is primarily used as a residence is called:
An incidental occupancy is a business conducted in a dwelling that is primarily used as a residence with no other businesses operating on the same property. The policy defines which types of incidental businesses are allowed. A private school, professional office or studio could qualify as incidental occupancies.
The cost that is assessed to a claim due to the cost of investigating and adjusting the insurance claim is called:
Loss adjustment expense is the cost that is assessed to a claim due to the cost of investigating and adjusting the insurance claim.
_________________________ occurs when an insurer steps into the shoes of the insured to recover money or damages paid out on behalf of the insured from another party.
Subrogation is the insurance principle referring to an insurer stepping into the shoes of the insured to recover money or damages paid out to or on behalf of the insured from another party.
Combined Ratio
Loss Ratio + Expense Ratio
Expense Ratio
Total Underwriting Expenses / Total Written Premiums
Loss Ratio
Incurred Loss Amount / Earned Premium Amount
NFIP coverage
Standard coverage provides up to $100,000 for the building contents.
A National Flood Insurance Program (NFIP) policyholder gets 2 flood insurance programs: emergency and regular. Emergency coverage is in effect before the NFIP processes the insurance application. Emergency coverage currently has a standard deductible of $1,000 and maximum coverage limits of $35,000 for buildings and $10,000 for the building contents (e.g. personal property). Once regular coverage is in effect, there is currently a standard deductible of $500 and coverage limits of $250,000 for buildings and $100,000 for the building contents.
Which duties can an agent perform that a solicitor is not allowed to perform?
Solicitors sell insurance policies, receive insurance premiums and represent the insurance company. They share several duties with agents and can work for agents, but they cannot issue or countersign policies. Countersigning refers to the insurance agent’s authentication of an insurance contract. An agent is required to review and sign new insurance policies.
When NFIP coverage is provided, it covers any loss directly caused by the covered event, such as the items of personal property within the damaged structure. The following property is excluded from coverage:
-Most self-propelled vehicles such as cars, including their parts
-Property and belongings outside of an insured building, such as trees, plants, wells, septic systems, gas/oil/liquid tanks, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
-Currency, precious metals and valuable papers such as stock certificates
Federally subsidized flood insurance is managed by the:
FIA
Hynes loses his house as the result of a tidal flood. Luckily, his recently submitted flood insurance application was approved and he has had coverage for the last 3 months. He was able to move his valuable personal property to a safe location before the flood struck. For how long will his property be insured at the stored location?
Personal property that has been moved to a safe location to protect it from flood damage is covered for up to 45 days at the new location under NFIP.
The National Flood Insurance Program (a/k/a NFIP) is a federally subsidized program that provides flood insurance. The NFIP is managed by the Federal Insurance Administration (a/k/a FIA). Flood insurance coverage applies to a walled or roofed building permanently affixed to an above ground location. The building and its contents (e.g., personal property) are covered.
Transit coverage
insures property while it is being transported over land from one location to another.
Cargo insurance
provides coverage for goods while the goods are transported over water
Robbery
Robbery is the theft of property accompanied by the use or threat of physical force.
Burglary
Burglary is the theft of property by forced entry into a premises with visible evidence of the forced entry.
Subrogation
insurance principle referring to an insurer stepping into the shoes of the insured to recover money or damages paid out to or on behalf of the insured from another party
Waiver of subrogation
Waiver of subrogation is the insurance principle referring to an insurer giving up that right. The person from whom the insurer seeks recovery usually caused the loss requiring the payout. It is also called “transfer of rights of recovery”
Solicitors are similar to _____________.
Solicitors have many of the same duties that agents have and they could work for agents. They can represent the insurance company, sell insurance and receive premiums. However, solicitors are not permitted to issue or countersign policies.
Employee dishonesty
Employee dishonesty coverage protects a business against an employee’s theft of money, property or securities.
Tree coverage is available if one of the following occurs:
-the downed tree causes damage to a covered structure
-the downed tree blocks a driveway entrance
-the tree is blocking a handicap accessible feature
Surplus lines insurance
Surplus lines insurance provides coverage for unique situations or situations with high-risk. For example, a celebrity or artist who wants to insure a certain body part (e.g., legs, hands) could purchase surplus lines insurance. Medical malpractice insurance is also an example of a surplus line of insurance. Surplus agents (a/k/a excess agents) sell surplus lines of insurance. Surplus lines agents are permitted to sell surplus lines even in states where surplus lines insurance is not authorized or the insurer is not licensed.
Time element insurance
property insurance for lost earnings or income caused by the inability to use the damaged property. That is the best answer, since the question involves a specific piece of property and all business operations were not affected.
Coverage E in a homeowner’s policy covers
policy covers the insured when the insured causes property damage to another person’s property or is liable for causing injury to another person
A loss payable provision
A loss payable provision authorizes insurance payments to someone or an entity that has an insurable interest in the insured property.
Twisting
Twisting occurs when an agent misrepresents facts to a client in order to persuade the client into canceling an active insurance policy and purchasing a new policy. Twisting is a technique that solely benefits the agent by generating a new commission.
