1. Home
  2. Flashcards
  3. Preview

INSURANCE

  1. An “accident” is a single event where as an “occurrence” involves a continued exposure
  2. Wind damage to a rowboat in the backyard is covered under DP-3
  3. DP-3 covers loss by theft of attached building materials less the dedutible
  4. DP-3 covers damage to a detached garage caused by the insured's auto
  5. Special Limit of Liability
    • $200 - money
    • $500 - off premises business property
    • $1500 - securities, tickets, passports, stamps, watercraft, trailers, jewelry, watches, furs
    • $2500 - theft of firearm or silverware, on premises business property
  6. Auto Comprehensive covers flood, but not damage to tire after hitting a pot hole
  7. Auto claims - proof of loss with 91 days of the accident
  8. A person who will operate the covered auto becomes a household member, should notify the insurer within 60 days
  9. vehicle is under repair, body-shop worker injures a pedestrian while testing the car
    - insured policy will exclude because the mechanic is in the business of repairing or servicing autos
  10. PIP - loss of wages up to 75%
    WC - total permanent 66 2/3%
    WC - partial or temporary of any type 60%
  11. NOC should be sent by regular mail w/ a postal receipt
  12. Consideration - an act by one party in exchange for a promise by the others
  13. Authorities
    • Actual/Express - authorities granted to producer/agent through an agency agreement
    • Implied - unwritten in agreement, but necessary for transacting insurance
    • Apparent - public believes but actually not
  14. Exposure Elimination - Avoidance
  15. Policyowner's consideration - initial premium and statements on the application
  16. An agent acts on behalf of a principal
    principal = insurer
  17. Lloyds Association
    • - Insurance related organization
    • - Does not issue insurance contracts 
    • - Provide a site for individual underwriters to review individual risks
  18. Surplus lines insurance carrier - non-admitted insurer (not authorized)
  19. Intentionally misrepresents material facts - insurer can void the contract
  20. Government sponsored insurance programs
    • - Medicaid
    • - Social Security
    • - Medicare
  21. Risk retention group is involved in commercial liability
  22. Risk Sharing - non-binding agreement on a voluntary basis, financial assistance to a member if it suffers a loss
  23. reasonable expectation
    • - a court of law will generally state that an insurance contract may be interpreted by a "reasonable" consumer to mean what the producer
    • - or insurer has indicated it means
    • - or what he or she has interpreted or expected it to mean
  24. Binding force in an insurance contract - Consideration
  25. Direct writing insurer markets its insurance products through employees who are licensed as producers (Captive)
    - does not own renewals and expirations
  26. Direct Response Insurer - sells insurance over the phone or through mail, mass media (GEICO)
  27. Reduction - lessen severity 
    Prevention - masonry rather than wood
  28. To assign, the policy owner must receive written permission from the insurer
  29. In most insurance, a written proof of loss must be submitted by an insured to the insurer within 60 days
    Auto claims - proof of loss with 91 days of the accident
  30. Contributions by Equal Shares
    insurers pay an equal amounts of a covered loss until one policy is exhausted w/ any remaining loss amounts payable by the other policy up to its limit
  31. an insured under a contract of insurance
    Anyone covered by the insurance policy
  32. Result/ Consequence of an direct loss = indirect loss
  33. Declarations = personalize an policy
  34. Insuring Clause = describes the nature of the agreement
  35. Definitions = identified and describes a policy's insurance terms
  36. An insurance company may reduce its losses through = Salvage
  37. Combined Ratio - determine the profit or loss of an insurer
  38. Vicarious Liability
    • - imputed liability
    • - respondeat superior/Master-servant
  39. Defense Negligence
    - fellow servant rule     which stated that if an employee injury was caused by the negligence of a fellow employee
    • -contributory negligence
    • -last clear chance
    • -assumption of the risk
    • -In addition, another employer defense wasavailable called the fellow servant rule
  40. Car is damaged while repairing, Collision will pay
  41. Named Insured
    • - based on declarations;
    • - any family or (resident) relatives living in the household (i.e., spouse, children even if away atcollege, foster child, etc.)
    • - any other person under age 21 who is in the care of any of the aforementioned insureds(i.e., foreign exchange student);
    • - any person who has temporary possession of an insured’s animal or watercraft;
    • - or a student enrolled in school full-time, as defined by the school, who was a resident of the household before moving out to attend school, provided the student is under the age of 24 and your relative,
    • - or 21 and in your care or the care of another insured.
  42. Fire Legal Limit = limit for damage to premises rented to you (GL); $100,000 limit
    - per fire limit basis
  43. Tree is not covered against windstorm (VVFLARE)
    • -Cost to remove tree will not be covered since it did not damage a covered structure.
    • -Damage to the tree itself is not covered if damaged by windstorm.
  44. Captive - direct writer
  45. Combined Single Limit of coverage
    A limit of liability that combines bodily injury and property damage for any one occurence
  46. WC
    - 1. Benefits
    - 2. Employer's Liability
    - 3. Other States (states listed in Dec)
    • - Benefits (medical exp, income benefits, dependent/funeral exp $4000, rehabilitation/restoration benefits)
    • - Liability ($100,000 per accident; $100,000 per occupational disease; and a $500,000 aggregate for occupational diseases)
    •     - dual capacity (manufacturer)
    •     - third part over (machinery)
    •     - consequential BI
    •     - care and loss of service
  47. casual employee = an independent contrctor
  48. Subsequent Injury Funds
    • - setup by each State to pay all or part of the compensation required when a partially disabled employee suffers a subsequent injury
    • - pay benefits for the previous injury so new employer is willing to hire
    • - This fund will pay what the current employer's policy does not
    • - 1/4% premium tax on allinsurers or carriers who write Workers' Compensation coverage
  49. Different states for employer's home office and the place got injured
    employee can select the state that pays the highest benefit
  50. Employer should make no payments to injured employee when the employee is injured
  51. Employee injuries must be reported to the Industrial Accident Board (i.e., IAB).
    - This organization is referred to as the Division of Industrial Accidents (DIA) in MA
    Notice of injury must be provided by the employer to the DIA within 7 calendar days if the injured employee has lost 5 days of work.
  52. Premiums of WC
    - determine by insurer, depends on the following
    - multiplying the manual rate for each job classification code by each $100 of payroll for that classification
    • -1. job classification/type
    • -2. payroll of all workers
    • -3. modification factor(employer past claim experience; compare the employer’s actual losses (claim experience) to its expected losses by industry type
  53. Bonding (expect no loss)
    - contract bonds <bid/performance bond; maintenance bond; payment bond>
    - License and Permit bonds
    - Judicial bonds <court bond; fiduciary bond (high position officer)>
    • Principal - whose performance is being guaranteed
    • Obligee - protected by the bond
    • Obligor - surety, an insurer or bonding company
    • - the bond maybe an indeterminable length and noncancelable
  54. Fidelity Bond
    • - involves relationship b/w employer and employee
    • - protects an employer against dishonest of employee
  55. Professional Liability
    • - Malpractice Insurance (medical; claim-made;protect the name; compensatory, pain&suffering)
    • - Errors & Omissions (insurance producer, no intentional; claim-made)
    • - Directors & Officers (corporation officer)
    • - Fiduciary Liability (who manage the trust; pension plan; ERISA)
    • - Employment Benefit Liability (improper advice of the plan)
    • - Employment Practice Liability (employer, wrongful termination, unfair discrimination and sexual harassment; no need of consent of employer)
    • - Lawyers Professional Liability (no BI cov); druggists or professional architects liability
  56. Excess Liability - not boarder cov, only higher cov limit
    Umbrella - boarder cov and higher limit; PI;
    • UMCL - not incl WC, incl GL, garage liability, BAP and boiler and machinery
    • UMPL - personal auto,homeowners, comprehensive personal liability and watercraft liability
    • UMB - self insured retention, when not covered by any underlying policies
  57. Flood
    - A general and temporary condition of partial or complete inundation of normally dry land area resulting from overflow of inland or tidal waters or the unusual and rapid accumulation or run off of surface waters from any source.
    - include mudflow, surface runoff, flood related erosion of shorelines or lake overflow that are caused by the accumulation of water on or under ground
    • - rates determined by Federal Insurance Administration (FIA)
    • - Emergency program->Regular Program
    • - Dwelling, contents (inside fully enclosed dwelling), property removed up to 45 days of named peril
    • - not cover accumulation of water on an insured's property due to the formation of the land
    • - Low risk = $500 ded, high risk = $1000 ded, ded can be incr at any time, while decr ded can only be endorsed in renewal, ded can be up to $5000
    • - waiting period = 30 days
  58. BAP
    - excl loss due to a false pretense or trick
    • - 1. Covered Auto
    • - 2. Liability Coverage (BI & PD)
    • - 3. Physical Damage Coverage
    • - 4. Business Auto Condition
    • - 5. Definition
  59. BAP - Covered Auto Symbol
    • - 1. any auto w/ liability only, provides the broadest coverage because it includes all owned, hired and nonowned autos
    • - 2. owned autos only for liability and physical damage coverage
    • - 3. owned private passenger autos only for liability and physical damage coverage
    • - 4. owned autos other than private passenger autos only for liability
    • - 5. owned autos subject to a no-fault law
    • - 6. owned autos subject to a compulsory uninsured motorist law
    • - 7. specifically described autos for liability and physical damage coverage
    • - 8. hired autos only for liability
    • - 9. nonowned autos only for liability
  60. BAP - Liability
    - BI, PD, pollution clean up (fluid to operate the veh, reduce limit), legal exp
    • - BI or PD caused by the use of mobile equipment is excluded but would be covered if loss occurs when this equipment is being transported or towed by a covered auto
    • - $2000 bail bonds, etc.
    • - $250 loss of income per day
  61. Not Covered as Named Insured under BAP
    • - 1. Employees use their own autos (okay when endor employees as insureds endorsement); covered auto that the named insured does not own, hire or borrow in the named insured employer's business or personal affairs
    • - 2. auto-related business (not cover road testing, can buy garage liability)
    • - 3. Anyone except the named insured, employees, partners, a lessee or borrower of the auto while loading or unloading the covered auto
    • - 4. hired or borrowed auto, protect the owner of the leased or hired vehicle is known as the "additional insured-lessor endorsement"
    • - 5. Partners of the named insured while driving their own autos or that of their family or partnership business
  62. BAP - Physical Damage
    - collision, comp, specified causes of loss and towing and labor
    - ACV
  63. BAP - endor
    • - drive other car coverage (employee w/o own personal auto pol)
    • - individual named insured (sole proprietor; extends BI and PD liability to the sole proprietor's resident relatives)
    • - hired non-owned (provides liability coverage for a vehicle that is not owned by an insured)
    • - additional insured-lessor (protects a leasing company)
    • - miscellaneous type vehicles (modifies the definition of covered auto to include motor homes, motorcycles, ATVs, dune buggies, scooters and other types of motorized conveyances.)
  64. hired auto
    - an owned auto when an auto lease requires a lessee to provide primary auto insurance on the leased auto
  65. Garage Coverage Form
    - purchased by automobile, truck, trailer, and recreational vehicle dealers
    - NOT for shopping center parking lot
    - I. Covered Autos; II. Auto Liability and Premises and Operations liability
    - coverage for products, completed operations and medical payment 
    - does not cover damage to autos or other property of customers in the care, custody or control of the named insured (unless endor Garage-keepers Liability<bailee>)
  66. Trucker Coverage Form
    • - Common carrier (service the public; bus;covers act of god)
    • - Contract carrier (service if contract involved)
    • - Private carrier (transport own prop in own trucks)
    • - bobtail endorsement (tractor or cab of the trucker only, Truckers Insurance for Non-Trucking Use)
    • - deadheading (tractor or cab pulls an empty trailer, Truckers Insurance for Non-Trucking Use)
    • - type 1 (nonhazardous; min $750,000)
    • - type 2 (hazardous; min $5 million)
    • - type 3 (hazardous but not type 2, min $1 million)
    • - MCS-90 endorsement (to make it conform to cov requirement w/ regard to the carrying of hazardous materials)
    • - Section I and II (BI and PD to others)
    • - Section III. trailer interchange coverage (covers truckers who damage the trailer of another trucker while it’s in the former’s possession)
    • - Section IV. describes physical damage coverage
    • - Sections V. and VI. describes truckers’ conditionsand definitions
  67. Commercial INLM
    • - acct receivable
    • - bailees customers (dry cleaner)
    • - commercial articles (film, photography)
    • - contractors equipment (insured premise or any job site)
    • - electronic data processing (rewrite program)
    • - equipment dealer (heavy construction equipment)
    • - installation floater (in transit or while installing)
    • - jewelers block (retail jewelers on the premises only)
    • - signs (electrical signs)
    • - valuable paper and records (tax, but not money/securities)
  68. Motor truck cargo
    - cover property in transit or transported on trucks by an insured
    • - shipper's form (carrier has no legal obligation to pay the shipper's loss)
    • - trucker's/carrier form (iability for damage to property of others thatthe trucker is transporting for hire)
    • - owner's form (damage to own property)
  69. Commercial Property Policy
    - at 12:01 am, standard time of the specified date
  70. Aviation Insurance
    • - Aircraft hull insurance is available to cover direct total loss to aircraft (i.e., physical damage only); on the ground, in the air or while landing
    • - Aircraft liability provides similar protection as that covered by commercial automobile liability
    • - Airport liability coverage, covers the ownership, maintenance, or use of insured aircraft
    • - Hangar-keeper's liability (bailee, damage to an aircraft owned by another person while it is kept in the airport hangar)
    • - Voluntary payments for passenger BI can be added to the policy as admitted liability coverage
  71. Boiler and Machinery
    - covers accidental breakdown of almost any type of equipment
    • - business income, extra expense and other forms of consequential losses resulting from physical damage
    • - electrical; mechanical; AC/refrigerator; boiler; biz equipment (copier, computer)
    • - expediting expenses up to $25,000
    • - $100 of loss of income per day
    • - pay up to $25,000 for direct damage due to breakdown (spoilage caused by ammonia contamination; consequential loss<unmarketable products>; cost to restore damaged data; clean-up or repair of covered property damaged by a hazardous substance; damage to covered property by water or water leakage <excl sprinkler/domestic water piping>)
    • - endor for Business Income/Interuption
    • - endor for ACV(ind does not want RC)
  72. Most Commercial Liability
    - per occurrence/ aggregate
  73. Contracts covered under Commercial GL
    • - Lease agreements,
    • - Easements,
    • - incidental Agreements with a municipality, (ex. an indemnification of a municipality as required by ordinance)
    • - Sidetrack agreements and
    • - Elevator maintenance agreements
  74. Supplementary payments are included in addition to the policy's limit of liability in a liability insurance policy.
  75. Businessowners' Policy
    - covers medical exp pf others as long as they are incurred and reported within one year of the date of the accident under liability cov
  76. Claims-made and Occurence
    - The "trigger" is the event that must occur in order for the claim or loss to be paid.
    • Clams-made (the injury or damage happens after a retroactive date; reported and submitted to the insurer within the policy period)
    • Occurrence (BI or PD to occurs during the policy period; reported to the insurer at any time in the future)
    • Extended Reporting Periods (may not be canceled, not extend policy period, only claims-made has this)
    • ERP (basic extended reporting period) - automatically included by claims-made, insurer is notified within policy period or 60 days after expiration, will pay up to 5 years)
    • ERP (supplemental extended reporting period) - tail, make a claims-made to be occurence w/ extra premium, req to buy within 60 days after expiration, go effects when BERP ended<5 yrs>
  77. If no retroactive date selected for claims-made policy form
    A claim will be paid if the BI occurs prior to the effective date of the policy
  78. Commercial GL
    • - Coverage A - Bodily Injury and Property Damage Liability
    • - Coverage B - Personal Injury and Advertising Injury Liability
    • - Coverage C - Medical Paments
  79. Commercial Crime
    • - Burglary (visible signs of a forcibleentry)
    • - Robbery (person to person encounter)
    • - Mysterious Disappearance
    • - Theft
    • - Custodian (inside the insured premises)
    • - Messager (outside)
    • - Loss Sustained Form (covers losses that are sustained during the policy period and discovered within one year of the policy expiration.)
    • - Discovery Form (one year, for coverage to be present, the loss must occur on or after a retroactive date and be discovered during the discovery form period, or within 60 days of its expiration<similar to claims-made>)
  80. Commercial Crime
    • - Employee Theft (Dishonesty)
    • - Forgery Or Alteration (on financial doc)
    • - Inside The Premises / Theft Of Money and Securities
    • - Inside The Premises / Robbery or Safe Burglary of Other Property 
    • - Outside The Premises (above, but outside)
    • - Computer Fraud
    • - Funds Transfer Fraud (fraudulent instructions)
    • - Money Orders and Counterfeit Papers
    • - Kidnap, Ransom and Extortion Insurance (K&R)
    • - Extortion Insurance (blackmail or an unlawful demand for money by threatening harm or exposure of disgraceful conduct)
  81. Farm Liability Form
    • -Coverage A / Dwelling ($250 satelite dish)
    • -Coverage B / Other Private Structures
    • -Coverage C / Household Personal Property
    • -Coverage D / Loss of Use
    • -Coverage E / ScheduledFarm Personal Property
    • -Coverage F / Unscheduled Farm Personal Property (not race horse or poultry)
    • -Coverage G / Other Farm Structures
    • -Coverage H / Bodily Injury and Property Damage Liability ($250 loss of earning)
    • -Coverage I / Personal and Advertising Injury Liability
    • - custom farming $5000
  82. Interline endorsements maybe added to the CPP which apply to more than one coverage part added to the policy
  83. Fair Credit Reporting Act
    • - allows the applicant to receive a copy of the information in the provider's report, especially if coverage has been denied as a result of the information derived from the report
    • - If any of the information is incorrect, the applicant has a right to request a copy of the report, a personal interview or to see that in some manner it is revised and corrected.
    • - This law does not allow the insured to require that the insurer send him or her a copy of the report.
    • - If an insurer requests information from a consumer reporting agency, it must notify the insurance applicant of such a request as soon as possible (generally within three days).
Author
janet_0923
ID
321440
Card Set
INSURANCE
Description
Insurance
Updated

  1. Home
  2. Flashcards
  3. Preview