1. Insured must have a financial interest in the subject. (must exist at the time of the loss)
    insurable interest
  2. % of premiums used to pay claims
    loss ratio
  3. can't be excessive to consumers, inadequate to insurers, or unfairly discriminatory to consumers
  4. types of rates
    • class (apply to all members of a wide group of consumers)
    • judgment (rates that are partially or exclusively based on judgment)
  5. something seen, touched or felt that increases the probability or severity of loss
    physical hazard
  6. subjective characteristic; usually based on past actions that may tend to increase the probability or severity of loss
    moral hazard
  7. present actions that display an indifferent on an "I don't care attitude"
    morale hazard
  8. protects the insured for direct losses to the property they own
    property portion
  9. land, buildings, and other property attached to it
    real property
  10. contents of a dwelling or an auto
    personal property
  11. protects policyholder for injuries or damages the policyholder is legally liable for
    casualty portion
  12. wrongful act committed by one party against another, other than a crime or breach of contract
  13. The failure to exercise the standard of care required by law to protect others from harm
  14. the four elements of negligence
    • - existence of a legal duty to act or a standard of care
    • - failure to perform a legal duty
    • - actual damages or injuries are sustained
    • - a proximate cause relationship b/w the negligent act and the resulting damages
  15. unbroken connection b/w the peril and the loss w/o the intervention of a new and independent cause
    proximate cause
  16. caused by a peril after, or as a result of an initial peril
    ensuing loss
  17. a doctrine; person may not recover for an injury received when he/she voluntarily exposes him/herself to a known and present danger
    assumption of risk
  18. permit the injured person to recover damages even though he/she contributed in anyway to the accident (only 49% or less negligent)
    comparative negligence
  19. person cannot recover from the other party if that person contributed in anyway to the accident
    contributory negligence
  20. an independent cause of injury or damage that intervenes b/w the original wrongful act or omission
    intervening cause
  21. any legal action must be brought against an insurer within this time frame
    statute of limitations
  22. combination of special and general damages
    compensatory damages
  23. compensate the victim for itemized losses
    (medical bills, loss of earnings, and property damage
    special damages
  24. damages that cannot be specifically itemized 
    (pain and suffering)
    general damages
  25. intended to punish the wrongdoer for their reckless disregard for the safety of others
    punitive damages
  26. certain activities that impose liability without regard to fault or negligence
    Absolute Liability
  27. imposed on one party as a result of the actions of another
    vicarious liability
  28. separate limits apply to bodily injury (BI) and property damage (PD)
    split limits
  29. minimum allowable limits on a personal auto policy
    Bodily Injury Liability: 30,000 per person & 60,000 per occurrence

    Property Damage Liability: 25,000 per occurrence
  30. the difference b/w an accident and an occurrence
    duration of the event
  31. single limit applies to both bodily and property damage arising from a single accident
    (usually found in commercial auto insurance; homeowners)
    combined single limits
  32. maximum amount that would be paid during a policy term for all damages arising out of one or more occurrences (usually found in commercial lines of insurance)
    aggregate limit
  33. what are the extended coverage perils
    • Riot, Explosion, Vehicle, Civil Commotion, Hail, Smoke, Hurricane, Airplane,Windstorm
    • (REV.C.H.SHAW)
  34. list of perils that the company will protect the property against
    named or specific perils policy
  35. covers the insured property against all causes of loss, unless the cause of loss is specifically excluded
    open or all risk policy
  36. damage to property caused as a direct result of the peril
    direct loss
  37. losses that occur after direct damages of a peril
    indirect or consequential loss
Card Set
terms for licensing test