Licensing Flash Cards
(215 cards)
1
Q
The _______, Supervisor, or Director of Insurance is the chief insurance regulator
who protects the insuring population by regulating all insurers and insurance professionals doing
business in the State.
A
State Commissioner - Section 1.1
2
Q
A _________ issues non-participating policies and is owned by stockholders who
received taxable corporate dividends as a return of profit.
A
Stock Insurance Company- Section 1.2
3
Q
A _________ issues participating policies and is owned by the policyholders
who receive non-taxable dividends as a return of unused premium.
A
Mutual insurance company - Section 1.2
4
Q
______ is the transfer of risk between insurance companies. The reinsurer assumes some or
all of the risk of the ceding, or primary, insurance company
A
Reinsurance Section 1.3
5
Q
What is a Domicile? and what are the 3 types?
A
Domicile refers to the state in which an insurer is incorporated.
1 - Domestic insurer is organized under the laws of the resident state
2 - Foreign insurer is organized under the laws of another state
within the United States
3 - Alien insurer is organized under the laws of a country outside
the U.S.
Section 1.4
6
Q
An_______ is authorized to do insurance business in the state and is issued a Certificate
of Authority by the state’s Department of Insurance.
A
Admitted Insurer - Section 1.4
7
Q
The _______ department of an insurance company is responsible for the selection of risks to
insure and determines the rate to be charged.
A
Underwriting - Section 1.5
8
Q
An _______ can be the employee of an insurance company that owns the agent’s book
of business, or an independent agent that enters into agency agreements with more than one
insurance company. Independent agent retains ownership of their books of business.
A
Agent/Producer Section 1.5
9
Q
The _________ is a three-party relationship where a Principal authorizes an Agent to act on
its behalf to create a legal relationship with a Third Party.
A
Law of Agency Section 1.6
10
Q
______________ is written into the producer’s agency contract; implied authority is that which
the public assumes the agent possesses; and apparent authority is created when the agent
exceeds express authority and the insurer does not respond
A
Express authority Section 1.6
11
Q
The ____________ protects consumer privacy by ensuring that any data
collected by an insurer remains confidential, and is accurate, relevant, and used for a proper and
specific purpose.
A
Fair Credit Reporting Act (FCRA) Section 1.6
12
Q
A is the uncertainty of a loss
A
Risk Section 1.8
13
Q
A ____ is the cause of loss.
A
Peril Section 1.8
14
Q
A ____ increases the probability of a loss.
A
Hazard chapter Section 1.8
15
Q
What are the 3 types of Hazards?
A
Physical- A physical condition that increases the probability of loss; use, condition, or occupancy of property. Example: Flammable material stored near a furnace.
Moral Hazard - Dishonest tendencies that increase the probability of a loss; certain characteristics and behaviors of people. Example: An insured burns down his/her own house to collect the insurance payout.
Morale Hazard - Attitude that increases the probability of a loss. Example: Indifference or carelessness of leaving one’s house or vehicle unlocked.
Section 1.8
16
Q
The _______ does not allow the insured to profit from a loss; instead, it restores
the insured to the same financial or economic condition that existed prior to the loss.
A
principle of indemnity Section 1.9
17
Q
______________ in property and casualty insurance must exist at the time of the loss.
A
Insurable interest section 1.9
18
Q
The ________ is one of adhesion; one party (the insurer) prepares the contract and
presents it to the second party (the insured), who must accept it on a “take-it-or-leave-it” basis.
A
insurance contract section 1.10
19
Q
The _________ used to determine premium include the nature of the risk, hazards,
claims history, and other factors that vary depending upon the risk.
A
underwriting factors section 1.11
20
Q
_______ is a rate charged to a group of policyholders who have similar exposures and
experience.
A
Class Rating
Section 1.11
21
Q
What are the 4 types of rating factors?
A
- Nature of the risk.
- Hazards that are present.
- Claims history.
- Other factors that depend upon the type of risk being insured.
Section 1.11
22
Q
______ is The dollar amount charged for a particular unit of insurance, such as $5 per $1,000 of
insurance.
A
Rate
Section 1.11
23
Q
_______ is the total cost for the amount of insurance purchased.
$50,000 of coverage = $5 rate x 50 (per $1,000 of insurance) for a $250 premium.
A
Premium
Section 1.11
24
Q
_______ is a rate based on the policyholder’s actual loss history when compared to
the loss history of similar risks.
A
Experience Rating
Section 1.11
25
________ is a rate used for a policyholder because a large enough pool of similar
risks is not available to any other type of rate. Primarily used for commercial and specialty
risks because of the number of unique variables involved.
Individual Rating
| Section 1.11
26
_______ is an individual rate that doesn’t use loss history as a
component and that is derived largely from the underwriter’s evaluation and best judgment
the risk poses to the insurer
“A” Rating or Judgment Rating
| Section 1.11
27
_______ A rating organization provides insurers with the portion of a rate that does
not include provisions for expenses or profit.
a. The expense and profit components to develop the final rate must be added by individual
insurers based upon their projections.
b. Loss cost rating is used on risks for which the insurer may not have enough data to
develop the rate, other than for expenses and profit.
Loss Cost Rating
| Section 1.11
28
_________ The use of rates contained in a manual published by the insurer or those of
the rating organization of which it is a member.
Manual Rating
| Section 1.11
29
_______ is the use of rates that rewards a policyholder that takes measures to decrease
the probability of loss by the implementation of safety programs, loss control programs, etc.
Merit Rating
| Section 1.11
30
____________ The use of rates that adjust the policy premium to reflect the current loss experience of the policyholder. Premium adjustments are subject to minimums and maximums.
Retrospective Rating
| Section 1.11
31
_______ is the required initial premium paid into the policy that is
subject to adjustment. A premium audit will be used to determine the actual premium based
on the risk exposures
Deposit Premium
32
```
_______ is a method of rating property and liability risks by using charges and credits
to modify a class rate based on the nature of the particular risk being rated.
```
Schedule Rating
33
_____ Rates must be filed with the state insurance regulatory authority (Department
of Insurance) and may be used as soon as they are filed.
File and Use Rate Approval
34
_________ Insurers cannot use rates until approved by the Department of Insurance, or
until a specific time period has expired after the filing.
Prior Approval
35
________ Some states require that mandatory rates be used for certain lines of
insurance.
Mandatory Rates
36
_______ A state relies on competition between insurers to produce fair and
adequate rates.
Open Competition
37
Loss reserve Method
| _______ – A loss reserve established for each claim, when reported.
Case Reserve Method
38
Loss Reserves
_______ A loss reserve established based on average settlements of
particular claim types.
Average Value Method
39
Loss Reserve
________ A loss reserve formula based upon the expected losses for a
particular class or line.
Loss Ratio Method
40
Loss Reserve-
___________ A loss reserve based upon the estimated length of an insured’s or
claimant’s life or expected disability.
Tabular Method
41
Financial Ratios-
_______ - Determined by dividing Paid Losses + Loss Reserves by Total Earned
Premiums.
Loss Ratio
42
Financial Ratio -
________ – Determined by dividing an insurer’s Total Operating Expenses by Written
Premiums.
Expense Ratio
43
Financial Ratios -
| _________ – Sum of the loss ratio and expense ratio.
Combined Ratio
44
_________ – A valid contract that for reasons satisfactory to a court, may be set aside by
one of the parties. An example is an insurer may void or revoke coverage for misrepresentation
or fraud.
Voidable Contract
45
_________ – An agreement without legal effect because it was made illegally or it was
declared void by the courts because it doesn’t contain all the elements of a legal contract.
Void Contract
46
________ – One party writes the contract, without input from the other party. One
party (insurer) prepares the contract and presents it to the other party (applicant) on a “take-it-or-leave-
it” basis, without negotiation. Any doubt or ambiguity found in the document is construed
in favor of the party that did not write it (insured).
Contract of Adhesion
47
________ – The exchange of value is unequal. Insured’s premium payment is less than
the potential benefit to be received in the event of a loss. The insurer’s payment in the event of
a loss may be much greater, or much less (e.g., $0 in the event a loss doesn’t occur), than the
insured’s premium payment.
Aleatory Contract
48
______ – A contract that pays a stated amount in the event of a loss. (Most insurance
policies are NOT valued contracts unless they are endorsed.)
Valued Contract
49
______ – An agreement to pay on behalf of another party under specified
circumstances, such as when a loss occurs.
Indemnity Contract
50
_____ – The party submitting an application for insurance.
Applicant
51
_______ – A document submitted by an applicant to an insurer that provides information
needed for the insurer to underwrite a risk; becomes part of the insurance contract. Most
applications require statements on the application to be true to the best knowledge and belief of
the applicant.
Application
52
______ – A policy form that alters or adds to the provisions of a property and casualty
insurance contract.
Endorsement
53
________ – Owner cannot transfer or assign ownership of an insurance policy (property
and casualty) to another person.
Personal Contract
54
________ – Owner may transfer or assign ownership of a life or health insurance
policy to another person.
Non-Personal Contract
55
_______ – Policy owners may not assign or transfer their rights under an insurance contract
without the written consent of the insurer.
Assignment
56
_______ – Insured’s original age on the policy issue date.
Issue Age
57
_______ – Insured’s age at any point in time at issuance, renewal or conversion.
Attained Age
58
________ – Only one party is legally bound to the contractual obligations after the
premium is paid to the insurer. Only the insurer makes a promise of future performance, and
only the insurer can be charged with breach of contract.
Unilateral Contract
59
_________– Both parties must perform certain duties and follow rules of conduct to
make the contract enforceable. The insurer must pay claims if the insured has complied with all
the policy’s terms and conditions.
Conditional Contract
60
_________ – What a reasonable and prudent policy owner would expect;
the reasonable expectations of policy owners are honored by the Courts although the strict terms
of the policy may not support these expectations.
Reasonable Expectations Doctrine
61
________ – Statements made by the applicant on the application that are believed to be
true to the best of the knowledge and belief of the applicant; may be withdrawn prior to policy
issuance.
Representations
62
________ – A false statement contained in the application; usually does not void
coverage or the policy. If material to the issuance of coverage, meaning the insurer would not
have issued coverage had the misrepresentation not been made, coverage does not apply. In
some cases, a material misrepresentation may void the policy.
Misrepresentations
63
________ – The willful hiding or obscuring of material facts pertinent to the issuance of
insurance (or a claim). Concealment results in denial of coverage and may void the policy.
Concealment
64
________ – Statements in the application or stipulations in the policy that are guaranteed true
in all respects. If warranties are later discovered untrue or breached (past, present or future),
coverage (and sometimes the contract) is voided.
Warranties
65
________ – Intentional deception of the truth in order to induce another to part with something of
value or to surrender a legal right. Contains 5 elements:
Fraud
66
What are the 5 elements of Fraud?
■ False statement, made intentionally and that pertains to a material fact.
■ Disregard for the victim.
■ Victim believes the false statement.
■ Victim makes a decision and/or acts based on the belief in, or reliance upon, the false
statement.
■ The victim’s decision and/or action results in harm.
67
What are the 4 elements of a Legal Contract?
68
An _________ is an accident and includes continuous or repeated exposure to the same general
harmful conditions
Occurrence Chapter 2 section 1
69
If an insurer cancels an insurance policy before its expiration date, the refund is made on a _________.
pro rata basis
| Chapter 2 section 1
70
The primary cause of a loss is referred to as the __________.
proximate cause
71
A _______ stays within its intended boundaries and a hostile fire burns outside its intended
boundaries.
friendly fire
72
An __________is a policy form that alters or adds to the provisions of a property and casualty
insurance contract
endorsement
73
The _________ is the specified amount of each loss that the insured must bear. A larger
________ reduces the premium and the submission of small claims.
deductible
74
A _________ causes damage without an intervening cause, and an indirect loss occurs as the
consequence of a direct loss.
direct loss
75
A _______policy specifically lists the covered causes of loss.
named perils
76
an ________ policy covers all causes of loss except those specifically excluded
open perils
77
The ________of property is the cost to replace it with property of like kind and quality,
at current pricing, without a deduction for depreciation.
replacement value
78
_________ is the replacement value of property minus depreciation.
Actual cash value
79
A _________ requires the insurance company pay the total scheduled limit of insurance for a
total loss.
valued policy
80
A policy insuring property for a ________ insures a single item on a single policy for a single
limit of insurance.
specific limit
81
. A policy insuring property for a _________ insures one or more items on a single policy and
each item is insured at a ________ limit of insurance.
scheduled limit
82
A policy insuring property for a _________ insures multiple items of property on a single policy
with one limit of insurance applying to all insured property
blanket limit
83
The _________ describes basic information about the policy; i.e., the who, what, where,
when, and how much.
declarations page
84
The _____ _____ is the insurer’s promise to pay the insured.
Insuring Agreement
85
The _______section states the obligations of the insurer and the insured, as well as any other
conditions of coverage
conditions
86
The ________ provision states the insured’s obligation to 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.
subrogation
87
Perils that are NOT covered by the policy are listed in the _____ section
exclusions
88
___________ are automatically included in property policies without an additional
premium and include items such as debris removal, collapse, and fire department service
charges
Additional coverages
89
__________ is a common property policy provision that requires the insured maintain a certain
limit of insurance coverage in order to avoid a penalty in the event of a partial loss.
Coinsurance
90
_______ is assigned to one party for the conduct of another, based solely on a
relationship between the two.
Vicarious liability
91
A _______ is a wrongful act, other than a breach of contract or a crime that violates a duty or the
rights of another and for which compensation may be sought from the responsible party.
tort
92
An _______ is a deliberate act that harms another and for which the injured party is
permitted by law to sue the wrongdoer.
intentional tort
93
________ provides coverage for most unintentional torts and excludes intentional torts
Liability insurance
94
________ damages are awarded to an injured party for actual loss sustained.
Compensatory
95
_________ are compensatory damages for tangible expenses such as bills, loss of earnings,
and the costs to repair or replace damaged property.
Special damages
96
__________ are compensatory damages for pain, suffering, mental anguish, disfigurement,
and similar types of losses that cannot be objectively calculated.
General damages
97
_________ is the legal liability arising from physical injury, including sickness, disease,
and death caused by the acts or omissions of an insured. Bodily injury liability expenses include
medical bills, lost wages, mental anguish, disfigurement, pain and suffering, etc.
Bodily injury liability
98
__________ pays for the legal liability arising from physical damage to tangible
property, including loss of use of that property, caused by the acts of an insured. _________ expenses include the actual cost of repair or replacement of the damaged
property as well as the inability to use damaged property (loss of use).
Property damage liability
99
________ coverage pays for necessary medical, surgical, x–ray, dental, ambulance,
hospital, professional nursing, and funeral expenses incurred by a third party on the insured’s
premises regardless of fault.
Medical payments
100
__________ is the legal liability arising from the wrongful conduct of the insured
resulting in injuries to one’s mental or emotional wellbeing and not bodily injury or property
damage.
Personal injury liability
101
An ___________ is a sudden, unforeseen, unintended, and unplanned event from which loss or
damage results.
accident
102
________ is a tort and, specifically, the failure to use the same degree of care a reasonable and
prudent person would use when given the same knowledge and set of circumstances
Negligence
103
___________ is a defense for negligence in which the claimant was also negligent to
any degree
Contributory negligence
104
_______________ involves fault on the part of all parties and the damages are reduced in
proportion to the degree of negligence
Comparative negligence
105
Under ________ , a claimant does not have to prove fault in order to collect damages
absolute liability
106
_________ applies when a manufacturer is held liable whether or not its product was
defective in causing injuries.
Strict liability
107
An ___________ pays a covered claim after the primary policies exhaust their limits or deny
coverage
excess policy
108
A __________ loss payment provision requires each insurer to pay its share of a loss in proportion to
the coverage of that policy as it relates to the total of all insurance on the risk.
pro rata
109
The __________ is the dollar amount of coverage specified for a liability loss.
limit of liability
110
The ___________ is the maximum amount payable for loss per location or per person from all
occurrences within a policy period regardless of the number of separate accidents.
aggregate limit
111
A ___________ is the amount of coverage divided between bodily injury and property
damage.
split limit of liability
112
A ____________ is the policy limit applied to either bodily injury or property damage as
needed or in any combination.
combined single limit
113
To be eligible for ___________ the _______ must be used principally for
residential purposes, cannot contain more than 4 dwelling units, and can have no more than 5
roomers or boarders.
dwelling property program,
114
The _________ perils are fire or lightning and internal explosion. If an additional premium
is paid for Extended Coverage (EC), the following perils are also included: windstorm or hail,
explosion, riot or civil commotion, aircraft, vehicles, smoke, and volcanic eruption. The peril of
vandalism or malicious mischief (VMM) may also be included with the payment of an additional
premium.
DP–1 Basic Form
115
Losses to the DP–1 dwelling, other structures, and contents are paid on an ________ to the insured.
actual cash value basis
116
The DP–2 Broad Form perils are __________
```
DP–1 perils
EC perils
VMM
damage by burglars, falling objects, weight of ice, snow, or sleet, and accidental discharge or overflow of
water or steam.
```
117
The ________covers the dwelling and other structures on an open perils basis, except
for the perils specifically excluded
DP–3 Special Form
118
____________ applies to the dwelling described in the declarations, used principally for residential
purposes, including structures attached to the dwelling, such as an attached garage, carport,
breezeway or deck.
Coverage A
119
The Coverage A ________ appears on the declarations as a specific limit. It is chosen
by the named insured at the time coverage is applied for and should represent the dwelling’s
replacement value.
limit of insurance
120
_________ applies to other structures on the described location if they are separated or detached
from the dwelling by clear space, a fence, or a utility line
Coverage B
121
The Coverage B limit of insurance is up to _____ of the Coverage A limit and is automatically
provided under each of the dwelling forms.
10%
122
________ applies to household and personal property usual to the occupancy as a dwelling if it
is owned by the insured or by members of the insured’s family who reside with the insured.
Coverage C
123
__________ provides insurance for indirect losses that occur as a result of direct losses to
property insured under Coverages A, B, or C that are covered by the policy.
Coverage D
124
The Coverage D limit of insurance is up to of the Coverage A limit and is automatically
provided under each of the dwelling forms.
20%
125
Under the DP–1, the Coverage B limit does or does not increase the amount of insurance?
Does not
126
under the DP–2 and DP–3 forms, this limit is/ is not additional insurance.
Is not
127
The additional coverage _________ pays the insured’s reasonable expenses for the ________of covered property if the property is damaged by an insured peril.
Debris Removal
128
The additional coverage , pays a tenant up to 10% of
the Coverage C limit for _________made or acquired at the insured’s expense to that part of
the described location he or she rents.
Improvements, Alterations, and Additions
129
The additional coverage ___________ pays the reasonable costs incurred by the insured
for necessary measures taken to protect covered property from further damage.
Reasonable Repairs
130
The ___________ additional coverage covers property against direct loss for all perils while
being _________ from the described location because the property at the described location is
endangered by an insured peril.
Property Removed
131
____________ is an additional coverage that provides insurance at a limit of up
to 5% of the Coverage A limit, with a maximum of $500 for any ________.
Trees, Shrubs, and Other Plants
132
Damage to trees, shrubs, plants, or lawns is or is not covered when caused by wind, hail, weight of
snow; ice or sleet; or loss by theft.
NOT
133
How much will your additional coverage pay for Fire Department Charges incurred when a department other than you own jurisdiction is called to save / protect your property?
500
134
Coverage for the peril of _______ is only provided under the DP–2 and DP–3 forms. Coverage is
provided for direct physical loss to covered property involving ______ of a building or any part
of a building.
collapse
135
_________is excluded and is the increased costs due to the enforcement of any
_________ regulating the use, construction, demolition, remodeling, renovation, or repair
of property – including removal of debris.
Ordinance or Law
136
__________ is excluded, including land shock waves or tremors before, during or after a
volcanic eruption; landslide; mudslide or mudflow; subsidence or sinkhole, earth sinking, rising,
or shifting.
Earth Movement
137
_________ is excluded and includes flood, surface water waves, tidal water, overflow of a
body of water, water or waterborne material that backs up through sewers or drains or overflows
from a sump or sump pump, water or waterborne material below the surface of the ground –
including water that exerts pressure on or seeps or leaks through a building, sidewalk, driveway,
foundation, swimming pool, or other structure (such as basement walls).
Water Damage
138
________ is excluded and is the failure of power or other utility service if it takes place off
the described location. ________ occurring on the described location is covered.
Power Failure
139
________is excluded and is defined as the insured’s_______ to use all reasonable means to save
and preserve property at and after the time of a loss.
Neglect
140
These 3 things are excluded under all the DP policies.
War,
nuclear hazard
intentional loss
141
The __________ is used to provide, at the annual renewal date
of the policy, an automatic increase in the Coverage A and B limits of insurance to help offset
inflation.
Automatic Increase in Insurance Endorsement ( aka inflation guard endorsement )
142
The _______ endorsement provides insurance for the perils of_____ attempted ______,
and vandalism or malicious mischief that results from _____ or attempted _____. It may only be
added to policies insuring owner-occupied dwellings.
Broad Theft Coverage
143
The____________ endorsement provides the insured an average amount of
insurance for Coverage A during the course of a ___________.
Dwelling under Construction
144
The _________ endorsement provides coverage for personal _______and medical
payments to others and may be added to any of the dwelling forms of coverage.
Personal Liability
145
Who oversees the operations of the insurance business?
Executives
146
Who gathers and interprets statistical information used in rate-making? They also determine the probability of loss and set premium rates.
Actuarial Department
147
What department is responsible for the selection of risks both persons and property and the rating that determines the actual policy premium?
Underwriting
148
What kind of authority is written in a producer's contract with an insurer?
Express Authority
149
What kind of authority is not specifically stated in a producer's contract however is assumed to be given if it is necessary and reasonable i.e company logo use and accepting applications or collecting premiums?
Implied Authority
150
This type of authority is when the producer exceeds the authority expressed in the agency contract, the 3rd party is falsely led to believe that the producer has i.e taking payment on a canceled policy.
Apparent ( apparently you have no idea what you are doing )
151
What is someone who represents the interests of the insured but not the interest of the insurer?
A Broker they can negotiate however can not bind a policy legally.
152
What do we call deceit, misrepresentation, untruthfulness, and falisifcation?
Dishonesty
153
What kind of risk is there a possibility of both loss and gain?
Speculative Risk
154
What kind of risk is it when the only outcomes possible are no loss and loss ie no gain to be had?
Pure Risk
155
What do we call a reduction, decrease, or disappearance of value this is the basis for a claim for damages under a policy?
Loss
156
What do we call the cause of a loss?
Peril
157
What do we call a specific condition that increases the likelihood or severity of loss from a peril?
Hazard
158
What do we call the condition of being at risk for loss just by existing property and people incur this risk?
Loss Exposure
159
What kind of Risk Management consists of Investments of a large number of people who may be pooled by use of a
corporation or partnership.
Sharing Risk
160
What kind of risk management is the taking out of an insurance policy giving the risk to another entity through a contract?
Transfer of Risk
161
What kind of risk management is installing automatic fire sprinklers, and burglar alarms?
Reduction of Risk
162
What is the special limit for Money, bank notes, bullion, medals etc for Homeowner's policies?
200
163
What is the special limit for personal property like securities, deeds, evidence of debt, and notes except bank notes, manuscripts passports, tickets, and stamps?
1500
164
What is the special limit for Watercraft of all types including their trailers, furnishings, equipment, engines, and outboard motors? Loss resulting from wind and hail are excluded unless in a fully enclosed building.
$1500
165
What is the special limit on trailers or semi-trailers not used with watercraft of all types?
$1500
166
Loss by theft of jewelry, watches, furs, precious or semi-precious stones have what special limit?
$1500
167
Loss by theft of firearms and related equipment, such as holsters
and ammunition, have what special limit?
$2500
168
The named insured is listed in the Declarations, and includes the _______ if a resident of the same
household.
spouse
169
A _________ is a person related to the named insured by blood, marriage, or adoption,
including a ward or foster child who is a resident of the household.
family member
170
A _________ is any vehicle shown in the Declarations, a newly acquired auto, any trailer the
insured owns, or a non-owned auto or trailer while being used as a temporary substitute vehicle.
covered auto
171
A ______________ is a non-owned vehicle used in place of an insured vehicle that is
out of normal use due to breakdown, repair, servicing, loss, or destruction.
temporary substitute vehicle
172
A _________ is one to which the named insured takes title and either replaces an
existing vehicle owned by the named insured, or a vehicle that increases the total number of
vehicles owned by the named insured.
newly acquired auto
173
The _________ under Part A – Liability Coverage include the cost of bail bonds,
appeal bonds, post-judgment interest, loss of earnings, and reasonable expenses while assisting
the insurer in the defense of a claim.
Supplementary Payments
174
__________ include bodily injury or property damage intentionally caused by an Insured;
property in the insured’s care, custody, and control; bodily injury to an insured’s employee
while working for the insured; using a vehicle as public or livery conveyance; working in the
automobile business or using a vehicle while engaged in business; and a vehicle used by a
person without the reasonable belief of entitlement to drive it.
Part A Exclusions
175
______________ does not apply to vehicles with fewer than four wheels, vehicles that are owned
but not insured, uninsured vehicles owned by family members; vehicles furnished for the regular
use of the named insured or family members; and vehicles inside a racing facility used for
competing in, practicing in, or preparing for a race.
Part A Liability
176
The ___________ paid under Part A – Liability Coverage is shown on the policy’s Declarations
and applies per accident for all bodily injury and property damage arising from one accident,
including damages for care, loss of services, and death.
maximum limit
177
If a loss is covered under more than one Part of the policy, payment will not be ______________ .
duplicated or stacked
178
When a covered auto is driven __________ in which it is principally garaged, Part A
– Liability Coverage extends to provide coverage required by the financial responsibility or
compulsory insurance laws of that state or Canadian province.
outside the state
179
If other insurance applies at the time of the loss, the personal auto policy will only pay its share
of the loss in the _______ the policy’s limit bears to all insurance in place.
proportion
| EXAMPLE POLICY A 100K POLICY B 200K TOTAL 300K the most A pays is 1/3 of the claim and 2/3 for B
180
Under Medical Payments coverage, the insurer will pay reasonable expenses incurred within _
________of the accident. The limit applies per person and payments are only made for necessary
medical and funeral services caused by the accident.
3 years
181
True or false Medical Payments under section B will only be paid out if the insured is deemed at fault?
False
Medical payments coverage applies, regardless of fault, to any insured occupying any auto or as
a pedestrian when struck by a motor vehicle designed for use mainly on public roads.
182
_____________________ include an insured occupying a vehicle with fewer than 4
wheels, using a vehicle as a public or livery conveyance or a residence, struck by an uninsured
vehicle owned or furnished to an insured family member, using a vehicle without the reasonable
belief of entitlement to drive it, using a vehicle while engaged in business, or when Workers’
Compensation benefits apply, or injuries sustained due to war, nuclear hazard, or racing.
Part B, Medical Payment EXCLUSIONS
183
_______________ provides insurance to persons injured in accidents
caused by another party who is legally responsible for injuries to an insured that arise out of the
ownership, maintenance, or use of an uninsured motor vehicle.
Part C – Uninsured Motorists Coverage (UM)
184
___________ under Part C are accidents involving an owned vehicle that is uninsured, a vehicle
while being used as a public or livery conveyance, the insured using a vehicle without the
reasonable belief of entitlement to drive it, using a vehicle while engaged in business, when
Workers’ Compensation benefits apply, and punitive or exemplary damages.
Excluded
185
The process of ___________ is used when the insurer and the insured do not agree on the recovery
of damages or the amount recoverable by the insured. Each party selects an arbitrator who then
jointly select a third arbitrator who determines the insured’s amount of damages.
arbitration
186
______________ covers the insured against drivers who have auto
liability insurance but the coverage limits are inadequate. UIM coverage will pay the amount
over the at-fault driver’s coverage up to the UIM limit.
Underinsured Motorists Coverage (UIM)
187
___________also known as the physical damage coverages
collision and other than collision, pays for direct and accidental damage, regardless of fault, to
the insured’s covered vehicles and non-owned autos.
Part D – Coverage for Damage to Your Vehicle,
188
_________ is the upset of the covered vehicle or a non-owned auto or its impact with another
vehicle or object.
Collision
189
_____ ____ _______ provides open perils coverage for loss caused by
any peril that is not excluded in the policy.
Other Than Collision (OTC, Comprehensive)
190
A _________ is any private passenger auto, pickup, van, or trailer not owned by, furnished
to, or available for the regular use of the named insured or a family member, while being used by
the named insured or a family member.
non-owned auto
191
____________ coverage pays for the cost of transportation expenses incurred as a
result of a covered collision or other than collision loss. No deductible applies and the limit of
coverage is up to _____ per day, or a total of ______ .
1- Transportation expenses
2 - $20
3 - $600
192
If a loss is caused by a _______ of the covered auto or a non-owned auto, the insurer will only
pay transportation expenses incurred during the period that begins ___ hours after the theft and
ends when the auto is returned to use or the insurer pays for the loss. Payments begin ____hours
after loss caused by all other covered perils.
1 - total theft
2 - 48
3- 24
193
_________ include an insured vehicle being used as a public or livery conveyance;
damage as a result of wear and tear; freezing; mechanical breakdown; road damage to tires; war
or nuclear hazard; tapes, records, disks, or other media; and electronic equipment unless it’s
permanently installed in the vehicle.
Part D exclusions
194
Part D exclusions also include total loss by _________ ; loss to radar or laser
detection devices and equipment; coverage for custom furnishings and equipment in any pickup
or van; a non-owned auto being used in the auto business; or any auto when located at a racing
facility for organized racing.
government or civil authorities
195
The Part D limit of liability for loss is the ______ of the actual cash value (ACV) of the vehicle or
the amount necessary to ____ __ _____ the vehicle with another of like kind and quality. Part
D does not pay for betterment.
1 - lesser
| 2 - repair or replace
196
__________ – Duties After an Accident or Loss include prompt notification of any claims and legal
papers received; cooperation in the claims investigation and settlement; submission to a physical
exam; authorization for the insurer to obtain copies of medical reports and records; submission
of a requested proof of loss; notification to the police if a hit-and-run driver is involved; and
protection of property from further damage.
Part E
197
___________________ is a form of coverage that is written on a homeowners policy
by endorsement or as a stand-alone policy. It insures moveable property against direct loss.
Personal Inland Marine Insurance
198
The ______________________ provides worldwide coverage when
| used to insuring individual personal property on an itemized or scheduled basis.
Personal Articles Floater (Scheduled Article Floater)
199
Coverage under a Personal Articles Floater is covered on an , and claims are
settled on an ________ basis with some exceptions.
1 - open perils basis
| 2 - actual cash value
200
Typical exclusions in a Personal Articles Floater include__________ , _________ ,
, and war. Specific classes of property also have additional exclusions.
1 - wear and tear,
2 - Insects or vermin
3 - intentional loss
201
The _________ policy is a package policy that provides both property and liability coverage and
is used to insure _______that can be towed by a car.
Boatowners
| boats
202
A ________ policy is designed for larger vessels with crew members and includes Hull Insurance:
protection and indemnity coverage, medical payments coverage, personal property coverage for
property on the ______, coverage for fuel spills, and commercial towing.
Yacht
203
A ______Warranty applies when the insured boat or yacht is in storage and allows for a return
of premium due to the reduced risk of loss while the boat is laid up. If the insured operates or
lives on the craft during the ________ period, no coverage applies.
Lay Up
204
The _____________ Insurance is an open perils policy with a high deductible. It
is used to fill coverage gaps in a property policy such as the perils of earthquake, flood, collapse,
and subsidence.
Difference in Conditions (DIC)
205
The __________covers earth movement that is excluded on virtually all property
policies, and in some jurisdictions may also be purchased as a separate policy.
Earthquake Endorsement
206
All earth movements occurring within a ________ are considered a single occurrence of
earth movement.
72-hour period
207
The ___________ is a federal program administered by FEMA,
which enables property owners to purchase flood insurance. Losses are paid or subsidized by the
federal government.
National Flood Insurance Program (NFIP)
208
Flood policies are available from participating private insurers under the ____________ as well as directly from the NFIP.
Write Your Own (WYO) Program
209
Communities in flood-prone areas must have established an approved _____________ in
order to participate in the NFIP. Only property located in participating communities is eligible for
flood insurance.
flood control program
210
___________ is a general and temporary condition of partial or complete inundation of at least __
acres of normally dry land. It involves the overflow of inland or tidal waters, unusual and rapid
accumulation or runoff of surface waters, mudflow, or collapse or destabilization of land from
erosion or the effect of waves or water currents exceeding normal, cyclical levels.
1- Flood
| 2 - 2 acres
211
The ___________ applies when a community is in its earliest stage of participation in the
NFIP.
Emergency Program
212
Each loss to property is subject to a deductible, which applies separately to the building
and to personal property, including any appurtenant structure and debris removal expense.
$500
213
A______________ program, _____ called a plan, provides basic property
insurance to property owners who are unable to secure coverage in the standard property
marketplace. Reasons for ineligibility in the standard market include loss history or the failure of
the client or property to meet other underwriting guidelines of an insurer.
1 - Fair Access to Insurance Requirements
| 2 - FAIR
214
The policy territory under a personal umbrella is _________and coverage is written at a base
limit of $_______ .
1 - worldwide
| 2 - 1 million
215
The insured pays ________ , a form of cost-sharing, if the personal umbrella policy
drops down to cover a loss not insured by an underlying primary policy.
self-insured retention
