Insurance Flashcards

Question

BOP General Aggregate and Products completed operations are what

Answer 1

2x the occurrence limit

Answer 2

Commercial - $1k Home - $500 NEVER A DEDUCTIBLE

Answer 3

ALWAYS PRIMARY

Answer 4

Provide proof of loss and respond in certain timeframe

Answer 5

Related by blood, marriage or adoption including foster children

Answer 6

Both parties want it to work

Answer 7

It should work as expected

Answer 8

No cars, bars, banks or manufactures

Answer 9

NO DEFENSE COST LIMIT

Answer 10

You are on someone else's property during work and make a mistake

Answer 11

3 days and investigates customer reports

Answer 12

No coinsurance requirement 80% = Replacement cost Less than 80% = Actual cash value

Answer 13

Seller is responsible for property being transported until it has been delivered

Answer 14

Buyer interests begin at the start of the shipment and they will be responsible for loss or damage to cargo

Answer 15

Open Perils

Answer 16

Again open perils for 30 days

Answer 17

Open Perils

Answer 18

Accept PAIP Assignments from another issuer

Answer 19

Assist insures in making their own rule

Answer 20

Method of evaluating losses, valuation and treats valuation of unsual property as stock that has been sold Valuation of loss under building and property form

Answer 21

No Liability in included

Answer 22

Max limit is equal to the limit of the policy with higher limits of liability

Answer 23

Coverage for employees who are unable to purchase coverage in the volunteer market

Answer 24

Applies to products and their manufacturing Held liable if product caused injury

Answer 25

Watercraft, their trailers, furnishing, equipment, engines motes are subject to 1.5k limits

Answer 26

The most a policy will pay for a loss arising out of any one accident

Answer 27

Covers - damage to others not done by them Not Cover - Rented, Employee use, Insured, USed for racing

Answer 28

False Arrest Malicious prosecution Copy right infringement

Answer 29

Bailor = Owner of item Bailee = Servicer

Answer 30

Does not auto apply to BAP - Added by endorsement

Answer 31

Provides change which favor the policy owner become effective immediately. Changes that affect the policy owner negatively don't become effective until the policy is renewed.

Answer 32

Subrogate = To go in place of another States the insured must transfer to the insurance company its right of recovery against any party causing a loss after it accepts payment from the insurer for a loss. Allows insurer to recover from the party that caused a loss any amount paid. Prevents insured from collecting twice on the same loss Helps the insurer control expenses and premiums Holds the responsible third party accountable for the loss

Answer 33

Commercial Lines = First Named Insured Personal Lines = Named Insured

Answer 34

May be written on all property of a single type, All property at one location Multiple types of property at multiple locations

Answer 35

Multiple companies should be sued to insure one property. The peril power should match.

Answer 36

Definitions

Answer 37

Insurer and the insured specify specific values of items before policy is issued Impossible to replace (arts antiques)

Answer 38

Insurer and the insured specify specific values of items before policy is issued Impossible to replace (arts antiques)

Answer 39

Provides payment of the full poliyc amount on the declarations page in the events of a total loss without ACV or depreciation

Answer 40

Noneconomic damages, humiliation

Answer 41

Written contract

Answer 42

Contract says the insurer pays only after a loss.

Answer 43

Resolve any ambiguity in policy wording in favor of the insured b/c the insurer has legal advice and writes the policy language, any ambiguity which means uncertainty in the contract will benefit the insured

Answer 44

One element of a legal contract Payment of premium by the insured in return for the promise to pay covered claims Both parties to the contract must be present for contract to be valid.

Answer 45

Unequal exchange of value

Answer 46

Insurance company wrote it, they must stick to it

Answer 47

One Promiser = Unilateral One Auther = Adhesion

Answer 48

When the private market does not ordinarily furnish the coverage, the residual market then steps in to provide that unavailable coverage. Example - Flood insurance

Answer 49

Guam, Puerto Rico, US Virgin Island and the Norhtern Mariana Islands.

Answer 50

When you need insurance that is unavailable in your state, you may go Through SURPLUS LINES PRODUCRS to purchase insurance from a non-admitted company.

Answer 51

When you need insurance that is unavailable in your state, you may go Through SURPLUS LINES PRODUCRS to purchase insurance from a non-admitted company.

Answer 52

Exposure = Risk

Answer 53

72 hours Commerical lines earthquake endorsement = 168 hours

Answer 54

Volcanic eruption

Answer 55

Use a % deductible instead of the flat dollar deductible

Answer 56

Liability = 100k Med pay = 1k

Answer 57

To losses committed intentionally or unintentionally by children who have not yet reached 13 years old

Answer 58

per occurence

Answer 59

Resident Employees / Per person basis

Answer 60

Detached garage = 20,000 Auto = 0 Personal Prop = 100k Additional exp = 60k

Answer 61

Not subject to a special dollar limit

Answer 62

Chosen by policy owner

Answer 63

Fall tress = 500 and 1,000 per occurrence

Answer 64

H/O = 500 Comm = 1000

Answer 65

Rental Reimbursement of $20 a day up to $600

Answer 66

Collision is named peril (upset and collision) Other Than Collision is open peril

Answer 67

Collision Coverage applies to the impact of a covered auto with an object or another vehicile or upset of a covered auto.

Answer 68

Missiles Falling object Fire Theft or Larceny Earthquake Windstorm Hail Water Flood Malicious mischief or vandalism Riot Animal Glass damage

Answer 69

Covers Commercial Auto ONLY

Answer 70

Dealership

Answer 71

Supplementary payments - first aid, bonds, reasonable travel expenses

Answer 72

Drowning of a covered livestock Electrouction of covered livestock Accidents involving loading and unloading

Answer 73

Voluntary parting with property

Answer 74

Provides open peril coverage for fine arts, cameras, musical instruments and there related equipment when used for business or commercial use. Theft is covered

Answer 75

80% of coinsurance value of building

Answer 76

Purchase a replacement cost endorsement

Answer 77

Commerical - 168 Personal - 72

Answer 78

Replacement cost

Answer 79

Immediately

Answer 80

At the time the insured becomes legally responsible for the property if that date occurs after the policy's effective date

Answer 81

Designed to replace income lost when a business must close temporarily following a covered loss

Answer 82

Shows the perils the property is insured against

Answer 83

If vacant for 60 days and coverage is continued, the perils of SPRINKLER LEAKAGE, WATER DAMAGE, VANDALISM, GLASS AND THEFT ARE NOT COVERED

Answer 84

Covers Plumbing

Answer 85

Who What When Where How much

Answer 86

(Did / Should) * (loss-deductible)

Answer 87

Eliminates redundancy by streamlining the various policy form into the package policy

Answer 88

Interline Endorsement

Answer 89

Provides coverage for a business that leases its premises and then causes negligent fire damage to those rented premises

Answer 90

Sets a higher bar than negligence. Negligence - it must be established that the defendant had a duty to the Plaintiff Strict Liability that is not necessary. The legal theory simply says that if you make, sell, distribute a product that hurts people, you are responsible

Answer 91

Medical General Aggregate Personal and Advertising injury

Answer 92

BOP insurers small and medium size businesses with one location for property, liability and other coverages as a singe policy similar to a homeowners policy Small and low risk

Answer 93

Amusements.. bowling alley, theatres, amusement parks will not cover cars,-bars, entertainment, manufacturers, banks

Answer 94

Open or named peril Purchase the property coverages of a BOP, casualty, coverages of a BOP, or both Workers comp can be added by an endorsement DOES NOT HAVE CO INSURANCE REQUIREMENTS

Answer 95

BOP feature is the REPLACEMENT COST LOSS SETTLEMENT on building and building personal property

Answer 96

Provides business income and/or extra expense coverage for 12 full months following the loss

Answer 97

two times the occurrence limit

Answer 98

Flood coverage begins 30 days after your application is received

Answer 99

Loss from collision damage

Answer 100

Business pursuits

Answer 101

Cover incidents over and above the coverage of underly`ing policies. Personal injury is excluded from homeowners policies therefore an umbrella is necessary to provide coverage for the insured

Answer 102

Both the: 1) Commercial Umbrella 2) Excess Liability Policies

Answer 103

Deductible

Answer 104

Both excess liability and umbrella policies are designed to pay over and above the limits of the underlying liability policies IF there is no underlying coverage: 1) Excess liability does not pay 2) Umbrella will pay AFTER the policyowner pays a predetermined amount called a retention limit. Umbrella = retention Liability = No retention

Answer 105

Employee covered

Answer 106

Insurance Company

Answer 107

Contractor

Answer 108

Insurance company

Answer 109

Promises payment if the principal defaults on an obligation

Answer 110

Covers wrongful employment behavior, such as 1) Discrimination 2) Harassment 3) Wrongful termination

Answer 111

The CGL covers 1) Contractual Liability

Answer 112

Provide both property and liability coverage in one policy designed to avoid overlaps or gaps in the coverage

Answer 113

Coverage additions like Fire Department service charge and debris removal benfit increase the amount paid followin a loss

Answer 114

Abolish use of the tort system for bodily injuries resulting from auto accidents

Answer 115

To state which perils are insured against

Answer 116

Personal Property losses on all H/O forms are paid on actual cash value basis

Answer 117

Coverage for a business that leases its premises and then causes negligent fire damage to those rented premises

Answer 118

Dwelling (chosen by policyowner) B Other structure - 10% C - Personal Prop - 50% D - Loss of use - 30%

Answer 119

Part c uninsured - Arbitration Part d damage to your auto = Appraisal

Answer 120

Value before the loss MINUS Value following the loss

Answer 121

An HO5 policy is the Premier Homeowner Policy, which includes everything included in an HO3 policy. It provides replacement cost coverage. It covers the structure and all of the property inside the home. It is the most comprehensive policy available. However, coverage for earthquakes or floods is excluded. HO5 policies are usually limited to dwellings built within the last 30 years or renovated within the last 40 years.

Answer 122

Windstorm/hail Fire/lightning Vandalism/criminal mischief Vehicles/aircraft Explosions/riots Glass breakage Smoke Volcanic eruption Personal liability Damage from flooding and earthquakes is excluded from coverage in HO1 policies. Coverage is provided on a replacement cost basis, so the insured receives the cost of rebuilding or repairing damage to the dwelling with materials of similar quality.

Answer 123

Falling debris/objects Freezing Collapses due to the weight of ice, snow or sleet Accidental discharge or overflow of water or steam Sudden and accidental destruction, burning, cracking or burning Accidental damage caused by surges of electrical current HO2 policies are available with replacement cost or actual cash value coverage. Be aware that an HO2 policy does not cover water damage caused by a water backup and foundation or slow leaks. It also does not cover open perils, including earthquakes or floods. However, they may provide mechanical breakdown coverage with respect to heat and air conditioning systems or water heaters, but not for kitchen or laundry appliances, computers, televisions, sound equipment or systems.

Answer 124

Laws/ordinances Earth movement Water damage Power failure Animals owned by insured Neglect War/nuclear hazards Intentionally caused loss Government action Collapse of structure Theft of property from an under construction dwelling Vandalism/Malicious mischief if the property is vacant for over 60 days Mold/fungus/rot Wear and tear or deterioration Mechanical breakdown Smog, rust, corrosion Smoke caused by agricultural smudging or industrial operations Discharge, dispersal, seepage of pollutants Settling/shrinking/bulging/expansion Birds/vermin/rodents/insects Some HO3 insurance plans have a named perils policy, which means it specifically lists what is covered. Regardless of the type of coverage, HO3 insurance typically does not include floods and earthquakes in its perils coverage, according to the NAIC.

Answer 125

Dwellings eligible for a Homeowners policy include second homes/vacation residences, life estate and trustees occupied homes, under construction dwellings, properties that are subject to installment contract payment plans and mobile homes that have been purchased. A farm is not a dwelling for Homeowners insurance eligibility purposes. For Homeowners coverage, the only eligible parties are the owner and occupants of a residential only dwelling, along with eligible residential renters. Both property and casualty lines must be purchased, unless the property is rented out. Additionally, there can be no more than four family units in the dwelling.

Answer 126

Coverage D provides coverage for loss of use. The insured receives a payout if the insured dwelling is rendered uninhabitable as the result of a covered loss. The two possible methods of reimbursement are: 1) additional living expense, which allows the insured to maintain their standard of living if the insured loses use of the residence dwelling; and 2) Fair rental value, which covers lost rental payments if the dwelling is rented to another person.

Answer 127

-Judgment rating: This is the simplest method. The underwriter uses their personal, expert judgment to determine the premium, instead of using rate tables. It is the oldest rating method. -Manual rating (a/k/a class rating): This is the most common premium rating method. Rates are grouped into categories and listed on a table. The underwriter analyzes the risk and classifies it according to the table categories. A premium is selected based on the corresponding category and then calculated by multiplying the rate by the amount of insurance units. For example, if $100,000 of insurance is purchased at a listed rate of $5 per $1,000, the total premium would be $500. $100,000 / $1,000 = 100 units x $5 = $500. -Merit rating is used for risks with unusual or unique characteristics. First, the manual rating is calculated and it is adjusted, in accordance with the specific risk involved. Types of merit rating include experience rating, schedule rating and retrospective rating. Experience rating analyzes the insured’s own loss history, so the premium will be higher for an insured with a loss experience greater than the average loss experience. However, if the loss experience is below the average loss experience, the premium will be less than the manual rate. Schedule rating utilizes a system of debits and credits, based on the insured’s own characteristics. Retrospective rating takes into account any losses occurring over the policy period.

Answer 128

An incidental occupancy is a business conducted in a dwelling that is primarily used as a residence with no other businesses operating on the same property. The policy defines which types of incidental businesses are allowed. A private school, professional office or studio could qualify as incidental occupancies.

Answer 129

Loss adjustment expense is the cost that is assessed to a claim due to the cost of investigating and adjusting the insurance claim.

Answer 130

Subrogation is the insurance principle referring to an insurer stepping into the shoes of the insured to recover money or damages paid out to or on behalf of the insured from another party.

Answer 131

Loss Ratio + Expense Ratio

Answer 132

Total Underwriting Expenses / Total Written Premiums

Answer 133

Incurred Loss Amount / Earned Premium Amount

Answer 134

Standard coverage provides up to $100,000 for the building contents. A National Flood Insurance Program (NFIP) policyholder gets 2 flood insurance programs: emergency and regular. Emergency coverage is in effect before the NFIP processes the insurance application. Emergency coverage currently has a standard deductible of $1,000 and maximum coverage limits of $35,000 for buildings and $10,000 for the building contents (e.g. personal property). Once regular coverage is in effect, there is currently a standard deductible of $500 and coverage limits of $250,000 for buildings and $100,000 for the building contents.

Answer 135

Solicitors sell insurance policies, receive insurance premiums and represent the insurance company. They share several duties with agents and can work for agents, but they cannot issue or countersign policies. Countersigning refers to the insurance agent’s authentication of an insurance contract. An agent is required to review and sign new insurance policies.

Answer 136

-Most self-propelled vehicles such as cars, including their parts -Property and belongings outside of an insured building, such as trees, plants, wells, septic systems, gas/oil/liquid tanks, walks, decks, patios, fences, seawalls, hot tubs and swimming pools -Currency, precious metals and valuable papers such as stock certificates

Answer 137

Personal property that has been moved to a safe location to protect it from flood damage is covered for up to 45 days at the new location under NFIP. The National Flood Insurance Program (a/k/a NFIP) is a federally subsidized program that provides flood insurance. The NFIP is managed by the Federal Insurance Administration (a/k/a FIA). Flood insurance coverage applies to a walled or roofed building permanently affixed to an above ground location. The building and its contents (e.g., personal property) are covered.

Answer 138

insures property while it is being transported over land from one location to another.

Answer 139

provides coverage for goods while the goods are transported over water

Answer 140

Robbery is the theft of property accompanied by the use or threat of physical force.

Answer 141

Burglary is the theft of property by forced entry into a premises with visible evidence of the forced entry.

Answer 142

insurance principle referring to an insurer stepping into the shoes of the insured to recover money or damages paid out to or on behalf of the insured from another party

Answer 143

Waiver of subrogation is the insurance principle referring to an insurer giving up that right. The person from whom the insurer seeks recovery usually caused the loss requiring the payout. It is also called “transfer of rights of recovery”

Answer 144

Solicitors have many of the same duties that agents have and they could work for agents. They can represent the insurance company, sell insurance and receive premiums. However, solicitors are not permitted to issue or countersign policies.

Answer 145

Employee dishonesty coverage protects a business against an employee’s theft of money, property or securities.

Answer 146

-the downed tree causes damage to a covered structure -the downed tree blocks a driveway entrance -the tree is blocking a handicap accessible feature

Answer 147

Surplus lines insurance provides coverage for unique situations or situations with high-risk. For example, a celebrity or artist who wants to insure a certain body part (e.g., legs, hands) could purchase surplus lines insurance. Medical malpractice insurance is also an example of a surplus line of insurance. Surplus agents (a/k/a excess agents) sell surplus lines of insurance. Surplus lines agents are permitted to sell surplus lines even in states where surplus lines insurance is not authorized or the insurer is not licensed.

Answer 148

property insurance for lost earnings or income caused by the inability to use the damaged property. That is the best answer, since the question involves a specific piece of property and all business operations were not affected.

Answer 149

policy covers the insured when the insured causes property damage to another person’s property or is liable for causing injury to another person

Answer 150

A loss payable provision authorizes insurance payments to someone or an entity that has an insurable interest in the insured property.

Answer 151

Twisting occurs when an agent misrepresents facts to a client in order to persuade the client into canceling an active insurance policy and purchasing a new policy. Twisting is a technique that solely benefits the agent by generating a new commission.

Insurance Flashcards

(190 cards)