Insurance Policy and Company Selection

Question 1

Tort

Answer 1

A wrongful act other than a breach of contract for which a civil action may be brought. A crime

Question 2

Intentional Tort

Answer 2

deliberately performed act, assault, battery

Question 3

Unintentional Tort

Answer 3

negligence or carelessness

Question 4

Attractive nuisance

Answer 4

a situation which a high degree of care is imposed on the land of the occupier.
Pool that isn’t screened, land with a lake

Question 5

Negligence per se

Answer 5

a situation where standard of care of set by statute.
school zones, crosswalk

Question 6

Strict liabililty

Answer 6

generally manufacturers, distributors of products found to be defective

Question 7

Aboslute liability

Answer 7

extra hazardous condition.
wild animals, workers comp

Question 8

Vicarious liability

Answer 8

when one person is responsible for behavior of another person

Question 9

assumption of risk

Answer 9

if one party recognizes risk and voluntarily chooses to encounter it
skiing

Question 10

Contributory negligence

Answer 10

any negligence on the part of the injured party, although slight, defeats the claim
jaywalking, DOI

Question 11

Comparative negligence

Answer 11

any degree of negligence on part of the insured does not defeat the claim but adjusts damages paid out

Question 12

last clear chance

Answer 12

injured party will not receive recovery if prior to injury had last clear chance to prevent accident

Question 13

Disability Insurance - Amount

Answer 13

typically 50%-60% of earned income

Question 14

LTC Insurance - Amount

Answer 14

generally purchased as cost per day. costs vary, typically 200-400/ day

Question 15

Health Insurance

Answer 15

medical is most common employee benefit. Older plans imposed deductibles and coinsurance. most new plans are HMO and PPO

Question 16

Property Insurance

Answer 16

real or personal property
Insurance for high severity, low frequency.
Retention for low severity, high frequency

Question 17

Liability Insurance - Best answer

Answer 17

typically includes umbrella liability policy

Question 18

Lloyds of London

Answer 18

Specialty insurance to unusual or high risk

Question 19

Duration of coverage

Answer 19

Disability may only be needed until 65. Life usually until child ends college or lifetime

Question 20

Participating Policies

Answer 20

pays annual dividend to policyholder. charges a larger premium and if extra premium is not needed it is returned to policyholder tax free

Question 21

Underwriting

Answer 21

Underwriter must
- cover a large number of insured so law of large number works
- obtain homogeneity of insured so that there is a reasonable equity between better and poorer insureds

Question 22

Process of Underwriting

Answer 22

uses 5 sources of information
- application
- information from broker or agent
- investigations
- information bureaus
- physical exams

Question 23

Loss Adjustment

Answer 23

Adjuster investigates loss, determines insurers liability, and amount of benefit
- notice of loss - notice by insured to company
- investigation - adjuster determines if there was a loss and if it was covered by the policy
- proof of loss - insured files a signed proof of loss
- payment or denial

Question 24

Life insurance needs analysis

Answer 24

• capital retention: only interest is distributed and original capital left at end
  ( need of first yr / return ) + need of first yr
• capital utilization : no money at end of period, TVM

Question 25

Industry ratings

Answer 25

AM Best - A++, F
S&P - AAA, CCC
Moodys - Aaa, C
Weiss - A+, F