Flashcards in Final Test Study Guide Deck (277)
What are the part of an insurance contract? (4)
2. Insuring Agreement;
What info is in the declarations section of the policy/contract? (4)
1. Insured info
3. Period of Coverage
4. Policy Limits
What is in the Insuring Agreement section of the policy/contract?
defines the coverages contained w/in the policy
What is found in the Exclusions section of the policy/contract?
What is found in the Conditions section of the policy/contract?
the requirements that must be met before a payment will be made
What is a contract of adhesion?
means that one party, the insured, cannot negotiate the terms of the contract.
What is required to win a claim for negligence? (4)
1. defendant had a duty to act or not act
2. defendant breached that duty
3. defendant's breach of duty was the cause of the plaintiff's injury
4. there was actual injury to the plaintiff
What is Direct Loss and Indirect Loss?
Direct Loss: physical harm/damage to tangible property
Indirect Loss: economic loss that results from the direct loss
What time is required to cancel an auto binder?
What is the definition of Property Insurance (vs LX)?
any insurance where the payment by the insurance company is made to the insured or others with an interest similar to the insured
What is the definition of Liability Insurance (vs Prop)?
payment by the insurance company will be made to a
third-party injured or damaged by the insured.
What is a peril?
an event that may cause a loss
What is a hazard?
something that may increase the risk of loss by peril
What are the three types of hazard?
How does a straight deductible work?
a set amount that is subtracted from the loss, that the insd has agreed to be responsible for
How does a franchise deductible work?
If value of the loss is equal to, or more than, the deductible, the full loss will be paid (no deductible).
If the value of the loss does not meet the deductible, then there is no payment made.
What is Valued Policy Law?
If there is a covered total loss to building, structure, mobile home, or manufactured housing unit, the ins company must pay policy limits, and not ACV.
What is a Mortgagee Clause?
Clause that protects a lender as an insured, that makes a loan secured by real property
What is a Loss Payable Clause?
Clause that protects a lender as an insured, that makes a loan secured by personal property (called loss payee)
What is the Principal of Utmost Good Faith? (2)
1. all insurance contracts based on this
2. assumed that parties to an insurance policy have disclosed all relevant fact and intend to carry out their obligations
What is a waiver?
act of voluntarily giving up a known right
What types of waivers are applicable to insurance? (2)
1. Express: written waiver of giving up a right under the contract
2. Implied: giving up a right due to violation/negligence
What is the Principal of Indemnity?
An insured may recover loss to the point of being made whole, but cannot profit from a payment made for a loss
What is Proximate Cause?
all damages that result from an unbroken chain between a covered event and damage that grows out of the event are covered
What is negligence?
failure to exercise the same degree of care a reasonable person would use to protect others from an unreasonable risk of harm
What is the Burden of Proof if a Civil Case?
that the evidence was more likely than not, the greater weight of evidence
How does Co-Insurance Work?
The insd must carry a specific amount/% of coverage to recover 100% of a covered loss limit.
If this min % isn't carried, than the insd's settlement will be reduced by the short %.
How does a percentage deductible work?
requires a deduction of a percentage of the value of the property or a percentage of the policy limits
What type of releases are available to settle a claim? (3)
1. can take several forms - simple to complicated
2. an adjuster can only fill in the blanks on a printed release prepared by co's legal dept
3. "contract of release" generally used, extinguishes any cause of action arising from the occurrence, whether known or unknown