Final Flashcards
(153 cards)
1
Q
Describe 3 things that are covered by the definition of an aircraft
A
Even when removed:
- Navigation/radio equipment
- Engine
- Tools/equipment carried
2
Q
Would a SPARE engine be covered under the definition of an aircraft?
A
NO!
3
Q
Loss of use coverage does NOT apply if:
A
The insured has available another a/c of similar type without charge
4
Q
Name 3 things medical payment coverage ensures
A
- Coverage of funeral expenses
- Payment is made regardless of legal liability
- Discouragement of liability suits
5
Q
Admitted liability requires:
A
A full release for all bodily injury after the payment is made
6
Q
True or False: Damaged landing gear due to a hijacking attempt would be covered by Hull Losses
A
True
7
Q
The Declarations Page includes:
A
- The 7 basic items
- Statements about the risk to be insured (from the insured)
8
Q
Coverage that relates to the physical damage of the a/c and benefits the owner only is:
A
Aircraft Hull Insurance
9
Q
The two most common a/c hull coverages purchased are:
A
- All risk-ground and flight
- All risk-not in motion
10
Q
Define Aircraft Hull Coverage
A
- Coverage that relates to the physical damage of the a/c and benefits the owner only is
- “Insurance covering the aircraft including all systems/equipment that are considered permanently attached”
11
Q
Define In-flight/In-Motion Hull Coverage
A
In-Flight: Time from actual takeoff run to completed landing roll
In-Motion: Time a/c is moving under it’s own power or the momentum generated therefrom, or while it is in flight
12
Q
Define Insured Value Hull Coverage
A
- The amount which is stated in the policy as the insured value
- Represents the purchase price of the a/c if new, or the current market value if used
13
Q
Define Deductible Hull Coverage
A
The amount of expense to be paid by the insured after a loss, and prior to/in conjunction with payment of any policy benefits
14
Q
Name 6 major EXCLUSIONS of Hull Coverage (what insurance WONT cover)
A
- Wear and tear
- Tires
- Embezzlement
- War confiscation
- Depreciation or loss of use
- Other
15
Q
Losses payable and breach of warranty would be considered endorsements of ____ coverage
A
HULL Coverage
16
Q
Loss of use would be considered an endorsement of ____ coverage
A
HULL Coverage
17
Q
Spare engine and detached equipment would be considered an endorsement of ____ coverage
A
HULL Coverage
18
Q
Automatic hull value increase would be considered an endorsement of ____ coverage
A
HULL Coverage
19
Q
War-risk coverage would be considered an endorsement of ____ coverage
A
HULL Coverage
20
Q
Unearned hull premium would be considered an endorsement of ____ coverage
A
HULL Coverage
21
Q
Name 6 examples of CONDITIONS applicable to Liability Coverages
A
- The Insured’s duties
- The Insured’s assistance and cooperation
- Financial responsibility laws
- Medical Reports
- Subrogation
- Action against the company
22
Q
A/c non-ownership would be considered an endorsement of ____ coverage
A
LIABILITY coverage
23
Q
Airport premises would be considered an endorsement of ____ coverage
A
LIABILITY coverage
24
Q
Non-owned physical damage would be considered an endorsement of ____ coverage
A
LIABILITY coverage
25
Property damage for non-owned hangars would be considered an endorsement of ____ coverage
LIABILITY coverage
26
Search and rescue expenses would be considered an endorsement of ____ coverage
LIABILITY coverage
27
Baggage would be considered an endorsement of ____ coverage
LIABILITY coverage
28
Host-liquor would be considered an endorsement of ____ coverage
LIABILITY coverage
29
What 3 main things does a/c liability insurance cover?
1. Bodily injury (including passengers)
2. Passengers bodily injury liability
3. Property damage liability
30
Name a few aspects of Airport Premises Liability
- Declarations
- Insuring Agreements
- Exclusions/Conditions
- Premium
- Assistance/Cooperation
31
What are 6 "Other" Airport Liability Coverages?
1. Medical payments
2. Contractual
3. Alterations/Construction
4. Hangar-keepers'
5. LOSS OF LICENSE
6. LOSS OF USE
32
What are the 3 major functions of Underwriting?
1. Selecting and pricing risks presenter to the insurer
2. Maximize profits
3. Obtain a profitable distribution of risks
33
Accepting or rejecting an applicant is the ______ of risks
PRE-selection
34
Getting rid of undesirable risks is the ______ of risks
POST-selection
35
What are the 4 principle areas of concern when evaluating an aviation risk?
Obtain basic info:
1. Type of a/c and equipment
2. Pilots
3. Geographic considerations
4. Purpose of use
36
In regards to aviation risks, pricing is based off of:
1. The open market
| 2. Annual quotes
37
What are the 5 classifications of AIRLINE insurance?
1. Major
2. Regional
3. Charter
4. All Cargo
5. Narrow-body only
38
Satellite launch risk covers:
Delays in launch or failure during launch
39
Third party liability covers:
Post-useful life (of satellites)
40
When several co-insurers are involved, it is usually known as:
Quota Share or Vertical Placement
41
The important factors in airline risk selection are:
1. Management philosophy/success
2. Profitability
3. Capital structure
4. Business plan
42
____ was designed to protect the owner/operator of an airport against losses arising out of use of the airport
Airport Premises Liability
43
____ are certain clauses in a policy that specify situations or special conditions in which insurance coverage would be invalidated
Exclusions!
44
An income protection plan that provides coverage for occupational disability to professional pilots in the event they lose their medical or authority to exercise privileges is what type of coverage?
Loss of License Coverage
45
What type of coverage provides compensation to an insured against loss resulting from the inability to utilize property in the furtherance of business?
Loss of Use Coverage
46
Coverage that protects from the use of a/c not owned by, or regularly provided to, the named insur-ed would be what type of insurance?
Non-Ownership Coverage
| Ex: When employees rent, charter or borrow non-owned a/c, or may fly their own a/c on company business
47
What type of insurance protects a manufacturer/distributor against claims arising from the use of a product?
Products Liability
48
What specific type of endorsement is of particular interest to lien holders?
Breach of warrenty
49
What is NOT a reason for a company to purchase a/c non-ownership liability coverage?
If the company may lease a non-owned a/c on an annual basis
50
Name 3 unique characteristics of aviation exposure:
1. Limiter number of exposure units
2. Few insurers
3. Catastrophe exposure
51
Deductibles generally do not apply to loses caused by:
1. Fires
2. Theft
3. Robbery/Vandalism
52
"In-Flight" commences:
With the actual takeoff run
53
A common hull endorsement found on policies covering older a/c is the:
Component Parts Schedule
54
Liability coverage (think liquor) protects the insured for:
Intentional injury to an intoxicated passenger interfering with the safe operation of the a/c
55
True or False: Most insurers will remove an assumed liability exclusion upon request of the insured
FALSE
56
What type of coverage is designed to reimburse the insured for extra expenses of obtaining another plane when his own business-used a/c is out of service due to damage covered by the policy?
Loss of Use
57
What is true regarding a/c hull and liability insurance?
Policy forms can vary within the same company
58
True or False: An a/c might be "in-flight" according to the a/c hull and liability policy even though it is in fact on the ground
TRUE
59
True or False: The hull coverage excludes any loss or damage to the a/c caused by war
True
60
True or False: Hull coverage would not apply to an engine destroyed by fire while it was removed from the a/c for an overhaul
FALSE
61
True or False: Some policies provide for a return of any unearned hull premium in the event of a partial loss
FALSE
62
True or False: Coverage for newly acquired a/c is usually provided under Hull Insurance
TRUE
63
True or False: The term "occurrence" is broader than the term "accident"
TRUE
64
True or False: Only expenses incurred for hospital and surgical procedures are payable under the Medical Coverage
FALSE
65
True or False: Non-ownership liability provides the owner of an a/c with protection, should they rent or lease it
FALSE
66
True or False: "Use of other aircraft" applies to the operation of any non-owned aircraft
True
67
True or False: Hull coverage is designed to protect owners, lessors, lessees, borrowers, and renters
False
68
True or False: All risk-not in flight is a popular coverage
False
69
True or False: Loss or damage arising out of a hijacking attempt would usually be covered, unless it was carried out by a governmental authority
True
70
True or False: War risk coverage only applies in the case of a declared war
False
71
True or False: Airport premises liability coverage can be included under the Aircraft Hull and Liability policy
True
72
True or False: Baggage liability is included under virtually all aviation policies, but the limits offered vary greatly among carriers
False
73
True or False: Insureds that are reimbursed for use of their a/c are covered so long as no profit is made
False
74
True or False: Buying a/c hull and liability insurance is very similar to buying automobile insurance
FALSE
75
True or False: Flying Clubs would be considered special uses under the "purpose of use" on the Declarations Page
False
76
True or False: Non-owned a/c physical damage coverage is basically in-flight hangerkeepers legal liability coverage
True
77
True or False: Each fractional owner usually carries their own Hull insurance
False
78
Name 3 things the Declarations Page includes
1. The Policy Period
2. Coverages and limits of liability
3. Description of premise
79
True or False: The Declarations page includes Insuring Agreements
False
80
"Completed operations" under products liability includes:
Aircraft repairs, "servicing and installation of parts and accessories"
81
What type of coverage is basically a form of bailee insurance?
Hangerkeepers
82
Hangerkeepers liability is written with what 2 limits:
A limit per a/c and a limit per occurrence
83
Consequential loss can be described as:
Indirect Loss
84
Many suppliers of a/c components purchase AIRCRAFT products liability coverage because:
Most other products liability insurance policies exclude all aviation exposures
85
The premium for various coverages under the airport premises liability policy is determined by what 3 things in particular?
1. Area of the premises
2. Number of admissions
3. Sales
86
True or False: The premium for various coverages under the airport premises liability policy is determined by the number of a/c operations
FALSE
87
The products liabiltiy coverage contains 3 limits of liability: a per person, a per accident, and a(an):
Aggregare Limit!
88
Personal injury liability covers claims arising out of:
Intentional Torts
89
Loss of use coverage applies while:
The insured's a/c is undergoing repairs following an accident
90
Loss of license insurance will:
Pay a preselected lump sum of money, less the amount paid out monthly, after a predetermined number of months
91
True or False: Architectural drawling contracts would be covered under assumed liability
False
92
What are the 3 limits of liability that apply?
1. A per Person limit
2. A per Accident limit
3. An aggregated Policy limit
93
True or False: A/c non-ownership liability can be purchased by a corporation because they may be held liable for physical damage to the non-owned a/c
False
94
True or False: Airport premises liability coverage is primarily designed for airport owners, not tenants
False
95
True or False: Many exclusions are included in the airport premises liability policy because there are other policies designed to cover such risks
TRUE
96
True or False: Liability arising out of the work of independent contractors is automatically covered under the airport premises liability contract
FALSE
97
True or False: Airport premises liability coverage does NOT extend to include the automobile parking facility
FALSE
98
True or False: Elevators and escalators are covered automatically under the basic airport liability policy
False
99
True or False: Medical payments coverage under the airport premises liability policy is designed to cover employees and independent contractors employed by the insured, as well as members of the public
False
100
True or False: Advertising injury liability protects an insured against misappropriation of advertising ideas or infringement upon another's copyright or title
True
101
True or False: There is generally no need for non-ownership liability protection if a company is covered as an insured under the owner's policy
False
102
True or False: Loss of use coverage is particularly attractive to commercial a/c operators
True
103
True or False: Loss of license insurance will pay the pilot a predetermined amount per month immediately following the loss of their medical
True
104
True or False: Any liability arising from the ownership/operation of automobiles/vehicles is excluded under airport premises liability
FALSE
105
True or False: Most airport liability policies do not provide automatic coverage for new premises and operations because underwriters must review the particular risk
False
106
An a/c was tied down by an FBO employee on the FBO's tie-down area, and the a/c was destroyed by a windstorm. What coverage is applicable?
Hangerkeeper's flight or ground
107
A gasoline truck, operated by a fueling company located at the airport, damaged a car in the parking lot. What coverage is applicable?
Airport premises PD
108
Someone slipped on some oil spilled on the apron area, which a mechanic failed to clean up after working on an a/c. What coverage is applicable?
Airport premises B1
109
A line employee lit a cigarette after fueling an a/c, and a fire ensued causing considerable damage to the a/c. What coverage is applicable?
Airport premises PD
110
A counter employee failed to inform an incoming pilot, via unicom, that the county maintenance crew was cutting the grass landing strip. The a/c was damaged when the pilot tried to avoid hitting the mower. What coverage is applicable?
Airport premises PD
111
A line employee pumped contaminated gasoline into an a/c causing it to crash after takeoff. What coverage is applicable?
Products BI or PD
112
The basic function of underwriting is to:
Avoid adverse selection
113
Products liability premiums are based on:
The gross receipts
114
True or False: Rate making in aviation insurance differs from price setting in other businesses since prices must be set before costs are known
True!
115
Diversification of risk applies to what 3 major things?
1. Make and model of a/c
2. Values of similar a/c
3. Use of a/c
116
Underwriters would probably require additional info. on being used by:
A Flying Club
117
True or False: Underwriters are particularly concerned in knowing the pilot's hours flown during the last 90 days
True
118
Limited spread of risks leads to:
Less credible statistics
119
What purpose would Flying Clubs fall under?
Business and Pleasure
120
The primary purpose of underwriting is to:
Obtain a profitable distribution of risks
121
True or False: Underwriters often impose pilot standards in the form of minimum hours beyond those required by federal regulations
TRUE
122
True or False: The pricing problem in insurance is simpler than that in most other businesses
False!
123
True or False: Underwriting involves the profitable distribution of risks
True!
124
True or False: "Select or be selected against" means choosing only the best risks and canceling all marginal accounts
False!
125
True or False: If an insured meets minimum FAA requirements for operating a particular a/c underwriters will generally NOT impose any restrictions
FALSE!
126
True or False: Generally underwriters require a copilot to be aboard all turboprop a/c
True!
127
True or False: Most underwriters agree that recency of experience/experience in the model are more important than total time
True!
128
True or False: Considerably less info. is needed when underwriting airports than a/c
FALSE
129
True or False: It is important from an underwriting standpoint to have many ratings and classifications
False!
130
What 4 principle areas are underwriters interested in when insuring a/c hull and liability risks?
1. Type of a/c
2. Pilot abilities
3. Geographical considerations
4. Purpose to be used
131
An FBO provides a/c and pilots to fly several executives on a business trip. What would the "purpose of use" be?
Full Commercial
132
A utility company uses a C150 for powerline patrol. What would the "purpose of use" be?
Special Use
133
A corporation rents its a/c to another company for business and pleasure usage. What would the "purpose of use" be?
Limited Commercial
134
A sales representative uses his own a/c to cover his territory. What would the "purpose of use" be?
Business and Pleasure
135
A corporate-owned a/c is flown by corporate-employed professional pilots on flights in which no charge is made. What would the "purpose of use" be?
Industrial Aid
136
True or False: Southwest Airlines is considered a major or legacy airline
False!
137
List 3 things considered to be major factors by underwriters in the airline risk selection process
1. Management strenght
2. Capital structure
3. Business plan
138
_____ is an arrangement where a number of co-insurers participate in an airline placement on a percentage basis
Quota Share
139
The most important satellites in use today are:
Geostatonary
140
The most popular launch vehicle for geostationary satellites used for commercial purposes is:
Ariane
141
Pre-launch and manufacturers' coverage indemnifies the insured for physical loss or damage to the satellite during:
Manufacture, testing, shipping and integration with the launch vehicle
142
Pre-launch and Manufacturers' coverage ceases:
At intentional ignition of the launch vehicle
143
_____ providers can purchase coverage for a replacement launch in the event the satellite is not placed in the proper orbit
LAUNCH providers
144
What is provided under In-Orbit third party liability coverage?
Coverage for damage that a satellite might cause to another satellite
145
True or False: Cargo carriers operate airline equipment but do not publish a schedule
False!
146
True or False: Financial security of the underwriter refers to the ability to service accounts and offer fair prices
False!
147
True or False: Space insurance is typically purchased by commercial entities and not by governmental agencies
TRUE
148
True or False: It is generally more advantageous for the launch provider to purchase coverage through the satellite owner
FALSE
149
True or False: All parties to a launch agree to cross-waiver of liability against all other parties
TRUE
150
True or False: Third party liability coverage is typically purchased by the satellite owner and includes the launch provider as an additional insured
FALSE
151
True or False: In-orbit third party liability coverage is designed to protect the launch provider for property damage to the satellite
FALSE
152
True or False: Each insurer may quote a different premium for their quota share (percentage) of the risk
False!!
153
True or False: Reinsurance has become a major factor in recent years in the space market
False!
