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PFS Personal Lines > Property and Casualty Insurance Terms and Related Concepts > Flashcards

Property and Casualty Insurance Terms and Related Concepts Flashcards

1
Q

What type of policy insures all property at multiple locations for a single amount?

A

Blanket policy

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2
Q

WAGERING on a SPORTING EVENT is known as what TYPE OF RISK?

A

Speculative

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3
Q

If an INSURED PERIL was the PROXIMATE CAUSE OF LOSS, what TYPE OF LOSS is it?

A

Direct

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4
Q

What PROVISION states that if a policy allows for GREATER BENEFITS than the FINANCIAL LOSS INCURRED, the insured may be compensated ONLY FOR THE AMOUNT LOST?

A

Indemnity

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5
Q

What SUBLIMIT in a LIABILITY POLICY puts a CEILING ON THE PAYMENT for all claims that arise from a SINGLE ACCIDENT?

A

Per occurrence

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6
Q

A policy that covers ALL CAUSES OF LOSS except for those SPECIFICALLY EXCLUDED is known as what type of policy?

A

Open peril (or special) form

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7
Q

A tornado that DESTROYS A PROPERTY would be an example of what?

A

Peril

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8
Q

Uncertainty of loss

A

RISK

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9
Q

What PROVISION found in property policies PREVENTS AN INSURED from COLLECTING TWICE for the SAME LOSS: once from the INSURER and again from a THIRD PARTY?

A

Subrogation

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10
Q

What law PROTECTS CONSUMERS from the CIRCULATION OF INACCURATE OR OBSOLETE INFORMATION?

A

The Fair Credit Reporting Act

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11
Q

What term defines an EXACT, DIRECT, and UNINTERRUPTED CAUSE OF LOSS?

A

Proximate cause

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12
Q

In property insurance, what is ACTUAL CASH VALUE?

A

REPLACEMENT COST at the TIME OF LOSS, minus DEPRECIATION

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13
Q

What does INDEMNIFY mean in insurance?

A

To RESTORE AN INSURED to the SAME FINANCIAL STATUS as BEFORE A LOSS

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14
Q

What do INDIVIDUALS use to TRANSFER THEIR RISK OF LOSS to a LARGER GROUP?

A

Insurance

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15
Q

INSURANCE is a CONTRACT that PROTECTS THE INSURED from WHAT?

A

Loss

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16
Q

What are the TWO TYPES of COMPENSATORY DAMAGES?

A

SPECIAL and GENERAL

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17
Q

How are DIRECT AND INDIRECT LOSSES related?

A

DIRECT LOSSES can CAUSE indirect losses

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18
Q

CONDITIONS that INCREASE THE CHANCE OF A LOSS are known as what?

A

Hazards

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19
Q

Both ROBBERY AND BURGLARY can be considered what?

A

Theft

20
Q

What are the THREE TYPES OF HAZARDS?

A

Physical
Moral
Morale

21
Q

An INSURED’S LEGAL RIGHT TO SEEK DAMAGES from THIRD PARTIES after REIMBURSING INSUREDS for a loss

A

SUBROGATION

22
Q

What TERM describes a loss CAUSED BY CONTINUOUS EXPOSURE TO A CONDITION?

A

Occurrence

23
Q

A person who DOES NOT LOCK THE DOORS to his or her house shows an INDIFFERENT ATTITUDE. What TYPE OF HAZARD does this represent?

A

Morale

24
Q

Under ABSOLUTE LIABILITY, does an INJURED PARTY need to PROVE NEGLIGENCE?

A

No. ABSOLUTE LIABILITY exists when a CONDITION OR CONDUCT is INHERENTLY DANGEROUS, so PROOF OF NEGLIGENCE is NOT REQUIRED

25
Q

In PROPERTY INSURANCE, what is the PURPOSE OF COINSURANCE CLAUSE?

A

To ENCOURAGE INSUREDS to insure property CLOSE TO ITS VALUE

26
Q

In PROPERTY INSURANCE, WHEN must INSURABLE INTEREST EXIST?

A

At the TIME OF LOSS

27
Q

The formula for Loss Payment

A

( Insurance Carried / Insurance Required ) x Loss Amount =

28
Q

( Insurance Carried / Insurance Required ) x Loss Amount =

A

The formula for Loss Payment

29
Q

What TYPE OF LIMITS OF LIABILITY has the LIMITS SEPARATELY STATED for DIFFERENT COVERAGES?

A

Split limits

30
Q

FAILURE TO ACT as a REASONABLE, PRUDENT PERSON under GIVEN CIRCUMSTANCES

A

NEGLIGENCE

31
Q

A SITUATION in which a person can experience ONLY A LOSS and NO GAIN presents what TYPE OF RISK?

A

Pure risk

32
Q

The REDUCTION, DECREASE, OR DISAPPEARANCE OF VALUE of the PERSON OR PROPERTY in a policy is KNOWN AS WHAT?

A

Loss

33
Q

What is the TERM for the CAUSES OF LOSS INSURED AGAINST in an INSURANCE POLICY?

A

Peril

34
Q

An INSURED’S BUSINESS is DAMAGED BY A FIRE, and TEMPORARILY SHUT DOWN for REPAIRS. As a result, the insured suffers LOSS OF INCOME. What TYPE OF LOSS is the LOSS OF INCOME?

A

INDIRECT or CONSEQUENTIAL

35
Q

If a MANUFACTURED PRODUCT is UNSAFE, what TYPE OF LIABILITY APPLIES to the MANUFACTURER?

A

Strict liability

36
Q

What determines an INSURER’S RESPONSIBILITY FOR PAYMENT, as STATED in an INSURANCE POLICY?

A

Limits of liability

37
Q

A FORCED ENTRY into ANOTHER’S PREMISES with FELONIOUS INTENT

A

What is BURGLARY?

38
Q

An insurer discovers that an APPLICANT FOR A POLICY has submitted a FRAUDULENT INSURANCE CLAIM in the PAST. What TYPE OF HAZARD does this represent?

A

Moral

39
Q

What is the difference between vacancy and unoccupancy?

A

VACANCY refers to an INSURED STRUCTURE in which NO PEOPLE have been LIVING OR WORKING and NO PROPERTY HAS BEEN STORED for a SPECIFIED PERIOD OF TIME.

UNOCCUPANCY refers to an INSURED STRUCTURE in which NO PEOPLE have been LIVING OR WORKING WITHIN A REQUIRED PERIOD OF TIME, but some PROPERTY IS STORED.

40
Q

refers to an INSURED STRUCTURE in which NO PEOPLE have been LIVING OR WORKING and NO PROPERTY HAS BEEN STORED for a SPECIFIED PERIOD OF TIME.

A

VACANCY

41
Q

refers to an INSURED STRUCTURE in which NO PEOPLE have been LIVING OR WORKING WITHIN A REQUIRED PERIOD OF TIME, but some PROPERTY IS STORED.

A

UNOCCUPANCY

42
Q

What is a DEDUCTIBLE in and INSURANCE POLICY?

A

A SPECIFIED DOLLAR AMOUNT that the INSURED MUST PAY before the INSURER WILL PAY THE POLICY BENEFITS

43
Q

A SPECIFIED DOLLAR AMOUNT that the INSURED MUST PAY before the INSURER WILL PAY THE POLICY BENEFITS

A

DEDUCTIBLE

44
Q

(Current replacement cost) - (depreciation)

A

How is the ACTUAL CASH VALUE of a property CALCULATED?

45
Q

How is the ACTUAL CASH VALUE of a property CALCULATED?

A

(Current replacement cost) - (depreciation)

PFS Personal Lines (10 decks)

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