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1
Q

What is insurance?

A

It is a contract

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2
Q

Define Indemnity

A

Restore a loss, no better and no worse

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3
Q

What is insurable Interest?

A

Financial interest in the preservation of the property

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4
Q

Two types if risks

A

Pure- no chance of gain

Speculative- can gain or lose (gambling)

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5
Q

Define Loss

A

Reduction in value of asset

Types:
Property
Liability
Human

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6
Q

Define a peril

A

Cause of a loss

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7
Q

3 named peril form

A

Basic
Broad
Earthquake

(Specifically named perils are covered and nothing else)

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8
Q

2 Open peril form types

A

Special

All Risk

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9
Q

3 types of hazards

A

Physical - Structural
Moral - Lying/Cheating
Morale- Carelessness/Indifferent

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10
Q

Who is the first party to an insurance contract?

A

The Insured (person buying insurance)

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11
Q

Who is the second party to an insurance contract?

A

The insurerer

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12
Q

Agent vs. Broker

A

Insurance agent works for a company and paid commission

Broker is hired by a client to find insurance

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13
Q

What type of loss exposure would include land and property attached to it?

A

Liability loss exposure (the other guy insurance)

Land is not covered by property insurance but someone being injured on your land can be covered by Liability insurance

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14
Q

What type of insurance or loss covers injury to another person or another persons property?

A

Liability Loss and insurance

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15
Q

The possibility if financial loss from ownership of property is called…

A

Insurable interest

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16
Q

Bill and Bob share ownership of a company worth $100,000. Bill is insured for $100,000 and Bob has none. In a settlement how much would each collect?

A

Bill would get his share of the company worth $100,000. So he would get $50,000 and is therefore over insured with his current policy. Bob gets nothing since he didnt buy insurance

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17
Q

Any exposure related to an individual, human or family is called

A

Personal loss exposure

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18
Q

Any exposure of loss related to a key person in a bussiness is called…

A

Personnel loss exposure

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19
Q

Where do policy forms come from?

A

ISO and NAIC

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20
Q

Where do you file policy forms?

A

The Insurance Department

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21
Q

Parts of a Contract

A

Competent Parties
Legal Objective
Offer and Acceptance
Consideration

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22
Q

Parts of a policy

A

Declaration page (named insured, premium amount, what is covered)
Insuring agreement (what the insurer promises to do, provide coverage)
Conditions (what needs to happen before the insurance company will pay a claim)
Exclusions

Definitions
Endorsements

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23
Q

Split limit for liability auto coverage

A

25/50/25

One Person, people total and property of others (for the other guy)

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24
Q

Uninsured and underinsured motorists limit in Ohio

A

Max coverage is $7,500 and is subject to a $250 deductible for your car

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25
Two types of physical damage for auto
Collision - you hit something | Other than Collision - something hits you (including animals)
26
What is tort law?
Civil wrong that causes a loss Examples: Intentional and unintentional negligence or Worker’s compensation
27
Rating factors for Liability insurance for auto
Driving record Miles driven annually Number of years driving
28
Rating factors for auto property damage
Year Make Model
29
Define pro-rata or pro-rate Cancellation
Insurance company cancels policy Insurance company keeps earned premiums and returns unearned premiums
30
Short Rate Cancellation
Insured cancels Returns unearned premium but also charges a small cancellation fee for early cancellation
31
Flat rate or recission Cancellation
Refund all premiums, policy never existed
32
What does PAP stand for?
Personal Auto Policy ISO PAP and Unendorsed PAP are all the same thing
33
How are fraud charges calculated?
$150,000 or double the amount of fraud, whichever is higher (add all charges up and times by 2)
34
What perils are insured against during a period of removal on a homeowners policy?
Aka “additional coverage - property removed” All Perils are covered!
35
Standard Fire Policy (SFP)
Fire Lightning Removal
36
Dwelling basic policy (DP-1)
Fire Lightning Internal explosion
37
6 parts of a homeowners policy
``` Section 1: Dwelling Other structures Personal property Loss of use ``` Section 2: Personal Liability Medical payments to others
38
What type does HO-4 cover?
Renters
39
What does HO-6 cover?
Condo
40
What types of Homeowners policies cover regular home owners (not renters or condo)
HO-2 HO-3 HO-5
41
SFP/Dwelling policy parts
``` Dwelling Other structures Personal property Loss of use Rental income Additional living expenses ```
42
Co-insurance Equation
Insurance you have / Insurance you should have had X the total loss This gives you the claim amount and will need a deductible payment made by insured
43
Define Replacement Cost
How much something is worth with no deductions for depreciation Or value in new condition
44
Define Actual Cash Value (ACV)
Replacement cost with deductions for depreciation
45
Define market value
Value of a piece of property can be sold at before the loss occurred
46
Fair Claims Practice
``` Notice of loss - Immediately in writing - Acknowledge - Investigate - Claim forms Proof of loss provides within 60 days from insured Payment of claims ```
47
Loss settlement types
Liability has an arbitrator Property has an appraisal
48
Parts of a Commercial General Liability policy
Coverage A: Bodily Injury and Property Coverage B: Personal and Advertising Injury Coverage C: Medical Payments
49
What is typically not covered by a standard dwelling policy?
Floods, earthquakes and sewer backup
50
What precent of the dwelling policy covers other structures?
10% of the dwelling
51
What is a bailee?
Someone who temporary has possession of someone else’s property
52
Name all 9 Auto Symbols
1: Any auto 2: Owned only 3: Owned private passenger autos only 4: owned autos other than private passengers 5: Owned autos subject to no fault (garaged) 6: Owned autos subject to uninsured motorist law 7: specifically described autos 8: Hired autos only (rented/leased) 9: Nonowned autos only (employees)
53
A tort
A civil wrong that causes damage to another person or business
54
Parts of an auto policy
Part A: liability Part B: medical payments Part C: uninsured/underinsured motorists Part D: physical damage coverage
55
What is the Surety party?
They are fiscally responsible if the principal defaults on the bond
56
What is a bond?
A contract between 3 parties
57
Define obligee
The party to whom the principal makes a promise. And for whose protection the bond is written for
58
Who is the principal in a bond contract?
The person who makes the promise
59
Define assumption of risk for workers comp
Employer is not at faults because the employee knew the risk before employment
60
Define Contributory negligence
If the injured party is at fault they cannot collect from the party being sued
61
Define Fellow Servant Rule
If the injury was caused by another employee the employer is not at fault
62
8 sections of the worker’s compensation policy
``` A: What the insurance covers B: What the insurance company pays C: The right to defend claims D: Additional things paid E: When other insurances apply F: What the employer must pay G: The right of recovery H: Legal stuff ```

Property/Casualty (2 decks)

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