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GA P&C Insurance License > Property & Casualty > Flashcards

Property & Casualty Flashcards

1
Q

Agent

A

Producer acting as a legal representative of Insurance Co

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2
Q

Broker

A

representative of insured/client

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3
Q

Risk

A

chance of loss

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4
Q

speculative risk

A

chance of loss one accepts in hopes of a gain

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5
Q

pure risk

A

chance of loss w/o possibility of a gain

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6
Q

spreading the risk

A

sharing the risk among customers

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7
Q

risk avoidance

A

staying away from risky activities

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8
Q

risk reduction

A

taking measures to reduce risk

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9
Q

risk shifting

A

get someone else to agree to accept risk. i.e. hold harmless agreement

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10
Q

risk retention (self-insuring)

A

having enough funds to cover losses

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11
Q

Insurance

A
  1. transfers risk from insured to insurer
  2. contract where Insurer agrees to proctect Insured against injury, damage, or liability from a future event
  3. social device through which indicviduals by paying a premium fee transfer a defined & limited portion of their risk to an insurance co.
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12
Q

Indemnification

A

concept that an insurance policy is to make the Insured whole after suffering a loss

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13
Q

insurance covers

A

pure risk but not speculative risk

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14
Q

law of large numbers

A

mathematical concept that says its easier to predict losses based on historical data if we have a large number of insureds

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15
Q

insurable losses are:

A

predictable, accidental, measurable, but not catastrophic

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16
Q

stock companies

A

sell shares of stock to investors
non participating companies (policy holders don’t participate in profits. owners do)
owned by stockholders

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17
Q

mutual companies

A 
owned by policy holders
participating company (policy holders may receive dividends if there's a profit)
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18
Q

reciprocal company (cooperative)

A

group of policy holders who have an agreement of indemnification managed by attorney in fact.

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19
Q

fraternal benefits society

A

sell insurance to policyholders with common ethnic, religious, or charitable heritage

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20
Q

National Assoc of Insurance Commissioners

A

provides unity in insurance laws throughout the country

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21
Q

perils

A

cause of loss

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22
Q

underwriting

A

refers to selection & classification of risk

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23
Q

hazard

A

factor that increases the chance of a loss occurring

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24
Q

physical hazard

A

tangible condition that make occurrence of peril more likely

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25
Q

morale hazard

A

carelessness or sloppiness

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26
Q

moral hazard

A

insured’s intentional act or disregard that may cause a loss or make a loss more likely to occur

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27
Q

insurable interest

A

financial interest in covered property if a loss occurs

needs to exist at time of loss not when policy is issued

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28
Q

limit of liability

A

max a policy will pay for any one loss

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29
Q

deductible

A

portion of the loss that the insured must absorb before insurance company begins to pay; doesn’t uphold indemnity

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30
Q

other insurance clause

A

each policy will pay a portion of the loss
Property policys = pro-rata
Liability policies = share equally

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31
Q

Assignment

A

transfer of policy to new policy owner. must be agreed to in writing by owner (assignor), new owner (assignee) and insurance company

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32
Q

nonrenewal

A

termination of coverage at the end of existing policy period; no reason has to be provided

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33
Q

cancellation

A

termination during the policy period (10 days notice)

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34
Q

reasons for cancellation

A
  1. nonpayment of premium
  2. material misrepresentation or concealment
  3. substantial increase in risk
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35
Q

Insurer cancels policy refund is

A

pro-rata

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36
Q

insured cancels policy refund is

A

short-rate

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37
Q

basic & broad provide

A

named peril coverage

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38
Q

comprehensive coverage

A

does not provide named peril coverage: aka all risk/special/open perils/extended coverage

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39
Q

exclusions

A

peril or item not covered

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40
Q

inherent vice

A

natural deterioration

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41
Q

liberalization clause

A

automatically updates policy

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42
Q

coinsurance clause

A

encourage insureds to insure to full value; requires property to be covered to specific percentage

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43
Q

contract

A

agreement consisting of an offer and its acceptance made by competent parties to provide something (consideration) for each other

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44
Q

insured gives insurer 2 items of consideration

A
  1. money-premium 2. information-application
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45
Q

representation

A

statement made to the best of the applicants knowledge

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46
Q

warranties

A

statements made on an application form that the applicant guarantees to be true. insured’s promise to do something

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47
Q

concealment

A

intentionally hiding the truth or intentionally telling only a partial truth regarding a material fact. includes acts of omission

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48
Q

misrepresentation

A

intentional lie

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49
Q

contract of adhesion

A

insured has no say in contract/policy

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50
Q

credit report

A

don’t need insureds permission or notify insured

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51
Q

investigative report

A

compiled by investigator, must notify applicant

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52
Q

real property

A

buildings & other structures

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53
Q

Additional Coverages

A
  1. debris removal
  2. removal/preservation of property
  3. fire dept service charge
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54
Q

replacement cost

A

pays the insured the full cost (up to limits of the policy_ of buying new, similar property to replace damaged or destroyed property

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55
Q

actual cash value - ACV

A

depreciate value

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56
Q

valued policy

A

exact amount of the benefit is in the policy

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57
Q

Appraisal Provision

A
  1. each party selects appraiser
  2. appraisers choose a neutral 3rd party - umpire
  3. agree - then its done. if not umpire casts tie breaker
    Can only settle disputes over money - not covered perils
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58
Q

direct loss

A

damage to property itself

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59
Q

indirect/consequential loss

A

loss of income or loss of use

60
Q

tort

A

injury to another or damage to another’s property

61
Q

negligence

A

failure to do what a reasonable person would do under the same circumstances

62
Q

proximate cause

A

initial act directly and foreseeably caused the damage

63
Q

builders risk coverage

A

covers both personal & commercial property during renovation or construction

64
Q

Business Income Policy Co-insurance

A

50% of estimated annual net income

65
Q

contractor’s equip floater

A

tools more than 100’ away from business

66
Q

installment sales floater

A

goods sold or held for sale i.e. on display in art gallery

67
Q

installation floater

A

items away from store being installed

68
Q

bailees customer floater

A

customer’s prop. temporarily in insured’s possession

69
Q

exhibition floater

A

goods at a trade show

70
Q

physician’s & surgeons floater

A

medical equipment and furniture

71
Q

jewelers block floater

A

jewelers entire stock of jewels

72
Q

jewelry salespersons sample floater

A

traveling salesmans samples

73
Q

Electronic Data Processing Equipment

A

computer systems

74
Q

Personal Effects Floater

A

tourist luggage

75
Q

personal articles floater

A

jewelry/furs, fine art, antiques

76
Q

dwelling policies

A

residential structures w/ no more than 4 apts & 5 boarders

77
Q

HO-1

A

Basic building & basic personal property

78
Q

HO-2

A

Broad form on buildings & personal property

79
Q

HO-3

A

Special coverage on buildings & Broad coverage on personal property

80
Q

HO-4

A

renters insurance

81
Q

HO-5 (comprehensive)

A

special form on buildings & special on personal property

82
Q

HO-6

A

condominium Broad on structures & personal property

83
Q

HO-8

A

older home policy basic for buildings & personal property

84
Q

personal articles floaters

A

personal property insurance that exceeds existing limits

85
Q

mobile home must be this size to be covered

A

at least 400 sq feet

86
Q

Business Owners Policy (BOP)

A

covers property & liability for small businesses

87
Q

does the bop have a co-insurance clause

A

no

88
Q

Peak Season Inventory Variable

A

BOP automatically adds 25% to protect against seasonal variations

89
Q

Commercial General Liability -CGL

A

standard liability policy for most large companies

90
Q

Premises Liability

A

occurs at insureds place of business

slip and fall/customer gets injured

91
Q

operations liability

A

off-site occurrences of negligence

92
Q

completed operations liability

A

liability on job sits away from the business after the job is done

93
Q

products liability

A

injuries from a product - pays for the injury but not a recall or cost of repair for the product

94
Q

strict liability

A

business that sells defective product even though they are not negligent

95
Q

independent contractors liability

A

coverage for any damage caused by the Insured’s independent contractors

96
Q

contractual liability

A

contracts that require the Insured to hold harmless another party to the contract
5 types - LEASE

97
Q

fire legal liability

A

allows some coverage if insured is liable for damage to property under insureds care, custody, or control

98
Q

personal injury liability

A

psychological damage

libel/slander, defamation of character, false arrest, malicious prosecution, violation of civil rights/privacy

99
Q

advertising injury liability

A

protects a business from infringement on name, logo, trademark, slogan

100
Q

when does products liability begin & premises end?

A

when the product leaves the business premises

101
Q

vicarious liability

A

liability for the acts of others

102
Q

which section of the CGL pays regardless of fault

A

Med Pay

103
Q

In a CGL both med pay & supplementary do what to a limit of liability

A

add to

104
Q

wrongful acts

A

acts which cause harm but which may not necessarily involve negligence

105
Q

occurrence basis

A

policy in effect in the year of occurrence will pay the claim

106
Q

claims-made basis

A

policy in effect at the time the claim is filed will pay

107
Q

Which basis are E&O policies almost always written on

A

claims made

108
Q

Mini tail erp

A

previous acts are covered when claim is filed during 1st 60 days after policy ends

109
Q

midi tail erp

A

5 years to file a detailed claim if the approximate nature of the issue is reported within 60 days of the policy’s end

110
Q

maxi tail erp

A

extends the reporting period forever

111
Q

retroactive date

A

date before which today’s policy will refuse to pay for claims

112
Q

E&O policy will pay a claim if

A
  1. wrongful act occurred after the retroactive date

2. claim is filed before the end of ERP

113
Q

EPL covers

A

discrimination & sexual harassment but not workers comp claims

114
Q

does workers comp regard fault

A

no - it’s a no fault program

115
Q

can a worker waive worker’s comp coverage

A

no

116
Q

second injury fund

A

state will pay any additional claim expense if Insured hires a worker with a previous worker’s comp claim.
encourages hiring workers who were previously injured

117
Q

workers comp coverage

A

no limit - determined by state law

118
Q

employers liability

A

covers employer if a 3rd party sues

119
Q

other states coverages

A

covers employees working in another state

120
Q

temporary substitute

A

auto used when insured auto is out of normal use b/c of breakdown, repair, servicing, loss or destruction

121
Q

does split limits or single limits provide better coverage

A

single limits

122
Q

PAP med pay covers

A

the insured. Not the other guy

123
Q

uninsured motorist covers

A
  1. a collision with a person who has less insurance than the state’s min required liability coverage
  2. only covers bodily injury. not phys dam
  3. hit and run drivers
124
Q

underinsured motorist

A

have legally required minimum liability coverage but not enough to pay the damages they caused

125
Q

another name for employee theft coverage

A

fidelity bond

covers theft of money

126
Q

Inside the premises - theft of money and securities

A

covers all money theft except by employee

127
Q

robbery of a custodian covers

A

theft from any employee while having care & custody of property inside the premises; not a watchman or janitor

128
Q

mysterious disappearance

A

unexplained absence of covered property without evidence of a theft

129
Q

inside the premises robbery or burglary of other property does not cover

A

employee theft or anyone’s theft of money

130
Q

a surety bond is

A

a contract btwn the surety co, the principal and the obligee

131
Q

service fee

A

premium paid for a surety bond

132
Q

if the obligee causes the principals default then what happens

A

both the surety and principal are discharged from their obligations

133
Q

penal sum

A

maximum amount the surety is required to pay if the principal defaults

134
Q

indemnity agreement - surety bond

A

if the surety comp has to pay the obligee the principal has to reimburse the surety co

135
Q

what is the key underwriting factor for surety companies when bonding a person

A

moral character

136
Q

completion bond

A

required by a lender financing a major construction project to insure funds will be used for the construction

137
Q

big bond

A

guarantees bidder will accept the job bid if selected & will post a performance bond

138
Q

performance bond

A

guarantees contractor will perform job according to the specifications

139
Q

fiduciary bonds

A

guarantees a representative will act faithfully & dutifully

140
Q

executors bond

A

person dies w/ a will (testate) - executor posts bond to protect the estate

141
Q

administrators bond

A

person dies w/o a will (intestate) - court appoints an administrator. may post bond to protect the estate

142
Q

fidelity bond

A

guarantees a person will not steal from an employer

143
Q

blanket position bond

A

fidelity bond covering a specific category of employees

144
Q

Garage Keepers Coverage

A

insurance for business who is temporary keeper of cars belonging to others

145
Q

truckers coverage form

A

physical damage & liability for businesses that routinely put other people’s property in their vehicles

146
Q

motor carrier coverage form

A

business that haul people not property

GA P&C Insurance License (1 decks)

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