Term
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Definition
| When insurance companies accept financial risk that an individual insured cannot afford it is called _______. |
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Term
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Definition
| Risk where the insured is the only one who stands to lose if a loss occurs |
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Term
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Definition
| If it is possible for an insured to gain (or profit) if a loss occurs. This is generally not covered. |
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Term
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Definition
| When a large group of people contributes money to a fund out of which their losses can be paid. |
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Term
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Definition
| The person or organization who is protected by the insurance policy and for whom the company accepts financial risk. |
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Term
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Definition
| Money paid by the insured to the insurance company in exchange for the insurance policy. |
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Term
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Definition
| When a policy is terminated due to nonpayment of premium |
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Term
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Definition
| A form added to an insurance policy for an additional premium for additional coverage. It can sometimes restrict coverage, also. |
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Term
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Definition
| An actual cause of loss that can be insured against. |
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Term
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Definition
| condition or operation in property which either creates or increases the chance of loss by a covered peril. |
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Term
What is a Risk
What is another term for RISK? |
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Definition
Likelihood, probability, or degree of uncertainty that a covered peril will cause a loss.
Exposure |
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Term
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Definition
Statistical tables used in calculating premium rate tables
Company rep who keeps track of loss statistics and calculates premium rate tables |
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Term
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Definition
| Money set aside to pay claims |
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Term
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Definition
| The more people the insurance company insures, the more accurate the actuarial tables will be |
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Term
Insurable Interest
When does insurable interest have to be present? |
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Definition
Financial interest (risk) that the insured must possess.
AT THE TIME OF LOSS |
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Term
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Definition
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Term
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Definition
| Contractor or material supplier |
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Term
Indemnity
Another word for Indemnity |
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Definition
Legal concept of one party standing in the place of, or making good for another
Reimbursement |
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Term
| The principles of INDEMNITY and INSURABLE INTEREST _____________________________ |
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Definition
| _________________prohibit the insurance company from reimbursing an insured for more than the actual amount of loss. |
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Term
Deductible
What is the purpose of the deductible? |
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Definition
Initial amount of loss which the insured must suffer before the insurance company begins to indemnify
To eliminate small claims that the insured can afford and which would cost the company to administer. |
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Term
- Limits of liability
- Aggregate limit
- Two other names for Limits of Liability
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Definition
- Max the ins. company will pay under each coverage
- The max the co. will pay to all persons per occurrence.
- Face amount and Amount carried
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Term
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Definition
| Things specified in AUTO policies that the insurance company will pay for in addition to the limits of liability |
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Term
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Definition
| Things specified in HOMEOWNERS policies that the insurance company will pay for in addition to the limits of liability |
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Term
| What is the difference between supplemental payments and additional coverages? |
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Definition
| Supplemental payments are paid in addition to limits of liability in AUTO policies. Additional coverages are paid in addition to limits of liability in HOMEOWNERS policies. |
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Term
Named Peril Coverage
Another name for Specified Peril Coverage |
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Definition
Protects the insureds property ONLY against loss caused by perils specifically named in the policy
Specified Peril Coverage |
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Term
Basic causes of loss
Another term for Basic causes of loss |
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Definition
12 named perils
Fire, Extended Coverage & Vandalism Coverage |
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Term
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Definition
| 20 named perils (broader than basic causes of loss) |
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Term
All Risk Coverage
Another term for All Risk Coverage |
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Definition
Protects insured's property against loss caused by all perils except those specifically excluded.
Open Peril Coverage |
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Term
Direct physical loss
Another term for direct |
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Definition
loss were the covered peril is the direct cause of the damage
Immediate or proximate |
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Term
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Definition
Loss where the covered peril is not the direct cause of the loss or where the property loss is mostly indirect in value
indirect cause of loss = downtime due to restoration
indirect value = actual value of money is as paper, the real value is indirect because it has more value than the actual material. |
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Term
Adjuster
2 responsibilities of an Adjuster |
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Definition
Insurance co. rep. who administers claims
Verify coverage at the time of loss; Investigate and settle the loss |
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Term
Loss Settlement
Another term for loss settlement |
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Definition
Amount paid on the loss
Adjustment |
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Term
Liability Coverage
Another term for LIABLE |
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Definition
Pays sums for which an insured becomes legally liable ffor bodily injury and/or property damage to third parties not to exceed the limits of liability.
Responsible |
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Term
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Definition
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Term
Is it possible for an insured to have liability coverage, for a claimant to have damages and file a claim, but the insurance company to pay no money to the claimant?
If yes, when would this occur? |
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Definition
YES.
A co. will pay on a liability claim only if it determines a court would have found the insured legally liable and order the insured to pay the damages if the claim were to go to court. If it is determined a court would not force the insured to pay, the co. will not pay. |
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Term
Necessary Elements
What is the most important necessary element? |
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Definition
Legal requirement that a claimant must be able to prove to a court to be successful in making a liability claim.
Negligence |
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Term
| What are the two ways an insured can be negligent? |
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Definition
1. Omission = failing to do something he should have done
2. Commision = doing something she should not have done |
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Term
Representations
Why could a co. contest representations? |
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Definition
Basic statements on an application made to the best of the insured's knowledge.
1. False or concealed 2. Material (would have changed the underwriting decisions) 3. Intentional |
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Term
- Warranties
- What are warranties usually for?
- Why can a company contest warranties?
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Definition
- Special statements on an application that the insured guarantees to be correct.
- To get a rate reduction
- If they are false in any way
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Term
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Definition
| The process of deciding whether an applicant qualifies for coverage and what the premium rate should be. |
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Term
| Three kinds of hazards and definition of each |
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Definition
| 1. Morale Hazard: risk is increased by insured acting carelessly or indifferently 2. Moral Hazard: risk is increased by a legal action 3. Physical Hazard: risk is increased by condition of the property or the use of the property or adjoining properties |
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Term
Fair Credit Reporting Act
What three rights does an applicant have? |
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Definition
Federal Law requiring an agent to warn an applicant if there MIGHT be a credit inspection as a result of the application.
1. The name and address of the investigating firm 2. To SEE the report (not to have a copy) 3. The procedure for correcting misinformation |
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Term
Gramm-Leach-Bliley Act
4 provisions of GLB Act |
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Definition
Privacy Act
1. Allows financial organization to consolidate 2. Provides for protection of consumer info 3. Requires financial organizations to provide a privacy notice and to notify consumers of their right to "opt out" of sharing their info 4. Financial organizations must have a written plan to protect consumer data. |
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Term
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Definition
| Structures permanently attached to land |
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Term
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Definition
| Property not permanently attached to land or buidlings |
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Term
| How are buildings usually insured? How is personal property usually insured? |
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Definition
| Buildings for replacement cost; Personal property for ACV. |
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Term
Replacement Cost
What happens if insured doesn't want to replace the property in kind at the SAME PLACE? |
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Definition
Cost of replacing or repairing the insured property with new materials and labor of LIKE KIND AND QUALITY at the SAME LOCATION (will pay betterment: ie, current standard shingles rather than exactly those of 20 years ago that were a loss)
The policy pays ACV |
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Term
| How is replacement cost determined? |
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Definition
| Square footage x cost to rebuild per sq. ft. of same type quality and at that location |
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Term
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Definition
| indemnifies the insured for no more than his/her actual financial loss |
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Term
Formula for Loss of Actual Cash Value (ACV)
Formula for Depreciation |
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Definition
ACV = Replacement cost - Depreciation (don't forget to subtract any deductible!)
Dep = % of life used x Replacement Cost |
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Term
Loss Settlement Provision
Another term for LSP
What is insurance to value? |
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Definition
requires property to e insured for a specified percentage of its value continuously, including at the time of loss.
Coinsurance Clause
Keeping property insured to required amount at all times |
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Term
Loss settlement formula under the coinsurance clause
Amount required formula
Two exceptions to remember: |
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Definition
Adjustment = (Face Amount/Amoutn required) x Loss
Amount required = Coinsurance % x Replacement cost at time of loss
1. Principles of indemnity and insurable interest prohibit adjustment for more than actual loss. 2. Company will never pay more than the limits of liability (face amount) on the policy. |
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Term
| Five ways to ensure property is insured to value: |
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Definition
1. producer may review property annually.
2. Inflation Guard Endorsement: increases face amount by a % at intervals to allow for increase in value.
3. Some companies will increase the face amount of some policies at renewal.
4. Insure the property at 100% instead of required % to provide a cushion.
5. Guaranteed Replacement Cost endorsement: if added there can be no argument over values at time of loss. |
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Term
| Inflation Guard Endorsement |
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Definition
| Increases face amount of the policy by a percentage rate and at an interval specified in the endorsement |
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Term
| Guaranteed Replacement Cost endorsement |
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Definition
| Endorsement to guarantee the insured value--with it there is no argument over the value of property at the time of the loss |
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Term
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Definition
1. Declarations Page (details summary)
2. The insured (named and additional)
3. Insuring agreement (or clause)
4. Conditions (or requirements)
5. Exclusions (limitations, reductions) |
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Term
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Definition
| person or organization specifically named in the declaration page. |
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Term
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Definition
| Additional specifically named persons or organizations, such as a lienholder or mortgagee |
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Term
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Definition
| Person or organization DESCRIBED but not named in the dec page...i.e., HO policies describe any resident of the named insured's household who is a relative or who is not a relative but under 21 and in the care of the named insured. |
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Term
| Insuring Agreement (or Clause) |
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Definition
| Is the promise to indemnify. Includes a list of covered perils. |
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Term
Conditions (Requirements)
1. At time of purchse
2. At time of loss |
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Definition
1. Application and premium paid
2. Notice of loss (claim) and proof of loss |
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Term
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Definition
| Limitations, reductions or things not covered |
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Term
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Definition
| An exclusion for when special property has a tendency to deteriorate under special circumstances. i.e., fur deteriorates when stored in damp/humid conditions. This is excluded under inherent vice. |
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Term
| 5 Elements of a contract (of Indemnity) |
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Definition
1. Competent parties
2. Offer and Acceptance
3. Mutual Agreement
4. Consideration
5. Legal subject (purpose) |
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Term
| If the parties aren't competent at time of purchase, who has the right to void? |
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Definition
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Term
Who makes the offer in a contract to indemnify?
What is considered the offer? |
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Definition
The insured
The application and premium payment |
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Term
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Definition
| When the insured orally gives the producer the application info and promises to pay the premium AND the producer assures the insured he is covered. |
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Term
What is "consideration" in a contract to indemnify?
What is the applicant's consideration?
What is the company's consideration? |
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Definition
the exchange of something of material value
application and premium paid
policy |
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Term
| 2 Reasons why people buy insurance |
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Definition
| 1. Protects against risk of loss the insured can not afford 2. A bank requires it to borrow money on the property |
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Term
| What is the Standard Fire Policy? What does it cover? What are the covered perils? |
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Definition
| 1943, 165 line New York Standard Fire Policy--it is the most basic of all property insurance policies Classes of property specifically described and for ONLY the ACV Hostile fire, Lightning and Removal |
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Term
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Definition
| Any fire not contained within its INTENDED boundaries. Also covers damage by the fire dept. and smoke damage from hostile fire on INSURED's property |
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Term
| What is the Removal peril of the standard fire policy? |
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Definition
| All risk coverage for property removed to avoid damage by a covered peril on INSURED'S property. |
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Term
What are the Insured's duties under the standard fire policy?
The insurance company's? |
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Definition
1. pay premium
2. Take all reasonable means to protect property
3. Give immediate notice of loss
4. Give proof of loss w/in 60 days
5. Separate damaged property from undamaged and all insurance company to inspect both the undamaged property and books and records.
6. Can't sue unless above five have been met and then only within 12 mos of the loss
1. Must indemnify w/in 60 days of proof of loss
2. Must pay either the ACV of loss or repair/replace the property
3. If there is disagreement about the settlement, each party can select an appraiser. If they disagree and "umpire" appraiser will make the final determination under the arbitration (appraisal) clause. |
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Term
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Definition
| If insured and company disagree about settlement or repair, each person chooses an appraiser to evaluate property. If they also disagree, they choose an "umpire" appraiser who makes a final determination. Also call Appraisal Clause. |
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Term
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Definition
| The insurance company can require the insured to assign to it any legal rights which the insured has against third parties. (means the company can SUE third parties to regain some or all of the settlement amount if they were at fault) |
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Term
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Definition
| No assignment (transfer) of the policy to another person unless it is signed by an officer of the insurance company. |
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Term
| The Other Insurance Clause |
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Definition
| Insurance company can prohibit other insurance or can limit the amount of other insurance |
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Term
Pro Rata Liability Clause
What circumstances need this clause? |
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Definition
When there are concurrent policies, no insurance company is liable for more than it's pro rata share of the property
With high value property (spreads the risk to more than one company)-- policies are identical except for face amount. |
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Term
| What are 3 rights of a mortgagee? |
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Definition
1. Notice of cancellation of policy within 10 days
2. To have loss paid to mortgagee
3. To provide proof of loss if insured fails to. |
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Term
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Definition
| When a company pays a claim, then assumes ownership of the damaged property to repair it and sell it to recover all/part of the loss. |
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Term
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Definition
| No property can be abandoned to the insurance company without the company's consent |
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Term
| When does the Vacancy and Unoccupancy clause take effect? |
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Definition
| When property has been left vacant or unoccupied for 60 CONSECUTIVE DAYS |
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Term
| What is the difference between Vacant and Unoccupied? |
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Definition
Vacant = completely empty or empty enough that the property can not be used for its intended purpose.
Unoccupied = Furnished, but no one lives/works there |
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Term
| Vacancy and Unoccupancy permit ENDORSEMENT |
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Definition
| Extends coverage beyond 60 days of vacancy or unoccupancy by specified time frame. |
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Term
| What property is excluded by the standard fire policy? |
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Definition
| Property of indirect value, i.e. money, accounts (bookkeeping records), legal documents, manuscripts & blue prints |
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Term
| What perils does the standard fire policy exclude? |
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Definition
| War, Neglect, Loss caused by order of a civil authority (except fire) |
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Term
| what are the two main types of property and casualty policies? |
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Definition
| Personal Lines (homeowners, dwelling and personal auto insurance) and Commercial Lines (commercial property, package, liability and crime policies and business auto policies) |
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Term
| 10 Property Insurance Policies |
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Definition
1. Extended Coverage
2. Vandalism and Malicious Mischief
3. Dwelling Building and Contents Basic
4. Dwelling Building and Contents Broad
5. Dwelling Building and Contents Special
6. Building and Personal Property Form
7. Homeowner (H.O.)1,2,3,4,5,6,8
8. Farm Owners Package Policies
9. Business Package Policies
10. Commercial Package Policies |
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Term
| What perils are covered under BASIC coverage? |
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Definition
| Extended Coverage (W.C. Shaver) and VMM |
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Term
| What perils are covered and excluded under Extended Coverage? |
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Definition
W.C. Shaver
Windstorm, Civil commotion, Smoke damage, Hail, Aircraft, Vehicle and volcanic action, Explosion, Riot.
Excludes: War; Earth movement; Flood, Sewer and Water below the surface;Power interruption off the premises |
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Term
| What perils are covered and excluded under the Vandalism and Malicious Mischief Endorsement? |
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Definition
Duh. Damage caused by Vandalism and Malicious Mischief.
Excluded after the property has been VACANT for 30 DAYS. (covers unoccupany) |
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Term
| What is "limited" smoke damage under extend coverages? |
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Definition
| Smoke damage must be from a sudden cause if there is no hostile fire. i.e., furnace backfire. |
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Term
Dwelling Building and Contents Basic
- Also called
- Criteria for property to qualify
- Perils covered
- Perils excluded
- Coverages
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Definition
- DP-1 Form
- Occupied by 4 or fewer families, does not need to be owner occupied, but can be
- Basic, extended and V.M.M. (for practice recite these now)
- Excluded under basic, extended and V.M.M. (for practice recite these now.)
- Cov A, Dwelling for ACV; Cov B, Other Structures 10% of Cov A (auto extended); Cov C, Personal Property (Opt. Add'l); Cov D, Rental Value, 10% Cov A (auto extended). [A, B & D are dwelling coverages for ACV. Personal Property, if added, is also ACV]
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Term
Section I coverages
What are they and what do they cover? |
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Definition
Coverage A: Dwelling/Building
Coverage B: Outbuildings/other structures/appurtenant structures
Coverage C: Personal Property (ACV)
Coverage D: Loss of Use |
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Term
Section II Coverages
What are they and what do they cover? |
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Definition
Coverage E - Personal Liability
Coverage F - Medical Payments (Med Pay) |
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Term
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Definition
| If the insurance company changes its policies within the policy period so as to provide more coverage without additional charges, the policy will automatically add the broadened coverage. |
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Term
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Definition
| extended coverages EXTEND to cover the specified situations UP TO but not exceeding the Coverage A limit. |
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Term
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Definition
| Additional coverages extend to cover specified situations and can EXCEED the coverage A limit. |
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Term
| What is the difference between an automatic coverage and an optional coverage? |
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Definition
| Automatic coverages cover without an additional premium charge. Optional coverages require and additional premium. |
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Term
Dwelling Building and Contents Broad Form
- Also known as
- Perils Covered
- Perils Excluded
- Coverages
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Definition
- Dp-2 Form
- Inc: Basic, E.C. and V.M.M. (recite these for practice)
- Exc: Basic, E.C. and V.M.M. exclusions (recite for practice) AND damage caused by agricultural or industrial smudging
- Cov A-Dwelling (Replacement Value); Cov B-Other Structures (Opt Add'l); Cov C-Personal Property (Opt Add'l); Cov D-Rental Value (Opt. Add'l) [Dwelling (A,B,D) covered up to replacement cost, Personal Property, if added, up to ACV]
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Term
| Other terms for "other buildings" in Coverage B? |
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Definition
| Outbuildings or Appurtenant Sturctures |
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Term
Dwelling Building and Contents Special Form
- Also known as
- Perils covered
- Perils excluded
- Coverages
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Definition
- DP-3 Form
- Inc: All Risks unless specifically excluded
- Exc: Basic, E.C. and V.M.M exclusions (recite these for practice) and Damage from agricultural or industrial smudging; damage caused by negligence in maintenance; Cost of repairing mechanical breakdown ie, plumbing, etc; damage caused by critters.
- Cov A-Dwelling (up to replacement cost); Cov B-Outbuildings (Opt Add'l); Cov C-Personal Property (Opt. Add'l); Cov D-Rental Value (Opt. Add'l) [Dwelling (under A,B,D covered up to replacement value; Personal property up to ACV]
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Term
Building and Personal Property Form
- Criteria for property to qualify
- Perils included
- Perils excluded
- Coverages (opt add'l and auto extensions)
- Endorsements available
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Definition
- Commercial buildings, including rentals with more than 4 families
- Can be written to cover: Basic, Broad or Special causes of loss. All three cover sinkhole damage, sprinkler leakage and debris removal.
- Exc: Basic, E.C. and VMM exclusions (recite these for practice); damage from industrial and agricultural smudging; damage from negligent maintenance; Cost of repairing mechanicial breakdown; damage caused by critters; property vacant or unoccuppied 60 consecutive days
- Optional Additional: A including signs and objects attached to the bldg; B personal property of insured w/in 100 ft of premises; C personal property of others (BAILEE coverage)
- Automatic Extensions: personal property of others, off premesis, newly acquired property, valuable papers and records (not bookkeeping) and outdoor trees, shrubs, plants, signs and antennas w/in 100 ft of the bldg.
- Bldg and personal property covered up to ACV. Can endorse up to replacement cost.
- Indirect Loss-Time Element Coverage endorsements available:1. business income coverage 2. Extra expense coverage (detailed in another card)
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Term
| Business income coverage endorsement |
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Definition
- Covers loss of earnings while shutdown to remodel and restock due to a covered peril.
- Covers net income before taxes, plus normal operating expenses, and payroll, unless excluded.
- Coinsured
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Term
| Extra Expense Coverage Endorsement |
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Definition
| Protects against extra expenses of doing business during restoration in excess of normal business costs, i.e. rent of facilities. |
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Term
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Definition
| includes all the property, casualty and liability coverage an owner needs all one policy |
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Term
Homeowner (H.O.) Policies
- 2 criteria for property to qualify
- Coverages A-F
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Definition
- Dwelling must be occupied by owner and four or fewer families total.
- Cov A-Dwelling covered for replacement cost except HO8
- Cov B-Outbuildings covered for 10% of Cov A or specified amount.
- Cov C-Personal Property automatic add'l 50% of Cov A. If endorsed can be covered for replacement cost, if not added is covered up to ACV. Neither will be more than 50% of Cov A.
- Cov D-Loss of Use (add'l livig expense and rental value) covered for automatic add'l 10% of Cov A on HO1 & HO8. All others add'l 30%
- Section II Coverages E & F
- Cov E: Personal Liability, Minimum $25,000 up to limit of liability.
- Cov F: Medical Payments, usually is a per person limit and an aggregate limit per occurrence.
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Term
Coverage E
How much is coverage?
What does it cover? |
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Definition
Personal Liability
Pays bodily injuries/property damage of third parties for which insured is legally liable.
Minimum $25,000 up to limits of liability
Bodily injury/property damage. Not personal injury (non-physical) such as slander or libel. Only to third parties. |
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Term
Coverage F
Also known as?
What does it cover?
Does insured have to be legally liable?
What are the limits?
Why do you need Section Coverage F? |
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Definition
medical payments
Med Pay
Medical expenses for third parties w/in three years of an accident on insured's premises, or caused by his activities, his animal or his resident employee. Includes ambulance and funerals.
No. It covers whether insured is legally liable or not.
Usually there is a personal limit and an aggregate limit per occurrence.
Having Med Pay will usually head off a liability claim against the insured. |
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Term
Homeowners Policies 1, 2, 3, 4, 5, 6, 8
- HO1: Dwelling and personal property covered against Basic Form Perils. Cov D Auto Add'l 10% of Cov A
- HO8: Modified Form SAME AS HO1 EXCEPT: Protects up to limits of liability based on ACV.
- HO2: Dwelling and personal property protected against Broad Form Perils. Cov D add'l 30% of Cov A
- HO3: Dwelling protected against Special Form Perils. Personal prooperty protected against Broad From Perils. Cov D add'l 30% of Cov A.
- HO4: Renter's Coverage. Contents protected against Broad Form Perils. No Cov A or B. Cov C up to limits of liability based on ACV unless endorsed for replacement value. Cov D add'l 30% of COVERAGE C.
- H05: Comprehensive Form. Protects both dwelling and personal property against all risk except those excluded.
- HO6: Condominium Owners Form. Both dwelling and personal property covered Broad Form unless endorsed for replacement value. Cov A-interior that is actually owned by insured covered for replacement value; Cov B-optional if insured actually owns an outbuilding; --condominium association must purchase separate policy to cover exteriors and any property commonly owned.
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Definition
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Term
HO Coverage C--How much will company pay for loss of the following?
- Money
- Valuable Papers
- Watercraft and furnishings
- Trailers not used with watercraft
- Theft loss of furs and jewelry
- Theft loss of silverware, goldware and pewterware
- Theft loss of firearms
- Any type of loss of property used primarily for business (ie painting equipment, plumbers tools, laptops, etc) on the premises? Off the premises?
- Electronic apparati used in autos
- loss of personal property kept off premises?
- What is Loss of pairs?
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Definition
- money = $200
- Papers = $1500
- Watercraft = $1500
- Trailer = $1500
- Furs/Jewelry = $1500
- Metalware = $2500
- Firearms = $2500
- Business property = $2500
- Electronics = $1500
- Property kept off premises = greater of 10% of Cov C or $1000
- If one of a pair is lost, the ocmpany has the option of paying the loss or restoring the pair.
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Term
| 5 additional coverages insurance companies will pay (supplemental payments) |
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Definition
1. debris removal
2. Reasonable repairs to prevent additional losses
3. Trees, shrubs & plants $500 each up to 5% of Cov A for covered perils.
4. $500 for fire department charges
5. $500 for credit card/check forgery andf counterfeit money |
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Term
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Definition
Basic, E.C. (except HO will cover theft) and VMM (except excluded after vacant 30 consecutive days)
Damage by agricultural or industrial smudging
Damage from negligent maintenance ie, wear, tear rot, mold, rust, inherent vice, discharge of pollutants, etc. HO provides limited coverage for mold which is hidden if it is caused by discharge of plumbing, cooling, heating, sprinklers or household appliances.
cost to repair mechanical breakdown (materials covered but NOT labor)
Damage to ro by domestic animals
Damage by birds, vermin rodents & insects |
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Term
| Homeowners Section II Exlusions |
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Definition
intended acts
Business and professional liability
other premesis owned by insured
aircraft and auto
watercraft with outboards more than 25 hp, inboard/outboards more than 50 hp and sailboats 26 feet or more in length.
RV's (snowmobile, dirt bikes, go carts, ATV's) used away from the premises except golf carts used on a golf course. |
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Term
Inland Marine Coverage
What is it?
6 types of Inland Marine Coverages |
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Definition
policy or endorsement protects personal property which is not attached to land or a building.
1. Personal Property Floater: peronal article floater: scheduled endorsement covering items limited or excluded under HO policies ( ie, jewlery, furs, cameras, art, coins, etc) worldwide for ACV (unless endorsed for Replacement Cost) up to the stated amount for each item. If it isn't detailed in the list it isn't covered. Pleasure Craft Coverage: protects against damage to boat in water or during transport, theft and liability arising from boat or use.
2. Commercial property floater: ie Commercial Equipment Floater which covers contractors tools, equipment and supplies.
3. Domestic shipments coverage: Covers goods being shipped w/in the US to and from the insured.
4. Instrumentalities of Transportation or Communication Coverage: Covers commercial television and satellite towers, antennas and disks.
5. Imports Coverage: Covers good being shipped from a foreign country to the insured.
6. Exports Coverage: Covers goods being shipped from the insured to a foreing country. |
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Term
Personal Umbrella Liability Endorsements
What does it cover?
Criteria to qualify for coverage? |
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Definition
Covers professionals, business people or public people who are known to own substantial property and have high income.
Covers excess of claims above the limits of homeowners and automobile policies, including personal injury claims.
Insured must maintain primary auto and home liability coverage with required limits to qualify for umbrella coverage. |
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Term
Mobile Home Coverage
How are they insured?
Section I coverages?
Section II coverages?
Are there special limits or exclusions? |
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Definition
Mobile homes are personal property not buildings. Some companies insure them on HO2 or HO3 policies with an endorsement. Some have developed special policies.
Cov A: Mobile home and attached structures.
Cov B: Other structures
Cov C: Personal Property
Cov D: Loss of Use
Cov E: Personal Liability
Cov F: Med Pay
All property is covered for ACV unless endorsed for replacement value (usually restricted to higher value, lower aged units) Coverage takes effect after set up, not in transit. |
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Term
Farm Owners Package Policies
- Section 1 coverages A-D
- Section 2 coverages E-F
- Coverage G
- Coverages H-J
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Definition
- A:Dwelling, B:Outbuildings of DWELLING, C: Household Pers. Property, D:Loss of use of dwelling
- E: scheduled FARM property, F: Unscheduled FARM property
- G: Outbuildings and structures of FARM
- H: Bodily Injury & Property damage Liability, I: Personal and Adv. Injury Liability, I: Med Pay
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Term
Crop Insurance
- Who issues?
- Named peril or all risk?
- What is crop Revenue Insurance?
- What credentials do you need to sell it?
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Definition
- by private companies but some programs are subsidized by govt
- named peril, but can be all risk (called MULTI-PERIL)
- protects against loss from decreases in commodity market or low yield
- some crop ins. requires a p&c license AND a crop course.
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Term
Business Package Policies (Commercial Package Policies)
- Business Owners Policy: Required and optional coverages
- Commercial Package Policy: Required & Optional coverages
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Definition
- BOP: REQUIRES Common policy decs, common conditions (same as Bldg and pers prop), liability coverage (same as CGL)
- BOP: OPT Crime, outdoor signs, exterior grade floor glass, employee dishonesty, boiler/machinery, builder's risk coverages
- CPP: REQUIRES common policy decs, common conditions
- CPP: TWO OF THE OPT commercial property, farm, builders risk, commercial inland marine, commercial gen'l liabiity, Boiler/Machine, commercial crime, commercial auto
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Term
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Definition
| OPT to BOP and CPP; covers boiler, insured's other property, legal liability resulting; business income coverage must be ADDED |
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Term
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Definition
| Can be added to BOP and CPP; covers contractor for bldgs under construction and equipment w/in 100 ft, ACV, Limits based on value at COMPLETION, must be insured to adequate limits, issued for 1 yr and terminates with purchase or inaction for 90 days |
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Term
Terrorism Risk Insurance Act
who participates and what are they required to do
What is terrorism?
What loss qualifies?
What' in it for the company? |
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Definition
| TRIA; Fed program insurance co can participate; if participating must offer endorsement on commercial policies; Terrorism=act committed on behalf of foreign interest. Must be w/in US, embassy or vessel; >100 million; Sec of Treas must certify the loss. Ins Co will be REINSURED by the Fed Govt. |
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Term
Earth Movement Coverage
What policies can it be added to?
What does it cover?
When? |
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Definition
| Can be added to any property policy: loss by earthquake, landshock waves and tremors before & after. Within 72 hr period. |
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Term
Flood Insurance
Who offers it? Why?
Who issues policy?
Req's to sell it?
What property qualifies?
What if the property is in a Special Flood Hazard Area?
What perils are covered?
Special info about flood coverage? |
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Definition
| National Flood Insurance program, because the risk is too great for an individual company; policies are issued by both NFIP and the ins. co; must have producer's license and flood insurance course; to qualify must be in participating community and not be left in the open; If bldg is in SFHA (flood plain) lenders must req flood coverage to get a loan on the bldg; covers inundation (temp, unusual, unintended SURFACE water; 3o day waiting period and deductibles 500 or 1000 depending on risk potential. |
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