Unit 3 Flashcards
Property insurance
Covers Personal belonging
Loss caused by covered peril
First party loss- insurer pays insured
Casualty Insurance
Casualty = Liability
Always pay the other guy
Third party loss
Policy Sections
DICEE
Declaration
Who what when where and how much
Insuring agreement
Promise to pay and perils covered
Conditions
Rules for the policy
Endorsement
Changes to original policy
Exclusions
Not covered
Additional/Supplementary Coverage
Payment for additional expenses not normally covered
May have separate limit of insurance
Insureds
Named insured
First named insured
Insureds
Additional insured
Policy period and Territory
Period - when policy begins and ends
Territory- where loss must occur
Cancellation
Occurs before policy end date
Co. Cancellation requires advanced notice
Full refund of unearned premium, pro rata
Non renewal
Occurs at expiration date
co. must provide advance notice
Partial refund of unearned premium, short rate
Other Insurance Provision
Multi policies insuring same loss
Primary/ Excess - primary policy pays first; excess pays what’s left
Extra share - ea. policy pays the same up to smallest policy limit
Pro Rata - ez. policy pays its share according to the total ins.
Named insured Duties after Loss
PPC - MSP
Prompt notice to insure Protect prop from further damage Complete proof of loss Make prop. available for inspection Submit to examination under oath Cooperate w/ Insurer
Assignment
policy cannot abandon prop that
Abandonment
insured cannot abandon prop that can be repaired and expect to be paid
Salvage
insurer has right to salvage
salvaged prop can lower claim cost for ins co
liberalization
extended coverage to insured
no additional premium charged
no action required by insured
Suborgation
insurer has right to sue an at fault party for damages paid by insured
common when at fault does not have ins
Binder
Temp ins
Usually given by agent
Can be cancelled by insurer
Not guaranteed to be issued
Auto ends once issued
Financial Ratios
Loss Ratio - Compares co ops over a yr
Expense ratio - Cost doing business
combined ration - breakeven
Rating a Risk
Judgement - No set rates; based on underwriter’s experiences
Manual ( class) - set rates for specific classes
Experience rating (Merit) - based on insured claim history. Increase or decrease premium
Loss Costs
pure claims data
no operating expenses included
no profits included
