Terminology

Question 1

Coverage for sickness, bodily injury or accidental death & may include disability income

Answer 1

Sickness, Accident & Health

Question 2

Coverage for direct & consequential loss/damage to property of every kind

Answer 2

Property

Question 3

Coverage against legal liability

Answer 3

Casualty

Question 4

Coverage under variable life &/or variable annuities

Answer 4

Variable

Question 5

Non-commercial property and/or casualty

Answer 5

Personal lines

Question 6

Debt insurance

Answer 6

Credit

Question 7

Any other type of insurance as determined by the Commissioner

Answer 7

Limited line

Question 8

Property insurance policy that covers specific kind/unit of property for specific amount of insurance

Answer 8

Specific insurance

Question 9

Single property insurance policy that provides coverage for multiple classes of property @ 1 location (or provides coverage for 1+ classes of property @ multiple locations)

Answer 9

Blanket insurance

Question 10

Current replacement cost, minus depreciation

Answer 10

Actual Cash Value

Question 11

Cost to replace damaged property w/ like kind & quality @ today’s replacement cost (w/out any deduction for depreciation)

Answer 11

Replacement cost

Question 12

Allows insurer (@ time of a loss) to adjust loss on basis of functional replacement cost, the cost to replace damaged property w/ less expensive & more modern construction/equipment

Answer 12

Functional Replacement Cost

Question 13

Based upon amt a willing buy would pay to willing seller for property prior to loss

Answer 13

Market value

Question 14

Property policy w/ previous agreed upon by insurer & insured as to amt of insurance that represents fair valuation for property @ time insurance is written & eliminates any coinsurance or other contribution clauses in policy

Answer 14

Agreed value

Question 15

An amt of insurance scheduled in property policy which isn’t subject to any coinsurance requirements in event of a covered loss

Answer 15

Stated amt

Question 16

Policy that pays 1st in event of covered loss (or in layered program of insurance, policy that covers 1st layer of loss)

Answer 16

Primary policy

Question 17

Policy that only pays loss after primary policy or amt has paid its limit

Answer 17

Excess policy

Question 18

Provision which provides for sharing of loss w/ other insurance companies

Answer 18

Pro Rata

Question 19

Doctrine that bars/reduces recovery to injured person if intervening cause interrupted chain of events & sets in motion new chain of events

Answer 19

Intervening Clause

Question 20

Time limit; injured party may bring legal action against another party for certain types of injuries

Answer 20

Statue of Limitations

Question 21

Formula used to relate income from loss expenses

Answer 21

Loss ratio (incurred losses + loss adjusting expense/earned premium)

Question 22

Unit of cost that’s applied against rating basis from which policy premium is developed

Answer 22

Rate

Question 23

Rates published by insurance company or rating organization for a unit of insurance

Answer 23

Manual rates

Question 24

Rates developed by underwriter based upon skills & experience, rather than using actuarial analysis

Answer 24

Judgement rates

Question 25

Rates established by judgment & don't have loss experience statistics as foundation for their development

Answer 25

'A' rates

Question 26

Rating method that provides insurer w/ that portion of rate that doesn't include provisions of expenses (other than adjusting expense) or profit; based on historical aggregate loss & loss adjustment expenses projected thru development

Answer 26

Loss costs

Question 27

In property, any interest an insured may have that is subject of insurance, so that damage/destruction would cause financial loss

Answer 27

Insurable interest

Question 28

How may insurable interest in property be created?

Answer 28

1) Ownership of a property | 2) Custody/control (leaseholder) & mortgagees for remaining balance due on property sold to them

Question 29

Factor in determining premium & amt of insurance required for property policy

Answer 29

Loss valuation

Question 30

Insured has several options as to how a loss to insured property will be valued at time of loss...what are they?

Answer 30

``` Actual Cash Value Replacement cost Functional Replacement Cost Market value Agreed value Stated amt ```

Question 31

What are the 7 limits of liability (insurer's liability for payment)

Answer 31

``` Per Occurrence Per Person Aggregate Limit Split Combined single Policy limits Coinsurance ```

Question 32

Accident is sudden, unplanned, unexpected; not under control of insured & results in injury/damage

Answer 32

Per Occurrence

Question 33

Amt available for payment of bodily injury to single person in accident, regardless of policy limit stated in policy for bodily injury claims

Answer 33

Per Person

Question 34

Max limit of coverage available under liability policy during policy year

Answer 34

Aggregate Limit

Question 35

Separately stated limits of liability for diff coverages; may be stated on per person, per occurrence, per policy pd basis, or can be split b/w bodily injury & property damage

Answer 35

Split

Question 36

Single $ limit of liability applying to total of damages for bodily injury & property damage, combined, resulting from 1 accident or occurrence

Answer 36

Combined single

Question 37

Max amt insured may collect, or for which insured is protected under terms of policy

Answer 37

Policy limits

Question 38

In consideration of reduced rate, insured agrees to maintain certain minimum amt of self insurance on insured property

Answer 38

Coinsurance

Question 39

What are the 4 elements of a negligent act?

Answer 39

Legal Duty Standard of Care Proximate cause Actual Loss or damage

Question 40

What are the 5 defenses against negligence?

Answer 40

``` Assumption of Risk Comparative Negligence Contributory negligence Intervening Clause Statute of Limitations ```

Question 41

3rd class of damage; form of punishment for extreme outrageous behavior, gross negligence or willful intent

Answer 41

Punitive damage

Question 42

What are the 3 coverage forms for a Dwelling Policy?

Answer 42

``` Basic (no minimum amt of insurance required; losses paid on actual cash value basis) Broad (losses covered on replacement cost bais as long as insured maintains min of 80% coverage of dwelling replacement cost) Condominium Association (Coverage form for common building property & Unit-Owners Coverage form for owner's personal property) ```

Question 43

Physical damage coverage for auto includes....

Answer 43

Both collision & other than collision coverage