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Property and Casualty Basic Concepts Flashcards

1
Q

The right to sue due to pain and suffering is covered under what liability coverage?

A

Personal Injury

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2
Q

Pays above and beyond the policies liability limits, has NO specific limits

A

Supplemental Payments

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3
Q

Minimizes small nuisance claims

A

Deductible

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4
Q

First peril in an unbroken chain of events

A

Proximate Cause

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5
Q

Only covers losses when the proximate cause is specifically listed

A

Name peril policy

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6
Q

If the Insurance company and named insured disagree about if named perils are covered by the policy THIS is up to the policyholder to prove peril is covered

A

Burden Of Proof

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7
Q

Covers everything except exclusions

A

Special/Open/All Risk Peril Policies

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8
Q

Replacement cost less depreciation

A

ACV

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9
Q

If the policies liability limits are at 100/300/50, what is the maximum the company will pay out for injuries to the 3rd party during an occurrence?

A

300M

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10
Q

Will pay the full cost to replace the home even if it exceeds the policy limits

A

Guaranteed Replacement Cost

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11
Q

The Price AFTER negotiation

A

Market Value

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12
Q

The amount the insurance company agrees to pay for what your property is worth and agrees to pay the full amount during a loss

A

Agreed Value

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13
Q

Insures property at more than one location, more than one type of property or both

A

Blanket Limit

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14
Q

Civil situations that govern the wrongs between individuals

A

Tort Law

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15
Q

Failure to act or not act as a reasonable and prudent person would in a similar situation

A

Negligence

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16
Q

Any loss of bodily function for 90 days or more would be considered

A

Tort Limitation/Verbal Threshold

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17
Q

Negligence is never considered _______

A

Intentional

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18
Q

Lawsuits must be filed within a specific time from the occurrence otherwise it’s violating the

A

Statue Of Limitations

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19
Q

Liability regardless of negligence for high risk circumstances

A

Absolute/Strict Liability

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20
Q

Situations where one party is responsible for the action/liability of others

A

Vicarious Liability

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21
Q

The most the insurer is obligated to pay during a specific period of time and will not be returned until next renewal

A

Aggregate Limit

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22
Q

Who has the authority to either settle or defend the liability claim?

A

The Insurer

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23
Q

Damage that indemnifies the injured party and pays for the loss

A

Compensatory

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24
Q

Additional damages awarded on top of compensatory damages due to gross negligence or recklessness

A

Punitive

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25
The duty to defend ends once _________ have been reached
Settlement or Judgement
26
An insurance policy or contract that is considered one-sided, only the insurance company is legally obligated
Unilateral Contracts
27
A contract offered for acceptance or rejection without negotiation
Contracts Of Adhesion
28
Both parties follow the rules and perform the duties listed in the contract
Conditional Contract
29
Unequal transfer of value between both parties, and requires an expense, even if its small
Aleatory Contracts
30
Mutual reliance on truthfulness, both parties must be able to rely on honesty and cooperation of the other party
The Doctrine Of Utmost Good Faith
31
A policy should cover what a reasonable policyholder would expect. Ex.) An earthquake policy will cover damage by an earthquake
Doctrine Of Reasonable Expectations
32
Initiated through the application being submitted
Offer
33
The first payment is received
Acceptance
34
Promises are made, may not be equal and the exchange may not be equal. Ex.) Promise of the PH to pay premium, and promise of the insurance company to pay claims
Consideration
35
The 4 elements that prove negligence:
Duty to Protect Breach of Duty Damages Proximate Cause
36
Both parties must have the legal capacity to enter into contract, considered the 'Meeting Of The Minds'
Competent Parties
37
Must adhere to the laws of the land, cannot be illegal
Legal Purpose
38
A loss must be considered
Measurable or Calcuable
39
The formula for Actual Cash Value
Replacement Cost less Depreciation
40
Large number of homogenous units, the more examples to develop a statistic, the more accurate the statistic
Law of Large Numbers
41
Statement made by an applicant they believe is true to the best of their knowledge?
Representation
42
A statement made by an applicate that is definite and will remain true until the end of the contract Contract can be voided if untrue
Warranty
43
A written or verbal lie
Misrepresentation
44
A lie that impacts the rate or causes the policy to be rejected
Material Misrepresentation
45
Withholding information, or hiding information that should have been provided to the insurer
Concealment
46
An intentional misrepresentation that causes some type of harm
Fraud
47
Termination of contract from the beginning as if it never existed
Recission
48
The intentional and voluntary relinquishment of a known right caused by actions taken or not taken - Failure of an insurer to enforce a prevision
Waiver
49
The insurer failed to enforce a prevision and will NOT be enforced later
Estoppel
50
The propensity for those that are high risk to purchase insurance, while those with a lesser risk are less apt to purchase the coverage
Adverse Selection
51
What is the limit for defense through liability?
There isn't a limit, supplemental payments will pay above and beyond the limits
52
The insurance Company cancels the policy when the policy period ends
Pro-Rata
53
The policyholder canceling the policy mid-term and may be charged a cancellation fee
Short Rate
54
The termination of coverage during the policy period
Cancellation Clause
55
The insurance company terminating coverage at the end of the policy period
Non-Renewal Clause
56
Someone that has care, custody and control of YOUR property
Bailee
57
The Bailee cannot benefit from the insured's insurance policy and is liable for any damages that occur while they have custody
No Benefit to Bailee Clause
58
Some exclusions can be purchased and added to the policy with an endorsement
Buyback
59
Any changes to an existing policy either at the beginning or during their term
Endorsement
60
A loss that would damage the solvency of the insurance company
Catastrophic Loss
61
Intentional losses, general wear and tear
Predictable Loss
62
3 common exclusion categories are:
Predictable Catastrophic Covered Elsewhere or by another policy
63
``` The amount that an entity would have to pay to replace an asset at the present time according to its current worth A.) Actual Cash Value B.) The Replacement Cost Principle C.) Market Value D.) Functional Replacement Cost ```
B.) The Replacement Cost Principle
64
The insurer assumes the right to sue the at-fault 3rd party after they have reimbursed the insured, prevents the insured from collecting twice
Subrogation Clause
65
The Insured may not transfer policy ownership without the insurer's written consent
Assignment Clause
66
Give prompt notice to insurer, notify police if there is a theft, cooperate with the insurance company, protect property from further damage, and prepare inventory of damaged property are all steps of:
Duties After A Loss Clause
67
The duties, obligations, rules, clauses, and responsibilities of both the insurer and the named insured
Conditions
68
What is the makeup of a policy structure:
``` Declaration Insuring Agreement Conditions Exclusions Definitions ```
69
The heart of the policy, the companies promise to pay and will define and describe all perils covered
Insuring Agreement
70
Personalizes the policy, listing who is covered, property, effective dates Etc.
Declaration
71
Anything that is written in additionally for perils will be listed in the:
Exclusions
72
Glossary, clarifies and defines words used in the contract
Definitions
73
The transfer of risk is
Insurance
74
A hazard caused by something you can see, and is always tangible. A material structure or feature that may increase injury
Physical Hazard
75
Caused by the dishonesty of the insured
Moral Hazard
76
Caused by the carelessness or indifference of the insured | Ex.) Failing to fix or update your home
Morale Hazard
77
A condition that increases the chance of loss
Hazard
78
A tangible loss, caused by peril
Direct Loss
79
An economic loss, suffering further financial consequences as a result
Indirect Loss
80
The state of being vulnerable, susceptible, or subject to a loss. The potential for an accident or a loss to occur to something you own
Exposure
81
The reason the loss has occurred
Peril
82
Methods Of Handling Risk
``` Sharing Transferring Avoiding Retaining Reducing ```
83
Choosing a $500 Deductible would be an example of what method:
Retaining the risk
84
A sudden, unexpected, and unforeseen event resulting in loss or damage
Accident
85
Continuous and repeated exposure to injurious conditions
Occurrence
86
The chance, uncertainty, or possibility of a financial loss
Risk
87
a chance of loss and a chance of gain
Speculative Risk
88
A chance of loss without gain
Pure Risk
89
Having a financial stake in the property
Insurable Interest
90
``` Which would not be covered through supplemental payment? A.) Loss of earnings to testify in court B.) The cost of an appeal C.) The insured's Medical Bills D.) The 3rd party's pain and suffering ```
C.) The insured's medical bills
91
To put back to a pre-loss financial position
Indemnification
92
Anyone listed on the policy would be considered:
Named Insured
93
Premium paid in full before the company has the opportunity to provide coverage
Unearned Premium
94
Two party contract, protects your property, and indemnifies you and yours for a loss
Property Policy
95
3rd party contract, protects you from lawsuit due to injuries to others, indemnifies others you injure (3rd party and their property)
Casualty/Liability Policy
96
The injured party knew the risk involved but took the chance
Assumption Of Risk
97
An external factor contributed or caused the damages
Intervening Cause
98
Comparing blame, assigning partial blame to the victim in court
Comparative Fault
99
Two types of compensatory damages
Special & General
100
Consumer privacy regulations required to protect their customer's privacy. The insurer must notify, explain and give the opportunity to opt-out
Gramm-Leach Bliley Act
101
What is the consideration of the policyholder?
Truthful Statements and paying the premium
102
Selecting, classifying, pricing and insuring a risk
Underwriting
103
Consequences of a material misrepresentation will result in what?
Voided

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