Unit 5 - Basics Of Casualty Insurance

Question 1

Property

Answer 1

Covers personal belongings and buildings

Example: if my house burns down, insurance pays me to rebuild

Question 2

Casualty

Answer 2

Pays the “other guy”

Example:
If the mailman gets bit by my dog, my insurance company will pay the mailman to pay for his medical claims due to my negligence

Question 3

Third-Party Losses

Answer 3

•The first party is the insured
•The second party is the insurance company legally representing or defending the insured
•The third party is the “other guy”

Question 4

Liability insurance covers

Answer 4

Unintentional torts

Question 5

Tort

Answer 5

Civil wrong that causes someone else to suffer loss

Question 6

Negligence

Answer 6

Failure to act or not act reasonably

Question 7

Elements of Negligence

Answer 7

•Owe a duty
•Breach the duty
•Be the proximate cause
•Damages

-Drunk driver is guilty of a crime but is not guilty of negligence unless he causes harm to another.

Question 8

Defenses Against a Claim of Negligence by another

Answer 8

•Contributory
•Comparative
•Assumption of Risk
•Intervening cause
•Statute of limitations
•Last clear chance

Question 9

Absolute/Strict liability

Answer 9

Liability without negligence

Question 10

Vicarious Liability

Answer 10

Liability for the actions of another

Question 11

Types of Damages

Answer 11

•Compensatory
•Punative

Question 12

Compensatory

Answer 12

•Special-Provable monetary losses
•General-nonmonetary losses

Question 13

Punitive

Answer 13

•Gross negligence

Question 14

Liability

Answer 14

•Bodily injury-injury to the body
(Medical bills, lost wages, pain and suffering, and death)
•Property damage-injury to property
(Cars, buildings, ext.)
•Personal injury-hurt feelings of a person or business

Question 15

Limits of Liability

Answer 15

•Split (bodily injury, Property damage)
•Combined single
•Per person
•Aggregate

Question 16

Restoration of limits/Non-Reduction of Limits

Answer 16

•Policy limit restored after loss
•Payment of loss reduces the aggregate limit
•Aggregate limit is restored upon renewal

Question 17

Duties After a Loss

Answer 17

•Notify company promptly
•Forward notices
•Assist the company
•Don’t assume liability

Question 18

Exclusions

Answer 18

•Damage to property of an insured
•Bodily injury to an insured
•Bodily injury to an employee
•Nuclear energy liability
•Intentional damage caused by an insured