Property and Casualty Exam

the one basic characteristic of any type of insurance is that the insured is returned to the same status that existed prior to the loss, but without a chance for gain or profit
true

which of the following coverages does an open peril policy provide?
perils other than those specifically named as being excluded

determine the actual cash value in the following situation: original price of office equiptment when purchased 8 years ago- 9,000. depreciated amount at time of fire-5,000 current replacement cost 12,000
7,000

liquor liability
need for a dram shot, liquor, or package store

inherent vice or defect
iron rusting, milk going sour, rubber breaking down are all inherent vices

how is hitting an animal on the road covered?
other than collision otc

medicare supplement insurance
aka medical gap insurance. must include core benefits

ordinance or law
an endorsement for building code upgrades

loss sustained/discovery forms under crime coverage
loss is for later than the policy period. discovery is for before the policy (loss is later, discovery before)

designated brush fire or civil unrest areas
qualifying areas under the fair plan

stop loss provision
used in health insurance to limit the maximum amount of money the insured would have to pay out of pocket on a health claim in any particular claim

shortages of inventory
under crime insurance the employee dishonesty endorsement never covers

can the mortgagee still collect if the insured burns their house down
yes, the mortgage clause is a standard provision

otc covers
earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)

law of large numbers
the greater the number of insured the more accurately the prediction

where does a driver have coverage?
U.S. Canada and US possessions eg puerto rico, guam

what is excluded under commercial general liability?
pollution-with the exception of fuel spilled during normal operations. Pollution is normally covered under cpp or builders risk

what is the midi-tail on claims made?
provides 5 years coverage for something reported during minitail

speculative risk
chance for loss or gain

commercial package
modular policy

Binder
a temp insuring contract (written or oral)

Hazard
anything that increases a chance for loss

OTC
anything causing loss or damage to the car, except collision

you have liability only and borrow a car and collide with another. which pays?
the borrowed cars insurance is primary

basic broad special: which has the broadest coverage?
special

gap insurance
pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease

eligibility/enrollment period
used in life and health group benefits without having to prove insurability

symbol 9
non-owned autos

the lender on a home is called
mortgagee or mortgage holder

multiple employer trust
a legal entity of small biz owners grouped together to buy insurance

what percentage must vacant for a building to be called vacant?
70%

size limits for business owners policy
6 stories, 100,000 sq feet on offices, 25,000 sq feet and 3 million dollars gross sales for mercantile space (store)

Dp-1 covers
fire, lightning, and internal explosion

dp1, 2, 3 all dwelling forms cover?
loss of rental income

third party
the injured party. to whom liability insurance pays claims

Personal property
property that can move eg furniture, clothes, paintings, etc

why is yacht like ocean marine, even though yacht is a personal line?
the structure of the policy is the same; hull covers damage to the vessel. P and C covers liability and workers comp. A yacht policy can be used for organized racing while ocean marine cannot.

Medical Payments in boat owners insurance covers?
covers medical payments and injury for insured and others on a personal boat. does not cover business use or competitive racing.

Protection and Indemnity on Ocean Marine or Yacht
Liability and workers comp. portion of ocean marine or yacht policies.

code section 770
when buying property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker

part of protection and indemnity
worker compensation in a yacht policy

elimination period
used in disability income health insurance. that time period benefits are not paid. also called the waiting period

did over should
did over should is the fraction of the loss the company pays. the remaining is paid by the insured.( take what they did carry over what they should have carried.

Occupational disability income contract
a disability income policy that will pay benefits whether on or off the job.

Guaranteed renewable insurance contract
a life or health insurance policy that cannot be changed except for the rate.

does the fair plan cover vandalism and mischief
yes, during civil unrest ( riots) you will need it.

Misc Vehicle
Motorcycle atvs (not autos, not mobile equiptment)

Open Peril
all perils except those specifically excluded.

Whats the penalty for not carrying the amount required in a coinsurance clause?
you become a coinsurer and pay a portion of the loss

Consequential loss
a consequence of a direct loss eg. a store loses business income after a fire.

personnel loss
loss of an employee

do corporations have absolute liability?
Yes

What is embezzlement?
employee dishonesty, which is not covered by a crime policy unless an employee dishonesty form is attatched. (does not cover shortages of inventory).

Deductible
a specified amount of money that is paid by the insurer; pays money on the claim.

What has a single limit?
Property Damage

Substandard Risk
classification of risk that is more than the normal acceptable risk

The fair plan
Distributes the risk among companies

Commercial Package
Common Conditions, Common Dec, and two or more modules equal.

What is not considered transacting?
establishing a list of clients

What has a seperate aggregate limit under commercial general liability?
products completed

Full tail optional or exteneded coverage on claims made commecial general liability
unlimited duration for reporting costs extra

Comparative Negligence
You can file a claim, but damages are reduced based on that party’s negligence

Contributory Negligence
a person cannot file or collect if he/she is at all negligent

Indemnify
to restore one to there previous financial condition that existed prior to the loss

Mexican Liability Endorsement
Excess liability for accidents within 25 miles of the U.S. Border (trips of 10 days or less)

Section 2 on Homeowners Policy
Liability and medical payments. paid to others only

selling price
market value

where are covered perils listed
Declarations page

Exclusions
things that arent covered

where are excluded perils listed?
exclusions are found in the cause of loss form

coordination of benefits
discourages multiple payments for the same claim under two or more policies

what are common things not covered by the basic dwelling policy dp1?
no burglary, no falling objects, no collapse, no coverage e, additional living expenses

boat coverage is strucured like?
Auto insurance

NFIP (flood insurance) is only found where?
participating communities, areas designated on a flood map

where does the insurer make promises?
insuring clause. aka insuring agreement

which NFIP coverage pays more to the insured, the standard or emergency?
Standard

Tort
a wrongful act other than breach of contract or a crime

Non-admitted Insurer
an insurer that is not licensed to business in a particular state. (a surplus lines broker works with non-admitted carriers)

number of days to notify an insurer to add collision to a new car replacing a a car that only had liability?
4 days

pure risk
chance of loss

any occupation
definition for being totally disabled in a disability income policy. person cannot perform any occupation he/she is qualified

for what amount can a binder be written for?
1 million dollars

Minimum limits for low cost auto insurance
10/20/3

what are special damages for?
time away from work is special. going to the doctor is special.

starr
share, transfer, avoid, retain, reduce (ways to manage risk)

who needs professional liability insurance?
doctors, architects, lawyers, and accountants

purpose of insurance
to transfer the risk

retroactive date
the first date an occurrence would be covered under a claim made commercial general liability policy

parking lots, dealerships, and repair garages need
garagekeepers

subrogate
the insured transfers the right to sue to the insurance company

how much coverage does a dwelling policy give for personal property away from the premises?
10%

Collision
colliding with another car, an object or upset (rolling)

peril is
the cause of loss

pure risk
the insured only has a chance of loss, never gain

dp1 ho 1 and ho 8
basic

in a contract “you” indicates
the insured

would otc cover a laptop or briefcase stolen from my car?
personal property is usually not covered

disability income insurance
type of health insurance that pays a monthly income to the insured if he/she is sick or injured and cannot work. Pays partial portion

cargo insurance covers
merchandise being shipped

what is the mini-tail on claims made commercial general liability?
automatically gives 60 days to report a claim after the policy period

pre-existing condition
a health condition or sickness that occurred prior to the issuing of a health policy

hull covers
physical damage to insured’s ship or yacht

endorsement
written agreement attached to a policy to add or subtract insurance coverages

broad form of coverage for personal property of a condo owner
h06

physical hazard
disctinct characteristics arising from material, structural, or operational features that increase a chance for loss ie being next to a nuclear power plant

workers comp insurance
insurance purchased by employers to cover their employees in case a worker is hurt on the job

renters
h04

a, b, and c in a homeowners policy are?
a=dwelling, b=other structures, c=personal property

in a contract who is we?
the insurer

standard risk
classification of risk that is normal

risk
uncertainty of loss. a risk must be uncertain to be insurable

raising the deductible
lowers the premium because small claims are eliminated

is a building under constructin vacant?
no

repair, replace, acv
the amount a company pays on a damaged or stolen vehicle whatever is less

insurable interest
financial interest

a,b,c of commecial liability cgl are:
a-bodily injury and property damage, b-personal and advertising injury, c-medical payments

underwriter
a person whos job it is to assess risk and determine classification of the insured. (an agent is a field underwriter)

noncontributory benefits
a life or health insurance plan that an employer provides for employees in which the employee does not pay any part of the premium

minimum good driver discount
20%

a vehicle for hire, to transport people eg limo
livery

dwelling or homeowners which has broader coverage?
homeowners

acv
replacement cost-depreciation

pays excess liability amounts
umbrella after underlying policy or retention is paid. liability only; does not cover property

lowering the deductible
raises premium bcs small claims are covered

morbidity table
a table that shows the average number of sickeness’s or accidents at various ages

experience rating
method used to determine rate based on insureds loss experience

is an object falling from an airplane covered?
under extended coverages

vicarious liability
someone not directly involved but still held responsible. an employer has vicarious liability for employees

symbol 4
owned autos, other than private passenger vehicles

yacht is personal line but is structured like?
ocean marine

blanket insurance
used with large groups where the members change frequently and are not individually names. eg schools, campgrounds, churches

group insurance
life or health insurance provided for large numbers of people who have something in common, such as the same employer

broker
a person who represents the client in transaction: property and casualty only

h02,46
broad forms also dp2 and mobile home policies

replacement cost
the cost to replace without deduction for depreciation. not what someone paid for it

will the cost of sandbaggin a home be covered?
yes the insured does not have to bear the cost