Midterm Review Flashcards
What is a hazard?
Any condition that increases the chance of loss or frequency or severity of a loss
What is insurance?
Protection against certain losses by transferring risks from individuals to a group
What is the formula for Actual Cash Value (ACV)
Replacement value - depreciation
What is an Open/All Policy?
Covers all perils except those excluded
What is named/specific policy?
Only covers perils listed in policy
Where would one find the term insured?
Definitions section of policy
Where would you find the “who” and “what” that are insured?
Decelerations section of policy
Where would you find the promise to pay?
The insuring agreement section of policy
Where would you find the limitations to coverage?
Exclusions section of policy
What is an insurable interest?
A financial interest or ownership at the time of loss
What are the four parts of a contract?
Consideration
Legal purpose
Agreement
Competent parties
In the insurance contract, what does agreement represent?
Offer is when the person submits the application
Acceptance is when the insurance company offers a policy
What coverages are only available as an endorsement to BAP?
PIP and Uninsured
Where would you find the coverage extension Transportation Expenses?
Comprehensive
What is he difference between Medical Payments and PIP?
Medical pays $500, does not cover lost income
PIP pays $2,500 80% of actual income lost or reimbursement of essential services
Both are per person and 3 year time limit to report
What is the difference between newly acquired replacement vehicle and newly acquired additional vehicle?
Newly acquired replacement vehicle - the most broadest coverage transfers for 30 days then drops to liability
New acquired additional vehicle, no coverage after 30 days
What is the only coverage that can be rejected with an option form?
PIP/Medical
Uninsured
What is a garage keepers policy?
Physical damage to property you don’t own but that you have care, custody or control of is covered under this type of policy.
What is the deductible for Uninsured Motorist?
$250
Define negligence
Failure to exercise the standard of care required by law to protect others from harm
What is subrogation?
Insurance company’s right to go after the truly negligent party after a claim is paid
Prevents someone from being paid by the insurance company and the negligent party.
What is the difference between accident and occurrence?
An accident is a single event, normally sudden and unexpected
An occurrence is a single event that can occur over a period of time
What is the controlled business law?
25% or more has to come from general public
75% can come from whoever you want
What are the CE requirements for a PCA?
30 CE hours every 2 years
What is a domestic insurer?
An insurer who is in the same state that they are incorporate and formed in
Who is a foreign insurer?
An insurer in a different state than the one they are incorporated in
Who is an alien insurer?
An insurer from a different country
What is the Texas Property & Casualty Guaranty Association?
Provides for:
25K in unpaid premiums
300K in unpaid claims
Covers workers compensation at 100%
Under a PAP, if I hit a tree or other object, what physical damage coverage would pay?
Collision
If I hit an animal, what physical damage coverage pays?
You can chose between comprehensive or collision
What physical damage coverage pays in the case of a hurricane?
Comprehensive
What is defamation?
Publishing false information in order to hurt someone
What is rebating?
Inducing someone to buy a policy by offering something of value
What is representation?
Statement
What is a hazard?
Something that increases the chance of a loss
What is risk?
Chance of loss
What is peril?
An event that causes a loss
A temporary emergency license is issued for his long?
3 months / 90 days
Licenses renew every
2 years
Misrepresentation is
Telling a lie
Who holds a company appointment?
Property casualty agent (PCA)
How soon must a claim to the Texas Property and Casualty Guaranty Association must be made?
30 days
Who does an agent represent?
Insurance company
Who does the broker represent?
The policyholder
When must a licensed agent report of change of address?
Immediately
What is twisting?
Giving a misleading comparison to the insured to induce them to buy
What type of insurance company is the policyholder considered an owner with the right to vote and share in profits?
Mutual company
What is indemnity?
The principle that an insured should be restored to approximately the same financial condition after a loss as before the loss
What is an indirect loss?
Loss and result of a direct loss
Example is the hotel costs after a house fire
What is the only Insurable risk?
Pure risk
Concealment
Failure to disclose a known truth
Appraisal
Provides a means to settle the amount of loss when the insured and insurance company can’t agree
What does a binder do?
Provides temporary protection for the insured between the time the application is made and the policy is issued or the binder expires
What is a deductible?
Insured must pay a certain amount for each loss incurred under the policy
Consequential loss
An additional loss that results from a direct loss
What are supplementary payments?
Payable in addition to policy limits
Covers defense costs
Work cost if required to be in court
Bail
