Vocab Flashcards
An insurer not organized under the laws of this state, but in one of the United States or jurisdictions within the United States, whether or not it is admitted to do business in the state or jurisdiction
Foreign Insurer
An insurer organized under the laws of any jurisdiction outside of the United States, whether or not it is admitted to do business in this state
Alien Insurer
Hazard
A specific condition that increases the probability, likelihood, or severity of a loss form a peril.
Peril
The cause of loss.
Physical Hazard
A physical condition that increases the probability of loss; use, condition, or occupancy of property. The hazard can be seen.
Moral Hazard
Dishonest tendencies that increase the probability of a loss; certain characteristics and behaviors of people.
Morale Hazard
Attitude that increases the probability of a loss. Carelessness
Starr Risk Management Sharing Transfer Avoidance Reduction Retention
The method of handling Risk
Which principle of insurance restores the insured to the same economic condition that existed before the loss?
A. Idemnity
B. Insurability
C. Adhesion
D. Underwriting
A. Indemnity
Direct
Physical loss
Indirect
Consequences of the direct loss
5 examples of Exposure
- Auto Accident
- Luggage lost on a trip
- Pet bitting a mailman
- Employee hurt on job
- House fire
Exposure
Possibility that a loss will occur
Pure Risk
Chance of loss only; insurance companies will insure.
Speculative Risk
Chance of loss or gain, not insurable
Law of large numbers
The larger the group, the more accurately future losses can be predicted
CANHAM
Elements of an insurable risk
CANHAM stands for..
CALCULATED
AFFORDABLE
NON- CATASTROPHIC
HOMOGENEOUS
ACCIDENTAL
MEASURABLE
Aleatory
Not equal value
Small premium for a large amount of vegetate
Adhesion
Policy written by the insurance company
Contract is like glue-cannot be changed
Insured has no input
If ambiguous (not clear), count will take the side of the insured
Dwelling Property Coverages
A : Dwelling
B : Other structures (10% of coverage A)
C : personal property on premises; off premise covered at 10%
D : fair rental value
E : additional living expense
Coverage E is included with DP-2 and DP-3. It can be added to DP-1 by endorsement.
Other dwelling coverages
(Automatically Included)
Debris removal
Property removed - 5 days all perils
Reasonable repairs
Renters improvements (10% of coverage C)
Fire department service charge - $500, no deductible
Worldwide personal property- 10% of coverage C
Other coverages : DP-2 and DP- 3
All basic other coverages
Trees, shrubs, and plants
Maximum of $500 each
Total -5% of coverage A
Collapse- caused by a covered peril
Glass
Ordinance or law 10% of coverage A
Removal - 30 days (5 days for DP-1)
DP -1
Only insures fire, lighting, and internal explosion automatically
DP-2: Broad
All of DP-1 available perils ( fire, lighting, internal explosion)
Plus Big affect
Burglar damage
Ice and snow weight
Glass breakage
Accidentally discharge or overflow of water
Falling objects
Freezing pipes
Electrical damage
Collapse
Tearing asunder
DP-2 Broad Exclusions
Weight of ice, snow, or falling objects on awnings, fences, patios, swimming pools, docks, and retaining walls.
Accidental discharge of water from continuous leaking
Flood
Burglary of property vacant> 60 consecutive days
