Property and Casualty Insurance Flashcards
What are the different property coverages?
Coverage A: Dwelling
Coverage B: Other Structures
Coverage C: Personal Property
Coverage D: Loss of Use
What is real property and what is it covered under?
Land and anything permanently attached including built in appliances are covered under Coverage A
What’s the difference between uninsured and underinsured motorist?
Uninsured:
Drivers without insurance.
Drivers with less insurance than the minimum required by state law.
Hit-and-run drivers.
Drivers with coverage provided by insolvent insurers.
Underinsured:
Insured for less than the amount of the insured’s Coverage C’s liability limits
What are types of loss exposures covered by ocean marine insurance policies?
Hull, cargo, and freight losses and liability loss
What are five types of property covered by inland marine insurance?
Property designated for export.
Imported property until it reaches its destination.
Domestic property in the process of shipment.
Property used to facilitate transportation, such as bridges, tunnels, pipelines, and electrical transmission towers.
Personal property that is easily moved and typically of significant value, such as jewelry, furs, cameras, and some types of electronic data processing property.
(Add’l: Bailees’ Customers’ Policies
Annual Transit Policies
Instrumentalities Of Transportation Policies
Floater Policies)
HO-3 policy coverage for personal property is typically at what percentage of the Coverage A amount?
50%
Jose’s personal automobile policy (PAP) is written with split limits of $50,000/$100,000/$5,000. Jose was driving on slick roads last winter and the car slid onto the sidewalk, striking, and injuring four persons on the sidewalk.
What is the total amount Jose’s insurance will pay for bodily injuries caused by this accident?
Under split limits of $50,000/$100,000/$5,000, the insurer pays a maximum of $50,000 to any one injured person. and a maximum of $100,000 for any one accident regardless of the number of injured people.
Beatrice has a Personal Automobile Policy (PAP) written with split limits of $70,000 / $120,000 / $50,000. What is her coverage for total damage to the automobile?
The maximum for bodily injury coverage for one person is $70,000, the maximum coverage for one accident for all bodily injuries is $120,000, and the $50,000 for total damage to the automobile.
Omid was driving on a snow-covered city street and lost control of his vehicle, sliding into a street intersection, striking four pedestrians and an oncoming vehicle. The accident caused $20,000 damage to the other person’s vehicle and $10,000 damage to Omid’s vehicle. Omid was found liable for the damage to the other person’s vehicle and the four pedestrians were each awarded $250,000 for their injuries. His automobile insurance has a $500 deductible for comprehensive, a $1,000 deductible for collision, and a split liability limit of $250,000 / $750,000 / $100,000. What total amount will Omid’s insurance company pay for the damages caused by the accident?
The damages to Omid’s vehicle will be subject to a $1,000 deductible and the insurance company will pay the balance, $9,000. Omid’s liability coverage has a split limit, $250,000 per person for bodily injury with a maximum payable of $750,000 for all bodily injuries in the accident and a limit of $100,000 for damage to another person’s property. The total award is $1,000,000 for bodily injuries (4 x $250,000) but the insurance will pay a total of $750,000. The insurance company will pay $20,000 for the damages to the other person’s vehicle.
Val carries a HO-05 homeowners policy for her home with a policy limit of $400,000 under coverage A. She also was able to purchase an endorsement providing replacement cost coverage on contents, valued at $100,000 for replacement. Her home was recently appraised at $500,000. A tornado and subsequent fire destroyed the home and all contents. The claims adjuster classified a total loss. What amount will her insurance pay for the dwelling loss?
The maximum amount payable is the policy face amount, $400,000.
Mario’s automobile insurance has a $500,000 limit for liability. He also maintains a personal liability umbrella policy with an underlying coverage requirement of $300,000 and a policy limit of $1,000,000. Mario causes an automobile accident that results in him being liable for bodily injury and property damage to others. What must be the amount of the damages to exhaust Mario’s personal liability coverage for the automobile accident?
$1,500,000
Mario’s automobile liability coverage of $500,000 must be exhausted before the liability umbrella coverage begins to pay. After the underlying limit is exhausted the umbrella policy will cover an additional $1,000,000.
Mario’s automobile insurance previously had a $100 collision deductible and a $500,000 limit for liability. He also maintains a personal liability umbrella policy with an underlying coverage requirement of $300,000 and a policy limit of $1,000,000. Recently, to lower his premiums, Mario increased the automobile policy collision deductible to $1,000 and decreased the liability coverage to $250,000. Mario causes an automobile accident that results in him being liable for bodily injury and property damage to others in the amount of $1,000,000. What amount of the damages will Mario be responsible for out of pocket?
In reducing the liability coverage to $250,000, Mario does not meet the underlying coverage requirement of $300,000 for the liability umbrella policy. Mario’s underlying policy will pay $250,000 and Mario will be responsible for the balance of $50,000 out-of-pocket, then, the umbrella policy will cover the remaining $700,000.
Val carries a HO-05 homeowners policy for her home with a policy limit of $400,000 under coverage A. Her home was recently appraised at $500,000. A tornado and subsequent fire destroyed the home and all contents. Under a standard HO-5 policy, what amount of coverage is provided for contents in Val’s policy?
A standard HO-5 policy typically provides coverage for contents at a limit of 50% of the Part A – Dwelling coverage limit.
