Combo with "Homeowner's Insurance" and 27 others

Business Auto Cov Form - Declarations

2 Declaration: 1. Business Auto Cov Form Dec - used in CPP 2. Business Auto Dec - used when cov is being written as a monoline

commercial crime coverage can be written on what kinds of basis?

1. blanket basis 2. schedule basis

what two physical damage coverages are available for Business Auto Policy?

1. comprehensive coverage (from any cause except collision with another object) 2. collision coverage (upset of the vehicle/collision with object)

DP Personal Liability Supplement

**This adds all of Section 2 Homeowners to the Dwelling Policy** *Bodily Injury *Property Damage *Medical Payments to Others **Limits are same as Homeowners** Personal Liability $100,000 per occurence Medical Payments to Others $1000 per person 3 year time limit

DP1 Basic Perils 1-3

*Fire *Lightning *Internal Explosions

Homeowners Policy Eligibility

*The residence must be located within the standard territorial definition. *It must be a one or two family home if owned, or any rental premise. *The premise must be owner occupied if owned and tenant occupied if rented. *If renting space within your premise, no more than two boarders. *The home must be principally used as a residence, not a business or a farm

Use and File State

a company is allowed to use new forms and rates and must file with the Dept of Insurance within a certain time after use begins

BAP

a land motor vehicle, trailer, or semi-trailer designed for travel on public roads. Commercial vehicles used for public roads and moble equipment

Auto

a land motor vehicle, trailer, or semi-trailer designed for use on public roads, but does not include "mobile equipment"

in flood insurance, "write you own" means: a) any person can write the policy by contacting the insurer directly b) a licensed producer can write the coverage w/ an insurer c) a licenses producer can write the flood policy only w/ the Federal Government d) a licensed producer can write a flood policy on his own home

a licensed produced can write the coverage w/ an insurer

If a Commercial Package Policy is written w/ only one Coverage Part, it is referred to as: a) a package policy b) a monoline policy c) a monotone policy d) an interline policy

a monoline policy

which of the following would be an eligible business for a Business Owners Policy? a) a fast lube auto sho b) a six unit apartment building c) a huge shopping mall d) an amusement park

a six unit apartment building

Under the Business Auto Policy, the definition ofhired auto would not include? a) an auto leased by the insured b) a can owned by a company employee c) a truck rental d) a borrowed pick-up truck

a van owned by a company employee

Reinsurrance

acceptance by an insurer, called a reinsurer, of all or part of the risk of loss of another insurer insurance purchased by the insurance company, can be purchased policy by policy or a whole block of policies and helps protect insurance companies from catastrophic losses and wild fluctuations in underwriting results`

which of the following is considered a covered loss under a flood policy? a) back-up of a swer system b) accumulation or run-off of surface water c) windblown rain d) if the insured drains his pool and it floods the house

accumulation or run-off of surface water

All of the following are time element coverages EXCEPT... A) Extra Expense Coverage Form B) BUsiness Income Coverage Form c) Homwoeners Coverage D- Loss of Use d) Additional Coverages

additional coverages

guarantees the fiduciary will faithfully handle the financial affairs of the estate of a deceased person

administrator (executor)

Under OK Workers Compensation, when do benefits for Loss of Income Benefits begin? a) as soon as the claim is filed b) after 3 days c) after 7 days d) after the waiting period

after 7 days

Independent Agency System

agencies that are independent contractgors contract with several different companies to represent and sell insurance for those companies

per employee basis

all loss caused by one employee

Independent or Nonexclusive Agent

an agent who represents moret han one company

Foriegn Company

an insurance company doing business in a state other than the one in which it is incorporated

Risk Retention Groups (RRG)

an insurance company formed by several organizations to cover those organizations' liability loss exposures; risk retention groups are exempt from most state laws that govern insurance companies

Implied Authority

authority given by the principal to the agent that is not formally expressed or communicated

covers all employees for a single amount of insurance regardless of the number of employees in collusion (secret cooperation for an illegal or dishonest purpose)

blanket bias

used to guarantee promises (obligations) made by a person (or legal entity) if they fail to uphold their promise

bonds

Forcible entry into locked premises, w/ visible signs of forced entry, in order to steal is called.... a) theft b) robbery c) mysterious disappearance d) burglary

burglary

Larry's car is stolen. Which of the following coverage would pay for the value of the car? a) comprehensive b) collision c) transportation expense d) property damage

comprehensive

losses resulting from the use of a computer OFF the insured's premises to fraudulently transfer property

computer fraud

All of the following are covered as business personal property EXCEPT... a) executive office furniture on the insureds premises b) inventory on the insureds premises c) concrete outdoor furniture on the insureds premises d) raw materials stacked on the insureds premises

conrete outdoor furniture on the insureds premises

Support Departments

departments in the insurance company that contribute to all other departments examples - personnel, training, informatin systems, administration, forms and filings, and building and maintenance

vandalism

eliminates coverage for damage to those types of proeprty by vandalism or malicious mischief

person employed by a business.

employee

To qualify for coverage outside the premises losses resulting from 1) theft 2) mysterious dissappearance 3) destruction of the property outside must be what?

in the custody of an armored motor vehicle or messenger

Money

includes currency, coins, bank notes, travelers checks, register checks, and money orders

Securities

instruments or contracts that represent money or property, Checks, drafts, bonds, certificates of deposits, stock certificates, stamps, and credit card receipts are all considered securities

Domestic Company

insurance company doing business in the state in which it is incorporated

which of the following does a flood policy cover? a) docks and piers b) care in the garage c) money d) kitchen appliances

kitchen appliances

unexplained loss of property with the presumption of theft

mysterious disappearance

Fiduciary

person who stands in a special relationship of trust to another person agents have this relationship with the customer when handling their premium agents have this relationship with the insurer as they represent them to the customer

Earned Premium

premium the company actually earned by providing insurance protection for the designated period

under a Workers Comp policy, the premium basis is... a)remuneration (payroll) b) gross receipts c) # of employees d) type of business

remuneration (payroll)

Regarding professional liability policies, all of the following are true EXCEPT... a) written on a claims-made basis b) include a consent to settle clause c) require underlying limits of insurance d) medical profession is referred to as malpractice

require underlying limits of insurance

taking property from the care and custody of a person by someone who threatens to cause bodily harm

robbery

requires the employee to be identified either by name or position. the limit of insurance applies separately to each employee

schedule basis

The Basic Cause of Loss Form provides coverage for which of the following perils? a) earthquake b) flood c) sprinkler leakage d) theft

sprinkler leakage

A person on the premises with the knowledge and consent of the owner, but possibly without benefit, is considered to be what?

A licensee

What is Particular Risk?

A risk that affects only the individual and not the entire community or country. Ex. Theft of a stereo set. This is insureable.

UTMOST GOOD FAITH

ACTING IN FAIRNESS AND EQUITY WITH A SINCERE BELIEF THAT THE ACT IS NOT UNLAWFUL OR HARMFUL TO OTHERS. THE INSURANCE CONTRACT REQUIRES THAT EACH PARTY IS ENTITLED TO RELY ON THE REPRESENTATION OF THE OTHER WITHOUT ATTEMPTS TO CONCEAL OR DECEIVE.

PERIL

ACTUAL CAUSE OF A POSSIBLE LOSS (FIRE, THEFT,RAIN, ECT.)

Coverage C Basis of Recovery

ACV....FOR ALL H.O. POLICIES

condition that states that the insured cannot abandon damaged property to the insurer and demand full replacement

Abandonment

Which liability doctrine would likely be imposed on the owner of wild animals kept in captivity should a third party be injured by one of those animals?

Absolute liability

The normal vacancy condition under a commercial lines policy can be waived by:

Adding a Vacancy Permit endorsement. NOTE: A vacancy permit is needed in order to waive the condition of vacancy under a Building and Personal Property coverage form.

*Must be physical contact...vibration damage is not covered.

Aircraft

The insured's own aircraft is not covered

Aircraft Exclusions

Exclusions on a Dwelling Policy

All Homeowner Policy Exclusions apply to All Dwelling Policies

Territorial Clause

All of Coverage A is Standard Territorial Clause

Open Peril

All perils except those specifically excluded.

The Commercial Articles Coverage Form is provided on an:

All-risk basis.

What is the formula for calculating the coinsurance penalty?

Amount carried, divided by required amount, multiplied by loss, minus deductible NOTE: Carried = $60,000 X Loss $10,000 - ded.= Loss Pmt. -------------------- $7,500 Required = $80,000

True.

An occupant of a dwelling under a life state is eligible for HO insurance. True or False?

Symbol 1

Any Auto Coverage

Powersurge

Artificial Current AKA: The Sudden & Accidental Discharge From Artificially Generated Electrical Current

Coverage A Limits

As declared by homeowner...FOR ALL H.O. POLICIES

condition in insurance policies that specifies that the po9licy cannot be transferred to another unless the company consents to the transfer in writing

Assignment Condition

The taking of property from inside the premises by a person unlawfully entering or leaving the premises as evidenced by VISIBLE SIGNS OF FORCED ENTRY or EXIT, is an example of:

Burglary

Jettison is defined as:

This is a term used to define the act of throwing cargo overboard to lighten the ship and may be necessary to reduce the amount of loss.

Collision

Colliding with another car, an object, or upset (rolling)

Nonadmitted or Unauthorized Insurer

Company that is not authorized to do business in a particular state

Gravemarkers (Not covered by HO8)

Considered an insured location Covers losses covered under Coverage C $5000

Coverage B

Covers other unattached structures and fixtures.

Personal Property - 50% of Coverage A;

DP Coverage C:

Part of Coverage A Limits Adds 5% to Limit

DP- Debris Removal

A + B (Seperate Amounts)

DP3

Coverage Form C, Theft, Disapperance and Destruction covers the following:

Damage caused to the premises in the course of the crime.

DOI

Department of Insurance state department charged with controlling matters within the state regarding insurance

Under Garagekeepers coverage, which basis covers physical damage caused to a customer's vehicle regardless of liability, but only if the customer has no physical damage coverage of their own?

Direct Excess Basis

Professional Liability coverage is designed to cover:

Errors on a contract drawn by of a real estate agent for a client. NOTE: Professional Liability is designed to cover the negligent acts or omissions of individuals who cause bodily injury to another when rendering or failing to render professional services.

Only kicks in after existing liability policy runs out of coverage

Excess Insurance

Mexican liability endorsement

Excess liability for accidents within 25 miles of the U.S. border (trips of 10 days or less)

Inventory more than 100 feet off premise is:

Excluded from the policy. NOTE: Inventory off premise needs to be insured by a Commercial Inland Marine policy.

Fellow Employee

Exclusion related to liability arising out of an auto accident in which one employee negligently causes injury to another employee.

The seller retains interest in the property until after the trip is completed

FOB(free on Board) Cargo Ins.Point of Destination

would not cover flood water from a source on the insureds property unless the flood is displaced over 2 acres of the premises. $500 ded. applies to both property and contents

Flood Policy

Loss Sustained FOrm

Form that covers losses actually sustained during the policy period and discovered no later than one year after policy expiration.

What are the current Homeowner Forms?

HO-2 (Broad Form); HO-3 (Special Form); HO-4 (Contents Broad Form also known as the "Tenants Form"); HO-5 (Deluxe Form-open peril coverage for buildings and contents); HO-6 (Condominium Unit-Owners form); HO-8 (Modified Coverage Form)--the most limited form.

3pecial Form Open Peril or Special aka All-Risk Perils Covered, Replacement, Coverage A Dwelling

HO-3

5omprehensive Form, Best

HO-5

What is the difference in HO-5?

HO-5's dwelling and personal property is OPEN PERIL.

$1000 per occurence

HO8...Any theft

MATERIALITY

IN INSURANCE, IT REFERS TO A FACT WHICH IS SO IMPORTANT THAT THE DISCLOSURE OF IT WOULD CHANGE THE DECISION OF AN INSURANCE COMPANY, EITHER WITH RESPECT OF WRITING COVERAGE, SETTLING A LOSS, OR DETERMINING A PREMIUM.

PROPERTY INSURANCE

INDEMINIES A PERSON WITH AN INTEREST IN PSHYSICAL PROPERTY FOR ITS LOSS OR LOSS OF ITS INCOME PRODUCING ABILITIES.

A. HO-04-46 Inflation Guard prevents underinsurance due to inflation and rising replacement costs. 1. It gradually and automatically increases limits throughout policy period for Section I Property Coverages A,B,C, & D 2. Insured and insurer agree annually on % of increase (4,6,8%) to original amount of insurance. 4% additional increments are available. B. HO-04-61 Scheduled Personal Property Endorsement covers personal property NOT covered by an unendorsed homeowner's policy. 1. Endorsement provides scheduled coverage for specific items - jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps, and rare and current coins. 2. Neither Coverage C Special Limits nor Section 1 deductible apply to scheduled items C. HO-04-90 Personal Property Replacement Cost Loss Settlement Endorsement: replacement cost for personal property, awnings, carpeting, household appliances, and outdoor equipment. If policy doesn't have this endorsement losses on the above is at ACV. 1. Endorsement lists types of property ineligible for replacement costs including rare articles that can't be replaced, whose age or history increase value, articles not maintained, & outdated and obsolete articles. 2. Items covered under the endorsement are paid at no more than the least value of: a. replacement cost at time of loss with NO deduction for depreciation b. full cost of repair at time of loss c. Coverage C Personal Property liability limit d. Any special limits of liability that apply e. Any item separately described and specifically insured at the limit of liability 3. Losses with replacement value of more than $500 - insured must repair or replace lost or damaged items before insurer pays. D. HO- 24-82 Personal Injury Endorsement expands homeowners' liability coverage by adding definition and coverage for personal injury: 1. Personal injuries = injuries arising out of one or more of these offenses: a. false arrest, detention, or imprisonment b. malicious prosecution c. invasion of privacy, wrongful eviction, or wrongful entry d. libel or slander against a person or organization or disparaging acts against a person's or organization's goods, products or services. 2. Exclusions - intentional acts, criminal acts, contractual liability, employment, business activities, bodily injury to an insured, civic or public activities performed for pay, & pollutants. E. HO-07-01 Home Business Insurance Coverage (HOMEBIZ) comprehensive business package policy when attached to a homeowners form covers insured's operating office or a service, sales, or crafts business from their homes. 1. Endorsement provides wider range of coverages normally only in commercial policy 2. Endorsement excludes professional liability coverage and excludes many professional activities. 3. Insurers determine final underwriting eligibility BUT policy lists minimum requirements for coverage of home business: a. business entity must by owned only by insured and resident relatives b. business must operate from residence premises listed on Dec page, and must be primarily residence. c. business can have up to 3 employees d. business CANNOT manufacture, sell or distribute food products e. business CANNOT manufacture personal care products (shampoo, soap, perfume, hair color, or similar products.) f. business CANNOT sell or distribute personal care products manufactured by insured g. business CANNOT have gross annual receipts > $250,000 4. Home Business Endorsement coverages: a. Section I Property Coverage gives full Coverage C -Personal Property limits for: • business property, • accounts receivable ($5,000 limit) • loss of business income and extra expense (actual cost for a max.of 12 mos) • valuable papers ($2,500 limit) • increases to Coverage C - Personal Property special limits on money ($1,000) • credit cards ($1,000) • business property away from premises ($5,000) b. Section II Liability Coverages provides: • products-completed operations coverage up to an annual aggregate limit equal to Coverage E -Personal Liability limit • all other business liability coverage, including personal and advertising injury BUT NOT professional liability up to annual aggregate of twice the combined Coverage E-Personal Liability and Coverage F-Medical payment to Other limits; • med pay equal to Coverage F limit and • increases Damage to Property of Others limit to $2,500 F. HO O4 54 Earthquake endorsement covers earthquake damage and land shock waves from volcanic eruption. G. HO 04-77 Ordinance or Law-Increased Amount of Coverage Endorsement covers costs of a homeowner's repairs to comply with current ordinances or laws. It increases the HO-3 limit for such costs (10% of Coverage A-Dwelling limit) in increments of 25% up to unlimited % of Coverage A limit. H. HO-04-95 Water Back-Up & Sump Discharge or Overflow Endorsement adds $5,000 of property coverage for water or waterborne materials backed up through sewers or drains or overflowing from a sump pump, pump, or related equipment. $250 deductible applies. I. HO-O4-35 Loss Assessment Coverage Endorsement adds coverage to Additional Coverages of Section I - Property Coverages and Section II - Liability Coverages for insureds living in communities with neighborhood associations who are charged monthly fees to cover maintenance costs and upkeep of common areas. 1. Limit set at $1,000 on assessment applied to association's insurance deductible 2. applies to loss resulting from single event, whether it involves property, liability or both J. HO-24-70 Additional Residence Rented to Others -1,2,3, or 4 Families Endorsement covers insureds owning rental property not at insured location. Extends Coverage E-Personal Liability and Coverage F - Med Pay to Others to these insureds. K. HO-04-53 Creit Card, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money-Increased Limit Endorsement: homeowners Section I limit increases for losses resulting from unauthorized use of an insured's credit card, bank transfer card, check forgery, or acceptance of counterfeit money. Adds as much as $10,000 limit vs HO-3 $500 limit L. HO-04-26-04-02 Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement: for losses caused by mold: 1. includes mold in definition of fungi, covers mold ONLY IF it's due to result of fire fighting or repeated seepage unknown to insured. 2. Limits coverage to $10,000 when mold arises from a covered water loss. Insured can elect to increase limit or to increase annual aggregate limit of $50K on mold liability claims.

ISO HO Endorsements

Aleatory

If the contract has values that are not equal it is called an aleatory contract.

Workers Compensation Insurance.

Insurance purchased by employers to cover their employees in case workers is hurt on the job.

Garage liability is broader than business auto liability because:

It covers CGL and business auto together.

Theft Limits

Jewelry and Furs: $1500 All Firearms: $2500 Gold, Silver, Platinum, Pewterware: $2500 ***HO8---No matter what is stolen the policyholder will only get $1000.

RISK RETENTION

KEEPING ALL OR PART OF THE FINANCIAL RISK OF A LOSS.

Which of the following is NOT a covered peril under the Specified Causes of Loss form? Water damage from accidental discharge of water or steam Falling Objects Leaking from fire extinguishers and equipment Volcanic Action

Leaking from fire extinguishers and equipment is not a covered peril.

The liability coverage is the same for each H.O. Policy

Liability

condition found in property insurance contracts that provides that if the insurer broadens coverage under a policy form or endorsement without reuiring an additional premium,. then all existing similar policies or endorsements will be construed to contain the broadened coverage

Libralization Condition

HO-8

M8dified Form

False. Mobile homes are eligible with the attachment of the modbile home endorsement. HO-5.

Mobile Homes are not covered under HO insurance. True or False?

condition found in property insurance policies that specifies the rights and duties of the mortgagee under the policy

Mortgage Condition or Loss Payable Condition

Miscellaneous Vehicle

Motorcycles, ATV's (not autos, nor mobile equiptment)

Revenue minus expenses describes:

Net income NOTE: Net income is the difference between revenues (money received) and expenses

Property when insured is the Bailee if indoors

No special limit applies

How is hitting an animal on the road covered?

OTC. (animal movements are unpredictable)

What does Liability coverage under a Boatowners Policy include?

Operations, Passenger and Flotilla Liability are all covered

Any loss due to building settling is excluded

Settling of Building Exclusion

Size limits for business owners policy

Six stories, 100,000 sq. feet on offices 25,000 sq. feet and million dollars gross sales for mercantile space (store)

LAPSE

TERMINATION OF A POLICY DUE TO NONPAYMENT OF PREMIUMS.

INDEMNIFY

TO RESTORE THE VICTIM OF A LOSS TO THE SAME POSITION AS BEFORE THE LOSS OCCURRED.

Employee Theft Cause of loss

Theft committed by any employee

Indemnify

To restore the victim of a loss to the same condition before the loss occurred. (insurance will make you whole)

Inland Marine

Transportation Insurance/Floater Insurance Designed to protect ships and cargo.

Auto Coverage C:

Uninsured Motorist

Water Back-up and Sump Pump Discharge or Overflow

Covers back-up of sewers and drains Covers damage caused by sump pump failure

What is Glass or safety glazing material?

Covers loss of doors and windows of the dwelling as a result of breakage of glass or safety glazing material.

Part of Coverage A Limits

DP-Reasonable Repairs

Theft of Firearms (If peril is other than theft, regular limits apply)

$2500

The percentage of a deceased worker`s weekly wages payable to the spouse and dependent children is:

66% or 2/3 percent of a deceased worker`s weekly income is payable to the spouse up to a minimum and maximum dollar amount established by the state. Dependent children usually receive benefits to a specified age.

BOP's property section cannot be written on which form?

BOP's are written either as Standard or Special. There is no Broad form BOP.

Unilateral

A unilateral contract contains the exchange of a premium for a promise.

and individual or company, in additional to the insured, who is listed in the Declarations; an example is a mortgage company that has an insurable interest in the property insured

Additional Insured

Personal Article Floater

Is used to insure certain classes of personal property on an itemized and scheduled basis.

As declared by homeowner...FOR ALL H.O. POLICIES

Coverage A Limits

DP2 Parts

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expenses Coverage F: Additional Coverages

HO8...Functional Replacement Cost HO2...Replacement Cost HO3...Replacement Cost HO5...Replacement Cost HO4...Dwelling Not Covered--Tenant Policy HO6...Replacement Cost

Coverage B Basis of Recovery

10% of Coverage A Limit....FOR ALL H.O. POLICIES

Coverage B Limits

Crime policy form that is similar to CGL claims made in activating coverage?

Discovery form NOTE: The discovery form pays claims that are discovered during the policy period.

An insured who takes necessary precautions to reduce Workers Compensation claims or severity of losses, could receive a discount through:

Experience Modification NOTE: The Experience Rating discount allows an insured to reduce premium costs, due to a loss history that shows fewer claims or severity of claims.

*Credit Card Fraud *Money and Securities *Liability *Gravemarkers *Watercraft Only rowboats and canoes are covered *Theft

Extra Exclusions for Dwelling Policies

Loss Assessment Liability

$1000 When association is sued and assesses homeowners for damages

Property in another home owned but not insured under this policy

$1000 or 10% of C...Whichever is Greater

Freezing of Plumbing Systems (Frozen Pipes)

Only covered if the either is done: *Leave the heat on OR *Drains the water from the pipes

$1500

Portable Electronic Equipment used in Vehicles

Artificial Current AKA: The Sudden & Accidental Discharge From Artificially Generated Electrical Current

Powersurge

What is Comparative Negligence?

Law that allows an injured party to collect from another party for a loss, even when the injured party contributed to his or her own loss. Damages are reduced to the extent of the injured party's negligence.

Which one of the following is not a major exposure to a business owner of an auto related facility? Auto Liability Premises Liability Product Liability Completed Operations

Premises Liability

Common Policy Conditions on a Commercial Property Policy include what?

Premiums, Examination of Books and records, and Changes.

What has a seperate aggregate limit under CGL?

Products completed.

Professional liability policies are normally written on which form(s):

Professional liability policies are normally written on a claims made form.

Builders Risk Coverage Form

Provides commercial property coverage for buildings while under construction. It also provides coverage for foundations and if, situated within 100ft. of premises. The coinsurance is 100% of the completed value.

Federal Employers Liability Act

Provides exclusive remedy for railroad employees who receive work-related injuries caused by the negligence of their employees.

Intentional Injury Exclusion

Self defense is covered

Market Value

Selling Price.

Covers other unattached structures and fixtures.

Coverage B

Absolute Liability

Engaged in especially hazardous activities. Also known as strict liability.

Under the Building and Personal Property coverage form, vacancy means:

Insufficient business property present to conduct customary operations. NOTE: The premises does not need to be completely empty to be considered vacant.

What coverages must a BOP policy inclued?

Medical expense Bodily Injury Liability & Property Damage Liability Protection and Indemity coverage & AI

All of Coverage A is Standard Territorial Clause

Territorial Clause

Suit Against Us (The insured can sue their insurance company only if both of the following occur:

The lawsuit is instituted within 2 years The insured complied with all policy conditions

What happens if the insured dies during the policy period?

The legal representatives of the deceased will be protected by the Homeowner's Policy.

INSURING AGREEMENT (OR CLAUSE)

THAT PORTION OF AN INSURANCE CONTRACT WHICH STATES THE PERILS INSURED AGAINST, THE PERSONS AND/ OR PROPERTY COVERED, THEIR LOCATIONS AND THE PERIOD OF THE CONTRACT.

True or False: insurer can't subrogate against insured

True

property that is specifically listed and is insured for an agreed upon amount at the policy inception and if the listed property is damaged during the policy period the agreed upon amount insured for will be used to value the loss examples are a historic home in which the value is far more than the replacement cost

Valued or Agreede Amount Contract

Provides up to 10% of Coverage A, dwelling for increased costs the insured incurs due to the enforcement of any ordinance or law which requires or regulates the construction, demolition, remodeling or repair of the covered building damaged by a peril insured against.

What is Ordinance or Law?

advertising injury and personal injury do not cover a) wrong description of prices b) slander and libel c) copyright infringement d) violation of privacy

wrong description of prices

Symbol #9

non-owned autos

Which of the following loss forms would provide coverage for weight of ice, snow, and sleet? a) basic, broad, special, and earthquake b) broad, special, and earthquake c) broad and special d) special

broad and special

a patient trips and falls in the dr's office incurring severe bodily injury. Which policy would provide coverage for the bodily injury? a) workers compensation b) professional liability c) commercial general liability d) personal liability

commercial general liability

all of the following can be insured on a homeowners policy, EXCEPT... a) seasonal dwelling b) dwelling under construction c) mobile home on permanent foundation d) farm dwelling

farm dwelling

which of the following would not be required to carry workers comp insurance? a) state government b) non profit organization c) school district d) farmer w/ only 2 employees

farmer w/ only 2 employees

Ratification

function performed by the DOI that approves policy forms, endorsements and rates used by the company

designed for insureds in the business of driving, servicing, and working on nonowned autos. examples would be auto dealers, recreational vehicle dealers, auto repair shops, auto service stations, and parking garages

garage liability coverage

Which of the following would NOT be covered by a boat owners policy? a) BI and PD caused by the operation of a boat b) PD to the boat when boat strikes an underwater object c) mechanical breakdown of the boat d) physical damage to the trailer destroyed by the tornado

mechanical breakdown of the boat

autos used in the insured's business that are owned by employees

non-owned autos

How much coverage does a flood policy provide for trees? a) $250 b) $500 c) none d) $500 after deductible

none

an oil field worker is off work 60 days before returning to work. what type of disability? a) temporary total b) temporary partial c) permanent partial d) permanent total

temporary total

first party

the insured named is known as the _________________________ to the contract.

Warranty

A warranty is a pledge, either expressed (written) or implied (not written but is understood by conduct, environment, or other means).

O.T.C.

Anything causing loss or damage to the car, except collision/upset.

DP-1

Basic, Perils Covered A, B on BasicForm, & C on Basic Form; ACV, Fire, Lightning & Internal Explosion + may purchase E/C WHARVES, No Extra Living Expenses Covg E

Commercial Crime Insurance

Coverage for money, securities, and other property from various causes of loss such as burglary, robbery, theft, and employee dishonesty typically is provided by.

Which policy form provides coverage for only 3 named perils? a) DP-1 b) DP-2 c) DP-3 D) DP-4

DP-1

$500

DP-Fire Department Service Fee

HO Sub-Limits Residence Business:

$2,500

HO Sub-Limits for Firearms*

$2,500 *sub-limit only applies to loss by theft

Money

$200

Business Property---On Premises

$2500

Business Property---Off Premises

$500

DP-Fire Department Service Fee

$500

Fire Department Service Charge

$500

HO Sub-Limits for Business away from Home:

$500

Unilateral Contract

A contract such as an insurance policy in which only one party to the contact, the insurer, makes any enforceable promise. Insurer is obligated to perform.

Insurance Score

A credit-based score based on an individual's credit record and other factors that is highly predictive of future claim costs; insureds with low insurance scores generally file more homeowners and auto insurance claims than insureds with good credit and higher insurance scores.

Contributory Negligence

A person cannot file or collect for a claim if he/she is at all negligent.

Underwriter

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

Reciprocal insurance exchange

A reciprocal company is an unincorporated company that consists of subscribers managed by an attorney.

Binder

A temporary insuring contract (written or oral)

Coverage F

Medical Payments to others

Where are excluded perils listed?

They are found in the cause of loss form.

In BOP where are Common Policy Conditions found?

They are included as Section III of the BOP

5 BASIC WAYS TO DEAL WITH A RISK

(STARR) SHARING, TRANSFER, AVOIDANCE, RETENTION, REDUCTION

A Bailee is defined in the insurance industry as:

A Bailee is a person who has care, custody, or control of a customer`s property.

Coverage A of the CGL policy covers:

Bodily Injury and Property Damage the insured is legally obligated to pay due to a covered loss. NOTE: Coverage A is for Bodily Injury and Property Damage Liability the insured is legally obligated to pay. Any injury to an employee would be covered under Workers Compensation.

The four (4) components of the Section II, Business Liability coverage are:

Bodily Injury, Property Damage, Personal and Advertising Injury. NOTE: These 4 components apply to third party (Liability) claims and are similar to the CGL.

$500

Business Property---Off Premises

Six common conditions to a CPP

Cancellation, Changes, Right to examine, Inspection and Surveys, Premiums, Transfer of Rights and Duties.

Which DP policy form provides broad form perils on the dwelling and the personal property? a) DP-1 b) DP-2 c) DP-3 d) DP-4

DP-2

HO3 (III) Special

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Special/Open) Cov C: Contents (Broad Perils)

All of the following are true about the State Fund, EXCEPT: The State Fund competes for Workers Compensation business with the private sector. The State Fund may be used only as a last resort. State Fund is operated by the state of California. The State Fund sells its policies through brokers, as well as directly to the general public.

The State Fund may be used only as a last resort. NOTE: The State Fund may be used at any time as a Workers Compensation carrier, not only as a last resort.

For an employee's illness or injury to be covered it must:

The illness or injury must be work related to be covered.

Third party

The injured party. To whom liability insurance pays claims.

Bankruptcy Clause

The insolvency of the insured does not relieve the insurance company of its obligations to pay a claim.

A LOSS OCCURS

WHEN THINGS ARE DESTROYED OR REDUCED IN VALUE.

Includes bodily harm, sickness, diesease, and death.

What is Bodily Injury?

issued to guarantee the fulfillment of contract obligations

contract bond

Direct Response System

there are no agents, these companies sell through direct mail or over the phone

Section 1 Includes

*Person's property *Deductible ($250 Standard) *Different for each of the six policies *Covers 1st party

Conditions of the Dwelling Policies

All of the conditions of the Homeowner Policies Apply

Ideally Insurable Risk

Refers to risk that is financially within reason and is, therefore reasonable to insure. The loss must be an accident, create economic hardship, predictable, definite and measurable, cannot be catastrophic and the insured person must fit a category to which a company can apply the law of large numbers.

Collision

Refers to the impact of an auto with another object or the ground.

Exposure

Refers to the possibility of a loss.

True or False: losses are not expected in relation to bonds

True

The oldest type of insurance in the world is:

Ocean Marine insurance began in 1689 in the coffeehouses of England.

Yacht is a personal line, but is structured like?

Ocean Marine.

24 Hour coverage is defined as:

Providing around-the-clock coverage through a Workers Compensation, Medical, and Group Disability policy. NOTE: NO Life insurance is available in the 24 Hour coverage plan.

Directors and Officers coverage does not protect directors and officers of a corporation for:

Punitive damages, fines and penalties against a director or officer. NOTE:If a suit was filed against the General Liability policy, it might cover this.

Insurance is designed to provide protection against what type of risk?

Pure Risk

Loss of Use

This is a "contingent" loss as it is a resulting indirect loss. Unknown events are the only events that can be insured against.

The Homeowners Program provides the same property coverages that are available under the Dwelling Property program. True or False?

True. It also includes theft insurance and personal liability coverage under one contract.

which of the following is false about medical payments? a) it pays regardless of fault b) the amount of medical payment is applicable per occurence c) the amount is applicable per person, per accident d) medical payments can be claimed up to one year from the date of the accident

the amount of medical payment is applicable per occurence

Rates

the basic charges an insurance company sets for various types of insurance

Combined Ratio

the sum of the loss ratio and the expense ratio 100% is the breakeven point <100% is an underwriting profit >100% is an underwriting loss

a person snatches a womans purse and runs. Under the crime coverage definitions, this act would be called... a) robbery b) safe burglary c) theft d) burglary

theft

any act of stealing. this is the broadest definition of criminal activity; includes burglary, safe burglary, robbery, and larceny

theft

Loss Control Department

this department in the insurance companny inspects factgories, certifies boilers, and makes recommendations to insureds as to how risks may be avoided or reduced

Claims Department

this department in the insurance company sees that the company's insureds are adequately indemnified

Actuarial Department

this is the numbers department in the insurance company, uses statistics to determine rates

Personal Effects of Others

$2.5k

HO Sub-Limits CASH:

$200

accounting or arithmetical errors or omissions

3,4,5 do not cover losses resulting from accounting or arithmetical errors or omissions

Property moved to a new residence within 30 days

30 Day Coverage

HO Renewal Notice:

30 Days

Newly acquired vehicles are not automatically covered under which symbol?

#7 NOTE: Symbol seven is for Specifically Described Autos only, no automatic coverage.

Smoke

*Fireplaces are not covered *Agricultural or Industrial smudging excluded. *Puffbacks are covered

Liberalization

Process of the insurer revising the policy to provide more coverage without additional premium charge

The P.A.P. Medical Payments cover: A. The insured as driver; B. A passenger; C. The insured as pedestrian; D. All of the above.

D. The medical payments coverage covers all of those listed.

Property when insured is the Bailee if stolen

No Coverage

HO Sub-Limits for Watercraft, including Trailers:

$1,500

Contract

An agreement between two or more parties enforceable by law.

A covered peril Hidden vermin or hidden decay Weight of people, objects, or rain Defective materials or construction methods--only covered during construction period

Collapse (Not covered by HO8) Covered if building abruptly falls down or caves in, making in unusable, when caused by....

Dwelling

Coverage A

Other Structures

Coverage B

DP Coverage A:

Dwelling

$1500

Electronic Business Property--Off Premises

What form would be used to cover a business that owns several laptop computers used by employees off premises?

Electronic Data Processing Equipment Coverage form.

residential,condominiums and non residental or commercial Buildings

Eligible properties under NFIP Ins Includes:

dwelling $35,000 Contents $10,000

Emergency Program for NFIP Insures a Single Home

*All explosions are covered no matter where they originate from.

Explosion

*Interior damage only covered if exterior damage happens first

Falling Objects

What does DP-1 Cover?

Fire, Lighting, and internal explosion.

What provides indirect loss coverage that protects the shipper in the event that the voyage is not completed or if the goods have sustained partial damage and the shipper is not able to secure a refund of the duty or freight charges paid on the damaged goods?

Freight Insurance

Any fire that is contained in its intended receptacles.

Friendly Fire

Parking lots, dealerships, and repair garages need what type of coverage?

Garage Keepers.

Collapse due to hidden vermin is covered under all but the HO8 policy

Losses caused by birds, vermin, rodents, or insects

an addition to Hull Ins. that covers damage caused by the bursting of boilers the breaking of propeller shafts or loss due to faults or error in navigation by the crew. (boiler and Machinery)

Inchmaree Clause

What type of businesses would be covered?

Incidental Businesses (ex. Art/Music Studios, Schools, and Home Offices)

This applies on and off premises This includes watching children in your home as a business which is also referred to as Home Care Business

Liability arising out of Business Pursuits or Professional Services Exclusion

What is Misrepresentation?

Misrepresentations are an untrue statement or statements made by the insured, usually at the time when application is made. For example, the insured may state on an application for auto insurance that they have not been involved in any automobile accidents or moving violations, when in fact, they have. Some misrepresentaions, such as the ones mentioned, are material because the insurer may have declined the application for insurance had the information been known.

In crime coverages the phrase theft, destruction, disappearance applies to:

Money & Securities

Symbol 9

Non-Owned Autos Only

Drive other car endorsement on a Business auto may be used to cover:

Non-business exposures. NOTE: A Drive other car endorsment extends coverage to personal use of vehicles.

Symbol 2

Owned Autos Only

What is conditional?

Promises action in the event of a future occurrence. The insured's obligations are based on conditions specified in the contract (such as the reporting of a claim in a timely manner and paying premiums).

form completed by an insured after a loss that provides an official inventory of damages

Proof of Loss

Four Lines of Insurance

Property Causalty Life Health and Disability

What has a single limit?

Property Damage.

Prior Approval

Rates must be approved by the state before it can be used. This system is used by the state of California to regulate rates for most property and casualty insurance written in California.

Personal Articles Floater- PAF

SCHEDULED or LISTED personal property, property insured is APPRAISED

CONCEALMENT

THE FAILURE TO DISCLOSE A MATERIAL FACT.

ESTOPPEL

THE LEGAL PRINCIPLE WHEREBY A PERSON LOSES THE RIGHT TO DENY THAT A CERTAIN CONDITION EXISTS BY VIRTUE OF HAVING ACTED IN SUCH A WAY AS TO PERSUADE OTHERS THAT THE CONDITION DOES EXIST. FOR EXAMPLE, IF AN INSURER ALLOWS AN INSURED TO VIOLATE ONE OF THE CONDITIONS OF THE POLICY, THE INSURER CANNOT LATER DATE VOID THE POLICY BECAUSE THE CONDITION WAS VIOLATED. THE INSURER HAS ACTED IN SUCH A WAY AS TO LEAD THE INSURED TO BELIEVE THAT THE VIOLATION DID NOT VOID THE COVERAGE.

LIMITS OF INSURANCE

THE MAXIMUM AMOUNT AN INSURANCE COMPANY WILL HAVE TO PAY IF CERTAIN EVENTS SHOULD OCCUR.

LIMIT OF LIABILITY

THE MAXIMUM AMOUNT FOR WHICH AN INSURER IS LIABLE AS SET FORTH IN THE CONTRACT.

HO-2, HO-3, HO-4, HO-5, HO-6. This peril is not included in HO-8 which is the most limited Homeowner form. The collapse must be as a result of an abrupt falling down or caving in of the structure or a part of the structure--cannot be a gradual collapse.

The Collapse peril is found in which HO forms?

Which Homeowner form has been withdrawn in most states?

The HO-1 basic form has been withdrawn in most states.

*Covers the house and any garage (attached or not) Following are all excluded: *Awnings *Fences *Patios or paved surfaces *Swimming Pools *Foundation *Retaining Walls *Bulkheads *Piers *Wharfs *Docks

The Weight of Ice, Snow, and Sleet

Forgery

The act of claiming one's own writing to be that of another.

Waiver

The act of giving up a right, claim or privilege.

Personal contract

This is a contract between the insurance company and an individual.

Contract of adhesion

This is a contract prepared by the insurer and accepted or rejected by the insured.

Coverage not included in a business auto policy would be: BI and PD UMBI Specified causes Physical damage

UMBI NOTE: Uninsured motorist and medical payments must be endorsed to the policy.

Spread of risk

When the company works to pay claims and other expenses and still makes a profit, the degree or range of risk is known as spread of risk.

1st Party

Who gets paid

which of the following bonds are similar to the CPP Crime Coverage? a) judicial bond b) bail bond c) fidelity bond d) bid bond

fidelity bond

DP2

A + B (Seperate Amounts)

Medical in $1,000s

Homeowners Coverage F:

Who gets paid

1st Party

Debris Removal

25% of loss or $10k

Newly Acquired or Constructed Property

25%; 250k for Real Prop 10%; 10k for Personal Prop

Insurance Company

2nd Party

Loss of Use- Consequential Losses (10% of Coverage A)

Homeowners Coverage D:

Liability in $100,000s; SAME coverage for ALL Homeowner's Policies

Homeowners Coverage E:

property that is specifically listed in the Declarations and covered for a specific amount

Specific Insurance

PAP

The _______________________ is a contract that provides coverage to protect the insured from loss.

Solicitor

may sell insurance and may be authorizede to collect premiums, however, CANNOT issue or countersign policies

Auto NOC Non-Renewal:

30 Days

Commercial Renewal Notice:

30 Days

HO Non-Renewal:

30 Days

Securities

$1500

Watercraft, equipment and trailers

$1500

Preservation of Property

30 Days

Broad Theft Endorsement

*Adds theft coverage--with same limits of homeowners *Also covers building damage caused by thief

Explosion

*All explosions are covered no matter where they originate from.

Coverage C

*All properties including renters are covered. *Your personal property is covered no matter where it is in the world. Who's property is covered? *Covers insured personal property and their resident relatives (Must live in home and be related to you) *Covers personal property belonging to the insured's guests. *Covers personal property belonging to the insured's residence employees.

Water Damage (Perils 3 & 4) *Accidental Discharge or Overflow of Water or Steam from within Appliances or Plumbing Systems *The Sudden and Accidental Rupture of a Heating, Air Conditioning, Fire Sprinkler, of Hot Water Heating System Caused By Tearing Apart, Cracking, Burning, or Bulging

*Very limited Only covered if caused by the following: *Appliances *Air Conditioning or Heating Systems *Internal Pipes *Fire Sprinkler Systems ***Only covers damages, doesn't cover replacement of object that caused damage***

The loss condition states the insurer must pay the claim within:

30 Days NOTE: Upon both parties being in agreement payment must be made within 30 days.

True or False: uninsured motorist coverage is covered by Business Auto Policy

1/2 False; it is but must be added by endorsement

HO-3

3pecial Form Open Peril or Special aka All-Risk Perils Covered, Replacement, Coverage A Dwelling

Pays person sueing you

3rd Party

What is a Peril?

A peril is the actual cause of a loss (fire, windstorm, hail).

How is a "trucker" defined under the Truckers Coverage Form?

A person or organization engaged in the business of transporting property for hire.

What coverage form has the sole purpose of insuring most types of industrial risks for direct damage by an accident?

Boiler and Machinery Coverage Form NOTE: The sole purpose of the Boiler & Machinery coverage form is to insure most types of industrial risks for direct damage caused by an accident.

Leased vehicles can be covered under the P.A.P. if they are leased for a minimum of: A. 30 consecutive days; B. 60 consecutive days; C. 6 consecutive months; D. 1-year

C. A leased vehicle is treated like an owned vehicle if leased for a period of at least six consecutive months.

Homeowners policies are what type of policy? A. Single-line policy; B. Broad coverage policy; C. Multi-line policy.

C. Multi-line policies--they combine property and casualty coverage in the same policy. A multi-line policy packages several coverages related to a specific type of exposure and it reduces the number of policies that one has to purchase.

What is the limit for damage to a non-owned trailer under the personal auto policy? A. $500; B. $1000; C. $1500; D. $2000

C. The 2005 PAP policy provides a limit for non-trailers in the amount of $1,500. The pre-2005 forms provided a limit of $500.

Protection Indemnity

Combo liability & Workers Comp.

What is Negligence?

Failure to do what a normal prudent person would do under the same circumstances. If you are guilty of negligence, you have committed a tort and are considered a "tortfeasor". Negligence is defined as the lack of reasonable care that is required to protect others and/or their property from the unreasonable chance of harm. This could also be a failure to act or not act as a reasonable person would under the same set of circumstances. Note: Gross Negligence is defined as willful and wanton negligence or misconduct without the slightest degree of care.

Reimburses the insured for expenses incurred for first aide to others. 1st Party Coverage

First Aid Expenses

In order to sell Flood insurance the producer must be:

Flood Reform Act of 2004 requires a 3 hour training course be completed first.

Examination of Records

Gives the right to audit the insured's books and records anytime during the policy period, and for three years following the expiration of the policy.

This includes destruction, confiscation, or seizure of property by the government or a public authority, or orders of demolition

Government Action Exclusion

6ondo 6nit 6wner's Broad Form

HO-6

Symbol 8

Hired Autos Only

A,B,C or D

In DP's, Insured may choose which coverage they need of the following:

What is Bodily Injury?

Includes bodily harm, sickness, diesease, and death.

2nd Party

Insurance Company

Representation

Is a statement that may be written or oral.

Named Peril

Listed perils

B.I. includes payment for

Medical expenses Lost Wages Miscellaneous Expenses Pain and Suffering Funeral Expenses

Medical Payments

Must be endorse on a BAP policy and it provides 1 year of coverage from date of accident

10% of Coverage A limit ***Not covered by HO8

Ordinance or Law (Pays the increased cost to bring repairs up to current code following covered loss)

RISK SHARING

POOLING THE RISK WITH A VARIETY OF OTHER PEOPLE WHO SHARE THE SAME RISK.

a partialloss that affects only a particular interest and the loss is not shared

Particular Average

Self funding

Paying out of pocket for expenses arising as a result of not having insurance.

Other Insurance Clause

Pro-rata aka Contributory

RISK AVOIDANCE

REMOVING THE POSSIBLE CAUSE OF A LOSS.

Homeowner's Real Property Valuation is PAID on:

Replacement Cost Basis, as long as 80% Co-Insurance requirement is met

RISK TRANSFER

SUCH AS BUYING INSURANCE.

The amount the bond is issued for is known as the:

The amount of the bond is call "penalty".

Aircraft Exclusions

The insured's own aircraft is not covered

In a contract, who is "we" ?

The insurer.

The insured's own vehicles are not covered, with the exception of the following: Vehicles for the handicapped---wheelchairs Vehicles used to maintain the property Golf carts

Vehicle Exclusion

Inland Marine Insurance could be used to insure all of the following EXCEPT... a) tunnels and bridges b) bulldozer c) cargo d) autos

autos

owning.

for the purposes of the policy, leasing is deemed to be

Producer

general term used to describe someone who sells insurance, such as an agent or broker

autos titled to the company name

owned autos

Definition of Theft

unlawful taking of money, securities or other property

Homeowner's Section II is:

CPL: Comprehensive Personal Liability, Coverages provided: E & F (E Liability, F Medical)

Personal Property Replacement Cost Endorsement

Changes Basis of Recovery for Personal Property (Coverage C) from A.C.V. to Replacement Cost

NOT DP1

Collape

Family member refers to

1) Person related to named insured by blood, marriage, adoption and 2) Resides in the named insured's household

What do "you" and "your" refer to

1) The "named insured" on the declaration page 2) The unnamed spouse if a resident of the same household

What does Part B cover?

1) The named insured and family members 2) Any other person while occupying a covered auto

Who are named insureds

1) an individual 2) married couple 3) other parties

Boiler and Machinery is now known as:

Equipment Breakdown NOTE: B&M is now known as Equipment Breakdown Protection Coverage.

The product and completed operations hazard claims are subject to a:

Per occurrence limit.

Personal Property

Property that can move e.g. furniture, clothes, painitings.

$1000

Property when insured is the Bailee if outdoors

Which of the following coverage parts is available on a Commercial Package Policy? a) aircraft b) farm c) workers compensation d) umbrellas

farm

Within a BAP, which auto symbol applies to mobile equipment?

#19 NOTE: This symbol only applies to land vehicles that are considered mobile equipment under the policy's mobile equipment definition. The symbol was just introduced in the 03 06 edition of the Business Auto Policy. It allows extension of BAP coverage for vehicles in states that confer vehicle status by making certain types of self-powered equipment subject to registration/licensing law.

Loss Assessment **Covers the additional charges levied against the insured for the building association, for damages to common areas (Clubhouse and pool), when caused by a covered peril

$1000

Coverage F--Medical Payments to Others (Pays all necessary medical expenses incurred within 3 years of the accident)

$1000 per person 3 year time limit Worldwide *Does not cover named insured or relative residents--only 3rd party *Liability does not have to be established. Medical payments will pay regardless of insured's liability

ITP Robery Special limit

$5,000 per occurence for the precious metals, stones, pearls, furs, manuscripts, drawing or records of any kind or the cost of reconstructing them or reproducing any information contained in them

Exclusions in Part A

1) Intentional injury 2) Property owned or transported 3) Business use 4) Racing

Rating info to Reduce premium

1) Multiple cars 2) Driver training 3) Good student record 4) Defensive driving courses 5) passive restraints 6) anti-theft devices

Low Cost Auto Insurance

10/20/30

payments of temporary partial disability may NOT be paid longer than what period of time? a) 52 weeks b) 72 weeks c) 156 weeks d) no time limit

156 weeks

When a claim is settled on an ACV basis, B & M equipment must be repaired or replaced within how many months?

18 Months NOTE: "Claim" is the key here. A claim was opened and no repairs were made in a timely manner. Equipment must be repaired or replaced within 18 months or the claim is settled on an Actual Cash Value basis.

For newly acquired property such as jewelry, furs, cameras, and musical instruments, how much is paid out?

25% of the amount of insurance for that class of property, or $10,000. When new property is acquired, you must report these objects to the company within 30 days and pay an additional premium.

What are the continuing educational requirements that a fire-casualty broker/agent must fulfill as required by the DOI

25-Hours during each year of the first four years that the licensee is licensed.

Motor Vehicles ro Equipment and Accessories

3,4,5 do not cover loss of or damage to motor vehicles, trailers, or semi-trailers or equipment and accessories attached to them

1. Legal Duty; 2. Standard of Care;3. proximate cause and 4. Actucal loss or damage

4 Major Elements in determining the tort of negligence are:

Commercial Special Circumstances:

5 Days

Midi-Tail Extended Claims Made

5 years.

DP-Replacement of Trees, Shrubs, and Plants NOT DP1

5% of Coverage A Limit: $500 per plant

HO-5

5omprehensive Form, Best

*It covers indirect/consequential losses *Fair Rental Value: Money towards rental income from boarders. (Collect loss of rental income) *The only way they pay indirect loss is if direct loss is covered.* **Additional Living Expenses: Hotel bills, restaurant bills, etc.**

Coverage D *Loss of Use

10% of Coverage A

DP-Ordinance or Law NOT DP1

If a boiler in a church building were to blow up and cause property damage and injury, which coverage would be necessary to cover this loss?

Equipment Breakdown (Boiler & Machinery) coverage NOTE: Boiler & Machinery coverage is excluded on the BPP form and only covered through a B & M policy. Non-profit entities may purchase this as well.

Handling of Property

Exclusion that applies to the loading and unloading process

Provides for reimbursement of expenses incurred as a result of identity theft or fraud. Covered expenses up to the $15,000 limit, including reasonable attorney fees to defend suits brought by merchants, financial institutions, or collection agencies, lost income for time taken to meet law enforcement officials or complete affadavits (maximum $200 per day, $5000 total).

Identity Fraud Expense Coverage?

Who would be covered under a commercial crime policy?

Insured NOTE: Officers, employees, and independent contractors are not covered under the commercial crime policy.

CAARP coverage's

Liability, Medical Payments, Uninsured Motorist.

The perils that trigger coverage under the business income form are found:

On the Declaration page NOTE: The declaration page states the cause of loss form that triggers coverage

Coverage E

Personal Liability

*Person's property *Deductible ($250 Standard) *Different for each of the six policies *Covers 1st party

Section 1 Includes

$1500

Securities

Which of the following is NOT considered subrogation? An insured assists an insurer in seeking recovery for payments made. The insurer collects damages from the responsible party. The rights to sue a third party are transferred to the insurer. The insured collects damages from the responsible party.

The insured collects damages from the responsible party. NOTE: Subrogation is the transferring of rights to recover damages from a third party to the insurer.

Pure Risk

The insured has only a chance for loss, never gain.

What defines a policy written with a Combined Single Limit?

The limit of the policy may be applied to either bodily injury or property damage.

Limit of liability

The maximum amount for which an insurer is liable as set forth in the contract.

the number of individuals listed on the Dec page

There can be multiple you and your depending on

Outdoor Prop.

Up to 1k for Fences or $250 for trees

It adjusts the claim on the basis of replacement cost for the structure.

What does the Mobile Home endorsement do?

Open Competition State

allows companies to compete openly with forms and rates they select

the insurance company cannot cancel, non-renew, or charge a higher auto insurance premium for any of the following EXCEPT... a) insured involved in an auto accident and not at-fault b) insured had a DUI traffic ticket that was dismissed c) insured was w/out auto liability insurance for over a 60 day period d) insured has lower liability limits w/ previoius insurance company

insured was w/out auto liability insurance for over a 60 day period

What is Property Damage?

means physical damage to tangible property including loss of use.

Field Underwriting

using pre-established criteria to seek out the type of business that is likely to be acceptable to the company

The residence premises. The parts of other premises, other structures and grounds used by the insured as a residence, and which is shown in the Declarations; Any premises used by the insred in connection with the premises; Vacant land owned or rented by the Insured; Land owned by or rnted to an "insured" n which one, two, three, or four famly dwelling is being built as a residence of the insured; Individual or family cemetary plots or burial vaults.

"Insured Location" means:

7 Commercial Coverages:

"PLACE IF" : Property-Real & Personal; Liability-Occurrence/Claims Made; Automobile- Business Auto Liability; Crime-Discovery or Loss Sustained; Equipment Breakdown- Boiler & Machinery; Inland Marine-Transportation of Property Farm- Personal & Commercial

which symbol of covered autos must notify the insurer of newly acquired autos within 30 days?

#7 specifically described autos only. all the other symbols (1-9) newly acquired autos are covered until the end of policy period

Homeowner's Coverage to Property of OTHERS is paid up to:

$1,000 Per Occurrence

HO Sub-Limits Jewelry*

$1,500 *sub-limit only applies to loss by theft

$100/$300/$50

$100 bodily injury to each, $300 bodily injury maximum, $50 property damage

Property when insured is the Bailee if outdoors

$1000

HO8...Any theft

$1000 per occurence

in OK, if a workers dies as a result of a work-related disease or injury, the Workers Comp Policy pays a lump sum to the spouse in the amount of? a) $5000 b) $10000 c) $50000 d) $100000

$100000

Pollutant Cleanup and Removal

$10k

Increased Cost of Construction

$10k or 5% (whichever is less)

an insured w/ a Homeowners Section II liability limits of $300000 and a $1000000 umbrella would have a combined personal liability limit of... a) $300000 b) $700000 c) $1000000 d) $1300000

$1300000

An apartment building is insured for $300,000 with an 80% coinsurance clause. The property is valued at $500,000. A covered loss occurs in the amount of $200,000. How much will the insurance company pay?

$150,000 NOTE: C Apply the coinsurance formula: 80% of the value of the home ($500,000) is $400,000, which is what they should have carried. Divide the limit they carried ($300,000) by what they should have carried ($400,000). Multiply that figure by the loss amount. When there is no known deductible, figure it as zero.

Electronic Business Property--Off Premises

$1500

Portable Electronic Equipment used in Vehicles

$1500

Theft of Jewelry and Furs (If peril is other than theft, regular limits apply)

$1500

Fire Department Charge

$1k

HO Sub-Limits for Silverware, Gold Ware*

$2,500 *sub-limit only applies to loss by theft

Valuable Papers and Records

$2.5k

HO-4 Contents Broad Form covers what?

HO-4 does not cover the structure. This form is designed to cover the contents of a tenant living in a non-owned structure. This could be an apartment or a dwelling. Since the tenant does not own the structure the form does not provide coverage except for the improvements and betterments that the tenant may have made to the structure at his or her expense. This form provides the named "broad perils."

HO-5 is a Deluxe form, open-peril coverage on both dwelling and contents. This is the broadest homeowner form. It provides "open-peril" coverage on both buildings and their contents. The HO-2, HO-3 and the HO-5 provide replacement cost coverage on the structures provided the insured carries at least 80% of the replacement cost value of the structure. Contents coverage under all of the homeowner forms provide actual cash value (ACV) coverage on contents unless a separate replacement cost endorsement is purchased.

HO-5 Comprehensive Form covers what?

HO-5 Comprehensive Form covers what?

HO-5 is a Deluxe form, open-peril coverage on both dwelling and contents. This is the broadest homeowner form. It provides "open-peril" coverage on both buildings and their contents. The HO-2, HO-3 and the HO-5 provide replacement cost coverage on the structures provided the insured carries at least 80% of the replacement cost value of the structure. Contents coverage under all of the homeowner forms provide actual cash value (ACV) coverage on contents unless a separate replacement cost endorsement is purchased.

Mortgage guaranty insurance

Includes insurance against financial loss by reason of the nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.

Insolvency insurance

Includes insurance against loss arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.

Burglary insurance

Includes insurance against loss by burglary, theft, or both.

Boiler and machinery insurance

Includes insurance against loss of property and liability for damage to persons or property from explosion of, or accident to, boilers, tanks, pipes, pressure vessels, engines, wheels, electrical machinery, or apparatus connected to or operating nearby.

What is Estoppel?

If someone intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited (estoppel) from asserting that the fact does not exist. For example, an agent has advised an insured that a certain peril is covered under their Homeowner policy when it is actually excluded. The insured suffers a loss from the excluded peril. In most cases, the loss must be paid because the insured relied on the statements of the agent.

Cancellation by the Insurer

If the Insurer learns that an employee is committing theft or any other dishonest acts the coverage will stop for that employee

90 days after change of residency, effective date of another policy listing the non-resident spouse as a named insured or the end of the policy (which ever comes first)

If the spouse is no longer a living resident, the policy will only qualify the spouse under you and your definition until

Liability insurance

Includes insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person or resulting from liability for damage to property or property interests of others.

Common carrier liability insurance

Includes insurance against loss resulting from liability of the goods of a common carrier for property in their care, but not owned by them.

Sprinkler insurance

Includes insurance against loss through damage by water to goods or premises arising from the breakage or leakage or sprinklers, pumps, or other apparatus placed for extinguishing fires, or loss arising from the breakage or leakage of water pipes or through accidental injury to such sprinklers, pumps, or other apparatus.

Team and vehicle insurance

Includes insurance against loss through damage or legal liability for damage to property caused by the use of teams or vehicles other than ships, boats, or railroad rolling stock.

Personal Injury Exclusions

Includes when being sued for damaging a 3rd party's reputation such as libel or slander, false arrest, invasion of privacy, etc.

Which endorsement would be added to the BAC form to provide Coverage for family members that a sole proprietor or partner desires to have drive their business autos?

Individual Named Insured

Endorsement added at the insured's request to a homeowners policy to increase periodically the face amount of insurance on the dwelling and other policy coverages by a specified percentage.

Inflation-Guard Endorsement

What is Absolute Liability?

It is imposed by law on those participating in certain activites that are considered especially hazardous. Individuals involved in such operations may be held liable for the damages to another, even though the individual was not negligent. Absolute liability is most frequently applied to activities involving: Dangerous materials, Hazardous assignments, Dangerous animals. Absolute Liability is sometimes known as STRICT LIABILITY.

How does the Debris Removal extention of a Dwelling policy affect the limits of coverage?

It is included in the limit of liability,it is not additional coverage.

What is true of Protection and Indemnity Insurance?

It may be attached to an Ocean Marine Hully Policy or written as a seperate policy, It covers legal liability arising out of the insured's negligence causing cargo to be lost or damaged, It covers injuries to seamen resulting from unseaworthiness of the vessel and general damages subject to the Jones Act caused by negligence.

According to a new legal development, AB984 Chapter 439, what must happen for a automobile service contract to be considered an insurance policy:

It must be pre-approved by the Insurance Commissioner and the seller must be licensed. NOTE: This bill was for the purpose of regulating the insurance written in auto service contracts and has certain requirements that must be met.

The Businessowners Policy (BOP) is a package policy combining what types of coverages?

Liability, Property, Business Income & Extra Expense and Property of Others coverage NOTE: The BOP package policy includes all of these additional coverages the Commercial Property policy would not .

the dissemination of any written orprinted matter tending to unjustly injure a person'sreputation

Libel

HO-2, HO-3, HO-4 & HO-6 cover what perils?

Lightning, Windstorm or hail, Explosion, Riot or civil commotion, Aircraft, Vehicles, Smoke, VMM, Theft, Volcanic eruption, Falling objects, Weight of ice or snow or sleet, Discharge of water or steam, Sudden or accidental rupture, Freezing of plumbing and related systems, artifically generated electrical current.

HO2 (II) Broad

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Broad Perils) Cov C: Contents (Broad Perils)

HO6 (VI) Condo *Unit Owners*

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (As Declared) Cov D: Loss Of Use (40% of C) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Broad Peril) Cov C: Contents (Broad Peril)

HO4 (IV) Tenant *Contents Broad Form*

Limits: Cov A: Buildings (N/A) Cov B: Other Structures (N/A) Cov C: Contents (As Declared) Cov D: Loss of Use (20% of C) Basis of Recovery: Cov A & Cov B: All Structures (N/A) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (N/A) Cov C: Contents (Broad Peril)

HO5 (V) Comprehensive

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Special/Open) Cov C: Contents (Special/Open)

$1000

Loss Assessment **Covers the additional charges levied against the insured for the building association, for damages to common areas (Clubhouse and pool), when caused by a covered peril

Compensation to a husband or wife for the loss of companionship of a spouse. (spouse can sue the ins.co. for spouse not being the same after an accident ex. he is now a big *******)

Loss of Consortium

DP Coverage D:

Loss of Use - Indirect or Consequential Losses (Coverage D & E); Indirect or Consequential Losses

Homeowners Coverage D:

Loss of Use- Consequential Losses (10% of Coverage A)

Coverage D

Loss of Use- Temporary housing and rental income at same property you reside in is lost.

Which of the following would be covered by a crop insurance policy? Loss to plants on which a crop would normally yield income to the farm owner. None of the above. Loss of growing crops normally given to a homeless shelter in town. Loss of crops due to hail damage.

Loss of crops due to hail damage. NOTE: Hail is a covered peril in the crop insurance program. Plants are not covered, and crops must be a main source of income

In a Commercial General Liability policy, Supplementary Payments covers which of the following? Damage to the property of others in the insured`s care. Copyright Infringement. Rental Car Expense. Loss of earnings for up to $100 per day.

Loss of earnings for up to $100 per day. NOTE: Supplementary Payments includes loss of earnings, bail bonds, defense costs, taxes and interest assessed to the insured or insurer.

DP-1,DP-2, DP-3 All 3 dwelling forms cover?

Loss of rental income

In crime coverages the discovery period applies to which policy form?

Loss sustained form.

Which of the following is a filed commercial inland marine form? Contractor's Equipment Annual transit EDP Floater Mail coverage form

Mail coverage form is one of the commercial inland marine filed forms.

Stock Insurer

Managed by board of directors who are elected by shareholders who own a fixed amount of capital stock in the company.

the amount property could be sold for at the time of loss; may be used to determine the amount of reimbursement for a loss

Market Value

Pays for medical expenses of others under a homeowners policy in the event that a person (not an insured) is accidentally injured on the premises, or by the activities of an insured, resident employee, or animal owned by or in the care of an insured.

Medical Payments to Others

Homeowners Coverage F:

Medical in $1,000s

NAIC

National Association of Insurance Commisioners organization made up of individual state insurance commissioners whose purpose is to promote uniformity in regulation by drafting model laws and regulations

NCCI

National Council on Compensation Insurance a rating bureau with jurisdiction over worker's compensation

FEMA a federalprogram which enables property owners to purchase flood ins. payments to losses are made by the federal goverment. agents do not have authority to bind coverage with the NFIP but may write with the NFIP. The Federal Gov.is the reinsurer

National Flood Insurance Program (NFIP)

Identity Fraud Expense Endorsement

Necessary and pre-approved legal fees Postage, telephone, photocopy, notarization costs, reapplication fees Travel expenses when pre-approved and necessary Lost wages with special limits **Extended Reporting Period: As most victims cannot determine when actual theft occurred, this endorsement will provide benefits for a loss discovered during the policy period, regardless of when the loss actually occurred.

a type of tort (civilor private wrong) defined as the failure to act in a resonable and prudent manner and it is usally reprimanded by a monetary penalty.

Negligence

Coverage D *Loss of Use

*It covers indirect/consequential losses *Fair Rental Value: Money towards rental income from boarders. (Collect loss of rental income) *The only way they pay indirect loss is if direct loss is covered.* **Additional Living Expenses: Hotel bills, restaurant bills, etc.**

Section 2 Includes

*Liability *Same for all six policies *3rd party

Dwelling Policy Eligibility (To Purchase Policy all of the following must be true)

*Residence must be located within the Standard Territorial Definition *Must be either 1-4 family home (if owned), Mobile Homes, Manufactured Home, Rowhouse (attached homes), or rental premise *If renting within residence, no more than 5 boarders *Must be principally used as a residence, and not a farm or business (Incidental businesses are covered--schools, studios, home offices)

Appraisal Clause (This clause outlines the procedure when the insured and insurer disagree on the value of the property following a loss)

*The insured and insurer select and pay their own appraiser *The appraisers select an umpire. If they cannot agree on an umpire, they go to court and one is chosen for them. *The cost of the umpire is shared equally by the insured and insurer *When any 2 of the 3 party's agree, the value is determined. *The insurance company reserves the right to deny benefits

Non-renewal Clause

*The insureer must provide at least 45 days written notice, but not more than 60 days of notice. *Non-renewals can only be done annually on the anniversary date of the policy (All insurance policies must wait one year to non-renew a policy)

Mortgage Clause/Loss Payable Condition Clause (When a bank or mortgage company is added to the policy as an additional insured, this clause provides then with certain rights as well as certain responsibilities)

*The mortgage company or bank will receive a notices of cancellation *The mortgage company or bank must pay any outstanding premium *The mortgage company or bank can still be paid on a claim, even if the insured invalidates the policy *The bank or mortgage company must notify the insurer of any change in property ownership or interest *The mortgage company or bank must submit a Proof of Loss if the insured fails to do so.

Basic Perils *The WHALES aRe Very Very Very Fat*

*Theft *Wind *Hail *Aircraft *Lightning *Explosion *Smoke *Riot/Civil Commotion *Vandalism/Malicious Mischief *Volcanic Eruption *Vehicles *Fire

Optional Extended Coverage Package (DP1)

*Wind *Hail *Any Explosions *Riot *Aircraft/Vehicles *Smoke *Volcanic Eruptions ***All Broad Perils found in Homeowners Policies, except Theft***

Business Auto Cov Form - Section I - Covered Autos - Owned Autos Acquired After the Policy Begins

- if symbols 1-6 are entered to a cov for autos in Item 2 (schedule of cov and covered autos) of dec, then newly acquired autos are covered for remainder of the policy period. -If symbol 7 is enter, then auto is covered only if the autos are replacing previously owned and inr is notified in 30 days

What is covered in Coverage E - Personal Liability?

1. The premises shown in the Declarations section of the policy as well as any location the insured occasionally rents. For example, a community bldg. that the insured rented to hold a party; 2. Personal activities such as sports, social, etc., anywhere in the world; 3. Acts of residence employees acting within the scope of their duties; 4. Vacant land; 5. Individual or family cemetery plots or burial vaults of any insured.

On a dwelling policy, how much coverage do you get for personal property away from premises?

10%

DP-Ordinance or Law NOT DP1

10% of Coverage A

Coverage B Limits

10% of Coverage A Limit....FOR ALL H.O. POLICIES

Ordinance or Law (Pays the increased cost to bring repairs up to current code following covered loss)

10% of Coverage A limit ***Not covered by HO8

California's Law for minimum liability coverage

15/30/5

Auto Other than Non-Payment:

20 Days

Auto Renewal Notice

20 Days

HO Other than Non-Payment:

20 Days

Good Driver Discount

20%

HO-2

2road Form Perils Covered, Replacement, Coverage A Dwelling

surety bonds are a) 2 party contracts b) 3 party contracts c) double party contracts d) first party contracts

3 party contracts

Exchanges or purchases

3,4,5 exclude loss due to giving or surrendering proprety in an exchange or purchase

Mini-Tail Unendorsed Claims Made

60 Days

HO-6

6ondo 6nit 6wner's Broad Form

what is the max amount an insurer would ay to all injured third parties for bodily injury and property damage under an auto policy w/ 25/50/25 limits of liability? a) 25000 b) 50000 c) 75000 d) 100000

75000

CASUALTY INSURANCE

: PRIMARILY CONCERNED WITH THE LEGAL LIABILITY FOR LOSSESS CAUSED BY INJURY TO PERSONS OR DAMAGE TO THE PROPERTY OF OTHERS.

DP3

A + B (Seperate Amounts)

All of the following are differences between a Bond and Insurance EXCEPT: A Bond is not insurance, only a financial guarantee. With a Bond, the company can seek recovery for claims payments from the Principal. A Bond is identical in nature to an Insurance contract.

A Bond is identical in nature to an Insurance contract.

Which form would you buy if you wanted to buy a Contingent Business Interruption form?

A Business Income from Dependant Properties Form. NOTE: Business Income from Dependent Properties Form is available for insureds who are likely to incur extra expenses because of loss or damage to dependent properties.

SHORT RATE CANCELLATION

A CANCELLATION PROCEDURE IN WHICH THE PREMIUM RETURNED TO THE INSURED IS NOT IN DIRECT PROPORTION TO THE NUMBER OF DAYS REMAINING IN THE POLICY PERIOD. IN EFFECT, THE INSURED HAS PAID MORE FOR EACH DAY OF COVERAGE THAN IF THE POLICY HAD REMAINED IN FORCE FOR THE FULL TERM.

SPECULATIVE RISK

A CHANCE OF BOTH A GAIN OR A LOSS. NOT INSURABLE.

SUBROGATION CLAUSE

A CLAUSE GIVING AN INSURER THE RIGHT TO PURSUE ANY COURSE OF ACTION, IN ITS OWN NAME OR THE NAME OF THE POLICYOWNER, AGAINST A THIRD PARTY WHO IS LIABLE FOR A LOSS WHICH HAS BEEN PAID BY THE INSURER. ONE OF ITS PURPOSES IS TO MAKE SURE THAT AN INSURED DOES NOT MAKE ANY PROFIT FROM HIS OR HER INSURANCE. THIS CLAUSE PREVENTS COLLECTING FROM BOTH THE INSURER AND A THIRD PARTY.

LIBERALIZATION CLAUSE

A CLAUSE IN PROPERTY INSURANCE CONTRACTS WHICH PROVIDE THAT IF POLICY OR ENDORSEMENT FORMS ARE BROADENED BY LEGISLATION OR RULING FROM RATING AUTHORITIES AND NO ADDITIONAL PREMIUM IS REQUIRED, THEN ALL EXISTING SIMILAR POLICIES WILL BE CONSTRUCTED TO INCLUDE THE BROADENED COVERAGE.

ABANDONMENT CLAUSE

A CLAUSE IN PROPERTY INSURANCE POLICIES THAT PROHIBITS THE INSURED FROM ABANDONING PARTIALLY DAMAGED PROPERTY TO THE INSURER IN ORDER TO CLAIM A TOTAL LOSS.

PERSONAL CONTRACT

A CONTRACT BETWEEN TWO SPECIFIC PARTIES THAT GENERALLY CANNOT BE TRANSFERRED TO OTHER PARTIES, UNLESS UNDER CONDITIONS SPECIFIED IN THE CONTRACT. INSURANCE POLICIES ARE USUALLY NOT TRANSFERABLE UNLESS THE INSURER AGREES TO DO SO.

Which of the following would be used to cover property of others left in a camera shop for repair? Rationale - A Camera & Musical Instrument Dealers/Commercial Articles coverage form. A Business Personal Property coverage form. A Commercial General Liability (CGL) form. An Equipment Dealers form.

A Camera & Musical Instrument Dealers/Commercial Articles coverage form. NOTE: Some companies refer to it as a specific Camera & Musical Instrument Dealers form, and some use the generic term Commercial Articles coverage form because they also insure fine arts and similar property with this form.

CLAIM

A DEMAND MADE BY THE INSURED OR THE INSURED'S BENIFICIARY, FOR PAYMENT OF THE BENEFITS PROVIDED BY THE CONTRACT.

What would be needed if a business owner had no personally owned vehicles, but wanted insurance on a rental car he personally rented on vacation?

A Drive Other Car endorsement is needed because the insured requires coverage as an individual. The BAP would not provide coverage for this loss.

ENDORSEMENTS

A FORM ATTACHED TO THE POLICY WHICH ALTERS PROVISIONS OF THE CONTRACT TO MAKE IT BETTER FIT THE NEEDS OF THE INSURED OR THE INSURER FOR THAT PARTICULAR RISK.

INSURANCE

A FORMAL SOCIAL DEVICE FOR REDUCING RISK BY TRANSFERING THE RISKS OF SEVERAL INDIVIDUAL ENTITIES TO AN INSURER. THE INSURER AGREES, FOR A CONSIDERATION, TO ASSUME, TO A SPECIFIED EXTENT, THE LOSSES SUFFERED BY THE INSURED.

The Second Injury Fund is:

A Fund issued by the state of California, which assists in claims payments for totally disabled individuals who had a permanent pre-existing disability with their prior employment. NOTE: The Second Injury Fund is not a federal program and is available for permanent pre-existing disabilities, not only loss of sight, hearing, or limbs

AN INSURANCE POLICY

A LEGALLY BINDING CONTRACT BETWEEN TWO PARTIESTHAT DESCRIBES THE RIGHTS AND OBLIGATIONS OF EACH PARTY.

ADDITIONAL INSURED

A PERSON OTHER THAN THE NAMED INSURED WHO IS PROTECTED UNDER THE TERMS OF THE CONTRACT. USUALLY, ADDITIONAL INSUREDS ARE ADDED BY AN ENDORSEMENT OR REFFERED TO IN THE WORDING OF THE DEFINITION OF "INSURED" IN THE POLICY ITSELF.

FLAT CANCELLATION

A POLICY WHICH IS CANCELLED UPON ITS EFFECTIVE DATE. USUALLY UNDER A FLAT CANCELLATION NO PREMIUM CHARGE IS MADE.

MORTGAGE (OR MORTGAGEE) CLAUSE

A PROVISION ATTACHED TO A PROPERTY POLICY THAT COVERS MORTGAGED PROPERTY, SPECIFYING THAT THE LOSS REIMBURSEMENT SHALL BE PAYED TO THE MORTGAGEE AS THE MORTGAGEE'S INTEREST MAY APPEAR, THAT THE MORTGAGEES RIGHTS OF RECOVERY SHALL NOT BE DEFEATED BY ANY ACT OR NEGLECT OF THE INSURED, AND GIVING THE MORTGAGEE OTHER RIGHTS, PRIVILEGES, AND DUTIES. FOR INSTANCE, ONE DUTY IS THAT THE MORTGAGEE MUST REPORT TO THE INSURER ANY CHANGE IN HAZARDS THAT HE BECOMES AWARE OF.

OTHER INSURANCE CLAUSE

A PROVISION FOUND IN ALMOST EVERY INSURANCE POLICY STATING WHAT IS TO BE DONE IN CASE ANY OTHER CONTRACT OF INSURANCE COVERS THE SAME PROPERTY AND/OR HAZARDS.

LOSS PAYABLE CLAUSE

A PROVISION IN PROPERTY INSURANCE CONTRACTS THAT AUTHORIZES PAYMENT TO PERSONS OTHER THAN THE INSURED TO THE EXTENT THAT THEY HAVE AN INSURABLE INTEREST IN THE PROPERTY. THIS CLAUSE MAY BE USED WHEN THERE IS A LIEN OR LOAN ON THE PROPERTY BEING INSURED, AND IT PROTECTS THE LENDER.

COINSURANCE CLAUSE

A REQUIREMENT THAT THE INSURED MUST CARRY INSURANCE TO AT LEAST 80% OF THE PROPERTY VALUE AT THE TIME OF LOSS TO BE FULLY PAID FOR THE LOSS WITHOUT ANY PENALTY. FOR THE PROPERTY POLICIES THE COINSURANCE CLAUSE REQUIRES INSUREDS TO CARRY INSURANCE TO VALUE. TYPICALLY 80% OF THE VALUE OF THE PROPERTY.

REPRESENTATION

A STATEMENT MADE ON AN APPLICATION FOR INSURANCE THAT THE APPLICANT REPRESENTS AS CORRECT TO THE BEST OF HIS OR HER KNOWLEDGE AND BELIEF.

WARRANTY

A STATEMENT MADE ON AN APPLICATION FOR MOST KINDS OF INSURANCE THAT IS WARRANTED AS TRUE IN ALL RESPECTS. IF UNTRUE IN ANY RESPECT, EVEN THOUGH THE UNTRUTH WAS NOT KNOWN TO THE APPLICANT, THE CONTRACT MAY BE VOIDED WITHOUT REGARD TO THE MATERIALITY OF THE STATEMENT. BY CONTRAST, STATEMENTS IN LIFE AND HEALTH APPLICATIONS ARE NOT WARRANTIES EXCEPT IN CASES OF FRAUD, AND THE TREND IN MORE RECENT COURT DECISIONS IN OTHER LINES HAS TENDED TO MODIFY THE DOCTRINE OF WARRANTY TO AN APPLICATION ONLY WHEN A STATEMENT IS MATERIAL TO A RISK OR THE CIRCUMSTANCES OF A LOSS.

LAW OF LARGER NUMBERS

A STRATEGY USED BY INSURANCE COMPANIES WHERE THEY HAVE A LARGE ENOUGH NUMBER OF SIMILAR RISKS TO PREDICT THE PROBABILITY OF LOSS WITHIN A GROUP.

VACANT

A TERM USED IN PROPERTY INSURANCE TO DESCRIBE A BUILDING THAT HAS NEITHER OCCUPANTS NOR CONTENTS.

Garagekeepers Coverag

A bailee coverage providing physical damage coverage for customers autos in care, custody, control.

Surplus lines broker

A broker who is licensed to place coverage with non admitted insurers

Short Rate Cancellation

A cancellation procedure in which the premium returned to the insured is not in direct proportion to the number of days remaining in the policy period.

Speculative Risk

A chance of loss, or a chance of gain. Example: Risk of gambling at a casino.

Liberalization Clause

A clause in property insurance contacts which provides that if policy or endorsement forms are broadened by legislation or ruling from rating authorities and no additional premium is required. (Broadened coverage, no additional premium)

A carrier of cargo is NOT liable for damage in all of the following situations, EXCEPT: Inherent Vice A collision due to a mechanical malfunction. Acts of God/Nature Negligence of the shipper

A collision due to a mechanical malfunction. NOTE: It is the obligation of the carrier to provide safe delivery of goods and see that the trucks are in proper operating condition. Remember, the coverage on a Common Carrier Cargo Liability form is for inland transportation, not ocean transportation. The Ocean Marine policy is used for water transportation.

What is a Tort?

A tort is a civil wrong that violates the rights of others. A person becomes legally liable by committing a tort. Generally, but not always, a court of law must determine negligence. There are usually 4 factors involved to establish negligence: 1. Legal duty is owed; 2. Breach of legal duty owed; 3. Proximate cause; 4. Damages

What is not excluded under Coverage A of a PAP?

A vehicle being used as a share-the-expense carpool

Livery

A vehicle for hire, to transport people e.g. Limousines.

What is Breach of Warranty?

A warranty is a policy condition, based either on information given by the insured in an application or inserted by the insurer in the policy. An incorrect statement by the insured (a breach of warranty) may void coverage.

Tort

A wrongful act other than breach of contract or a crime.

In DP's, Insured may choose which coverage they need of the following:

A,B,C or D

A,B,and C of a Commercial Liability (CGL) are:

A- Bodily Injury and Property Damage B- Personal and Advertising Injury C- Medical Payments.

DP1

A-B (Cov A limits is for both A and B---cannot go over declared amount)

Section 1 Coverages A,B,C, D

A-Dwelling B-Other Structure (10% of A) C- Personal property D- Loss of use (30% of A)

A car, traveling at high speed, skids at a turn and rolls over. The damage incurred would be covered under which of the following personal auto coverages? A. Collision; B. Comprehensive; C. Uninsured motorist; D. P.D. liability

A. Upset or overturn is an example of a collison loss.

Inland Marine Policies normally provide coverage on what basis? a) ACV b) guaranteed replacement cost c) agreed amount d) blanket

ACV

Homeowner's Personal Property is PAID on the Valuation Formula of:

ACV= Replacement minus Depreciation

INSURABLE INTEREST

ANY INTEREST A PERSON HAS IN A POSSIBLE SUBJECT OF INSURANCE SUCH AS A CAR OR HOME, OF SUCH A NATURE THAT IF THAT PROPERTY IS DAMAGED OR LOST, THAT PERSON WILL SUFFER A REAL FINANCIAL LOSS.

SUBLIMIT

ANY LIMIT OF INSURANCE WHICH EXISTS WITHIN ANOTHER LIMIT. FOR EXAMPLE, SPECIAL CLASSES OF PROPERTY MAY BE SUBJECT TO A SPECIFIED DOLLAR LIMIT PER OCCURRENCE, EVEN THOUGH THE POLICY HAS A HIGHER OVERALL LIMIT.

NAMED INSURED

ANY PERSON, FIRM, OR CORPORATION OR ANY MEMBER THEREOF, SPECIFICALLY DESIGNATED BY NAME AS THE INSURED(S) IN A POLICY. OTHERS MAY BE PROTECTED AS INSUREDS EVEN THOUGH THEIR NAMES DO NOT APPEAR ON THE POLICY. A COMMON APPLICATION OF THIS LATTER PRINCIPLE IS IN AUTOMOBILE POLICIES WHERE, UNDER THE DEFINITION OF INSURED, PROTECTION IS EXTENDED TO COVER OTHER DRIVERS USING THE CAR WITH THE PERMISION OF THE NAMED INSURED.

The definition of _________ for the Boiler and Machinery form is sudden and accidental (not intentional) breakdown of an object.

Accident NOTE: The definition of accident for this form is sudden and accidental (not intentional) breakdown of an object, or a part thereof, resulting in physical damage to the object and necessitating repair or replacement.

policy condition that outlines a procedure for when the insured and insurer disagree on the amount of a loss - the insured and the insurer each select an appraiser; the two appraisers select an umpire; if the appraisers cannot agree on the amount of loss, the umpire is consulted; the amount agreed to by any two of the three parties is the amount paid for the loss

Appraisl Condition

policy condition that is similar to the appraisal condition; may be used to resolve other areas of disagreement besides those regarding the value of a loss

Arbitration Condition

Which of the following is NOT a common exclusion on the Boiler & Machinery policy? Leaking of valves, joints or fittings Loss due to safety devices not functioning properly Property of Others, not in the insured`s care Breakdown of refrigeration units

Breakdown of refrigeration units NOTE: Refrigeration units are covered for breakdown on the B & M policy. Pg.

A cause of loss form that doesn't list the covered losses is named all the following except: Open peril Special Broad Form All Risk

Broad Form NOTE: The Special form is "special" in that it does not list the covered causes of loss. It is also referred to as "open-peril" and "all-risk" because everything is covered unless specifically excluded.

DP-2

Broad Form Perils Covered Replacement Fire, Lightning & Internal Explosion, WHARVES, Falling Objects & Collapse, Coverage D & E

*Adds theft coverage--with same limits of homeowners *Also covers building damage caused by thief

Broad Theft Endorsement

Covers improvements tenant makes while renting 10% of Coverage C Limit

Building Additions and Alterations (Covered by HO4 Only)

Coverage A of the Commercial Building and Personal Property coverage form covers which of the following: A riding lawn mower. Personal Property Buildings and sparate structures and a riding lawn mower are both correct answers. Buildings and Separate Structures

Buildings and sparate structures and a riding lawn mower are both correct answers. NOTES: Buildings and separate structures as well as a riding lawn mower is considered part of Coverage A, as it is used to maintain/service the property

Which of the following would be considered a "module"? Conditions Business Auto Declarations Exclusions

Business Auto NOTE: Modules are the coverage parts that make up a package policy.

Mayberry Construction has a Business Auto policy covering a 1995 pickup truck for liability and physical damage coverage. At the time of an accident, the driver of the pickup truck was pulling a trailer carrying a bulldozer. If the bulldozer slips off and causes bodily injury to another party, there is coverage under which of the following policies? A Mobile Equipment Floater The Business Auto Policy There is no coverage for mobile equipment. The Commercial General Liability Policy

Business Auto Policy NOTE: The BAP covers mobile equipment liability only if it is being towed or carried by a covered auto.

$2500

Business Property---On Premises

BOP's provide coverage for property of others under: Personal property Building coverages By endorsement only Property of others

Business personal property also covers property of others in a BOP.

All of the following major perils are commonly insured under a crop insurance policy except: Chemical disease Flood Insect infestation Fire

Chemical disease. NOTE: Plant diseases are commonly covered buy damages or losses caused by chemical are not normally covered.

DP 3 Parts

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expenses Coverage F: Additional Coverage

Business Auto Cov Form - Section II- Liability Coverage - Coverage Agreement

Coverage Agreement 1.Duty to Pay Damages 2.Duty to Pay "Covered Pollution Cost or Expense" 3.Duty to Defend

What is Collapse?

Covers physical loss to covered property involving abrupt falling down or caving in of a building, or any part of it caused by perils insured against in the policy, hidden decay, hidden vermin or insect damage, weight of contents, weight of rain. Does not include settling, cracking, shrinking, bulging, or expansion of a building.

Coverage A

Covers residence, all attached structures and fixtures, foundation, and materials used for construction and alterations.

What does Hull cover?

Covers ship, engine, fuel.

What is covered in the Fire Dept. service charge?

Covers the Fire Dept. service charge of $500. This is also additional insurance and the deductible does not apply to this coverage.

Glass or Saftey Glazing Materials

Covers the breakage of glass that is part of the building, including windows and doors.

What was OSHA established to do?

Create education and training for employers. Promote and assure the safety and health standards for American workers. Mandate that all employers who do not comply with health standards will be fined.

$500 **Insured must notify bank or credit card company**

Credit Card, Electronic Fund Transfer Card, Access Denied, Forgery, and Counterfeit Money

Which one of the following would be insured under a Business Auto Policy? Auto owned by a partner Customer who borrowed a company car with permission. Hired owned auto Employee owned auto

Customer who borrowed a company car with permission. NOTE: The Named Insured is any party causing a loss while acting on behalf of the insured and anyone having the named insured's permission except: Hired auto owner, Employee-owned auto, Anyone in the auto business, People loading/unloading car (other than named insured employees), Auto owned by partner or member.

An uninsured motor vehicle includes: A. An insured vehicle whose insurer denies coverage; B. An insured vehicle whose insurer become insolvent; C. A "hit and run" vehicle; D. All of the above.

D. All of the responses are corret as to UM coverage.

The P.A.P. liability coveage excludes all of the following EXCEPT: A. Intentional injury; B. Damage to insured property; C. Damage to property of others in the insured's care; D. Damage to property of others due to the insured's motor vehicle negligence.

D. Damage to property to others, other than property being transported by the insured, is covered under property damage liability.

The Equipment Breakdown policy is designed to cover equipment ____ the insured. A. Owned by; B. Leased to; C. Operated by; D. All of the above

D. The policy can cover equipment owned, leased to or operated by the insured.

If a boiler explodes and damages a building, contents and property of others, what coverage would apply? A. Only the damage to the boiler is covered; B. Only the building coverage is provided; C. Only the insured's contents are covered; D. If proper limits are in place the entire loss is covered

D. The policy covers the entire loss. The coverage is not just limited to damage to covered equipment.

All of the following are considered insureds under the P.A.P. EXCEPT: A. Any person using the insured auto; B. A family member using the insured auto; C. Any organization the insured represents; D. Any person using an auto not owned by the insured.

D. The policy covers vehicles stated on the declarations page of the PAP. The driver of a vehicle not owned by the insured is not covered.

Under the P.A.P., the insurer will pay for transportation expenses up to which of the following amounts? A. 410 per day; $300 maximum; B. $20 per day; $500 maximum; C. $15 per day; $300 maximum; D. $20 per day; $600 maximum

D. The policy pays $20. per day subject to a maximum of $600. as a result of a covered physical damage loss.

Other Structures: *All unattached structures *All unattached fixtures Loss Valuation aka Basis of Recovery *DP1---ACV *DP2---Replacement Cost *DP3---Replacement Cost Unattached Structures that are not covered: *Unattached structures that are rented out *Unattached structures used in business Limit: 10% of A

DP Coverage B

Other Structures

DP Coverage B:

Contents/Personal Property (Covered Under Blanket Basis) *Covers the insured's personal property *Covers the personal property belonging to the insured's guests *Covers the personal property belonging to the insured's employees home based Loss Valuation aka Basis of Recovery **ACV for All 3 Coverages** Limit: *On Premises: As Declared *Off Premises: 10% of C ****Worldwide**** No Theft Coverage on Any Dwelling Policy

DP Coverage C

Loss of Use - Indirect or Consequential Losses (Coverage D & E); Indirect or Consequential Losses

DP Coverage D:

Additional Coverages for DP1 Additional Living Expenses for DP2 & DP3

DP Coverage E

**This adds all of Section 2 Homeowners to the Dwelling Policy** *Bodily Injury *Property Damage *Medical Payments to Others **Limits are same as Homeowners** Personal Liability $100,000 per occurence Medical Payments to Others $1000 per person 3 year time limit

DP Personal Liability Supplement

Basic, Perils Covered A, B on BasicForm, & C on Basic Form; ACV, Fire, Lightning & Internal Explosion + may purchase E/C WHARVES, No Extra Living Expenses Covg E

DP-1

Broad Form Perils Covered Replacement Fire, Lightning & Internal Explosion, WHARVES, Falling Objects & Collapse, Coverage D & E

DP-2

A-B (Cov A limits is for both A and B---cannot go over declared amount)

DP1

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Coverages NO Coverage F

DP1 Parts

Without regard to liability, pays maximum of $1000 per occurence. If borrowed property is also covered under Section 1, this coverage becomes excess and Section 1 becomes primary

Damage to property of others in the insured's care, custody or control (Policyholder is the bailee)

If a shipowner who purchases an Ocean Marine policy on an All Risk form runs into a dock while transporting cargo for a customer, the policy would pay for:

Damages to the ship, dock, cargo and any resulting bodily injury; including that of injured employees.

Personal Liability pays on behalf of the insured all sums he/she is legally obligated to pay others because of bodily injury and property damage to others, caused by an "occurrence." The minimum limit is $100,000 per occurrence.

Under Section II, what is Personal Liability?

File and Use

Under this method, once filed with the state it may be used. The state review the rate and determines if the rate is acceptable or not.

D. The dwelling must be used exclusively as a residence, except for certain incidental occupacies such as offices, professional or private schools, or studios.

Which of the following do NOT meet the eligibility requirements for Homeowner's Insurance? A. Tenants in non-owned buildings used primarily for residential purposes; B. Owner-occupants of condominiums; C. Dwellings purchased under installment contracts when the purchaser is occupant of the dwelling; D. Dwellings that are used exclusively for offices, professional or private schools.

What is Unilateral?

Unilateral means "one-sided." An insurance policy is one-sided because only the insurance company is legally bound to perform its part of the agreement. If an insured pays a premium and a loss occurs, the insurer is legally bound to pay for the loss under the terms of the policy. However, insureds are not legally obligated to pay premiums. If an insured stops paying premiums, the insurace company can cancel the contract but it cannot sue the insured for breaking the contract. On the other hand, if an insured fails to comply with conditions and duties specified in the contract, the insurance company may deny an insured's claim.

One of the major differences between a business auto policy and a personal auto policy are the endorsements. Which coverage listed below is considered an endorsement on the business auto policy? Cost of legal defense Liability coverage Comprehensive & Collision coverage Uninsured Motorist and Medical coverage

Uninsured motorist and Medical coverage. NOTE: UMBI & Medical coverage are not automatic coverages on the BAP and are considered endorsements, not separate lines of insurance coverage.

failure to act as a resonably prudent person would act under similar circumstances resulting in harm to another

Unintentional Tort

An unendorsed liability policy provides for what?

Unintentional Torts (Unintentional Civil Wrong)

Theft

Unjustly taking and keeping the property of another, against the reasonable will of the owner.

the absence of people from a premises property coverage is often restricted if there are long periods of unoccupancy

Unoccupied

Contributory Plan

Used in a group Insurance. Employee and employers share in the paying of premiums

Drive other car endorsement

Used when employees have company cars and don't own any cars, so they don't have a PAP. Provides liability coverage for persons named in endorsement (and their spouses) while using autos not owned by them

Blanket Insurance

Used with large groups where the members change frequently and are not individually named: e.g. Schools, Campgrounds, Charitable groups.

What is Policy Territory?

Usually limited to the U.S., Puerto Rico & Canada. There are some policies that provide coverage on a "world-wide basis" such as certain types of inland marine policies and personal property covered in a Homeowner's Policy as well as personal liability coverage in a homeowner policy.

What is Speculative Risk?

Usually not insureable--caused by nature (Betting on a horse race, investing in real estate).

Unoccupied: No people in the dwelling Vacant: No people or furniture in the dwelling The following coverages are suspended: *Glass Breakage *Vandalism or Malicious Mischief *Water Damage

Vacancy/Unoccupied Clause (This clause applies to a dwelling that remains vacant for 60 days or more)

absence of both people and property from a premises

Vacant

Coverage A of a Building and Personal Property form would exclude all but: Vacuum and Floor waxer Patios and Driveways Indoor Furnishings Piers, wharves, docks

Vacuum and Floor waxer NOTE: Equipment used to service the premises is covered under Coverage A on the BPP.

The stated Value of the invoice, import duties, and freight Charges

Valuation of Cargo Includes:

What is NOT a general condition under the Equipment Breakdown Coverage Form?

Valuation. This is a loss condition, not a general condition.

Willful and malicious damage to property, including burglars entering or exiting is called ___________.

Vandalism NOTE: Vandalism is the willful and malicious damage to property, including burglars entering or exiting. However, glass breakage or damage to an outside sign caused by vandals, or other damage resulting from theft is not covered.

Two perils that can be excluded from the vacancy permit are: Vandalism and Sprinkler Theft and Attempted theft Glass and Water Theft and Water

Vandalism and Sprinkler NOTE: Vandalism and sprinkler leakage can be excluded from the vacancy permit.

*Must be physical contact *Vibration coverage is not covered *Fences are not covered when struck by vehicles.

Vehicles

Which of the following is NOT an excluded loss under the Commercial property forms? Mechanical breakdown Earth Movement Contractual Liability Volcanic Action

Volcanic Action NOTE: Volcanic Action is a covered peril under the commercial property form. Contractual Liability refers "liability," not property. Earth Movement is always covered by endorsement or a separate policy, and Mechanical Breakdown is covered through a Boiler & Machinery policy.

*Covers any loss by the lava *Covers the blast *72 hour occurence period--1 deductible every 3 days. *Blast from volcano--Airbornne Shockwaves *Ash and Dust *Only covers hostile fire

Volcanic Eruptions

Jettison

Voluntarily throwing cargo overboard in an effort to reduce weight to prevent total loss of ship.

In regards to workers compensation volunteer workers are considered to be:

Volunteers are an exempted category that can be can covered by endorsement.

AGREEMENT

WHEN AN OFFER MADE BY ONE PARTY HAS BEEN ACCEPTED BY THE OTHER, WITH MUTUAL UNDERSTANDING BY BOTH.

ADVERSE SELECTION

WHEN INSUREDS SELECT ONLY THOSE COVERAGES THAT ARE MOST LIKELY TO HAVE LOSSES.

Covers back-up of sewers and drains Covers damage caused by sump pump failure

Water Back-up and Sump Pump Discharge or Overflow

*Very limited Only covered if caused by the following: *Appliances *Air Conditioning or Heating Systems *Internal Pipes *Fire Sprinkler Systems ***Only covers damages, doesn't cover replacement of object that caused damage***

Water Damage (Perils 3 & 4) *Accidental Discharge or Overflow of Water or Steam from within Appliances or Plumbing Systems *The Sudden and Accidental Rupture of a Heating, Air Conditioning, Fire Sprinkler, of Hot Water Heating System Caused By Tearing Apart, Cracking, Burning, or Bulging

HO8 excludes all water damage All other policies exclude water damage unless caused by appliances, air conditioning or heating systems, pipes, or fire sprinkler systems. Excluded: floods, tsunamis, water spray, mudslides, backed up or broken drains, backed up or broken sewer lines, water seeping through a foundation, sump pumps and swimming pools.

Water Damage/Flood Exclusion

This is VERY limited, and is only covered if: *Inboard Motors of 50HP or less *Outboard Motors of 25HP or less *Non-motorized boats less than 26 feet in length

Watercraft Liability

$1500

Watercraft, equipment and trailers

The HO-2, HO-3 & HO-5 include additional coverage for the following: Debris removal; reasonable repairs; trees, shrubs, and other plants; fire dept. service charge; property removed; credit card, forgery, and counterfeit money; loss assessment; glass or safety glazing material; collapse; landord's furnishings; building additions and alterations; ordinance or law, grave markers.

What are Additional Coverages of the HO forms?

D. Both A & C. Owner-occupants of residential dwellings can not contain more than 4 families under the HO-2; HO-3; HO-5; HO-8. Dwellings that are under construction are ELIGIBLE.

Which of the following does not meet the eligibility requirement for a Homeowner Policy? A. Owner-occupants of residential dwelling which do not contain more than six families; B. Tenants in non-owned buildings used primarily for residential purposes; C. No dwelling that is under construction; D. Both A & C

What are the 3 types of Hazard?

a. Physical Hazard. This includes such things as poor housekeeping, faulty wiring, failure to maintain the property.; 2. Moral Hazard--like running a meth lab in your home. This would increase the likelihood of a loss.; 3. Morale Hazard--This is a hazard arising out of an insured's indifference to loss because of the existence of insurance. For example, driving recklessly with no concern because you have insurance.

the coverage on an Equipment Breakdown Policy is triggered by an a) occurrence b) accident c) event d) explosion

accident

Policy Issue and Administration

after an underwriter approves the new application or change to a current policy the application is then sent to this department in the insurance company the policy analysts or screener makes sure the information is complete before giving it to the rater who computes the premium, the policy is then assembled and distributed

Excess or Surplus Lines Agent

agent licensed by the state to handle the placement of business with nonadmitted insurers

Misrepresentation (for agents)

agents cannot do this or falsely advertise the terms or benefits of a policy

Limit of Insurance

amount insurer will pay is based on the occurence which can be a single act or any series of acts

the definition of "Your Covered Auto" includes all of the following, EXCEPT... a) an additional auto purchases 45 days ago b) a vehicle listed on the Declarations Page c) an auto used by the insured while the insured's auto is being repaired d) an owned trailer

an additional auto purchased 45 days ago

a Fraternal Benefit Society

an incorporated society or order, without capital stock, that is operated on the lodge system and is conducted solely for the benefit of its members and their beneficiaries and not for profit; Fraternal benefit societies offer insurance that is available only to members ex. Knights of Columbus

Insurance Agent

an individual or organization that legally represents another; a state-licensed professional who represents the insurance company in the sale and servicing of insurance; the direct link between the insurance companjy and the policyholder

Insurance Broker

an individual who represents the prospect, instead of the insurance company, in the insurance transactiuon

Alien Company

an insurance company incorporated in a country other than the U.S. that is doing business in the U.S.

Stock Company

an insurance company owned by its stockholders; profits are shared by the stockholders; policyholders are not entitled to share in company profits

should be covered.

an insured using a newly acquired van while transporting tools and parts needed in his business of repairing appliances

Under OK Statutes 36 O.S. 3636, an uninsured motor vehicle includes all of the following, EXCEPT... a) a hit-and-run driver b) a driver insured by an involvent insurer company c) an insured vehicle driven by an illegal alien d) a driver w/ no auto liability insurance

an insured vehicle driven by an illegal alien

Reciprocal Company

an unincorporated group of members that share insurance responsibilities with other members; it is managed by an attorney-at-fact

according to section 1 for covered autos what does symbol #1 covers what?

any auto (automatically includes owned autos, hired autos, and non-owned autos) provides the broadest coverage available. only available for liability coverage

All of the following are true regarding bid bonds EXCEPT... a) principal pays for thebond b) a refund is given to the contractor if he/she does not get the bid c) it is a type of contract bond d) any contractor can probably buy a bond

any contractor can probably buy a bond

under OK Workers Comp, the medical benefits a) begin after 7 days b) are provided for 52 weeks c) are unlimited d) have an 80/20 coinsurance clause

are unlimited

the Owner and Contractors Protection (OCP) Form covers the insured for liability: a) arising out of the operations of independent contractors or subcontractors b) arising out of contractual liability c) arising out of the insured premises d) arising out of products and completed operations

arising out of the operations of independent contractors or subcontractors

All of the following are excluded property from the Business Owners Policy EXCEPT... a) boats b) securities c) money d) attached signs

attached signs

Which of the following would NOT be covered under "comprehensive" coverage? a) auto sinking b) auto burning c) auto overturning d) auto flooding

auto overturning

Workers Compensation benefits pay for job-related a) accidents only b) diseases only c) both accidents and disease d) neither accidents nor disease

both accidents and disease

Which of the following is not included in the Nationwide Marine definition? a) imports b) building addition c) instruments of transportation d) personal property floater risks

building addition

Personal Inland Marine Floaters would cover any of the following? a) camera equipment b) boat c) a motorcycle d) 4-wheeler

camera equipment

Surety bonds can be cancelled by the surety w/ the following notice? a) 10 days b) 20 days c) 30 days d) cannot be cancelled once issued

cannot be cancelled once issued

property damage

claimant vehicle damage, rental car bill while vehicle is under repair, damage to claimant's structure, damage to property (fence, landscape), or injury or death to an animal can call be considered as ______________________ in an auto policy

If Beverly's pickup hits a puddle of rainwater and rolls, which of the following coverages could pay for damages to the pickup? a) collision b) medical payments and collision c) comprehensive and collision d) uninsured motorist

collision

If Henry misses the deer and hits the side railing on the interstate highway, the insurance company will pay for the damage to his 2012 Mazda CX-7 under what coverage? a) collision b) property damage c) transportation expense d) other than collision (comprehensive)

collision

the insured overturns his truck while driving too fast on the interstate. Which of the business auto coverages provide coverage for damage to the truck? a) comprehensive b) collision c) liability property damage d) no coverage for intentional acts

collision

limit may apply to either bodily injury or property damage whereever needed or in any combination exsample homeowner policy section 2 can be used all for bodily injury or all for property damage.

combine Single Limit

what insurance would pay the medical expenses for an emplyee injured on the job? a) employee group medical expense b) commercial general liability c) workers compensation d) commercial proeprty

commercial

losses resulting from an employee's act of theft (any act of stealing) are covered by what?

commercial crime coverage

an insured parked his car on the beach overnight. The car was destroyed by water at high tide. Which of the following statements is true? a) comp coverage would pay the claim b) coll coverage would pay the claim c) liability coverage would pay the claim d) no coverage provided

comp coverage would pay the claim

Admitted or Authorized Insurer

company that meets a state insurance department's standards and is authorized to do business in that state

Under the Commercial General Liability Policy what type of coverage would pay for bodily injury from a garage door improperly installed at the home of the customer? a) products liability b) premises liability c) completed operations liability d) operations liability

completed operations liability

Loss Sustained during prior insurance condition

condition found in loss sustained version of the commercial crime forms that allows losses that occurred during a prior policy period to be covered under the current policy period to be covered under the current policy if certain conditions are met

All of the following information must appear on the Declarations Page, EXCEPT.... a) applicable premium for each Coverage Pary b) description of the business insured c) conditions d) countersignature of the producer (AGENT)

conditions

Accident

continuous or repeated to the same conditions resulting in bodily injury or property damage

a performance bond is what type of bond? a) contract bonds b) judicial bonds c) fiduciary bonds d) fidelity bonds

contract bonds

All of the following coverage could be covered on an Equipment Breakdown Coverage form EXCEPT... a) heating & air conditioning system in an office building b) refrigeration system in a grocery store c) cook stove in a restaurant d) high pressure boiler

cook stove in a restaurant

Duties of an Insurance Agent

countersigning field underwriting prepare quotes complete applications maintain a suspense or diary system service needs of customer

all of the following statements about an HO-4 are true, EXCEPT... a) coverage for loss of use is provided b) coverage for personal property is provided on a "open peril" basis c) liability is covered d) no coverage is provided for the dwelling

coverage for personal property is provided on a "open peril" basis

All f the following are true about flood insurance, EXCEPT... a) indirect losses are excluded b) coverage is available for sewer back-up claim c) deductible of $500 applies for each: dwelling and contents per flood d) coverage may be sold by a license property and casualty insurance producer

coverage is available for sewer back-up claim

All of the following are true about apersonal Inland Marine policy, EXCEPT... a) coverage is usually restricted to the USA, its territories, and Canada b) the standard valuation is ACV c) damage cause by inherent vice is excluded d) flood is a covered peril

coverage is usually restricted to the USA, its territories, and Canada

Symbols

coverage on BAP is trigged by one or more of symbols which are specifics the covered autos

ITP extension for damage to premise

covers actual or attempted theft of money and securities, covers damage to the premises

ITP extension for containers

covers actualy or attempted theft or unlawful entry of locked safe, vault, cash box or cash drawer

Discovery Form

covers losses that are discovered during the policy period

Loss Sustaining Form

covers losses that are sustained during the policy period and discovered no later than 1 year after the policy expires

Outside the Premises

covers money, securities, and other property while outside the premises and in the care and custody of a messenger or an armored vehicle company

Inside the Premises- Theft of Money and Securities

covers theft, disappearance, or destruction of money and securities inside the premises or banking premises

The Liability Risk Retention Act

created in 1981 and amended in 1986 to give the right to form RRG's and PG's to all businesses, they are prohibited from writing workers' compensation and personal lines insurance

Definition of Employee

current employee or terminated in the past 30 days, compensated by the company, subject to control and direction of the insured

named insured, partner, or employee having care and custody of insured property within the insured premises.

custodian

custodian vs messenger

custodian has care inside the premises .... messenger has care outside the premises

all of the following losses are included under "Comprehensive" EXCEPT... a) damage caused by a painter who, while painting the nieghbors house, sprays paint on the insured car b) damage to the car by flood water c) damage to the car caused by students standing on the hood at a football game d) damage caused to the behicle when it runs into a mialbox

damage caused to the vehicle when it runs into the mailbox

All of the following would be exclusions on an Equipment Breakdown Coverage Part EXCEPT... a) damage to the object while being tested b) damage to the object by mechanical breakdown c) depletion, deterioratoin, and corrosion d) damage to the object caused by flood

damage to the object by mechanical breakdown

Underwriting Department

department in the insurance company that decides whether to accept or reject the applications sent in by agents ont he basis of the company's standards and their own judgement

Reinsurance Department

department in the insurance company that purchases/maintains reinsurance

Personal Auto Policy

designed to insure private passenger vehicles and SUVs primarily used on public roads

period of one year for a loss to be discovered after the policy expiration and still be covered if the loss occurred during the policy period

discovery period

Fidelity Bonds are known as... a) dishonesty bonds b) excess liability bonds c) utmost good faith bonds d) judicial bonds

dishonesty bonds

After a property homeowners loss, all of the following are duties of the insured, EXCEPT... a) notify the insurance company immediately b) protect from further damage c) do the repairs themselves to save the deductible d) permit the company to inspect the damaged property before repairs begin

do the repairs themselves to save the deductible

a deductible would apply to which of the following types of loss? a) dwelling b) loss of use c) medical payments d) liability

dwelling

Individual named insured endorsement

ed when the named insured is a sole proprietor. Essentially just extends BAC to provide named insured and his/her family the same coverage they would have with a personal auto policy (PAP)

Warehouse receipts

eliminated coverage for loss resulting from fraudulent or dishonest signing, issuing, canceling or failing to cancel, a warehouse receipt or any papers connected with it

an employee uses her employers computer to fraudulently wire transer funds from the employers business account to her personal account. Which Crime Coverage Form would provide Coverage? a) Compute fraud b) forgery or alteration c) employee theft d) inside the premises-theft of money & securities

employee theft

Which of the following Crime coverage forms would you recommend for a business owner who wants employee dishonesty coverage on all employees? a) employee theft- schedule basis b) employee theft- blanker basis c) robbery and safe burglary d) forgery and alteration

employee theft- blanket basis

Causes for inventory shortage other than employee theft

errors in count, failure to record material returned to vendors, failure to record material received, shipped, sold or transerred toa nother location, shoplifting or theft by third parties, damaged or spoiled goods

Governmental Action

exclude loss resulting from seizure or destruction of property by order of governmental authority

what does the garagekeepers coverage exclude?

excludes coverage for all other types of business property including inventory, supplies, machinery, and mechanic tools

Nuclear

excludes coverage for loss resulting from nuclear reaction, nuclear radiation, or radioactive contamination

Acts committed by you, your partners, or your members

excludes coverage for loss resulting from the named insured, names insured's partners or members whether acting alone or in collusion with other persons

Legal Expenses

excludes expenses related to any legal action

Trading

excludes loss resulting directly or indirectly from trading, whether in the named insureds name or in a genuine or fictitious account

War and Similar Actions

excludes war in all its various forms, declared or not, including insurrection, rebellion and revolution

Indirect Loss

exclusion for three types of loss other than physical loss of or damage to covered property: 1) business income loss 2) payment of damages for which the insured is legally liable 3) expenses incurred in establishing either the existence or the amount of loss under the policy

4 Basic Distribution Systems used to Market Insurance

exclusive agency system direct writer system direct response system independent agent system

surrender of money, securrities, or other property away from the insured premises as a result of a threat communicated to the insured to do bodily harm to a hostage

extortion

protect the employer for losses caused by dishonest employees

fidelity bonds (can be called dishonesty bonds because they guarantee the fidelity of the principal (employee) of the bond)

guarantees the faithful job performance of people in high positions of trust

fiduciary bond

when the court designates an individual to handle the assets of aminor, which of the following bonds would be appropriate? a) court bond b) performance bond c) fiduciary bond d) position schedule fidelity bond

fiduciary bond...

All of the following are common exclusions on the Commercial Causes of Loss Forms, EXCEPT... a) ordinance b) power failure off premises c) earth movement d) fire

fire

The Business Owners Policy would cover which of the following? a) guard dog b) fire extinguisher c) petty cash d) detached outdoor sign

fire extinguisher

All of the following could be insured on an Inland Marine Policy EXCEPT... a) bulldozer b) fishing boat c) bridge d) domestic goods in transit

fishing boat

losses resulting from financial instruments including checks, drafts, or promissory notes

forgery or alteration

A parking lot owner wants to have coverage in the event a vehicle in his/her care, custody, and control is damaged. Which of the following types would provide the proper coverage? a) business auto b) garage liability c) garagekeepers d) commercial general liability

garagekeepers

a package coverage providing physical damage coverage for customers' autos in care, custody or control of the insured for storage, service, or repair

garagekeepers coverage

occupying

getting into or out of the car, riding in car, sitting on the hood of the car, changing the tire, and putting items in the trunk of car would all qualify as

which of the following is eligible to be reimbursed for incurred medical bills by the homeowners medical payments? a) burglar b) father living with the insured c) named insured d) guest on the insured's premises

guest on the insured premises

Under Part I of a Workers Compensation Policy, medical benefits a) have annual and lifetime maximum limits b) are subject to deductibles and co-payments c) are subject to deductibles but have no co-payments d) have no dollar limit, no time limit, and no co-payments on covered expenses

have no dollar limit, no time limit, and no co-payments on covered expenses

in OK, employers can meet their obligations under State Workers Comp Laws thought all of the following EXCEPT... a) commercial insurers b) formal self-insurance plan c) competitive state fund d) health insurance

health insurance

A number of endorsements are available to adjust coverage for condominium unit owners. Normally, HO-6 provides broad form coverage for any building items and for personal property. An endorsement may be used to provide unit owners with special coverage for Coverage A, to the extent that building items are insured. Another endorsement may be used to provide unit owners with special coverage for Coverage C (personal property). An endorsement is also available to cover the personal property of unit owners while the residence is rented to others.

What is Condominium Endorsements?

Coverage for a limit of $500 on all of these including counterfeit money-U.S. or Canadian.

What is Credit Card, electronic transfer card, forgery or counterfeit money?

Awnings and fences; patios and swimming pools, underground pipes, flues, drains, cesspools, septic tanks, foundations, retaining walls, and docks.

What is EXCLUDED under Collapse Coverage?

Covers loss of doors and windows of the dwelling as a result of breakage of glass or safety glazing material.

What is Glass or safety glazing material?

Pays up to $5000 for grave markers including mausoleums on or away from the residence premises.

What is Grave Markers?

Provides up to $2500 for landlords furnishings. This additional coverage excludes theft of these items.

What is Landlord's Furnishings?

Liability is third party coverage that takes care of medical bills, property damages, lost wages, pain and suffering, inconvenience, etc. that is incurred by a third party in an "occurrence" and caused by or is allegedly the fault of an insured and members of the insured's household.

What is Liability?

Pays up to $1000 when the insured is assessed by a corporation or property owner's association for damage to property owned collectively if damaged by a peril insured against under the insured's policy.

What is Loss Assessment?

Occurrence is an accident, including repeated or continuous exposure to similar harmful conditionsl

What is Occurrence?

Excess or Surplus Lines

highly specialized insurance coverages that are often not available from any company admittd to do business in a state examples - coverage for auto racing, tuition refund insurance

autos used int he insured's business that are leased, hired, rented, or borrowed, but not autos owned by employees

hired autos

Symbol #8

hired autos only

according to section 1 for covered autos what does symbol #8 covers what?

hired autos only

does not , automatically provided

if a newly acquired auto replaces a vehicle on the policy, the insured _________________ have to request coverage, as it is __________________________ automatically provided.

an injured worker would NOT be entitled to Workers Compensation benefits in which of the following? a) if the employee was injured by a co worker b) if the employee knew the dangers c) if the employee was intoxicated d) if the employee was the cause of the accident

if the employee was intoxicated

repairs to the cart, loss of use of cart and loss of income

if the insured hit the claimants parked hot dog cart, the property damage would include _____________________________, ________________________________ and ___________________________.

Cancellation as to any Employee

if the insured learns an employee has committed theft or any other dishonest act, the coverage for that employee ceases immediately for any future acts by that employee

4 days, $500

if there is no collision coverage on a policy and the insured has a newly acquired auto, the insured MUST ask to insure the vehicle within __________.If asked to insure within the grace period but a collision occurs before asking to insure it, a _____________ collision deductible will apply.

elapsed , no coverage

if u ask us to insure a newly acquired auto after a specified time period has ___________, any coverage we provide will be as of the date you request coverage and within the time after the elapsed time period and your request for coverage there will be ________________________ for your newly acquired auto.

A financial institution has 12 tellers bonded on a blanket schedule bond. If one teller quits and a new employee is hired, when is the new emplyee covered by the bond? a) after the probationary period b) immediately c) after 15 days d) after the employer notifies the surety

immediately

If an insurance company representative finds an insureds boiler in a dangerous condition, coverage can be suspended... a) immediately b) w/ 10 days notice c) w/ 30 days notice d) upon policy arrival

immediately

when do the benefits for medical benefits become payable? a) 3 days b) immediately c) after temporary total d0 after 12 months

immediately

Under workers Comp Insurance, all of the following are true regarding rehabilitation benefits EXCEPT a) includes medical payments b) includes vocational training c) has unlimited benefits d) includes cost of wheelchairs

includes medical payments

Loss Ratio

incurred losses + loss adjusting expense/earned premium = loss ratio.

For an additional premium, an endorsement may be attached to a homeowner policy to cover the additional loss that may result from any ordinance or law regarding the construction, repair or demolition of property. In states where the 1994 coverage revisions are in effect, 10% of the coverage A limit is already provided as additional ordinance or law coverage and the endorsements may be used ot purchase higher amounts of coverage.

What is Ordinance or Law Endorsement?

May also be added by endorsement. When attached, this form amends the definition of "bodily injury" to include "personal injury." Personal injury means injury arising out of false arrest, libel, slander, defamation of character, invasion of privacy, and other offenses that could result in a personal liability claim.

What is Personal injury coverage?

means physical damage to tangible property including loss of use.

What is Property Damage?

When the insured is removing property from the premises when endangered by a peril insured against, coverage applies to any direct loss from any cause for no more than 30 days while removed.

What is Property removed?

Which of the following statements regarding homeowners insurance is correct regarding medical payments? a) only emergency treatment charges are covered by the policy b) incurred medical payments are payable up to three years after the accident c) incurred medical payments are payable to resident relatives d) incurred medical expenses are payable only if the insured is legally liable

incurred medical expenses are payable up to three years after the accident

who would not be covered by Workers Compensation benefits? a) independent contractor b) company president out of state on business c) employee injured by negligence of a fellow employee d) employee injured by own negligence

independent contractor

Residual market Insurance

insurance that is not ordinarily available from private insurers and may be provided by the government; examples include flood insurance, which is provided by the federal government, and worker's compensation benefits, which may be provided by state funds

Life Insurance

insurance that pays a stipulated sum to a designated beneficiary upon the death of the insured; protects the insured's beneficiary against the financial consequences of the insurede's premature death

Computer Fraud

insure against loss of money, securities and other property caused by the use of any computer to fraudulently cause a transfer of that property from inside the premises or banking premises to a person outside those premises or to a place outside those premises

who determines the repair shop the vehicle will be repaired? a) producer b) adjuster c) insurer d) insured

insured

Insurance is between what two parties?

insurer insured

Inventory Shortages

insurer will not pay for any loss that depends on inventory or profit-and-loss calculations to prove either the existence or the amount of the loss

Employee canceled under prior insurance

insurer will not pay loss cause by an employee who was canceled under any similar prior insurance and not reinstated since that last time of cancellation

Garage Liability

insures business that drive, service, and word on non-owned vehicles ex: auto dealers, recreational vehicle dealers, auto repair shops, auto service stations, parking garage

which situation would NOT be covered under the Inside the Premises- Theft of Money & Securities Crime Form? a) cash taken from the owner in a robbery of the premise b) damage to the fron door cause by burglars c) inventory stolen from the supply room d) securities that mysteriously disappeared

inventory stolen from the supply room

Personal Auto Policy

is a promise to pay in exchange for a premium.

collision coverage , 14 days

is automatically afforded on a newly acquired auto and the insured MUST report the vehicle to the insurance company within ____________________

all of the following are true about uninsured motorists, EXCEPT... a) in OK underinsured motorist is autmatically included in the coverage b) it pays for BI and PD c) a covered person means named insured and family members d) pays if the damages are caused by a hit and run driver

it pays for BI and PD

all of the following is true about a personal umbrella policy EXCEPT.... a) it is a stand-alone policy b) it provides excess property coverage c) it provides an excess liability protection over required underlying policies d) normally written in policy limits of $1000000

it provides excess property coverage

guarantees the contractor (principal) will complete and deliver the project free of any liens

labor and material bond (aka payment bond)

taking property that occurs when there is access to the area where the stolen property was located, ie, shop lifting or domestic employees

larceny

USA PATRIOT ACT

law gives federal government broad power to curtail attempts to launder money and finance terrorist activities

Which of the following could be covered by a Dwelling Policy? a) golden retriever b) cashed paycheck c) securities d) lawn mower used to service the premises

lawn mower used to service the premises

Express Authority

legal doctrine that states that an agent has the authority specifically given to the agent, either orally or in writing, by the principal

Apparent Authority

legal doctrine that states that an agent has whatever authority a reasonable person would assume he or she has

guarantees the fiduciary will faithfully handle the financial affairs of a person incapable of doing so themselves

legal guardian

six months

length of a leased auto on a policy must be equal to or greater than

All of the following could be anamed insured under a Business Auto Policy EXCEPT?... a) corporation b) association c) sole proprietor d) lien holder

lien holder

Under the building coverage of the building and personal property coverage, which of the following is covered? a) lighting fixtures b) inventory c) executive office furniture d) office supplies

lighting fixtures

per loss basis

limit of insurance applies regardless of how many employees were involved in the loss

A permit surety bond would be required for what type of business? a) insurance agency b) medical doctor c) veterinarian d) liquor store

liquor store

Declarations

list important information about the policy such as the named insured(s), the insured's address, the vehicles insured, their vehicle identification numbers, the driver's insured, the coverages, limits, and deductibles chosen.

the primary purpose of Business Income coverage is to indemnify the insured for: a) loss of income resulting from business interruption b) loss of income resulting from destroyed accounts receivable by records c) loss of income resulting from employee theft d) loss of income resulting from employees work-related injury

loss of income resulting from business interruption

Which of the following does a flood policy NOT cover? a) loss of use coverage due to a flood b) damage to the dwelling caused by mudslide c) damage to the contents caused by a rapid accumulation of flood waters d) overflow of tidal water damage to a single family dwelling

loss of use coverage due to a flood

all of the following are true regarding flood insurance policy, EXCEPT... a) damage caused by mud slide is covered b) loss of use of the building caused by flood is covered c) damage to the basement walls is excluded d) damage to property in the basement is excluded

loss of use of the building caused by flood is covered

all of the following property losses are excluded on a homeowners policy, EXCEPT... a) losses due to flood b) losses due to mud slide c) lsoses from nuclear fallout from neighboring nuclear plant d) losses due to the insureds negligence

losses due to the insureds negligence

if our insured was legally responsible, the personal auto policy liability would provide coverage for all of the following EXCEPT... a) medical expenses and hospital bills to the injured third party claimant b) medical expenses and hospital bills to a named insured c) pain and suffering to the third party claimant d) property damage to the third party claimants auto

medical expenses and hospital bills to a named insured

named insured, partner, or employee having care and custody of insured property outside the insured premises

messenger

Loss Ratio

method used to determine an insurance company's success in covering current losses out of current premium income; determined by dividing incurred losses by earned premium Incurred losses --------------------- = ? Earned premium

The personal auto policy provides coverage in all of the following territories, EXCEPT...' a) guam b) puerto rico c) mexico d) canada

mexico

currency, coins, bank notes in current use, registered checks, and money orders

money

Which of the following would not be covered under the Cause of Loss- Earthquake? a) lava flow damage b) volcanic eruption c) mud slide d) shockwaves from earthquake

mud slide

family member

must have relation by blood, marriage, or adoption; ( legal relationship as in a ward or foster child, (no limit to how distant the blood relationship goes or restriction on age), and must reside in the household to be qualified as a

newly acquired auto

must meet vehicle type for PAP, must weigh less than 10,000 pounds, CANNOT be used for the delivery of goods and materials UNLESS is is incidental to insured's furnishings or equipment installation, repair or maintenance business or farming and ranching.

Assessment Mutual Company

mutual insurance company that charges members a pro-rata share of losses at the end of each policy period

Which of the following isnot excluded by a Personal Inland Marine Policy? a) inherent vice b) fine arts outside the USA, its territores, and Canada c) mysterious disappearance d) damage by vermin

mysterious disappearance

identifies on the declarations page the coverage amount for each employee by name. (fred flistone, $100,000; Barney Rubble, $50,000) new employees are not covered until added to the policy

name schedule

all of the following are Surety Bonds, EXCEPT... a) bid bond b) permit bond c) name scheduled bond d) performance bond

name scheduled bond

Under the Loss of Income Benefits what determines how long benefits will be paid? a) nature of the injury b) nature of the employees job position c) amount of the benefits purchased d) after the waiting period

nature of the injury

Your covered auto

newly acquired auto, any trailer the insured owns, any auto or trailer not owned by insured but being used while their covered auto or trailer is being repaired, lost, broken, or stolen.

Employee's autos used in business of the insured are referred to as a) hired autos b) borrowed autos c) drive-other-car autos d) non-owned autos

non-owned autos

according to section 1 for covered autos what does symbol #9 covers what?

non-owned autos only

Under the personal auto policy, all of the following are considered "Your Covered Auto" EXCEPT... a) non-owned vehicle drived for pleasure on vacation b) driving your neighbors car when you car will not start because of dead battery c) rented a van because the engine on your car blew up d) the mechanic loaning you a car while repairs are made to your car

non-owned vehicle driven for pleasure on vacation

your insured has an ISO auto policy w/ 50/100/50 split limits liability coverage. In the event of 9500 hail damage to the insured auto, what coverage would apply? a) the actual cash value minus a deductible b) the replacement cost minus the deductible c) nothing, because bodily injury and property damage coverage is not for physical damages to the insured car d) same as the collision coverage

nothing, because bodily injury and property damage coverage is not for physical damages to the insured car

On an Equipment Breakdown Policy, the insured machinery is called the... a) device b) object c) insured equipment d) instrument

object

What party is protected by a Surety Bond? a) principal b) obligee c) insured d) surety

obligee

the party for whose benefit the bond is written. if the principal defaults on the obligation, this party expects the surety to fulfill the obligation or pay damages to this party

obligee

who would generally pay for a Fidelity Bond? a) bond company b) obligee c) principal d) surety

obligee

a loss whether caused by one or more persons or involving a single act or series of related acts.

occurrence

certain implied warranties are violated such as: Legality, seaworthiness and no deviation in voyage

ocean marine policy will be void if:

Unfair Descrimination

offering a lower or higher premium to one insured and not the other in identical circumstances

Underwriting Expense

one of the components used to calculate the expense ratio; includes all costs required to acquire and maintainn a book of business, such as expenses for commissions, salaries, and other administrative and regulatory costs

Written Premium

one of the components used to calculate the expense ratio; it is the gross amount of premium income on the company's books, which includes both earned and unearned premium

Incurred losses

one of the components used to calculate the loss ratio; it includes paid losses and certain expenses associated with claim handling

does medical payments coverage fall into business auto policy?

only by endorsement. like personal auto coverage is provided for only 1 year from the date of accident

A. M. Best Company

orgainization that rates the financial stability of insurance companies doing business in the United States

Workers compensation provides all of the following benefits EXCEPT a) income benfits b) funeral benfits c) pain and suffering d) medical benefits

pain and suffering

all of the following are provided under Workers Compensation coverage EXCEPT... a) medical benefits b) rehabilitation benefits c) loss of income benfits d) pain and suffering benefits

pain and suffering benefits

Medical payment on a personal auto policy pays incurred medical bills for all of the following, EXCEPT... a) funeral expenses of the named insured struck as a pedestrian b) emergency room charges of a person riding in a "You Covered Auto" c) pain and suffering damages awarded by the courts d) hospital bills for named insured struck as a pedestrian

pain and suffering damages awarded by the courts

an adjuster can do all of the following in the settlement of the claim EXCEPT... a) pay replacement cost b) pay to repair the damaged item c) pay for more than the value of the damaged item d) pay for the depreciated value of the damaged property

pay for more than the value of the damaged item

in a commercial inland marine policy form, if an insured loses one part of a set, the insurance company may choose to adjust the loss by all of the following methods, EXCEPT... a) replacing the set b) paying the difference between the value of the set before and after the damage c) paying for the value of the lost part d) paying more than the value of the loss

paying more than the value of the loss

the premium for Workers Compensation is based on... a) # of employees b) # of permanent employees c) payroll d) income tax level

payroll

All of the following are true regarding a personal umbrella policy EXCEPT... a) has a self-insured retention which acts like a deductible and is paid by the insured b) includes defense costs which are not included in the $1000000 policy limits c) the umbrella has required underlying limits of coverage for personal auto and homeowners liability d) pays on a primary basis

pays on a primary basis

the amount of the bond is known as... a) limit of liability b) amount of coverage c) penalty amount d) focus amount

penalty amount

guarantees the contractor (principal) will perform the project according to specification outlined in the contract

performance bond

which of the following types of disabilities would pay a lump sum payment, in addition to a monthly loss of income? a) permanent total b) temporary partial c) permanent partial d) temporary total

permanent partial

income benefits are provided under Workers Compensation for all of the following types of disability EXCEPT... a) permanent partial b) permanent total c) permanent temporary d) temporary partial

permanent temporary

the most severe form of disability would be a) permanent total b) temporary total c) permanent partial d) temporary partial

permanent total

all are physical damage exclusion EXCEPT... a) loss to the car while delivering people or property for hire b) damage to the engine because the radiator freezes c) permanently installed stereo d) loss of cd's

permanently installed stereo

guarantees 1)certain types of taxes are paid or 2) specific laws and regulations are followed

permit and license bond

what type of bond would be required for a convenience store selling cigarettes? a) fidelity bond b) permit bond c) payment bond d) bail bond

permit bond

Regarding the Dwelling Form, all of the following statements are correct, EXCEPT? a) theft coverage is added by endorsement b) liability is added by endorsement c) personal property coverage is a percentage of Coverage A-Dwelling d) the policy excludes money

personal property coverage is a percentage of Coverage A- Dwelling

What does the Garagekeepers Coverage cover? a) physical damage to vehicles owned by garage b) damage to the garage c) product liability for a car part sold by the garage d) physical damage to car in the custody of the insured

physical damage to car in the custody of the insured

A Contractors Equipment Floater could be used to cover all of the following EXCEPT... a) a backhoe used on the job site b) bulldozer used on road project c) portable cement mixer d) pickup truck used to haul supplies to the job site

pickup truck used to haul supplies to the job site

The BUsiness Owners Policy is all of the following EXCEPT... a) package and policy b) commercial policy c) policy designed for small mercantile risk d) policy designed for small "mom and pop" hometown bar

policy designed for small "mom and pop" hometown bar

Which of the following is not a primary coverage provided under the CGL policy? a) personal and advertising liability b) pollution cleanup property damage c) bodily injury to a neighbor on the business premise d) medical payments to a customer

pollution cleanup property damage

identifies on the declaration page the coverage amount for each job title. (President, $100,000; vice president $50,000). new employees filling the specified job title are covered automatically

position schedule

the relationship between insured and insurer in insurance is the same as __ and __ in bonding?

principal / surety

according to section 1 for covered autos what does symbol #3 covers what?

private passenger autos only

qualified vehicles

private passenger, pick ups, or vans

If a child becomes ill from eating an improperly packaged food, what type of liability exposure does the food manufacturer have? a) premises b) operations c) products d) completed operations

products

a physician causes bodily injury to a patient while performing a medical procedure. Which would cover the physicians negligence? a) personal injury liability b) excess liability c) professional liability d) premises and operations liability

professional liability

Errors and Omissions (E&O) Insurance

professional liability coverage that protects the insured against liability for committing an error or omission in the performance of professional duties

Nationa Do Not Call Registry

program managed and enforced by the FCC limits telemarketing calls received *can call customers who have a business relationship with the insurer and up to 18months after relationship ends

3.5.6.1. Prohibited Persons in Insurance - Federal Violent Crime Control and Law Enforcement Act (18 USC Sect 1033, 1034)

prohibites anyone who has been convicted of a state or federal felony involving dishonesty or breach of trust from engaging in the insurance business without consent waiver from the Commissioner has no statute of limitations prohibits fraud, embezzelment, falsification of company records or coercion in insurance transactions in interstate commerce penalties range from $5,000 tp $10,000, imprisonment from 10-145yrs, or both - violations may result in both civil and criminal fines

Under the building and personal property coverage form, which of the following is a coverage extension? a) property off premises b) business personal property c) land d) fixtures

property off premises

Which of the following statements is correct about workers compensation? a) an employee must prove the employer was negligent b) medical payments have a $100000 maximum payment c) employers can purchase protection only from commercial insurance companies d) protection is considered considered compulsory

protection is considered compulsory

Part II- Employers Liability of the Workers Compensation Policy a) covers losses not subject to compensation laws b) protects the employer against common law claims c) doesnt require proof of negligence d) explains the coverage provided by the policy

protects the employer against common law claims

medical payments on the Commercial Liability Coverage Part are a) provided up to one year from the date of the injury b) provided up to three years from the date of the injury c) provided for an unlimited time since no negligence is required d) is provided if negligence is proven

provided up to one year from the date of the injury

The Business Owners Policy... a) provides property coverage only b) provides both property and liability coverage for specific types of businesses c) is a package policy w/ great flexibility of coverages d) is a package policy which can be used for almost any commercial exposure

provides both property and liability coverage for specific types of businesses

Territory Extension

provides coverage for loss caused by any employee while temporarily outsdie the regular policy territory for a period of not more than 90 days

On the BUilding and Personal Property Coverage Form, coverage applies to all of the following EXCEPT... a) real property b) business personal property c) residential dwellings d) personal property

residential dwellings

for which of the following does Workers Compensation Insurance not provide coverage? a) medical benefits b) funeral benefits c) retirement benefits d) income benfits

retirement benefits

Countersignature

signature of a licensed agent that, in most states, must appear on the policy to validate the contract In most states, the agent's countersignature is required to validate the contract.

Definition of Forgery

signing of the name of another person or organization with intent to deceive

Insurance Guaranty Association

state funds created by law that pay claims of insurers domiciled in that state that become insolvent; funds are generated by making assessments against other insurers operating in the state

on a business auto policy "covered auto" is designated by __.

symbols

Other Property

tangible property that has value other than money or securites

Which of the following could be insured by a Business Auto Policy? a) motorcycle b) mobile equipment c) taxi d) domestic goods transported by the delivery truck

taxi

rehabilitation benefits under Workers Compensation include... a) medical bill of the rehabilitation b) loss of income until retraining is complete c) the cost of occupational and medical rehabilitation d) supplemental payments

the cost of occupational and medical rehabilitation

All of the following is true about Inland Marine policies EXCEPT... a) it is open peril coverage b) it is usually written w/ a low deductible c) the coverage is replacement cost d) it is worldwide coverage except for fine art

the coverage is replacement cost

which of the following is the major difference between the HO-2 Broad Form and the HO-3 Special Form? a) the covered perils on the dwelling coverage b) the covered perils on the personal property c) the liability is broader on the HO-3 Special Form d) theft is included only on the HO-3 special form

the covered perils on the dwelling coverage

A customer in our insureds office trips on worn carpet and incurs BI. what date triggers coverage under the Commercial General Liability (CGL) policy? a) the date the accident b) the date the customer gives notice of his/her BI c) the date the claim is made d) the date the customer hires an attorney to sue our insured

the date the accident

The BUilding and personal Property Coverage Form can be cancelled in writing w/ the consent of a) any insured b) any named insured c) the first name insured d) the first or second name insured

the first name insured

Exclusive or Captive Agency System

the insurance company contracts with agencies, which are independent businesses, to represent and sell insurance only for that insurance company

second party

the insurance company is considered the _____________________________ to the contract

Direct Writer System

the insurance company's agents are actually employees, they may receive a salary, be paid by commission or a combination of both

the insurer can cancel an auto policy for all of the following reasons, EXCEPT... a) premium was not paid b) the insured gave false info on the application c) insured was driving while intoxicated and his drivers license was revoked d) the insured was at fault while driving at a high rate of speed causing sever bodily injury to seven innocent third passengers in a church van

the insured was at fault while driving at a high rate of speed causing severe bodily injury to seven innocent third passengers in a church van

the standard mortgage clause of a homeowners policy affords the mortgage company all of the following EXCEPT... a) the right to pay past due premiums b) the right to be notified if the premium is past due c) the right to collect all benefits payable under the policy d) only the right to collect benefits equal to the insurable interest

the right to collect all benefits payable under the policy

Duties of the DOI

the state's Dept of insurance is responsible for regulating and monitoring the following: Companies Agents Ratification Enforcement

Audit Department

this department in the insurance company conduct audits for certain insurance coverages for which premium is determined during or after the policy term

Accounting Department

this department in the insurance company determines the financial condition of the company

Legal Department

this department in the insurance company interprets the various state insurance laws and helps the company keep its policies and practices in complience

Marketing Department

this department in the insurance company is related to the agency department, helps determine the company's overall marketing strategy

Investment Department

this department in the insurance company oversees funds the company needs to invest to make sure adequate funds will be on hand to pay claims

Agency Department

this department in the insurance company works closely with agents and agencies

All of the following are covered perils on a DP-1, EXCEPT... a) fire b) lightning c) tornado d) internal explosion

tornado

All of the following would typically be excluded on a boat owners policy EXCEPT.... a) intentional acts b) fishing equipment c) racing of power boats d) trailer for the boat

trailer for the boat

What is the link between inland marine and ocean marine insurance? a) water b) replacement cost coverage c) transportation d) warranties

transportation

What is in Coverage B?

Other structures. Coverage B covers: 1. Structures located on the insured's premises that are separated from the dwelling by a clear space, or connected only by a fence, utility line or similar connections, i.e. detached garage or shed. No coverage for structures used for business or for buildings rented to nontenants unless used as a private garage; 2. Coverage B--a percentage of coverage A, depending on the number of dwelling unites and is an additional amount of the insurance. 10% coverage for 1-2 family dwelling, or 5% on a 3-4 family dwelling; 3. Under HO-6, owned garages or storage buildings are covered for a stated amount. If coverage is needed; 4. Under HO-8, Coverage B cannot be increased by endorsement. Just 10% of coverage A.

Insurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the po9licy; also called all risk and special coverage

Open Peril

*Wind *Hail *Any Explosions *Riot *Aircraft/Vehicles *Smoke *Volcanic Eruptions ***All Broad Perils found in Homeowners Policies, except Theft***

Optional Extended Coverage Package (DP1)

The Commercial Broad Form Causes of Loss include all of the following EXCEPT: Breakage of Glass Collapse All of the above are included. Ordinance or Law

Ordinance or Law NOTE: Ordinance or Law is a common exclusion in all 3 Causes of Loss forms.

Pro-rata aka Contributory

Other Insurance Clause

policy condition that sets out how any other insurance that applies to the same loss will affect reimbursement under the policy

Other Insurance Condition

Homeowners Coverage B:

Other Structures or Appurtenant Structures (10% of Coverage A)

DP Coverage B

Other Structures: *All unattached structures *All unattached fixtures Loss Valuation aka Basis of Recovery *DP1---ACV *DP2---Replacement Cost *DP3---Replacement Cost Unattached Structures that are not covered: *Unattached structures that are rented out *Unattached structures used in business Limit: 10% of A

What is Loss Assessment?

Pays up to $1000 when the insured is assessed by a corporation or property owner's association for damage to property owned collectively if damaged by a peril insured against under the insured's policy.

What is Grave Markers?

Pays up to $5000 for grave markers including mausoleums on or away from the residence premises.

Which one of the following common insuring agreements would not be found within a Directors and Officers policy? Pending Litigation Coverage Entity Securities Coverage Corporate Reimbursement Coverage A-Side Coverage

Pending Litigation Coverage. NOTE: Agreement 1 - Insuring Agreement A (D&O) Insuring Agreement A, often referred to as Side Coverage. Agreement 2 - Insuring Agreement B (Corporate Reimbursement)Insuring Agreement B, or side coverage. Agreement 3 - Insuring Agreement C (Entity Securities Coverage) Insuring Agreement C, or side coverage.

Personal Liability Limit

Per Occurence $100,000

maximum amount that the coverage willpay for loss to any one person regardless of overall policy limits exsample: the liability coverage part of a personal auto is typically written with a per person limit that is the most it will pay to any 1 person even if several are injured.

Per Person Limit

Liability Insurance

type of insurance that protects an insured from financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurance company

What is the name of the coverage that provides excess protection when liability has been exhausted on the primary liability policy? a) difference in conditions b) excess property coverage c) umbrella coverage d) time element coverage

umbrella coverage

if a person has a libility-only personal auto policy, which of these coverages is also provided by law unless rejected in writing? a) medical payments b) comprehensive c) uninsured motorist d) collision

uninsured motorist

Safe Burglary

unlawful taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry upon its exterior or a safe or vault inside the premises

What is the amount of defense cost provided by the Commercial General Liability Coverage Part? a) 50% of the amount of the limits of liability b) 25% of the amount of the limits of liability c) included in the policy limits d) unlimited

unlimited

the neighbor falls down while approaching the front door of the home. The homeowners policy medical payments will pay for incurred medical bills: a) up to the medical payment limit b) up to the medical payment limit if the insured is legally liable c) up to the medical payment less the deductible d) nothing, because the neighbor was not invited

up to the medical payment limit

Part I of the Workers Compensation Law, all of the following would be considered employees EXCEPT a) volunteers b) part time workers c) officers d) employees of the State of OK

volunteers

all of the following would be considered employees EXCEPT a) part time high school help b) state of OK government employees c) volunteers d) officers

volunteers

the term for custodian does not include __ or __.

watchpersons or janitor

the flood coverage begins... a) when the insured signs the application b) when the insured signs the application and makes a down payment on the premium c) when the insured signs the application and pays the full annual premium d) when the insured signs the application, pays the first year premium, and 30 days have passed

when the insured signs the application, pays the first year premium, and 30 days have passed

Not subject to the per occurrence limit on a CGL would be:

Personal & Advertising NOTE: Personal & Advertising Injury is subject to a per person or per organization limit.

SCHEDULED or LISTED personal property, property insured is APPRAISED

Personal Articles Floater- PAF

provides open peril coverage for items worn by travlers applies worldwide but not at insureds home. (*turist must likly buy this ins.)

Personal Effects Floater

Acts of employees, managers, directors, trustees or representatives

whether such person was acting alone or in collusion with others and while such person is performin services for the named insured or otherwise

we, us, our

words used in policy to refer to the insurance company (insurance carrier)

All are available coverage parts on a Commercial Package Policy EXCEPT... a) workers compensation b) commercial property c) commercial liability d) inland marine property

workers compensation

Messenger

you, or a relative of yours, or any of your partners or members or any employee while having care and custody of property outside the premises

Injury for which legal liability arises (such as for false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, violation of the right of privacy, and unlawful entry or eviction) and which may be covered by an endorsement to the homeowners policy. Also included in the coverage by a personal umbrella policy.

Personal Injury

Includes when being sued for damaging a 3rd party's reputation such as libel or slander, false arrest, invasion of privacy, etc.

Personal Injury Exclusions

legal liablity arising from the wrongful conduct of the insured resulting in injury other than bodily injury exsample: libel,slander, falsearrest,invasion of privacy, defamation of character, etc.

Personal Injury Liability

This adds Personal Injury Liability to the policy *Would now cover such things as libel, slander, etc.

Personal Injury Optional Endorsement

Liability insurance that protects the insured for an amount up to policy limits against a claim or suit for damages b/c of bodily injury or property damage caused by the insured's negligence. This coverage is provided by Section II of the homeowners policy.

Personal Liability Insurance

Per Occurence $100,000

Personal Liability Limit

Homeowners Coverage C:

Personal Property (50% of Coverage A)

DP Coverage C:

Personal Property - 50% of Coverage A;

UNSCHEDULED, UNLISTED or BLANKET coverage on personal property

Personal Property Floater- PPF

Changes Basis of Recovery for Personal Property (Coverage C) from A.C.V. to Replacement Cost

Personal Property Replacement Cost Endorsement

Policy designed to provide protection against a catastrophic lawsuit or judgment, whose coverage rages generally from $1 million to $10 million and extends to the entire family. Insurance is excess over underlying coverages.

Personal Umbrella Policy Liability

Coverage B of the CGL includes coverage for:

Personal and Advertising Injury NOTE: Personal and Advertising Injury is Coverage B of the Commercial General Liability policy.

What is the primary difference between an HO-3 and an HO-5?

Personal property under HO-3 is covered for Broad form perils, and under HO-5 is covered for open perils

John is named as legal guardian for his nephew PETE. The court judge is requiring a fiduciary bond. Who will be the obligee on the bond written by Indemnity Surety? a) Pete b) John c) Indemnity Surety d) court judge

Pete

place where coverage under the policy applies United States, Canada and US territories

Policy Territory

type of policy that does not charge a flat premium; the insured pays a deposit premium, then submits periodic reports to the insurer showing the status of the factors on which the premium is based; from these status reports, premiums are calculated and charged against the deposit

Reporting Policy

limit of the policy is fully reinstated following a covered loss or on a policy anniversary date.

Restoration of Limit

________ requires a confrontation with another person.

Robbery NOTE: Robbery: requires a confrontation with another person. If no other person (insured, employee, etc.) is on the premises at the time, robbery is not the correct term for this incident. There must be threat of bodily harm, as well as the taking of property from the care and custody of a person. If a person came on the premises and took property without being detected, the loss would be considered theft rather than robbery.

damaged property that can be retrieved, reconditioned, and sold to reduce an insured loss

Salvage

Special coverage added at the insured's request to a homeowners policy to insure items specifically listed. Used to unsure valuable property such as jewelry, furs, and paintings.

Scheduled Personal Property Endorsement

Jewelry, Photo Equipment, Fine Arts, Golf Equipment, Musical Instruments, Postage Stamps, Furs, Silverware, Coins *Agreed or Stated Value *Open Peril Coverage *No Deductible *Newly acquired property in the same class is automatically covered under endorsement for 30 days

Scheduled Personal Property Endorsement (Provides a seperate schedule for any of the following categories of property:)

True. Seasonal dwellings are eligible when the insured is covered under a Homeowner Policy for their primary dwelling.

Seasonal dwellings are eligible for HO insurance. True or False?

*Liability *Same for all six policies *3rd party

Section 2 Includes

What is Consideration?

Something that has value in the eyes of the law in which a promisee receives something in return for a promise. The insured (the promisee) gives the application and premium to the agent and/or company in return for their promise to pay in the future.

Inspection and Surveys

States that the insurer has the right to inspect the risk and make loss control recommendations. These inspections determine the rate to be charge. (These are not safety inspections)

What Liability Doctrine establishes that a manufacturer of a product will be held liable for bodily injury or property damage arising form the use of their product, whether or not the product was defective?

Strict Liability

Yacht Policy

Structured and is similar to Commercial Ocean Marine.

Not covered for any peril except collapse of structure during construction due to poor workmanship or materials. Not covered by HO8

Structures under Construction Exclusion

the transfer to the insurance company of the insured's right to collect damages from another party

Subrogation

The lawsuit is instituted within 2 years The insured complied with all policy conditions

Suit Against Us (The insured can sue their insurance company only if both of the following occur:

Which of the following symbols used on a business auto policy offers the broadest coverage? Symbol 7 Symbol 2 Symbol 1 Symbols 8 & 9 together

Symbol 1 NOTE: Symbol 1 represents any auto the insured owns (#2), specifically described autos (#7) and hired and non-owned autos (#8 & 9). *************** NEEDS CORRECTION********************

Business Auto Cov Form - Section I - Covered Autos - Description of Covered Auto Designation Symbols

Symbol 1 - Any Auto : 2 - Owned Autos Only : 3- Owned Private Passenger Autos Only : 4 - Owned Autos Other Than Private Passenger Autos : 5 - Owned Autos Subject to No Fault : 6 - Owned Autos Subject to Compulsory Uninsured Motorists Law : 7 - Specifically Described Autos : 8 - Hired Autos Only : 9 - Non-Owned Autos Only : 19- Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Motor Vehicle Insurance Law Only

Which designation Symbol under Section I of the BAC form would indicate that the only autos covered by the form are "Owned Private Passenger Autos Only"?

Symbol 3

Which designation symbol under Section I of the BAC form would indicate that the insured is covered for liability arising from an employee using his/her own private passenger vehicle to deliver pizza for the insured who owns a pizza business?

Symbol 9

an insured is concerned about the vicarious liability that could be created by an employee driving his/her own auto on company business. What coverage symbol on the Business Auto Policy would you recommend to provide liability insurance? a) Symbol 8 b) Symbol 9 c) Symbol 7 d) Symbol 2

Symbol 9

Which symbol(s) covers the exposure of employer's non-ownership liability?

Symbols #8 and #9. NOTE: Symbol #8 is for hired autos and Symbol #9 is for non-owned autos.

CANCELLATION

TERMINATION OF A CONTRACT OF INSURANCE IN FORCE BY VOLUNTARY ACT OF THE INSURER OR INSURED IN ACCORDANCE WITH THE PROVISIONS IN THE CONTRACT OR BY MUTUAL AGREEMENT.

DECLARATIONS

THAT PORTION OF AN INSURANCE CONTRACT IN WHICH IS STATED SUCH INFORMATION AS THE NAME AND ADDRESS OF THE INSURED, THE PROPERTY INSURED, ITS LOCATION AND DESCRIPTION, THE POLICY PERIOD, THE AMOUNT OF INSURANCE COVERAGE, APPLICABLE PREMIUMS, AND SUPPLEMENTAL REPRESENTATIONS BY THE INSURED.

DEFINITIONS

THAT PORTION OF AN INSURANCE CONTRACT WHERE IMPORTANT TERMS USED IN THE CONTRACT ARE DEFINED.

INSURING AGREEMENT (OR CLAUSE)

THAT PORTION OF AN INSURANCE CONTRACT WHICH STATES THE PERILS INSURED AGAINST, THE PERSON AND/ OR PROPERTY COVERED, THEIR LOCATIONS, AND THE PERIOD OF THE CONTRACT.

ADDITIONAL (OR SUPPLEMENTARY) COVERAGE

THAT PORTION OF THE POLICY ADDING COVERAGES TO THE MAJOR COVERAGES DEFINED IN THE INSURING AGREEMENT, OR ADDING BACK COVERAGES AT LOWER LIABILITY LIMITS THAT HAVE BEEN SPECIFICALLY EXCLUDED.

WAIVER

THE ACT OF GIVING UP OR SURRENDERING A RIGHT OR PRIVILEGE THAT IS KNOWN TO EXIST. IN PROPERTY AND LIABILITY FIELDS, IT MAY BE EFFECTED BY AN AGENT, ADJUSTER, COMPANY, EMPLOYEE, OR COMPANY OFFICIAL, AND IT CAN BE DONE EITHER ORALLY OR IN WRITING.

INSURED'S RIGHT TO CANCEL

THE CLIENT MAY CANCEL AT ANY TIME BY LETTING THE INSURER KNOW IN WRITING OF THE DATE OF CANCELLATION IS TO TAKE EFFECT.

PROXIMATE CAUSE

THE EFFECTIVE CAUSE OF LOSS OR DAMAGE. IT IS AN UNBROKEN CHAIN OF CAUSE AND EFFECT BETWEEN THE OCCURRENCE OF AN INSURED PERIL OR A NEGLIGENT ACT AND RESULTING INJURY OR DAMAGE.

CONSIDERATION:

THE EXCHANGE OF VALUES ON WHICH A CONTRACT IS BASED. IN INSURANCE, THE CONSIDERATION OFFERED BY THE INSURED IS USUALLY A PREMIUM AND THE STATEMENTS CONTAINED IN THE APPLICATION. THE CONSIDERATION OFFERED BY THE INSURER IS THE PROMISE TO PAY IN ACCORDANCE WITH THE TERMS OF THE CONTRACT.

FIRST NAMED INSURED

THE FIRST NAMED INSURED APPEARING ON A COMMERCIAL POLICY. THE LATEST FORMS PERMIT THE INSURER TO SATISFY CONTRACTUAL DUTIES BY GIVING NOTICE TO THE "FIRST" NAMED INSURED RATHER THAN REQUIRING NOTICE TO ALL NAMED INSUREDS.

Burglary

THE FORCIBLE BREAKING AND ENTERING OF PREMISES CLOSED FOR BUSINESS WITH THE SUBSEQUENT REMOVAL OF CASH OR MERCHANDISE

TO MAKE A LOSS A WHOLE

THE IDEA OF PAYING FOR A LOSS WITHOUT ALLOWING THE INSURED TO MAKE MONEY.

RENEWAL

THE INSURER AGREES TO CONTINUE THE POLICY IN FULL BEYOND THE EXPIRATION DATE.

NONRENEWAL

THE INSURER DECIDES NOT TO CONTINUE THE POLICY BEYOND THE EXPIRATION DATE.

INSURED

THE PARTY TO AN INSURANCE ARRANGMENT WHO THE INSURER AGREES TO INDEMNIFY FOR LOSSES, PROVIDE BENEFITS FOR OR RENDER SERVICES TO. THIS TERM IS REFERRED TO SUCH TERMS AS POLICYHOLDER, POLICYOWNER AND ASSURED.

DEDUCTIBLE

THE PORTION OF AN INSURED LOSS TO BE BORNE BY THE INSURED BEFORE ANY RECOVERY MAY BE MADE FROM THE INSURER.

PRO RATA CANCELLATION

THE TERMINATION OF AN INSURANCE CONTRACT OR BOND WITH THE PREMIUM CHARGE BEING ADJUSTED IN PROPORTION TO THE EXACT TIME THE PROTECTION HAS BEEN IN FORCE.

MISREPRESENTATION

THE USE OF ORAL OR WRITTEN STATEMENTS THAT DO NOT TRULY REFLECT THE FACTS EITHER BY AN INSURED ON AN APLLICATION FOR INSURANCE OR BY AN INSURER CONCERNING THE TERMS OR BENEFITS OF AN INSURANCE POLICY.

CONDITIONAL CONTRACT

THERE ARE CONDITIONS WHICH MUST BE MET BY BOTH PARTIES BEFORE THE CONTRACT IS LEGALLY ENFORCEABLE. IN AN INSURANCE CONTRACT CONDITIONS FOR BOTH THE INSURER AND INSURED ARE SPELLED OUT IN THE POLICY FORM.

CONDITIONS

THESE ARE PROVISIONS OF AN INSURANCE POLICY WHICH STATE EITHER THE RIGHTS AND DUTIES OF THE INSURED OR THE RIGHTS AND DUTIES OF THE INSURER. TYPICAL CONTIONS HAVE TO DO WITH SUCH THINGS AS THE INSURED'S DUTIES IN THE EVENT OF LOSS, CANCELLATION PROVISIONS, AND THE RIGHT OF THE INSURER TO INSPECT THE PROPERTY.

CONTRACT OF ADHESION

THIS IS A CHARACTERISTIC OF A UNILATERAL CONTRACT WHICH IS OFFERED ON A TAKE IT OR LEAVE IT BASIS. MOST INSURANCE POLICIES ARE CONTRACTS OF "ADHESION" BECAUSE THE TERMS ARE DRAWN BY THE INSURER AND THE INSURED SIMPLY "ADHERES".

INDEMNITY

TO RESTORE THE VICTIM OF A LOSS TO THE SAME POSITION AS BEFORE THE LOSS OCCURRED.

True or False: professional liability is excluded in all other types of liability policies except for bonds

TRUE; so a professional such as a doctor would need commercial general liability policy to transfer financial risk for premises and operations liability AND professional liability to transfer the financial risk of professional liability)

A Released Bill of Lading assures:

That the carrier of goods will not be responsible for any more than the stated value on the contract. NOTE: A regular Bill of Lading doesn`t state a particular amount for which the carrier of the goods is responsible; the carrier must pay up to the invoice amount. The Released Bill of Lading states a specific dollar amount of responsibility, usually less than the invoice price, to reduce premium charges.

1. The dwelling described on teh Declarations page of the policy; 2. Structures attached to this dwelling; 3. Materials and supplies located on the dwelling used for construction, alteration or repair of the dweling. This coverage does NOT apply to land or to the HO-4 which is designed for contents ONLY. 4. Coverage A (Dwelling) under the HO-6 Condominium Unit Form covers which covers the alterations, appliances, fixtures, and improvements that are part of the building contained within the residence premises; Property that is the insured's responsibility under a corporation or association of property owner's agreement, structures owned solely by the insured, other than the residence premises a thte location of the residence premises.

What is covered in Coverage A under Section 1: Property Coverage?

Coverage D--Loss of use, the coveage is the same as the Dwelling Property programs "additional living expense" and "fair rental value." Under the HO-2, HO-3, HO-5, the coverage is 30% of Coverage A. Under the HO-4, the percentage is 30% of the contents limit which is Coverage C.

What is covered in Coverage D?

1. The premises shown in the Declarations section of the policy as well as any location the insured occasionally rents. For example, a community bldg. that the insured rented to hold a party; 2. Personal activities such as sports, social, etc., anywhere in the world; 3. Acts of residence employees acting within the scope of their duties; 4. Vacant land; 5. Individual or family cemetery plots or burial vaults of any insured.

What is covered in Coverage E - Personal Liability?

Debris removal is coverage after a loss like a fire, and provides up to $1000 to remove a fallen tree from the residence premises. Tree can fall on the property, and not just the house.

What is covered in Debris Removal?

HO-8 is the least broad form covering lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, VMM, theft, volcanic eruption.

What is covered in HO-8?

When the structure is damaged by an insured peril, the policy provides coverage within the limits to pay for temporary repairs until permanent repairs can be made. For example, the wind blows off a portion of a roof. The policy pays to install a temporary cover to protect the dwelling from additional damage.

What is covered in Reasonable Repairs?

Trees, shrubs, and other plants including lawns are covered for limited specified perils including fire or lightning, explosion, riot or civil commotion, etc. They are covered up to 5% of the dwelling limit and subject to a maximum limit of $500 for any one tree, shrub, or plant. This is additional insurance and is in addition to the limit of the policy.

What is covered in Trees, shrubs and other plants?

Covers the Fire Dept. service charge of $500. This is also additional insurance and the deductible does not apply to this coverage.

What is covered in the Fire Dept. service charge?

Retroactive date

The first date an occurrence would be covered under a claim made CGL policy

Direct Loss

The first loss that occurs, e.g. A fire burns down the store.

True or False: premium for new employees is adjusted biannually

False; annually

Real & Personal Property, Coverage's provided : A, B, C & D

Homeowner's Section I is :

True or False: losses are not expected in relation to insurance

False; they are expected

True or False: the surety can't subrogate (substitute for another) against principal

False; they can

False. Farm property is NOT eligible.

Farm property is eligible for HO insurance. True or False?

Codes Regulatin Agents

Fiduciary, Misrepresentation, Twisting, Rebating, Unfair Discrimination

CPL: Comprehensive Personal Liability, Coverages provided: E & F (E Liability, F Medical)

Homeowner's Section II is:

Dwelling

Homeowners Coverage A:

Other Structures or Appurtenant Structures (10% of Coverage A)

Homeowners Coverage B:

Personal Property (50% of Coverage A)

Homeowners Coverage C:

You and your residents of your household who are your relatives o other persons under age of 21; a student enrolled in school full-time who was a resident of your 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; With respect to a "motor vehicle", it applies to someone using a lawnmower or equipment, or persons engaged in your employ with your consent.

"Insured" means what?

Nathan owns a HO policy with a $100,000 Coverage C limit. How much coverage does Nathan have under Coverage C for his watercraft valued at $10,000, and its trailer, valued at $2,500?

$1,500

Glass Breakage under a Broad Form Causes of Loss is covered for up to:

$500 per occurrence NOTE: Without a glass endorsement, the policy limits glass breakage to $500 per occurrence.

Business Auto Cov Form - Section III - Physical Damage Coverage - Exclusions

-nuclear hazard -organized racing -wear and tear, freezing, mechanical or electrical breakdown -tapes, records, discs, radar and laser detectors -loss due to diminution in value

which of the following would be required to provide workers compensation benefits? a) volunteers b) farm employee c) 1 part -time employee d0 domestic employee

1 part time employee

What are the Parts of the Insurance Contract?

1. Parties to an Insurance Contract: First Party (The Insured); 2. Second Party (The insurance company); 3. Third Party: In liability insurance, this is the party that has been damaged by the first party. An at-fault auto accident is an example.

LOSS

1. THE AMOUNT OF REDUCTION IN THE VALUE OF AN INSUREDS PROPERTY CAUSED BY AN INSURED PERIL. 2. THE AMOUNT SOUGHT THROUGH AN INSUREDS CLAIM. 3. THE AMOUNT PAID ON THE BEHALF OF AN INSURED UNDER THE INSURANCE CONTRACT.

In order to place flood insurance through the NFIP, licensed agents must also complete ______________.

3 hours of continuing education before submitting the application. NOTE: As stated in Section 207 of the Flood Insurance Reform Act of 2004, in order for any producer to place flood insurance through the NFIP the three-hour training must be completed before submitting the policy.

Money Operated Devices

3,4,5 do not cover loss of proeprty from money operated devices (vending machines, change machines) unless a continuous recording instrument inside the machine keeps track of the amount of money deposited

Fire

3,4,5 do not cover loss resulting from fire, regardless of how the fire may be caused

HO-4

4entants or 4renters, Broad Form, Coverage A Dwelling not available

Commercial Non-Renewal:

60 Days

"PLACE IF" : Property-Real & Personal; Liability-Occurrence/Claims Made; Automobile- Business Auto Liability; Crime-Discovery or Loss Sustained; Equipment Breakdown- Boiler & Machinery; Inland Marine-Transportation of Property Farm- Personal & Commercial

7 Commercial Coverages

an employee who has a temporary total disability will begin receiving 70% average weeks wage after what period of time? a) 7 calendar days b) 7 work days c) 3 calendar days d) 3 work days

7 calendar days

What percentage must be vacant for a building to be called vacant?

70%

propertya spouse of a deceased employee is entitled to what percent of the wages of the mployss average weekly pay? a) 25% b) 66 2/3% c) 70% d) 100%

70%

Collapse (Not covered by HO8) Covered if building abruptly falls down or caves in, making in unusable, when caused by....

A covered peril Hidden vermin or hidden decay Weight of people, objects, or rain Defective materials or construction methods--only covered during construction period

What is a Hazard?

A hazard is any condition that increases the possibility of a loss. The Hazard sets up the likelihood that a loss may occur.

Any licensed agent or broker may submit risks to the FAIR plan:

But there is no binding authority. NOTE: An agent never has binding authority with the FAIR plan.

covers the goods being shiped while in transit.coverage may be written to cover a single shipment or on an open cargo basis that automatically protects any shipment as soon as the insureds interest begins (Buyers should get this)

Cargo Insurance

The insured is hit in the rear while stopped at a traffic light. The insured's company pays for his repairs, then seeks reimbursement from the responsibile party. This is described as: A. Subrogation; B. Reimbursement; C. Arbitration; D. Appeal

A. Subrogation is used by the insurer to seek reimbursement from the third party that caused the accident.

The purpose of equiment breakdown insurance is: A. To fill the gaps left by property insurance policies; B. To cover the maintenance of boilers and machinery; C. To cover damage done to boilers and machinery only; D. To cover the explosions of boilers in non-owned buildings that may cause damage the insured's property.

A. The purpose of the coverage is to fill the gaps in coverage not provided by the commercial property insurance forms.

An "accident" under an Equipment Breakdown policy includes: A. Sudden breakdown of an object; B. Gradual breakdown of an object; C. Leakage of a valve; D. All of the above

A. The purpose of the coverage to provide only a sudden breakdown of the covered property.

If an initial "accident" to a boiler causes three other boilers to have accidents, under the insurance policy, all four events will be considered: A. One event; B. Two events; C. Three events; D. Four events

A. This is considered to be one loss and only one deductible will apply.

INSURABLE EVENTS

ANY CONTINGENT OR UNKNOWN EVENT, WHETHER PAST OR FUTURE, WHICH MAY DAMNIFY A PERSON HAVING AN INSURABLE INTEREST, OR CREATE A LIABILITY AGAINST HIM, MAY BE INSURED AGAINST, SUBJECT TO THE PROVISIONS OF THE CODE.

ASSIGNMENT/TRANSFER OF THE INSURED'S INTEREST

ASSIGNMENT TO ANOTHER PERSON CANNOT BE MADE WITHOUT INSURER'S WRITTEN PERMISSION.

maximum amount payable for loss perlocation or per person from all occurrences within a policy period regardless of the number of seperate accidents.exsample commercial policy are written this way

Aggregate Limit

Additional Living Expenses DP2 and DP3 Only

Any extra bills you get because you cannot live at home *Covers additional living costs, such as hotel, motel, trailer, restaurant, and laundromat expenses. When applied: *Fllowing a covered loss *Civil Authority prohibits access to your property due to direct damage to a neighboring premise Limit Caused by a covered peril *20% of A If a monthly amount is asked for, divide the 20% by 12 Caused by a civil authority limiting access *2 weeks

The Personal Auto Policy provides coverage in all of the following locations EXCEPT: A. Hawaii; B. Mexico; C. Canada; D. Alaska

B. Mexico is not within the covered territory covered by the PAP.

The insurer will pay transportation expenses under the P.A.P. beginning ______ after a theft of the insured's automobile. A. 24 hours; B. 48 hours; C. 72 hours; D. 96 hours

B. The coverage applies after 48 hrs. when theft occurs. The insured must notify the police in case of a theft loss.

As a result of an auto accident, the insured sustains bodily injury worth $50,000. The responsible party carries auto liability insurance in the amount of 15/30/5. The insured's $100,000 underinsurance coverage would pay: A. $15,000; B. $35,000; C. $50,000; D. $100,000

B. The purpose of "underinsured motorist" coverage is to pay the difference in the amount payable by the negligent party and the actual damages sustained by the insured.

What is the Principle of Risk? a. The certainty that a loss might occur; b. The uncertainty that a loss might occur; c. The risk that the insured takes at any given time.

B. the possibility (uncertainty) that a loss might occur. This is the reason that people buy insurance. If a certain event happens, i.e. accident, sickness, or death--then a loss occurs. The loss can be life, or the loss of income due to accident or illness. In the case of property and casualty, a structure may burn or a commercial truck may be involved in an accident.

Medical expenses Lost Wages Miscellaneous Expenses Pain and Suffering Funeral Expenses

B.I. includes payment for

An unendorsed claims made CGL includes:

BERP NOTE: BERP at no additional charge. BERP contains 2 coverages: mini tail or midi tail

What is an Insurable Interest?

Before a person can obtain an insurance policy, he must have an insureable interest in property, and this occurs when he has a lawful, substantial economic interest in the preservation of that property. The term "person" includes an individual, company, insurer, association, organization, reciprocal, partnership or any other legal entity.

Mr. Pfister carried 15/30/5 limits on an auto, when he negligently ran into a parked car containing three occupants resulting n the following claims: Tom - B.I. - $18,000, P.D. - $8,000; Dick - B.I. - $8,000; Harry - B.I. - $4,000. In addition to these settlement awards, there was $18,000 in legal fees. In response to this accident, Pfisters P.A.P will pay: A. $32,000; B. $38,000; C. $50,000; D. $68,000

C. This is an example of a split limit claim. Payment is as follows: Tom -- $15,000; PD--$5,000; Dick $8000; Harry $4000 which totals $32,000. The defense costs ($18000) are covered and paid by the insurer, which brings the total to $50,000.

Private insurance companies distribute high risk properties prone to fire and riots among each other; requires properties to be well-maintained to qualify; provides basic coverage for personal and commercial property similar to DP2; not eligible with Farms & Automobiles

CA FAIR PLAN- State Plan

State plan where private insurance companies distributes, high risk automobiles drivers meet CA Financial Responsibility requirements of 15/30/5; for low-income drivers with good driving records, the minimum coverage= 10/20/3

CAARP- California Automobile Assigned Risk Plan

What are Punitive Damages?

Casualty policies cover bodily injury and property damage caused by the insured as a result of his/her negligence. Punitive damages (sometimes called "exemplary damges") are often awared by the court and intended to punish the defendant. An example would be "gross misconduct" and the court wants to make an example of the defendant to discourage others from behaving in a like manner.

All of the following are Physical Damage exclusions EXCEPT: A. Loss to vehicle used as a livery; B. Damage due to wear and tear; C. Loss to audio tapes; D. Loss to permanently installed car telephone

D. A permanently installed telephone is covered.

After a loss, the insured must: A. Notify the company; B. Permit the companyto inspect a damaged auto before repairs are started; C. Submit to a physical exam if needed; D. All of the above.

D. All of the items are part loss conditions of a PAP.

A deer crashes into the side of the insured's car. Which of the following P.A.P. coverages would cover this damage? A. Property damage liability; B. Collision; C. Uninsured motorist property damage; D. Comprehensive

D. Animal damage is treated as an Other Than "Collision" claim.

Under the P.A.P Medical Payments, the time limit for incurring medical expenses is: A. 6 months; B. 1 year; C. 2 years; D. 3 years

D. Medical payments under the PAP are payable for up to three years from the date of the accident.

Theft-Broad Form for Renter, Theft-Limited Form for Landlord, Personal Liability-Same Coverage as in HO's ($=for an additional premium)

DP Endorsement$

FRAUD

DECIEPT, TRICKERY OR MISREPRESENTATION WITH THE INTENT TO INDURCE ANOTHER TO PART WITH SOMETHING OF VALUE OR SURRENDER A LEGAL RIGHT.

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expenses Coverage F: Additional Coverage

DP 3 Parts

Dwelling

DP Coverage A:

Provision in Section II of a homeowners policy that pays up to $1,000 per occurrence on behalf of an insured who damages someone's property. Payment is made w/o regard to legal liability.

Damage to Property of Others

Coverage C of the CGL policy would cover all of the following EXCEPT: Emergency treatment for a customer who burns himself on a hot cup of coffee. A trip and fall on the insured property, but not the fault of the insured. Bodily Injury to a customer due to employee negligence. Damage to a customer`s property while left in the care, custody and control of the insured.

Damage to a customer`s property while left in the care, custody and control of the insured. NOTE: Coverage C is for Medical payments and pays regardless of fault of the insured.

OTC Coverages

Earthquake, Flood, Hail, Theft, Hitting an animal, Gunshots. (no collision or upset)

Movement of Land Exclusion

Earthquakes, tremors, sinkholes, excavating, grating, backfilling, landslides, as well as the cost of earth

What are types of Professional Liabilty Insurance?

Errors and Omissions Insurance, Physicians Surgeons and Dentists Liability Insurance, Fiduciary Liability Insurance

DP Coverage E:

Extra Living Expenses; not on DP1, YES on DP2&3

Which of the following perils are NOT covered under the Glass Coverage form? Breakage Chemical Damage Ornamentation Fire Damage

Fire Damamge NOTE: Fire damage is already covered under all three Causes of Loss forms on the CPP.

Coverage Form C, Theft, Disapperance and Destruction covers all of the following, except:

Fire damage to the building resulting from a burglary.

the person who is listed first on the Declarations page; the first-named insured may have a higher level of duties or rights under the policy

First Named Insured

Inside premises is which frequently used crime form?

Form C. NOTE: Form C - Inside Premises Theft, Disappearance, or Destruction-This form provides coverage for theft, disappearance, or destruction of money and securities from inside the premises. Stock and merchandise is excluded from coverage.

Surplus Lines

Found in property and casualty insurance. A surplus line broker places insurance with a non-admitted insurer.

Fraud

Fraud occurs when one party intentionally provides false information or conceals relevant information in order to benefit from unlawful gain.

$5000

Gravemarkers

Dwelling or homeowners. Which has a broader coverage?

Homeowners.

Any fire that is not contained in its intended receptacles.

Hostile Fire

Indemnity

Indemnity means the insurer restores the insured to the condition the insured was in before the loss occurred.

Claims-made and reported policies are unfavorable from the ________ standpoint.

Insured's Claims-made and reported policies are unfavorable from the insured's standpoint because it is sometimes difficult to report a claim to an insurer during a policy period of the claim is made late in that policy period.

Who is we, us, ours?

Insurer

Aircraft insurance

Insures aircraft owners, users and dealers against loss through hazards incidental to ownership, maintenance, operation, and use of aircraft.

Contractual Liability

Legal liability of another party that the business firm agrees to assume by a written or oral contract.

Auto Coverage A:

Liability (minimum 15/30/5)

Section 2 of a Homeowners Policy

Liability and Medical Payments. Paid to others only.

Trees, Shrubs, and Other Plants

Limit: 5% of Coverage A $500 maximum per plant ***Excluded perils: Wind, Hail, Smoke***

HO8 (VIII) Modified

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (10% of A) Basis of Recovery: Cov A & Cov B: All Structures (Functional Rep) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Basic Perils) Cov C: Contents (Basic Perils)

$1000 When association is sued and assesses homeowners for damages

Loss Assessment Liability

All of the following are considered a Specified Cause of Loss under the Business Auto Policy EXCEPT: Vandalism Earthquake Derailment while being transported Mechanical Breakdown

Mechanical Breakdown is not one of the Specified Causes of Loss.

Breakdown under the Equipment Protection coverage form includes what?

Mechanical failure including rupture or bursting caused by centrifugual force to equipment

Auto Coverage B:

Medical

What are the primary types of Professional Liability Insurance?

Medical Malpractice, D &O, E & O.

Mold is only covered if hidden and caused by water damage from appliance, pipe, heating/air conditioning, or fire sprinkler system

Mold and Pollution Exclusion

Mold and Pollution Exclusion

Mold is only covered if hidden and caused by water damage from appliance, pipe, heating/air conditioning, or fire sprinkler system

Liquor Liability

Need for a dram shot, liquor, or "package store"

No coverage for damages after a loss if the insured did not reasonable try to protect property form further loss, or to protect it from loss

Neglect Exclusion

loss settlement condition found in property insurance contracts that states that when part of a set is damaged or destroyed, the insured will not be reimbursed for the value of the entire set; various met methods are used to determine the amount of reimbursement

Pair or Set Condition

Statutory benefits are covered under what part of the WC insurance policy?

Part I of a WC policy provides the statutory benefits required.

DP-Reasonable Repairs

Part of Coverage A Limits

CA FAIR PLAN- State Plan

Private insurance companies distribute high risk properties prone to fire and riots among each other; requires properties to be well-maintained to qualify; provides basic coverage for personal and commercial property similar to DP2; not eligible with Farms & Automobiles

method of handling insurance when more than one coverage applies to a loss; each coverage pays a portion of the loss in proprtion to the relationship its limit of liability bears to the total limit of liability under all applicable insurance

Pro Rata (Other Insurance Method)

Damage to Property of Others

Provision in Section II of a homeowners policy that pays up to $1,000 per occurrence on behalf of an insured who damages someone's property. Payment is made w/o regard to legal liability.

CEA

Publicly managed risk pool; funded by premiums insurance companies contributions and re-insurance; available only for residential units; insurance companies must offer earthquake coverage to all new applicant's dwelling owner's, homeowner's, renter's or condo owner's.

Punitive Damages

Punishment. These are damages that the court can make you pay in addition to the compensatory damages awarded.

Smudging

Purposely personal use for smoke. (ex used to keep crops from freezing)

Utmost Good Faith

Rely upon the representation of each party with no attempts to deceive or conceal.

Negotiable and non-negotiable instruments are known as:

Securities: NOTE: Securities are negotiable and non-negotiable instruments (i.e. tokens & tickets).

Liability of Vehicles Exclusions

The following are the only vehicles covered for liability: *Vehicles of the handicapped (wheelchairs) *Vehicles used to maintain the premise *Golf carts---only while playing golf

Pair or Set Clause

The loss of one part of a set is not a loss to the entire set

Which are some standard characteristics of a BOP policy?

The standard deductible is $250. It typically has no coinsurance clause. Loss of income is coverage for up to 12 months. Losses are valued at replacement cost.

An example of robbery is best described as:

The taking of property from the care and custody of a person by threatening bodily harm to that person.

What is Static Risk?

These are connected with losses caused by the irregular action of nature, and by the mistakes and misdeeds of human begins. Similar to pure risk. This is insurable.

No Coverage

Watercraft if stolem

Vicarious Liability

When employer is liable for negligent acts of employee.

Profitable Distribution of Exposures

When the number of preferred risks is balanced with poor risks, and the number of average risks is in the middle, a profitable distribution of exposure exists.

an exclusion to the commercial crime coverage policy is inventory shortage

YES

Ocean Marine form that provides coverage for personal & liability (P&L) based on Homeowner's policy design; complete package includes HULL insurance & boat trailer (ACV used to pay loss); Protection & Indemnity; Medical Payments

Yacht Policy

this policy is an Ocean Marine form which provides both property and liability coverage. a Lay Up Warranty applies when the insured boat is in storage and allows for a return of premium due to the lower risk.

Yacht Policy

Do corporations have absolute liability?

Yes.

Comparative Negligence

You can file a claim, but damages are reduced based on that party's negligence.

Self-Insurance

alternative to purchasing insurance where a company or individual assumes the risk of paying for its losses and sets aside the necessary funds to pay for such losses

Garage Liability Form

combines both BAP and CGL into a single policy. offers broader coverage than BAP and CGL alone

Money orders and counterfeit paper currency

covers loss due to the insured's good faith acceptance of money orders issued by any post office, express company or bank that are no paid upon presentation or counterfeit paper currency that is acquired during the regular course of business

Insurance Commisioner

head official of a state insurance department, may also be called an Insurance Director or Insurance Superintendent

Prior Approval State

insurance company must obtain approval BEFORE using new forms and rates

Mutual Company

insurance company owned by its policyholders; the policyholders share in profits made by the company through dividends or reductions in future premiums

Personal Lines

insurance coverages that protect individuals and their families

Commercial Lines

insurance designed for businesses, institutions, or organizations

Health and Disability Insurance

insurance designed to handle the risk of medical bills and lo9ss of income resulting from injury or sickness

Multi-line Policy

insurance policy that provides multiple types of insurance coverage

Monoline Policy

insurance policy that provides one type of insurance coverage

Insurance Consultant

insurance professional who, for a fee, offers advice on the benefits, advantages, and disadvantages of various policies; they sell advice, not insurance

Bodily injury to an insureds employee is excluded in a Commercial General Liability Policy because... a) it is considered assumed risk b) it is considered workers compensation c) the employee is considered an insured d) coverage is provided under personal liability

it is considered workers compensation

the physical damage section of the Business Auto Policy excludes... a) earthquake b) flood c) theft d) mechanical breakdown

mechanical breakdown

Rebating

offering cash, gifts, securities to induce a customer to buy a policy

ISO

organization established for the benefit of its member insurance companies andother subscriber companies; ISO gathers statistics, provides loss costs, drafts policy forms and coverage provisions, and conducts inspections for rate-making purposes

according to section 1 for covered autos what does symbol #2 covers what?

owned autos only

Symbol #6

owned autos subject to complulsory unisured motorists law

Symbol #5

owned autos subject to no-fault benefits

You and your

policy words used for the name insured and the resident spouse

A commercial business would use what type of insurance coverage to protect against a customer slipping and falling? a) products b) personal injury c) premises and operations d) completed operations

premises and operations

party who has agreed to fulfill the promise that is the subject of the bond

principal (obligor)

Expense Ratio

ratio that indicates the cost of doing business; it is calculated by dividing the amount of underwriting expenses by the amount of written premium Underwriting Expenses ------------------------------- = ? Written Premium

taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by visible signs of forced entry or exit. also included the illegal removal of a safe from the insured premises

safe burglary

Blanket VS Schedule Coverage

schedule limits coverage to theft committed by employees whose name or position is listed in the policy, blanket covers theft committed by any person covered

negotiable and non-negotiable instruments including tokens, tickets, or revenue stamps. do not include money

securities

Watchperson

someone retained specifically by an insured whose sole duty is to have care and custody of property inside the premises

messenger

someone who has care and custody of property while it is outside the premises

according to section 1 for covered autos what does symbol #7 covers what?

specifically described autos

Symbol #7

specifically described autos only to similar to personal

guarantee performance. guarantor of the principal's obligations therefore indemnifying a default of performance

surety bonds (sometimes called surtyship)

guarantess an obligation between two parties will be fulfilled

surety; between principal and obligee

A severely sprained back injury that renders an employee unable to work for 6 weeks is an example of what type of disability? a) permanent total b) temporary total c) permanent total d) temporary total

temporary total

broadest coverage, owner, 14

the ______________________________ now provided will apply to a newly acquired auto . Coverage will begin on the date that the insured becomes the ____________ and insurance must be requested for the newly acquired auto within __________ days after becoming the owner.

other than collision coverage (aka comprehensive coverage)

the same requirements for collision coverage for newly acquired autos also apply to

person the insured hires (specifically by insured) whose sole duty is to have care and custody of the property inside the premises

watchperson

Why would someone not purchase a dwelling policy instead of an HO3?

Broader coverage is desired.

Auto Non-Payment of Premium:

10 Days

ALEATORY CONTRACT

A CONTRACT IN WHICH THE NUMBER OF DOLLARS TO BE GIVEN UP BY EACH PARTY IS NOT EQUAL. INSURANCE CONTRACTS ARE THIS TYPE.

Workers Compensation Certain Residence Employees

*Mandatory in NY State *Provides workers compensation to residence employees

Dwelling Policies

*Monoline Policy---Covering PROPERTY only *Usually sold to older homes and homes needing renovations

Vehicles

*Must be physical contact *Vibration coverage is not covered *Fences are not covered when struck by vehicles.

Aircraft

*Must be physical contact...vibration damage is not covered.

Personal Property

Coverage C

Homeowners Coverage A:

Dwelling

Which of the followeing is not a component of the Commercial Package Policy? a) Common Policy Declarations b) Common Policy Conditions c) General Conditions d) Coverage Parts

General Conditions

Hull Insurance, Cargo Insurance and Freight Insurance

Ocean Marine Insurance provides 3 coverages

What are general damages for?

Pain and Suffering emotional anguish, scaring, loss of body parts, disfigurement.

Symbol #7

Specifically described autos.

Replacement Cost

The cost to replace without a deduction for depriciation (not what someone paid for it)

Insurance policy

The policy is the written instrument setting forth a contract of insurance.

EXPOSURE

THE STATE OF BEING SUBJECT TO A LOSS BECAUSE OF SOME HAZARD OR CONTINGENCY. ALSO USED AS A MEASURE OF THE RATING UNITS OR THE PREMIUM BASE OF A RISK.

Where does a driver have coverage?

U.S, Canada, and U.S. Possesions e.g. Puerto Rico, Guam.

All Homeowners Policies are 80% Co-Insurance

*If home is insured for at least 80% of its value, the basis of recovery does not change. *If home is not insured for 80% of its value the basis of recovery changes to ACV.

Falling Objects

*Interior damage only covered if exterior damage happens first

RESCISSION

THE TERMINATION OF AN INSURANCE CONTRACT BY THE INSURER WHEN MATERIAL MISREPRESENTATION HAS OCCURRED. A CONTRACT MAY ALSO BE REPUDIATED FOR FAILURE TO PREFORM A DUTY.

Prop. off Premises

$10k

Dwelling Broad Perils

***All the same Broad Perils as Homeowners except for Theft*** *Instead of Theft it is Building Damage Caused by Burglars **All the Exclusions are the same**

Property Removed/Removal Clause/Preservation of Property **Covers personal property while being removed from a premise endangered by a covered peril**

**Open Peril Coverage **30 Day Limit

Insured Locations

*All insured locations must be located in standard territorial definition. *The resident premise listed in the declaration page. *All newly acquired residences purchased within the policy period are automatically covered until the end of the period. *Temporary residence used by the insured. (ex. Hotel, College Dorm) **Off Campus Housing is not included** *Vacant land ---LIABILITY ONLY *Grave Markers---Limit of $5,000

INSURABLE RISK CRITERIA

1. LOSSES MUST BE DEFINABLE. 2. LOSSES MUST BE ACCIDENTAL. 3. LOSSES MUST BE LARGE ENOUGH TO CAUSE A HARDSHIP TO THE INSURED. 4. THERE MUST BE A HOMOGENEOUS GROUP OF RISKS LARGE ENOUGH TO MAKE LOSSES PREDICTABLE (LAW OF LARGE NUMBERS). 5. LOSSES MUST NOT BE CATASTROPHIC TO MANY MEMBERS OF THE GROUP AT THE SAME TIME. 6. THE INSURANCE COMPANY MUST BE ABLE TO DETERMINE A REASONABLE COST OF INSURANCE. 7. THE INSURANCE COMPANY MUST BE ABLE TO CALCULATE THE CHANCE OF LOSS.

What are the Characteristics of an Insurable Risk?

1. The loss must be definable and definite; 2. The loss must be accidental; 3. The insurance company should be able to calculate the chance of loss; 4. The law of large numbers should apply; 5. The loss must be great enough to create economic hardship; 6. The insurance must be offered at a reasonable cost; 7. The loss must not be catastrophic in nature.----All of these elements might not be present for every insured risk but most of them should exist whenever possible.

RISK

1. UNCERTAINTY AS TO THE OUTCOME OF AN EVENT WHEN TWO OR MORE POSSIBILITIES EXIST. 2. A PERSON OR THING INSURED.

what 3 bonds fall within contract bonds?

1. performance bond 2. bid bond 3. labor and material bond

bonds are between what three parties?

1. principal (obligor) 2. surety 3. obligee

Factors that effect your premium

1.Driving Record 2.Annual Miles Driven 3. Years of driving experience 4. Other factors having a "significant relationship to the risk" e.g. location, zip code.

Business Auto Cov Form - Section II- Liability Coverage - Exclusions

1.Expected/Intended Injury 2.Contractual Liability 3.Workers Compensation 4.Employee Indemnification and Employers Liability 5.Fellow Employee 6.Care, Custody, or Control 7.Handling of Property 8.Movement of Property by Mechanical Device 9.Operations 10.Completed Operations 11.Pollution 12.War 13.Racing

Commercial Non-Pay:

10 Days

HO Non-Payment of Premium:

10 days

UNILATERAL CONTRACT

A CONTRACT SUCH AS AN INSURANCE POLICY IN WHICH ONLY ONE PARTY TO THE CONTRACT, THE INSURER, MAKES ANY ENFORCEABLE PROMISE.

Which of the following would purchase the Motor Truck Cargo form? A grocery store that owns trucks and ships its own goods to its various owned locations. A pizza delivery person. A business that owns its own trucks and delivers goods to customers on behalf of another company. A Taxi Company.

A grocery store that owns trucks and ships its own goods to its carious owned locations. NOTE: The Motor Truck Cargo form is designed to cover the interest of one who owns both the cargo and the truck. Hence, the term "Motor Truck Cargo" form.

Define Liability Losses

A liability loss occurs when a person or entity is determined to have been responsible, or legally liable for injury or loss to another person or liable for damage to another's property and the law requires them to make financial restitution. These are called third party losses. Liability losses are paid by casualty insurance type policies. These include: Personal auto politices, Commercial auto policies, General liability policies, Professional liability policies, Umbrella policies, personal liability (including boats and yachts).

Materiality

A material fact is a statement made that is important to the contract and will help a company determine whether to accept or reject an application (making a false statement is called misrepresentation).

Replacement Cost less Depreciation

Actual Cash Value

A workers compensation insurance policy provides:

Workers Compensation policy consists of both the statutory benefits and employer's liability coverage.

The Broad form includes perils for livestock for a farm risk which include: Drowning All of these are included Accidental shooting Electrocution

All of these are included. NOTES: These are added to the broad form perils when insuring a farm or ranching risk.

Which of the following applies to Commercial Inland Marine Coverage Part? All of these are true Filed forms Class rated Open Perils

All of these are true. NOTE: All of these are true concerning commercial inland marine coverage part forms.

Which are excluded under the BPP but covered under the EDP? Dropping the computer All of these Change in temperature Electrical surges

All of these forms are excluded under BPP and covered by EDP.

Which of the following coverage is added by endorsement to the BOP policy? Earthquake Boiler & Machinery Money & Securities Outdoor Signs

The peril of Earthquake is the only peril added by endorsement. Others are considered optional coverages.

Ordinance or law

An endorsement for building code upgrades.

Settling of Building Exclusion

Any loss due to building settling is excluded

Hazard

Anything that increases the chance of loss or the severity of loss due to a peril.

*The insured and insurer select and pay their own appraiser *The appraisers select an umpire. If they cannot agree on an umpire, they go to court and one is chosen for them. *The cost of the umpire is shared equally by the insured and insurer *When any 2 of the 3 party's agree, the value is determined. *The insurance company reserves the right to deny benefits

Appraisal Clause (This clause outlines the procedure when the insured and insurer disagree on the value of the property following a loss)

What is Dynamic Risk?

Associated with a changing economy. Examples are the change in taste of consumers or technological changes. Not insureable.

In a commercial property policy, concealment, misrepresentation or fraud could cause a policy to:

Be voided, denied or cancelled. NOTE: This is a common condition in the commercial property policy

The commercial inland marine "signs" form would not insure: None are excluded Neon signs Mechanical signs Billboards

Billboards NOTE: The signs inland marine form excludes billboards.

Coverage Form C, Theft, Disapperance and Destruction covers the following:

Money and securities from losses resulting from theft inside the premises.

Professional liability policies provide coverage for:

Both defense and damages.

What is Utmost Good Faith?

Both parties bargain in good faith. --No concealing of information.

Losses caused by birds, vermin, rodents, or insects

Collapse due to hidden vermin is covered under all but the HO8 policy

Business Auto Cov Form - Section II- Liability Coverage - Limits of Liability

Combined single limit of insurance applicable to all bodily injury, property damage, and covered pollution cost or expense arising from a single accident. No annual aggregate limit applies.

When an employer has the choice of purchasing Workers Compensation insurance from either the State Compensation Fund or from any authorized private insurer, the Workers Compensation system is considered to be:

Competitive NOTE: California has a competitive system for Workers Compensation, meaning that employers may satisfy the law by purchasing the mandatory coverage from any insurer authorized to sell it or from the State Compensation Fund, or may choose to self insure by posting a surety bond with the state Director of Industrial Relations. Some states have a monopolistic system, where coverage may only be purchased from the State Compensation Fund. a secondary market.

What is Concealment?

Concealment is the failure of the insured to reveal relevant facts known to the insured when applying for insurance. Perhaps the insured is concealing a criminal record of arson and if this information was known by the insurer, the coverage would be denied.

a situation where two or more perils act concurrently(at the same time or in sequence) to cause a loss; some courts ruled that losses from concurrent causation are covered even when one of the perils that contributed to the loss is excluded under the policy; these ruling led property insurers to revise the policy language to clarify the intent of the policy

Concurrent Causation

What is the part of the policy that specifies the rights and Duties of both the insured and the insurer?

Conditions

All of the conditions of the Homeowner Policies Apply

Conditions of the Dwelling Policies

Which of the following is NOT a common exclusion in the Flood Insurance program? Business Income Money Fences Contents

Contents NOTE: Contents coverage can be purchased, but is optional.

DP Coverage C

Contents/Personal Property (Covered Under Blanket Basis) *Covers the insured's personal property *Covers the personal property belonging to the insured's guests *Covers the personal property belonging to the insured's employees home based Loss Valuation aka Basis of Recovery **ACV for All 3 Coverages** Limit: *On Premises: As Declared *Off Premises: 10% of C ****Worldwide**** No Theft Coverage on Any Dwelling Policy

Commercial General Liability(CGL) Coverage A,B,C

Cov A- Bodily Injury&Property Damage Liability Cov B- Personal & Advertising Injury Liability Cov C- Medical Bills

HO8...Functional Replacement Cost HO2...Replacement Cost HO3...Replacement Cost HO5...Replacement Cost HO4...Dwelling Not Covered---Tenant Policy HO6...Replacement Cost

Coverage A Basis Of Recovery

*Any unattached structure used for business. *Any unattached structure that is rented for purposes other than parking a car. *Can rent out to park a car.

Coverage B Exclusions

*All properties including renters are covered. *Your personal property is covered no matter where it is in the world. Who's property is covered? *Covers insured personal property and their resident relatives (Must live in home and be related to you) *Covers personal property belonging to the insured's guests. *Covers personal property belonging to the insured's residence employees.

Coverage C

Medical expense coverage on a CGL is provided by which coverage?

Coverage C NOTE: Coverage C is Medical Expense coverage. Just remember "C" the doctor.

ACV....FOR ALL H.O. POLICIES

Coverage C Basis of Recovery

HO8...50% of Coverage A Limit HO2...50% of Coverage A Limit HO3...50% of Coverage A Limit HO5...50% of Coverage A Limit HO4...As Declared HO6...As Declared

Coverage C Limits

Fair Rental Value

Coverage D

Coverage F is "good will" coverage that pays the medical bills incurred by others in an accidnet, regardless of the fault or liability of the insured. The minimum limit of $1000. Coverage F will pay for the following as long as they are claimed within three years of the date of the accident, and the loss occurs to a guest, other individuals or residence employees: medical and surgical care; x-rays; dental services; ambulance, hospital and professional services; funeral services.

Coverage F - Medical payments to others.

$1000 per person 3 year time limit Worldwide *Does not cover named insured or relative residents--only 3rd party *Liability does not have to be established. Medical payments will pay regardless of insured's liability

Coverage F--Medical Payments to Others (Pays all necessary medical expenses incurred within 3 years of the accident)

Nuder farm liability which coverages are mandatory?

Coverage H,J, and I.

What is Credit Card, electronic transfer card, forgery or counterfeit money?

Coverage for a limit of $500 on all of these including counterfeit money-U.S. or Canadian.

a named insured.

Coverage is not as broad as those afforded to those who meet the definition of

What is Building additions and alterations?

Covered under the HO-4 and the HO-6 only.

Coverage C

Covers Personal Property & Contents

Covers earthquakes, land shock waves and land tremors associated with earthquakes. 72 hour occurence period Deductible is a % of either Coverage A or Coverage C Limits---whichever is higher. Deductible can never be less than $250

Earthquake Endorsement **Earthquake coverage is excluded from all HO policies**

*Covers loss of rental income if insured's is renting space within their residence *Premise must be owner occupied When Coverage Applies *Following a covered loss *If Civil Authority prohibits access to your property due to direct damage to a neighboring premise Limit Caused by a covered peril: * 20% of A (If a monthly amount is asked for, divide the 20% by 12 Caused by a civil authority limiting access: *2 weeks

DP Coverage D Fair Rental Value

Extra Living Expenses; not on DP1, YES on DP2&3

DP Coverage E:

Dwelling *The structure *All attached structures and all attached fixtures *The foundation *Materials used for construction and alteration Basis of Recovery aka Loss Valuation *DP1--- ACV *DP2 ---Replacement Cost *DP3----Replacement Cost Limit: As Declared

DP Coverages: Coverage A

*Covers building under construction *Limit must be 100% of the Replacement Cost of the completed building *Does NOT cover building materials (covered under Cov A)

DP Dwelling Under Construction

Which of the residential policies are basic perils? All the DP policies DP-1 and HO-8 DP-1, HO-8 and HO-2 DP-2 and HO-2

DP-1 and HO-8 NOTE: The Basic forms used to insure residential property are DP-1 and HO-8.

Open Peril Special or All-Risk, Replacement, Covg A Open Peril except exclusion, Covg B Open Peril, Covg C Broad Form, VAluation of personal property is paid on ACV= Replacement Cost Minus Depreciation

DP-3

Part of Coverage A Limits

DP-Glass/Saftey Glazing NOT DP1

Available for tenants who make improvements 10% of C

DP-Improvements and Alterations

Open Peril

DP-Removal Clause

5% of Coverage A Limit: $500 per plant

DP-Replacement of Trees, Shrubs, and Plants NOT DP1

*Fire *Lightning *Internal Explosions

DP1 Basic Perils 1-3

A + B (Seperate Amounts)

DP2

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expenses Coverage F: Additional Coverages

DP2 Parts

Which of the following is a coverage extension on the Commercial Building and Personal property coverage form? Indoor and Outdoor fixtures Stock or Inventory Improvements and Betterments Debris Removal

Debris Removal NOTES: Debris removal is a coverage extension with no extra premium charge and does not reduce the limit of insurance.

Applies to both the loss and clean up exceed declared limits Increase Coverage A limit by 5% Maximum for tree removal: $500 per tree $1000 Maximum

Debris Removal (Pays expenses to remove debris, ash, fallen trees, etc. following covered loss)

D.I.C.E.E.

Declaration, Insuring Agreement, Conditions, Exclusions, Endorsements.

dollar amount the insured must pay on each loss to which the deductible applies

Deductible

What is a Fundamental Risk?

Defined as a risk that affects the entire economy or large numbers of persons. Ex. Double digit inflation, foreign competition. Not insureable.

premium paid at the beginning of the policy period that is based on an estimate of what the final premium will be; this premium is adjusted basesd on reports submitted by the in sured to the insurer

Deposit Premium or Estimated Premium

U.S. Longshore and Harbor Workers Compensation Act

Designed to provide compensation and medical benefits to land-based employees while working on navigable water.

Which of the following businesses would be eligible for a Business Owners Policy? a) First National Bank of Small-town USA b) Dewey, Cheatem, and How Attorney-at-Law c) Jim's Good Time Bar and Grill d) Twenty One Flags Amusement Park

Dewey, Cheatem, and How Attorney-At-Law

A policy designed to fill in the gaps of a property policy would be?

Difference in Conditions NOTE: This floater is to fill in the gaps (perils) in a commercial property policy coverage.

Employee theft Coverage

Direct loss of Money, Securities, or other property; resulting from theft or forgery. Covers an employee acting alone or in collusion with another person or another employee.

The CEO of ABC corporation might need what type of Professional Liability insurance?

Directors and Officers NOTE: Directors & Officers Liability Insurance is often confused with Errors and Omissions insurance. The two are not synonymous; Errors & Omissions is concerned with performance failures and negligence with respect to your products and services. Directors and Officers Insurance is corned with the performance and duties of management.

Who needs professional liability insurance?

Doctors, architects, lawyers, accountants.

War, Nuclear Hazard, Earth movement, Neglect, Ordinance or law; Flood, Off-premises power shortages, Intentional acts.

General Exclusions include what?

*Contact Police if a crime was committed *Give prompt notice to insurance company or agent *Submit a Proof of Loss form to insurer within 60 days of loss This is a sworn written statement containing the following *Time and Cause of Loss *List of Inventory and Estimated Value *Other insurance information Upon receipt of Proof of Loss, insurer has 30 days to either pay or reject claim *Cooperate with insurer in settlement of claim

Duties After Loss Clause (The insured must cooperate and the insurer has no duty to provide coverage if they do not)

- giving prompt notice of claim tot he insurance company - protecting the property from further damage - completing a detailed proof of loss - making the property available for inspection by the company - submitting to the examination under oath if required - assisting the insurer as required during the claim investigation procedure

Duties Following a Loss

Special Limits

Money: $200 Securities: $1500 Business Property: On Premise--- $2500 Off Premise--- $500 Property in Additional Home: 10% of Cov C or $1000 (which ever is more) *This property is owned but not insured* Grave Markers: $5000

__________ insurance is a type of coverage that protects businesses from the financial consequences associated with a variety of employment-related lawsuits.

Employment Practices Liability NOTE: EPL insurance is a type of coverage that protects businesses from the financial consequences associated with a variety of employment-related lawsuits.

What type of States forbid private insurers to write Worker's Compensation?

Monopolistic

What is Ordinance or Law Endorsement?

For an additional premium, an endorsement may be attached to a homeowner policy to cover the additional loss that may result from any ordinance or law regarding the construction, repair or demolition of property. In states where the 1994 coverage revisions are in effect, 10% of the coverage A limit is already provided as additional ordinance or law coverage and the endorsements may be used ot purchase higher amounts of coverage.

What is sewer backup endorsement?

For an additional premium, an endorsement may be attached to provide up to $5000 of coverage for losses caused by water which backs up thru sewers or drains or which overflows from a sump pump. A special deductible of $250. applies to this coverage.

25% of the amount of insurance for that class of property, or $10,000. When new property is acquired, you must report these objects to the company within 30 days and pay an additional premium.

For newly acquired property such as jewelry, furs, cameras, and musical instruments, how much is paid out?

method to determine reimbursement for some losses, particularly those to antique, ornate, or custome construction; the damaged property is repaired or replaced with less expensive, but functionally equivilant materials

Functional Replacement Cost Basis

What is a Waiver?

Generally defined as the voluntary or intentional relinquishment of a known right. An example would be an insured who fails to report a claim in a timely manner. He/she could give up their rights of coverage under the policy. Another example would be when a policy provides for the insurer's right to demand an appraisal of the damaged property within a specific period of time. If the insurer fails to demand the appraisal, the right is waived. There are two types of waivers: expressed and implied. An expressed waiver occurs when the insurer or its representatives purposely gives up a known right under the contract. An implied waiver may result from some kind of neglect on the part of the agent or adjuster.

Oldest form of property Ins. There are no standard ocean marine policy. unregulated and its aso known as wet marine Insurance. written full value

Ocean Marine Policies

Covers the breakage of glass that is part of the building, including windows and doors.

Glass or Saftey Glazing Materials

The Insured shall mean the following except: Leased employees Partnership Corporation Governmental agency employees

Govermental agency employees NOTE: The Insured shall mean the following : Any corporation, partnership or business entity which engages in Professional Services and which is either owned or controlled by the Named Insured. Employees of the Named Insured. The heirs, executors, administrators or legal representatives of the Named Insured in the event of the Named Insureds death, incapacity or bankruptcy. Any leased or temporary employee

Yacht Policy

Ocean Marine form that provides coverage for personal & liability (P&L) based on Homeowner's policy design; complete package includes HULL insurance & boat trailer (ACV used to pay loss); Protection & Indemnity; Medical Payments

The Collapse peril is found in which HO forms?

HO-2, HO-3, HO-4, HO-5, HO-6. This peril is not included in HO-8 which is the most limited Homeowner form. The collapse must be as a result of an abrupt falling down or caving in of the structure or a part of the structure--cannot be a gradual collapse.

4entants or 4renters, Broad Form, Coverage A Dwelling not available

HO-4

HO-6 covers what?

HO-6 is the Unit-owners Broad Form, for condo owners. It covers the structural portio of the condo owned by the insured as well as his or her contents plus any improvements and betterments. Like the HO-4 form, property is covered by the "broad perils."

Coverage C perils are broad form on all HO policies except: HO-8 HO-3 & HO-5 HO-8 & HO-5 HO-4 & HO-6

HO-8 & HO-5 NOTE: Coverage C perils on an HO-8 are basic perils and HO-5 are open perils/all risk.

HO-8 is Modified Coverage Form. It covers the least broad perils. This is the MOST LIMITED HO form. it provides the very basic peril coverage. Coverage for both buildings and contens are considerd on an ACV basis only.

HO-8 covers what?

HO-8 covers what?

HO-8 is Modified Coverage Form. It covers the least broad perils. This is the MOST LIMITED HO form. it provides the very basic peril coverage. Coverage for both buildings and contens are considerd on an ACV basis only.

What is covered in HO-8?

HO-8 is the least broad form covering lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, VMM, theft, volcanic eruption.

Water Damage/Flood Exclusion

HO8 excludes all water damage All other policies exclude water damage unless caused by appliances, air conditioning or heating systems, pipes, or fire sprinkler systems. Excluded: floods, tsunamis, water spray, mudslides, backed up or broken drains, backed up or broken sewer lines, water seeping through a foundation, sump pumps and swimming pools.

Underwriting

The process of reviewing applications for insurance and checking the information on the application.

Mortgage insurance

Includes guaranteeing payment of the principal, interest and other sums agreed to be paid under the conditions of any note or bond protected by mortgage.

Plate glass insurance

Includes insurance against glass that breaks, its ornamentation, frames, glazing, etc.

Which of the following is NOT true regarding the voluntary workers compensation endorsement? It provides workers compensation coverage when a regular employee of a business ALSO volunteers to work at business-sponsored events. It can be added upon request by the insured at any time during the policy period. It applies only to volunteers who are working for the business named on the workers compensation policy. It protects a business owner from lawsuits that may arise, even from those who by law are exempt from coverage.

It provides workers compensation coverage when a regular employee of a business ALSO volunteers to work at a business-sponsered events. NOTE: This endorsement is designed to cover volunteers who are normally exempt from any workers compensation coverage.

Property Insurance

line of insurance that includees many types of coverages designed to handle the risk that a person will suffer financial loss because something he or she owns is damaged or destroyed

Scheduled Personal Property Endorsement (Provides a seperate schedule for any of the following categories of property:)

Jewelry, Photo Equipment, Fine Arts, Golf Equipment, Musical Instruments, Postage Stamps, Furs, Silverware, Coins *Agreed or Stated Value *Open Peril Coverage *No Deductible *Newly acquired property in the same class is automatically covered under endorsement for 30 days

Casualty Insurance

line of insurance that includes a wide variety of unrelated coverages, including liability, auto, worker' compensation, aviation, crime, and surety bonds

Which of the following is a disadvantage of having a coinsurance clause on a commercial policy? Premiums are generally higher. Small None of the above. Keeping up with property replacement values.

Keeping up with property replacement values. NOTE: Keeping informed of building cost increases is sometimes a difficult thing for the insured to do.

Personal Umbrella Policy Liability

Policy designed to provide protection against a catastrophic lawsuit or judgment, whose coverage rages generally from $1 million to $10 million and extends to the entire family. Insurance is excess over underlying coverages.

No theft coverage $2500

Landlord's Furnishings (Not Covered by HO8, HO4, HO6) **Covers loss of furnishings owned by the insured, but rented within their residence

general term used to describe policy conditions that specify what the insured and insurer must do after a loss

Loss Provisions

With Boiler and Machinery, insurance carriers place great emphasis on:

Loss control and inspections. NOTE: Insurance carriers place great emphasis on inspections and loss control, so most of the premiums are used to pay for inspections.

Loss control

Loss control refers to taking precautions to reduce the risk of a loss e.g. installing smoke alarms and a sprinkler system.

In which of the following events would coverage be provided under the CGL? An employer exposes an employee to hazardous chemicals, damaging his lungs. Mobile Equipment being transported to a job site falls off and hits a vehicle on the highway. An Insurance Agent neglects to advice and retain a waiver from an insured regarding Uninsured Motorist coverage. A grocery store sells liquor to a customer and the customer, driving while intoxicated, injures another party.

Mobile Equipment being transported to a job site falls off and hits a vehicle on the highway. NOTE: Liability for injury or damage caused by mobile equipment is covered under the CGL, but there is no coverage for physical damage to the mobile equipment itself. A Contractor`s Equipment floater would provide coverage for this.

$200

Money

Inside the Premises: Theft of Money and Securities covers what?

Money and Securities from losses resulting from theft inside the premises, Damage to a locked safe, vault or cash register that results from attempted entry, or damage caused to the premises in the course of the crime.

Moral Hazard

Moral hazards are associated with mental attitudes, behaviors and habits e.g. drug abuse, dishonest claims, alcoholism, smoking, and driving over the speed limit.

trailer

Must NOT be propelled under its own power. Must be towed by a private passenger auto, pickup truck, or van. Must be designed to be towed by an auto, pickup , or van. Can be a farm wagon or farm implement, if being towed by private passenger auto, pick up truck, or van.

Uninsured Motorist Coverage

Must be endorse on BAP policy and is not automatically provided on all vehicles

Collape

NOT DP1

Mutual insurance Company

Policyholders in a mutual insurance company contribute money by buying policies and paying the premiums, and become owners in the company. Mutual companies are sometimes referred to as participating companies because policyholders participate in dividends.

DP-3

Open Peril Special or All-Risk, Replacement, Covg A Open Peril except exclusion, Covg B Open Peril, Covg C Broad Form, VAluation of personal property is paid on ACV= Replacement Cost Minus Depreciation

Physical damage under a boat owners policy is generally written based on which type of coverage?

Open Perils

the realtionship between insured and insurer in insurance is the same as _____/______ in bonding. a) principal/safety b) obligee/surety c) obligee/principal d) surety/obligee

principal/safety

DP Coverage B:

Other Structures

The Single Payer Limit (of Liability Policy) does what?

Pays a single amount as the maximum liability of the insurer with respect to any one accident occurence. There may also be one single limit for all persons injured, and another for all property damage arising from the accident or occurrence.

Medical Payments to Others

Pays for medical expenses of others under a homeowners policy in the event that a person (not an insured) is accidentally injured on the premises, or by the activities of an insured, resident employee, or animal owned by or in the care of an insured.

What is Reimbursement Contract?

Pays only the amount of the loss.

most the coverage will pay for a loss arising out of any 1 occurence regardless of overall policy limits.exsample: section 2 of a hoemowner policy pays on a per occurance limit for bodily injury and property damage liability

Per occurence Limit

Auto Coverage D:

Physical Damage = Collision & Upset; and Comprehensive/Other than Collision/Non-Collision

the maximum amount the insurance comjpany will pay for a particular loss or for losses sustained during a period of time, also called limit of coverage, limit of insurance and limit of liability

Policy Limit

What is excluded under CGL?

Pollution. With the exception of fuel spilled during normal operations. Pollutions is normally covered under CPP policies or builders risk.

**Open Peril Coverage **30 Day Limit

Property Removed/Removal Clause/Preservation of Property **Covers personal property while being removed from a premise endangered by a covered peril**

Coverage C of the Commercial Building and Personal Property coverage form does NOT cover: Property at a repair shop Property at a dry cleaners Property on consignment Property being transported in a vehicle.

Property being transported in a vehicle. NOTE: Property in a vehicle must be within 100 feet of the building or the property must be covered on a Motor Truck Cargo form.

First Aid Expenses

Reimburses the insured for expenses incurred for first aide to others. 1st Party Coverage

Agency Relationship

principles governing the authority of any agent that represents a principal

Any injury or property damage to the insured Exclusion

Section 2 only provides 3rd party benefits

5 basic ways to deal with risk ( S.T.A.R.R.)

Sharing,Transfer, Avoidance, Retention, Reduction

Protection & Indemnity coverage includes all of the following claims EXCEPT: Job-related injuries to employees Shipping Costs that must be paid a second time. Ship Operator Negligence Comprehensive & Collision

Shipping Costs that must be paid a second time. NOTE: Shipping Costs are covered under the Freight coverage part of an Ocean Marine policy.

BOP's benefit the insured by providing all of the following, except: Reduced premium Business income Simplified rating Simplified reading

Simplified reading. NOTE: Simpler rating, not reading is beneficial to the insured.

Which Commercial Property Causes of Loss form has the broadest coverage?

Special Causes of Loss NOTE: Special Causes of Loss is an All Risk form.

Which of the following forms is NOT considered a Named Perils form? Broad form Special form Specified form Basic form

Special Form NOTE: The Special Form does not name any perils, since "everything is covered unless it`s excluded."

Money: $200 Securities: $1500 Business Property: On Premise--- $2500 Off Premise--- $500 Property in Additional Home: 10% of Cov C or $1000 (which ever is more) *This property is owned but not insured* Grave Markers: $5000

Special Limits

Scheduled Personal Property Endorsement

Special coverage added at the insured's request to a homeowners policy to insure items specifically listed. Used to unsure valuable property such as jewelry, furs, and paintings.

This form covers risk of direct physical loss subject to exclusions pertains to:

Special form NOTE: Special form covers direct loss subject to exclusions and limitations.

Basic, Broad, Special: Which has the broadest coverage?

Special.

Symbol 7

Specially Described Autos

amount of coverage is divided between property damage and bodily injury

Split Limit

What are Split Limits (of Liability Policy)?

Split limits are expressed by two figures. there may be a limit representing the maximum payable for each person injured per occurrence for bodily injury and another limit applicable to the claims of all persons injured in the accident or occurrence.

CAARP- California Automobile Assigned Risk Plan

State plan where private insurance companies distributes, high risk automobiles drivers meet CA Financial Responsibility requirements of 15/30/5; for low-income drivers with good driving records, the minimum coverage= 10/20/3

What is Statute of Limitations?

States have enacted laws as to when certain types of lawsuits must be filed.

All of the following are excluded on an equipment breakdown form, except: Foundation breakdown Functioning of any safety or protective device Steam boilers Leakage of values

Steam boilers NOTE: Common equipment included under the equipment breakdown form is steam boilers.

POLICY PERIOD (OR TERM)

THE PERIOD DURING WHICH THE POLICY CONTRACT AFFORDS PROTECTION, e.g., SIX MONTHS OR ONE OR THREE YEARS.

A PREMIUM

THE AMOUNT THE INSURED MUST PAY IN ORDER TO RECEIVE THE RIGHTS A POLICY GIVES.

UNEARNED PREMIUM VS. EARNED PREMIUM

THE UNEARNED PREMIUM IS THE PORTION OF AN INSURANCE PREMIUM COVERING THE UNEXPIRED TERM OF THE POLICY. ANY PREMIUM PAID IN ADAVANCE OF THE CURRENT PERIOD IS CONSIDERED UNEARNED PREMIUM; FOR INSTANCE, A POLICYHOLDER PAYS AN ANNUAL PREMIUM. EARNED PREMIUM IS THE PREMIUM PAID FOR THE EXPIRED OR USED PORTION OF THE POLICY.

What are Additional Coverages of the HO forms?

The HO-2, HO-3 & HO-5 include additional coverage for the following: Debris removal; reasonable repairs; trees, shrubs, and other plants; fire dept. service charge; property removed; credit card, forgery, and counterfeit money; loss assessment; glass or safety glazing material; collapse; landord's furnishings; building additions and alterations; ordinance or law, grave markers.

True. It also includes theft insurance and personal liability coverage under one contract.

The Homeowners Program provides the same property coverages that are available under the Dwelling Property program. True or False?

The three (3) parties to a Surety Bond contract are:

The Principal, Surety and Obligee. NOTE: The Principal is the one who will fulfill an obligation, the Surety is the company vouching for the reputation, etc. of a Principal and the Obligee is the one to whom the promise is made. Never choose the answer with insurer in it. The surety contract is not insurance.

Human Personnel Loss Exposure

The degree of loss an employer faces in regard to lawsuits brought by employees e.g. workers compensation

After the policy has expired, the one year to discover a loss is called the:

The discovery period.

What are Reasonable Expectations?

The doctrine of reasonable expectations states that a policy includes coverages that an average person would reasonably expect it to include, regardless of what the policy actually provides.

Under the Workers Compensation policy, disability income benefits are payable to a partially disabled worker when:

The injured worker can return to work, but is unable to earn the income once received. NOTE: When the injured worker is able to return to employment of any sort, but cannot earn what was once received, he or she will receive disability income benefits as a partially disabled worker. Benefits are equal to the difference between full wages and those the injured worker is able to currently earn.

What is Personal Aspect?

The insurance contract is bound to the insurable interest of the insured person. For instance, with the sale of a house, the policy does not automatically pass to the new purchaser.

Vehicle Exclusion

The insured's own vehicles are not covered, with the exception of the following: Vehicles for the handicapped---wheelchairs Vehicles used to maintain the property Golf carts

What statement is true regarding liability insurance under the PAP when the insured leaves his/her car at a facility (such as a gargage or parking lot), and the car is involved in an accident?

The insured's policy would serve as excess coverage

custodian

The named insured, any of the named insured's partners or members, or the named insured's employee while having care and custody of the property inside the premises; excludes any person while acting as a watchperson or janitor.

What unique exposure is present in a farming business?

The need for Commercial and Residential coverage on the same property. NOTE: The farming business is unique in that it not only has commercial business exposure, but also personal liability risk.

Covers Vandalism and Malicious Mischief

Vandalism/Malicious Mischief Optional Endoresment (DP1)

Theft on the Commercial Crime coverage form includes all of the following EXCEPT: Burglary Theft of stock or inventory Robbery Hold-up of an armored car

Theft of stock or inventory NOTE: Coverage for theft of stock or merchandise is covered under the CPP Coverage B, Business Personal Property.

Coverage that can be provided for goods shipped by several different carriers during a transport until they reach their ultimate destination is called ___________.

Trip Transit Coverage NOTE: Trip Transit coverage is used to cover a specific shipment or trip. Coverage can be provided for goods shipped by several different carriers during a transport until they reach their ultimate destination.

True or False: new employees are automatically covered under the blanket bias

True

Provides insurance protection when liability limits on other policies have been exhausted or not covered under underlying policy; requires Self-Retention when claim is not covered under underlying policies

Umbrella Policies

Vacancy/Unoccupied Clause (This clause applies to a dwelling that remains vacant for 60 days or more)

Unoccupied: No people in the dwelling Vacant: No people or furniture in the dwelling The following coverages are suspended: *Glass Breakage *Vandalism or Malicious Mischief *Water Damage

POLICY TERRITORY

WHAT GEOGRAPHIC TERRITORY IS OR IS NOT COVERED BY THE POLICY OF INSURANCE.

Declarations Page

What does the insurance company use to determine the risk and premium that the insured pays for coverages?

Falling objects, weight of ice, snow or sleet, discharge of water or steam, sudden accidental rupture, freezing of plumbing, artifically generated electrical current.

What is not covered in HO-8?

In 1995, the "open rating system" gave companies a competitive edge in that:

Workers Compensation insurance companies no longer had to file their rates and wait for approval from the Department of Insurance and no minimum rates were mandated. NOTE: This open competition is believed to be healthier for the consumer as well as the insurer.

*All winds including hurricanes and tornadoes *Interior damage is only covered if exterior damaged first. *Watercraft is only covered for wind damage when completely indoors. *Insurance companies may apply seperate deductibles for wind losses. **1% to 5% of limit

Wind

For a Commercial Property policy, which peril is covered under the Basic, Broad and Special Causes of Loss Forms?

Windstorm

Damage to property of others in the insured's care, custody or control (Policyholder is the bailee)

Without regard to liability, pays maximum of $1000 per occurence. If borrowed property is also covered under Section 1, this coverage becomes excess and Section 1 becomes primary

Declarations page does not include

agreements and definitions

guarantees an arrested person will appear in court at the designated time

bail bond

often required of contractors bidding on construction work to guarantee 1) successful binder contractor (principal) will accept the project and 2) can provide a performance bond

bid bond

bodliy injury

bodily harm, sickness, disease, or death (must be result of an accident)

If the insured is backing out of his drive and hits the neighbor boy on his bike, hospitalizing the boy and damaging the bike, what sections of the policy would pay for damages? a) medical payments and collision b) bodily injury and property damage c) bodily injury and collision d) medical payments and property damage

bodily injury and property damage

taking of property from the insured premises by a person unlawfully entering the premises as evidenced by visible signs of forced entry or exit.

burglary

Under the Crime Coverag Forms, which of the following is authorized to have money outside the premise? a) messenger b) guard c) watchman d) custodian

messenger

Covers Personal Property & Contents

Coverage C

How much of newly acquired fine arts are covered?

The Personal Property Endorsement of the HO policy will not pay more than 25% of the amount of insurance for fine arts; These objects must be reported to the company within 90 days and pay an additional premium.

What are Coverage F - Exclusions?

The following exclusions apply only to Coverage F (Medical Payments to Others): 1. To a residence employee not sustained in the course of employment or occurring off-premises.; 2. to any person eligible to receive workers compensation or disability coverage; 3. From any nuclear reaction; 4. To anyone residing on the insured premises (boarders, tenants).

What is EXCLUDED under Collapse Coverage?

Awnings and fences; patios and swimming pools, underground pipes, flues, drains, cesspools, septic tanks, foundations, retaining walls, and docks.

Someone who rents space within your home.

Boarder

*Artificial Current *Falling Objects *Water Damage (Accidental Discharge or Overflow of Water of Steam) (Sudden and Accidental Tearing Apart/Cracking/Burning/Bulging) *Weight of Ice/Snow/Sleet *Freezing of Plumbing Systems

Broad Perils *All Fat Whales Want Fish

Section VII. What are Homeowner's Endorsements?

Earthquake endorsement; Inflation Guard Endorsement; Personal Property Replacement Cost; Scheduled Personal Property Endorsement--called a Floater.; Ordinance or Law Endorsement; Sinkhole Collapse Endorsement; Condominum Endorsements; Sewer Backup Endorsement; Home business endorsement; Identity Fraud Expense Coverage.

What is the Sinkhole Collapse Endorsement?

For an additional premium, coverage for sinkhole collapse may be attached to the policy. Loss by "sinkhole collapse" means actual physical damage caused by sudden settlement or collapse of the earth supporting insured property resulting from underground voids created by the action of water on limestone or similar rock formations.

Which forms provide for replacement coverage?

HO-2, HO-3 & HO-5 provide replacement cost provided the insured carry 80% coverage.

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (As Declared) Cov D: Loss Of Use (40% of C) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Broad Peril) Cov C: Contents (Broad Peril)

HO6 (VI) Condo *Unit Owners*

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (10% of A) Basis of Recovery: Cov A & Cov B: All Structures (Functional Rep) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Basic Perils) Cov C: Contents (Basic Perils)

HO8 (VIII) Modified

*All insured locations must be located in standard territorial definition. *The resident premise listed in the declaration page. *All newly acquired residences purchased within the policy period are automatically covered until the end of the period. *Temporary residence used by the insured. (ex. Hotel, College Dorm) **Off Campus Housing is not included** *Vacant land ---LIABILITY ONLY *Grave Markers---Limit of $5,000

Insured Locations

What does the Mobile Home endorsement do?

It adjusts the claim on the basis of replacement cost for the structure.

What is Personal injury coverage?

May also be added by endorsement. When attached, this form amends the definition of "bodily injury" to include "personal injury." Personal injury means injury arising out of false arrest, libel, slander, defamation of character, invasion of privacy, and other offenses that could result in a personal liability claim.

The Home Day Care Coverage Endorsement is what?

May be added to insure the liability exposure arising out of a home day care business conducted by an insured on the residence premises. However, this endorsement excludes coverage for bodily injury or property damage arising out of sexual molestation, corporal punishment, or physical or mental abuse.

Under Section II, what is Personal Liability?

Personal Liability pays on behalf of the insured all sums he/she is legally obligated to pay others because of bodily injury and property damage to others, caused by an "occurrence." The minimum limit is $100,000 per occurrence.

Identity Fraud Expense Coverage?

Provides for reimbursement of expenses incurred as a result of identity theft or fraud. Covered expenses up to the $15,000 limit, including reasonable attorney fees to defend suits brought by merchants, financial institutions, or collection agencies, lost income for time taken to meet law enforcement officials or complete affadavits (maximum $200 per day, $5000 total).

HO-3 Special Form covers what?

Provides open-peril coverage except for exclusions. HO-3 is Open Peril/Broad Peril . All of the structures are covered on an "open-peril" basis. This means that if a cause of loss is not excluded, then coverage would apply. The burden of proof is up to the insurance company to prove that the loss is excluded. Contents coverage applies on a Broad Peril basis.

What is the Personal Property Endorsement--called a Floater?

The endorsement provides scheduled coverage for such things as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, stamps, coins. All other property is covered on an all risk basis, subject to limitations and exclusions. The policy does not insure loss, from any cause, to property on exhibition at fair grounds or premises of national or international expositions unless the premises are covered by this policy. If postage stamps or rare and current coins collections are covered, the following are excluded: Fading, creasing, denting, scratching, tearing or thinning; transfer of colors, inherent defect, dampness, shipping by mail other than registered mail.;

What is covered in Trees, shrubs and other plants?

Trees, shrubs, and other plants including lawns are covered for limited specified perils including fire or lightning, explosion, riot or civil commotion, etc. They are covered up to 5% of the dwelling limit and subject to a maximum limit of $500 for any one tree, shrub, or plant. This is additional insurance and is in addition to the limit of the policy.

General Exclusions include what?

War, Nuclear Hazard, Earth movement, Neglect, Ordinance or law; Flood, Off-premises power shortages, Intentional acts.

Incidental Businesses (ex. Art/Music Studios, Schools, and Home Offices)

What type of businesses would be covered?

What is Property removed?

When the insured is removing property from the premises when endangered by a peril insured against, coverage applies to any direct loss from any cause for no more than 30 days while removed.

"Insured" means what?

You and your residents of your household who are your relatives o other persons under age of 21; a student enrolled in school full-time who was a resident of your 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; With respect to a "motor vehicle", it applies to someone using a lawnmower or equipment, or persons engaged in your employ with your consent.

What is Condominium Endorsements?

A number of endorsements are available to adjust coverage for condominium unit owners. Normally, HO-6 provides broad form coverage for any building items and for personal property. An endorsement may be used to provide unit owners with special coverage for Coverage A, to the extent that building items are insured. Another endorsement may be used to provide unit owners with special coverage for Coverage C (personal property). An endorsement is also available to cover the personal property of unit owners while the residence is rented to others.

Section II -- Conditions. What are they?

A.Limit of Liability. The company's limit of liability, Coverage E, for all damages resulting from any one "occurrence" will not be more than the Coverage E limit. $100,000 for each occurrence.; B. Severability of Insurance--The insurance applies separately to each "insured"? this condition will not increase our limit of liability for any one "occurrence". In other words, the liability limit applies per insured but the maximum that can be paid on behalf of all insureds for one covered claim cannot exceed the coverage E liability limit.; C. Duties after an "occurrence" -- This clause spells out the duties of the insured if there is a claim. Reporting of the claim in a timely fashion, cooperate with the insurer are some examples.; D. Duties of an injured person--Coverage F--Medical payments to others--the injured person or someone acting for the injured person will: Give the company written proof of claim; authorize the company to obtain copies of medical records, the injured person will submit to a physical exam; E. Payment of Claim---Coverage F--Medical payments to others--Payment of claim is not an admission of liability by an insured or the insurer. ; F. Suit against the insurer: No action can be brought against the insurer unless there has been full compliance with all of the terms under section II. No one will have the right to join the insurer as a party to any action against the "insured." Also, no action with respect to Coverage E can be brought against the insurer until the obligation of such "insured" has been determined by final judgment or agreement signed by the insurer.; G. Bankruptcy of an "insured"--bankruptcy or insolvency of an "insured" will not relieve the insurer of their obligation under the policy; H. Other insurance--This insurance is excess over other valid and collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply to this policy; I. Policy Period--The policy applies only to bodily injury or property damage which occurs during the policy period; J. Concealment or Fraud--the insurer does not provide coverage to an "insured" who, whether before or after a loss has: Intentionally concealed or misrepresented any material fact or circumstance, Engaged in fraudulent conduct, Made false statements relating to this insurance.

*Theft *Wind *Hail *Aircraft *Lightning *Explosion *Smoke *Riot/Civil Commotion *Vandalism/Malicious Mischief *Volcanic Eruption *Vehicles *Fire

Basic Perils *The WHALES aRe Very Very Very Fat*

Covers residence, all attached structures and fixtures, foundation, and materials used for construction and alterations.

Coverage A

Loss of Use- Temporary housing and rental income at same property you reside in is lost.

Coverage D

What is covered in Coverage D?

Coverage D--Loss of use, the coveage is the same as the Dwelling Property programs "additional living expense" and "fair rental value." Under the HO-2, HO-3, HO-5, the coverage is 30% of Coverage A. Under the HO-4, the percentage is 30% of the contents limit which is Coverage C.

Which of the following does not meet the eligibility requirement for a Homeowner Policy? A. Owner-occupants of residential dwelling which do not contain more than six families; B. Tenants in non-owned buildings used primarily for residential purposes; C. No dwelling that is under construction; D. Both A & C

D. Both A & C. Owner-occupants of residential dwellings can not contain more than 4 families under the HO-2; HO-3; HO-5; HO-8. Dwellings that are under construction are ELIGIBLE.

Which of the following do NOT meet the eligibility requirements for Homeowner's Insurance? A. Tenants in non-owned buildings used primarily for residential purposes; B. Owner-occupants of condominiums; C. Dwellings purchased under installment contracts when the purchaser is occupant of the dwelling; D. Dwellings that are used exclusively for offices, professional or private schools.

D. The dwelling must be used exclusively as a residence, except for certain incidental occupacies such as offices, professional or private schools, or studios.

What is covered in Debris Removal?

Debris removal is coverage after a loss like a fire, and provides up to $1000 to remove a fallen tree from the residence premises. Tree can fall on the property, and not just the house.

What is covered in the HO-2 Broad Peril Form?

Fire, lightning, Windstorm or hail (interior damage); Explosion; Riot and civil commotion; Aircraft damage; Vehicle damage; Smoke; Vandalism and malicious mischief; Theft and attempted theft; Volcanic eruption; Falling objects-like a tree falling on a house; weight of ice or snow or sleet that damages property; accidental discharge of water or steam from heating or AC system; Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, ac system, sprinkler system or appliance for heating water; Freezing of plumbing, heating, ac, provided the insured maintains heat in the building and shuts off the water and drains of all systems of water; Sudden and accidental damage from artificially generated electrical current--such as Lightning; Collapse--caused by hidden decay, hidden insect or vermin damage, weight of contents, animals or people, weight of rain collecting on roof, use of defective material or methods in construction.

Limits: Cov A: Buildings (N/A) Cov B: Other Structures (N/A) Cov C: Contents (As Declared) Cov D: Loss of Use (20% of C) Basis of Recovery: Cov A & Cov B: All Structures (N/A) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (N/A) Cov C: Contents (Broad Peril)

HO4 (IV) Tenant *Contents Broad Form*

What is Liability?

Liability is third party coverage that takes care of medical bills, property damages, lost wages, pain and suffering, inconvenience, etc. that is incurred by a third party in an "occurrence" and caused by or is allegedly the fault of an insured and members of the insured's household.

What is Landlord's Furnishings?

Provides up to $2500 for landlords furnishings. This additional coverage excludes theft of these items.

What is Ordinance or Law?

Provides up to 10% of Coverage A, dwelling for increased costs the insured incurs due to the enforcement of any ordinance or law which requires or regulates the construction, demolition, remodeling or repair of the covered building damaged by a peril insured against.

What is the Home Business Insurance Endorsement?

This is very broad coverage. It's designed to cover businesses being run out of the home, i.e. real estate office, beauty parlor, CPA, etc. There is coverge for business income, extended business income, extra expense, and loss of business income because of the action of civil authority. Liability coverage is on an aggregate basis and includes coverage for premises operations, advertising injury and personal injury. Coverage for the products/completed operations hazard is limited to the amount shown for coverage E.

An occupant of a dwelling under a life state is eligible for HO insurance. True or False?

True.

Seasonal dwellings are eligible for HO insurance. True or False?

True. Seasonal dwellings are eligible when the insured is covered under a Homeowner Policy for their primary dwelling.

What is covered in Reasonable Repairs?

When the structure is damaged by an insured peril, the policy provides coverage within the limits to pay for temporary repairs until permanent repairs can be made. For example, the wind blows off a portion of a roof. The policy pays to install a temporary cover to protect the dwelling from additional damage.

Declaration does include

1) Policy period or time 2) Description of vehicles 3) Schedule of coverages and limits that apply to each vehicle

Named insureds rights

1) Premium payment 2) Request cancellation 3) Receive notices issued by the insurer

The insolvency of the insured does not relieve the insurance company of its obligations to pay a claim.

Bankruptcy Clause

Judgement Rating

Based on the best judgement of a underwriter in classifying a risk.

Medical Payments in a 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.

Supplementary payments apply to which of the following coverages? Coverage B only Coverage A and B only Coverage A only Coverages A, B, and C

Only Coverage A and B.

Excess Insurance

Only kicks in after existing liability policy runs out of coverage

Insurable events

Only losses resulting from events that exist but may or may not happen can be insured.

DP-Removal Clause

Open Peril

type of insurance policy that coversmorethan one item of property at a single location or one or more items of property at multiple locations

Blanket Insurance

an employer may purchase workers compensation insurance through all of the following EXCEPT... a) mutual insurance company b) stock insurance company c) Blue Cross Blue Shield d) CompSource

Blue Cross Blue Shield

Coverage E: Personal Liability

Bodily Injury (BI) of others Property Damage (PD) of others

Coverage C provides "Special Limits of Liability" on some property. What is covered?

$200 for money, bank notes, gold and silver; $1500 on securities, accounts, deeds, evidences of debt, letters of credit; $1500 on watercraft, including their trailers, furnishings and equipment; $1500 for trailers and semi-trailers not used with watercraft; $1500 for theft of jewelry, watches, furs, precious stones; $2500 for theft of firearms; $2500 for theft of pewterware, goldware, silverware; $2500 for property on the residence premises used at any time or in any manner for any business purpose; $500 for property away from the residence premises, used for business purposes; $1500 on electronic apparatus and accessories while in or upon a motor vehcile, but only if the apparatus is equipped to be operated by power from the motor vehicle's electrical system while still capable of being operated by other power sources; $1500 on electronic apparatus and accessories used primarily for "business" whiel away from the residence premises and not in or upon a motor vehicle.

Wanda owns a HO policy that provides a $500,000 limit of insurance on her dwelling. Her policy would provide what additional amount of insurance on her household personal property?

$250,000 (50% of Coverage A limit)

Theft of gold, silver, and pewterware (If peril is other than theft, regular limits apply)

$2500

Credit Card, Electronic Fund Transfer Card, Access Denied, Forgery, and Counterfeit Money

$500 **Insured must notify bank or credit card company**

Gravemarkers

$5000

Non-Owned

$5k

The Motor Carrier Act of 1980 states that a trucker must file proof of financial responsibility in order to meet the bodily injury and property damage minimum requirements for third party claims. What are the requirements?

$750,000 (non-hazardous materials) $1,000,000 (oil and other hazardous wastes) $5,000,000 (explosives, poisonous gasses or radioactive materials)

a commercial building insured for $100000 under a Building and Personal Property Coverage form has been vacant for over three months when it is totaled by fire. What amount of coverage would apply? a) $100000 b) $85000 c) $50000 d) none after 60 days of vacancy

$85000

How much would you receive if you carried $40K, the requirement was $30K, the loss was $10K, and the deductible was $1K?

$9,000 NOTE: First look at the amount required and see if the amount carried was enough. If it meets the 80% coinsurance, then the full amount is paid for a covered loss, minus any deductible.

If an insured has a $1000000 personal umbrella w/ a $1000 self-insured retention (SIT) limit, how much of a $10000 loss- not covered by an underlying insurance but covered by an umbrella- would be covered by the insurance company? a) $-0- b) $1000 c) $9000 d) $10000

$9000

Wind

*All winds including hurricanes and tornadoes *Interior damage is only covered if exterior damaged first. *Watercraft is only covered for wind damage when completely indoors. *Insurance companies may apply seperate deductibles for wind losses. **1% to 5% of limit

Coverage B Exclusions

*Any unattached structure used for business. *Any unattached structure that is rented for purposes other than parking a car. *Can rent out to park a car.

Broad Perils *All Fat Whales Want Fish

*Artificial Current *Falling Objects *Water Damage (Accidental Discharge or Overflow of Water of Steam) (Sudden and Accidental Tearing Apart/Cracking/Burning/Bulging) *Weight of Ice/Snow/Sleet *Freezing of Plumbing Systems

Duties After Loss Clause (The insured must cooperate and the insurer has no duty to provide coverage if they do not)

*Contact Police if a crime was committed *Give prompt notice to insurance company or agent *Submit a Proof of Loss form to insurer within 60 days of loss This is a sworn written statement containing the following *Time and Cause of Loss *List of Inventory and Estimated Value *Other insurance information Upon receipt of Proof of Loss, insurer has 30 days to either pay or reject claim *Cooperate with insurer in settlement of claim

Volcanic Eruptions

*Covers any loss by the lava *Covers the blast *72 hour occurence period--1 deductible every 3 days. *Blast from volcano--Airbornne Shockwaves *Ash and Dust *Only covers hostile fire

DP Dwelling Under Construction

*Covers building under construction *Limit must be 100% of the Replacement Cost of the completed building *Does NOT cover building materials (covered under Cov A)

Home Business Optional Endorsement

*Covers liability of a home based business *Covers unattached structures used for business *Raises limits to $10,000 *Provides for indirect losses such as loss of income and extra expenses incurred to keep business running after a covered loss.

DP Coverage D Fair Rental Value

*Covers loss of rental income if insured's is renting space within their residence *Premise must be owner occupied When Coverage Applies *Following a covered loss *If Civil Authority prohibits access to your property due to direct damage to a neighboring premise Limit Caused by a covered peril: * 20% of A (If a monthly amount is asked for, divide the 20% by 12 Caused by a civil authority limiting access: *2 weeks

The Weight of Ice, Snow, and Sleet

*Covers the house and any garage (attached or not) Following are all excluded: *Awnings *Fences *Patios or paved surfaces *Swimming Pools *Foundation *Retaining Walls *Bulkheads *Piers *Wharfs *Docks

Extra Exclusions for Dwelling Policies

*Credit Card Fraud *Money and Securities *Liability *Gravemarkers *Watercraft Only rowboats and canoes are covered *Theft

All Dwelling Policies Exclude the Following

*Credit Card Fraud, Fund Transfer, and Forgery (This is an additional coverage on Homeowners) *Money and Securities *Liability (This is no coverage for Liability or Medical Payments to Others) *Gravemarkers *Watercraft- except only rowboats and canoes are covered. No special limit, treated like any other personal property *Theft Can Mona Lisa Get White Teeth?

Hail

*Interior damage only if exterior damaged first. *Watercraft only covered if completely indoors.

The bond is written for the benefit of the:

Bonds are written for the benefit of the obligee.

Cancellation Clause

1-60 Days--Can be cancelled for broad variety of reasons 61+ Days--Policy can only be cancelled for: *Misrespresentation *Substantial change in risk being insured *Non-payment for premiums

What is Executory?

Both sides must perform certain acts to make the contract legally enforceable.

What are the Characteristics of an Insurance Contract (Policy)?

1. Aleatory; 2. Contract of Adhesion; 3. Executory; 4. Conditional; 5. Utmost Good Faith; 6. Personal Aspect; 7. Principle of Indemnity; 8. Valued Contract; 9. Reimbursement Contract; 10. Unilateral.

Physical Damage cover applies to all the symbols, except: Symbol #9 Symbol #1 Neither Symbol #1 or #9 Both Symbol #1 and #9

Both symbol #1 and symbol #9 are liability only.

What does insuring agreement include in Part A?

1) Damages and defense costs covered 2) person and organizations insured

What does a PAP include

1) Declarations page 2) Agreement and definitions page Part A Liability coverage Part B Medical payments coverage Part C Uninsured motorist Part D Damage to your auto Part E Insured duties following an accident or loss Part F General provisions

Business Auto Cov Form - Section III - Physical Damage Coverage -Collision Coverage -Comprehensive Coverage -Specified Causes of Loss Coverage

-Collision Coverage is coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn. -Comprehensive Coverage is coverage for direct and accidental loss or damage to a covered auto by any peril except collision or a peril specifically excluded. -Specified Causes of Loss Coverage is coverage for several named perils instead of all perils except those specifically excluded.

Commercial Carrier Regulations - The Motor Carrier Act of 1980

-This federal legislation authorizes the Department of Transportation (DOT) to enfore the financial requirements for motor carriers. -DOT ruled that MC must either carry an ins policy of certain min limits, or post a surety bond representing certain financial stability criteria when transporting passengers or cargo. Common approach is to purchase ins

Truckers Coverage Form

-almost identical to Bus. Auto Form, but 6 sections Section I- Covered Autos Section II - Liability Cov Section III- Trailer Interchange Coverage - covers trailer that ind does not own but has in his possession along with a written Trailer Interchange Agreement Section IV - Physical Damage Coverage Section V- Truckers Conditions Section VI- Definitions

Selected Commercial Auto Endts -Drive Other Car Coverage -False Pretense Coverage -Hired Autos Specified as Covered Autos

-commonly used with company cars -covers insured if he parts with his auto by trick or scheme -used for ind who hire autos for long-term basis, veh covered are specified, rates used are same as auto, owner of veh is added as AI

Commercial Carrier Regulations - The Endorsement for Motor Carrier Policies of Insurance for Public Liability (Form MCS-90)

-endt provides evidence of financial responsibility, on behalf of motor carrier, to the Interstate Commerce Commission (ICC). -endt must be included in any policy, and policy must meet DOT requirements including: 1. no condition, provision, contained in the policy will relieve the insurer from the liability (absolute liability for the inr) 2. If the inr is req to pay an excluded loss, it may seek reimbursement from the ind 3. Cov is in effect until termination 4. An inr must give notice at least 35 days advance notice of cancellation

Selected Commercial Auto Endts -Additional Insured - Lessor -Auto Medical Payments Cov

-includes person or organ. shows as the lessor in the endt, but only with respect to the liability arising out of maintenance, operation, or use. (Excludes: and accident that occurs after lease expires, cov. excludes losses arising out of sole negligence of an ind or work performed in connection with leased vehicle -provides Medical Payments Cov (this is not auto included in original policy), written on limit per perso, per accident, and pays up to the limit for necessary medical and funeral expenses from BI incurred within 3 years after accident

Business Auto Cov Form

-is divided into 5 sections: Section I- Covered Autos Section II- Liability Coverage Section III- Physical Damage Coverage Section IV- Business Auto Conditions Section V- Definitions -meets the needs of the majority of organizations; filed by ISO, covers liability arising out of the ownership, maintenance, or use of autos and physical damage to autos owned, leased, or hired by the named insured; -Used for all types of organizations other than auto dealers and motor carriers. -rating factors: 1. original cost of vehicle when new 2. territory where it is garaged 3. radius of operations: <50 miles is short haul, 50 to 200 miles is intermediate haul, >200 miles is long haul 4. Business use: service, retail, commercial (diff could be substantial) 5. weight of vehicle and seating capacity

Selected Commercial Auto Endts -uninsured Motorists Cov -Deduc Liability - Employee as AI -Mobile Equip

-self-explained

Business Auto Cov Form - Section I - Covered Autos - Certain Trailers, Mobile Equip, and Temporary Substitute Autos

-trailers with load capacity of 2000 pounds or less, if designated for travel on public roads, and mobile equipment being towed are included. -includes: street sweepers, and self propelled vehicles that have permanently installed equipment such as air compressors, cherry pickers, generators, pumps, and welding equip

What are the 5 Methods of Risk Management?

1. Avoidance: Risk avoidance simply means avoiding the hazard. For ex., if you don't want the risk of owning a car or a home, you avoid owning a car or home.; 2. Sharing a Risk: This is a common method of risk management by members of insurance pools.; 3. Transfer of Risk: This is the most common method of handling risk. It involves transferring the risk to an insurance company in return for a premium charge.; 4. Assumption of Risk: An individual decides to do what creates a risk (buys a car or a home) and retain the uncertaintly of loss. If the car is wrecked or the house burns, the individual will replace the car, rebuild the home or do whatever he deems appropriate at his own expense.; 5. Risk Reduction or Risk Control: Risk may be reduced via loss prevention methods. Examples are installing a sprinkler system in a building, a person stopping smoking or a planned weight loss program.

The Legal Interpretations Affecting the Insurance Contract (Policy)?

1. Breach of Warranty; 2. Misrepresentation; 3. Concealment; 4. Fraud; 5. Warranty; 6. Reasonable Expectations.

the garage liability form combines what 2 policies into a single policy form?

1. Business Auto (BAP) - liability/medical payments/uninsured motorist/physical damage (collision/comprehensive) 2. Commercial General Liability (CGL) - premises and operations liability

What are the Elements of a Contract?

1. Capacity to Contract; 2. Legal Purposes/Object; 3. Offer and Acceptance; 4. Consideration.

What are Additional Coverages under Section II--Liability?

1. Claims expenses--the following will pay: 1. The cost of investigating a claim; 2. Premiums for bonds requried in a suit the company defends; 3. Reasonable expense incurred by the insured at the company's request, including loss of earnings, subject to a predetermined $250 per day.; 4. Interest on judgment that accrues after the judgment.; 5. First Aid--the company will pay for the first aid expense incurred by an insured for first aid to to others; 6. Damage to Property of Others. The Insurer will pay up to $1000 for accidental damage to property of others caused by the insured, excluding. For example, if you borrow a neighbor's lawnmower and destroy it, it will be covered. If you break the scope on a neighbor's gun, it is covered up to $1000.; 7. Loss Assessment--provides up to $1000 per occurrence for the insured's assessment as a member of a group of property owners when assessed because of bodily injury or property damage, or liability for an act of a director or trustee if the director or trustee is elected by members of a corporation or association of property owners.

Commercial Package Policy (CPP) required contents.

1. Common Declarations. 2. Common Conditions. 3. Two or more coverage parts.

What are the Defenses Against Negligence?

1. Contributory Negligence; 2. Comparative Negligence; 3. Assumption of Risk; 4. Intervening Cause; 5. Statute of Limitations. See next for individual definitions.

Parts of the Liability Contract:

1. Insuring Agreement; 2. Exclusions; 3. Definitions; 4. Conditions; 5. Policy Territory.

What are Section II - Liability Exclusiosn?

1. Losses that are expected or intended; 2. Business pursuits of an insured; 3. Losses for the insured's failure to render professional services; 4. The ownership, maintenance, use, loading and unloading of motor vehicles. Liability coverage is provided for the following: A trailer not towed by or carried on a motorized land conveyance; a motorized land conveyance designed for recreational use off public roads; Not owned by an insured; Owned by an insured and on an insured location; A motorized golf cart when used to play on a golf course--covered off the premises; A vehicle or conveyance not subject to motor vehicle registration which is used to service an insured's residence, like running a lawnmower; designed for assisting the handicapped; in dead storage on an insured location. 5. the ownership, maintenance, use, loading or unloading of watercrafts listed below. Anything with inboard-outboard motor power uner 50 hp is covered; a sailing vessel under 26-ft is covered. ; Does not include ownership, maintenance, use, loading, unloading or an aircraft; Does nto include war-including accidental discarge of nuclear weapons; Does not include the transmission of a communicable disease; Does not include sexual molestation, corporal punishment, physical or mental abuse; Does not include the sale, mfg, delivery or transfer or possession by any person of a controlled substance.

Advantage of having package policy

1. Package discounts are available 2. Fewer Gaps in coverage 3.No duplication of coverage 4.Convenience of having all the coverage in one policy.

What are the Categories of Risk?

1. Pure Risk; 2. Speculative Risk; 3. Static Risk; 4. Dynamic Risk; 5. Fundamental Risk; 6. Particular Risk.

What is covered in Coverage A under Section 1: Property Coverage?

1. The dwelling described on teh Declarations page of the policy; 2. Structures attached to this dwelling; 3. Materials and supplies located on the dwelling used for construction, alteration or repair of the dweling. This coverage does NOT apply to land or to the HO-4 which is designed for contents ONLY. 4. Coverage A (Dwelling) under the HO-6 Condominium Unit Form covers which covers the alterations, appliances, fixtures, and improvements that are part of the building contained within the residence premises; Property that is the insured's responsibility under a corporation or association of property owner's agreement, structures owned solely by the insured, other than the residence premises a thte location of the residence premises.

Non-filed commercial inland marine forms are also known as:

Both uncontrolled and unregulated forms. NOTE: Non-filed forms are unregulated and uncontrolled line of insurance.

The California State Compensation Insurance fund is considered to be:

A competitive fund and direct writer.

Consequential Loss

A consequence of a direct loss. (e.g. a store loses business income after a fire)

Utmost Good Faith

A contract that is of utmost good faith is one in which both parties know all the material facts and any relevant information.

employee benefit plan

A contractual obligation either through a plan, fund, or arrangement by which an employer or an employee organization such as a labor union agrees to provide retirement benefits or welfare benefits to employees and their dependents and beneficiaries.

Deductible

A deductible is the amount of money the insured pays before the insurer (company) pays any part of a claim.

The following statement is true in regard to crime coverage.

A discovery type of crime coverage would pay for a loss that is found during the policy period, even if the loss occurs prior to the effective date of the policy.

Business Income and Extra Expense coverage would be necessary in which of the following cases? A grocery store suffers damage to stock when an earthquake collapses a shelf. A dry cleaners has a fire and must relocate temporarily to avoid losing customers. A contractor has his tools stolen from a job site. A restaurant owner forgets to order enough product and suffers a loss of business income.

A dry cleaners has a fire and must relocate temporarily to avoid losing customers. NOTE: Business Income and Extra Expense only applies after a covered peril and is designed for businesses that would not be able to operate for a period of time if a loss occurred.

What is considered as an uninsured motor vehicle under Part C of the PAP?

A hit-and-run vehicle, A vehicle with no liability policy, or a vehicle that has a liability policy in force--but their insurer denies coverage. These are all examples of Uninsured Motor Vehicles.

Robbery

A larceny from another's person or presence accomplished by force or threat of immediate injury + specific intent to steal

The following statement is true in regard to crime coverage.

A loss sustained type of crime coverage would pay for a loss which occurs during the policy period and is discovered no later than one year from the end of the policy period.

Business Income from Dependent Properties covers:

A loss that occurs at a property the insured does not own, but depends upon to run their business. NOTE: There must be a direct dependency on the other location for supplies, services, storage, advertising, etc.

Misrepresentation

A misrepresentation is a statement, written or oral, that is not only false in nature, but is stated in order to intentionally distract, deceive, or mislead a party to a contract.

A state that does not allow private insurers to offer workers compensation:

A monopolistic state does not allow private insurers to sell W/C, only the State can.

What is true of insuring a commercial risk under the National Flood Insurance Program?

A nonresidential structure and its contents may be insure for up to $500,000 under the regular program, and Agents DO NOT have authority to bind coverage under the NFIP, whether the risk to be insured is personal or commercial.

What is Pure Risk?

A situation where there is only the possibility of loss. This is an insurance risk. Ex. catastrophic medical expenses, liability loss or damage by fire or lightning.

Which of the following is NOT an exempt category under Workers Compensation insurance? A small business with only one employee. Volunteers for a non-profit organization. A student who is a pitcher for the school baseball team. A domestic employee who has earned only $90 total.

A small business with only one employee. NOTE: California law obligates an employer with one or more employees to purchase Workers Compensation, unless they are in an exempt category.

Deductible

A specified amount of money that is paid by the insured before the insurer pays money on a claim.

Stock company

A stock company sells shares of stock to stockholders in order to get money to run a business. Stock insurance companies are sometimes referred to as non-participating companies because policyholders do not participate in dividends (stockholders are not necessarily policyholders and vice versa).

Building Additions and Alterations (Covered by HO4 Only)

Covers improvements tenant makes while renting 10% of Coverage C Limit

The courts do not recognize the carrier as liable for a loss to another`s property by any of the following acts except: Acts of Public Authority Acts of faulty construction Acts of God and Nature Acts of Public Enemy

Acts of faulty construction. NOTE: It`s important to note that in certain instances the courts do not recognize the carrier as liable for a loss to another`s property while transporting: Acts of God or Nature, Exercise of Public Authority, Acts of a Public Enemy, Negligence of the Shipper, Inherent Vice, or Nature of the Property.

Tenant Improvements and Betterment Losses are valued at:

Actual Cash Value NOTE: Tenant Improvements & Betterments is written on an ACV basis, but Replacement cost is available.

What does the Glass Coverage form pay?

Actual Cash Value without limitation per plate or pane, unless stated as replacement cost on the policy. NOTE: The Glass Coverage form can be written with replacement cost coverage, but this must be stated on the policy. There is no limit of insurance on this endorsement.

DP Coverage E

Additional Coverages for DP1 Additional Living Expenses for DP2 & DP3

supplemental insurance coverages that apply only in certain circumstances, have reduced or separate limits of liability, or require the insured to meet certain requirements before they are applicable

Additional Coverages or Extended Coverages

Any extra bills you get because you cannot live at home *Covers additional living costs, such as hotel, motel, trailer, restaurant, and laundromat expenses. When applied: *Fllowing a covered loss *Civil Authority prohibits access to your property due to direct damage to a neighboring premise Limit Caused by a covered peril *20% of A If a monthly amount is asked for, divide the 20% by 12 Caused by a civil authority limiting access *2 weeks

Additional Living Expenses DP2 and DP3 Only

provides coverage on an open peril for physicalloss or damge to the insured aircraft while it is on the ground and while it is in flight.

Aircraft Hull Insurance

an In-motion ded. and a Not-in-Motion Ded. its in motion when ever it is moving on the ground or in flight as a result of engine power.

Aircraft Hull Insurance deductibles are:

*Credit Card Fraud, Fund Transfer, and Forgery (This is an additional coverage on Homeowners) *Money and Securities *Liability (This is no coverage for Liability or Medical Payments to Others) *Gravemarkers *Watercraft- except only rowboats and canoes are covered. No special limit, treated like any other personal property *Theft Can Mona Lisa Get White Teeth?

All Dwelling Policies Exclude the Following

*If home is insured for at least 80% of its value, the basis of recovery does not change. *If home is not insured for 80% of its value the basis of recovery changes to ACV.

All Homeowners Policies are 80% Co-Insurance

An exclusion section that limits the application of covered perils is found in:

All cause of loss forms NOTE: Each cause of loss form contains exclusions that limit the perils.

The implied warranties understood by the ocean marine contract include all of the following, EXCEPT? All crew members are experienced seamen. The seaworthiness of a vessel. Properly packed cargo. An agreed upon route with no deviation.

All crew members are experienced seamen. NOTE: There is no warranty (expressed or implied) regarding the experience of seamen.

If a building has been vacant for 90 consecutive days prior to a loss, which of the following is false? All of the above are true. The loss will not be covered if due to theft or attempted theft. The loss will not be covered if due to vandalism. If the loss is due to a fire, it will be covered but payment is reduced by 15%.

All of the above are true. NOTE: The policy states if a property is vacant for more than 60 days and the loss is due to vandalism, theft, attempted theft, sprinkler leakage, glass breakage or water damage, there is no coverage. All other losses are reduced in payment by 15%.

Which of the following is issued under the Motor Truck Cargo Form? Owner's form Shipper's Form Trucker's form All of these

All of these forms. NOTE: These are separate forms that can be issued under the Motor Truck Cargo form.

Cancellation and Renewal?

All property and casualty policies contain cancellation and nonrenewal provisions. A cancellation occurs before a policy has expired, in other words "mid-term". A nonrenewal notice is sent prior to the expiration date of the policy advising the insured that the policy will not be renewed. If the insurer cancels a policy, the unearned policy premium will be returned to the insured on a pro-rata basis. If the insured cancels the policy, the premium is returned on a short-rate basis. There is a small penalty when the policy is cancelled by the insured. The insured can cancel a policy at any time whereas the insurer is bound by the legal cancellation provisions in any given state and by the policy provisions.

The Jones Act

Also known as the Merchant Marine Act of 1924, this is an employers liability law that provides seamen with a tort remedy if they incur a work related injury

The main function of what policy is to provide higher limits of liability insurance in excess amounts over the underlying policy?

An Umbrella policy. NOTE: The main function of this policy is to provide higher limits of liability insurance in excess amounts over (hence the term "umbrella") the General Liability policy, Business Automobile Liability policy, Professional Liability and many other types of liability exposure.

In the Definitions Section of a Commercial General Liability policy, "occurrence" means:

An accident involving continuous or repeated exposure to the same general harmful conditions. An event that is not discovered until years later. A one time event.

Occurrence

An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, which results in bodily injury or property damage during the policy period. (See also "Accident")

Under the Commercial Crime insurance policy, "occurrence" is defined as:

An act or series of acts that may not involve people. NOTE: Crime insurance protection is for safe burglary and other acts that may or may not involve people.

What is Offer and Acceptance?

An applican t completes an application for coverage and the insurance company accepts it and returns a policy or a binder. If the insurance company issues an altered policy, the altered policy becomes a counter-offer.

Errors & Omissions insurance would be needed for which of the following: A real estate agent who provides services free of charge. An attorney who provides legal advice online for a fee. A volunteer at a church picnic who forgets to bring the pickles. An accountant`s assistant who makes an error.

An attorney who privides legal advice for a fee. NOTE: Errors & Omissions insurance is purchased by professionals who provide advice or services for a fee.

Identity Theft Endorsement

An endorsement to a homeowners policy that reimburses crime victims for the cost of restoring their identity and cleaning up their credit reports.

What is Intervening Cause?

An independent action that breaks the chain of causation and sets in motion a new chain of events. When this occurs, the intervening cause becomes the proximate cause of loss.

What are Legal Purposes/Object?

An insurance contract must not be written to cover an illegal activity or immoral purposes.

The Signs Coverage form is necessary when:

An insured has more than a $1000 value in signs or has any detached signs. NOTE: The Commercial Property policy doesn`t cover detached signs and typically has a limitation of $1000.

According to a new legal development, AB996 Chapter 647, regarding hate crimes against reproductive health facilities, all of the following are true, EXCEPT: This bill helps to guarantee the availability of insurance to these types of facilities. This bill states that all hate crime claims must also be reported to the Commissioner. An insurer may cancel or non-renew a policy due to excessive hate crime claims with written notice to the insured no less than 45 days prior to the cancellation or non-renewal. Insurers may not charge excessive or unfair premiums due to prior hate crime losses.

An insurer may cancel or non-renew a policy due to excessive hate crime claims with written notice to the insured no less than 45 days prior to the cancellation or non-renewal. NOTE: This bill states that a policy may not be cancelled or non-renewed due to claims made against the insured for hate crimes in the previous 5 years (60 months).

Non-Admitted Insurer

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

What is Fraud?

An intentional act designed to deceive and induce another party to part with something of value. Fruad may occur before or after a policy has been issued. Fraud may also involve misrepresentation and/or concealment but not all acts of misrepresentation or concealment are acts of fraud.

The two types of transit coverage are:

Annual and Trip Transit coverage NOTE: This covers the interest of the shipper for the goods transported. Annual Transit coverage is for business owners who ship items on a regular basis, while the Trip Transit is for those who may only ship goods occasionally.

Symbol #1

Any Auto = automatically includes owned, hired, non-owned autos. Provides the broadest coverage. Onl available for liability coverage

Friendly Fire

Any fire that is contained in its intended receptacles.

Hostile Fire

Any fire that is not contained in its intended receptacles.

Section 2 only provides 3rd party benefits

Any injury or property damage to the insured Exclusion

Which of the following describes a person eligible for insurance through the FAIR plan? Any person who has insurable interest in real or tangible personal property. Any person who has insurable interest in real or tangible personal property who, after diligent effort, has been unable to obtain basic property insurance through normal channels from an admitted insurer or licensed surplus lines broker. Any person who cannot afford insurance through the insurer of their choice. Any person who has insurable interest in personal property and currently has insurance that cannot afford extended coverage from insurers in the standard market.

Any person who has insurable interest in real or tangible personal property who, after diligent effort, has been unable to obtain basic property insurance through normal channels from an admitted insurer or licensed surplus lines broker. NOTE: The individual or agent must show efforts to place the risk through an admitted or non-admitted carrier before going to the FAIR plan. It is designed only for high risk properties.

Tort

Any wrongful act toward someone that leads to legal liability.

Which of the following is NOT true regarding the National Flood Insurance Program? The NFIP is administered by the federal government. The NFIP has an endorsement that can be purchased for Business Income coverage. Anyone desiring flood insurance pay purchase it through the NFIP directly. Any licensed agent or broker may place business with the NFIP.

Anyone desiring flood insurance pay purchase it through the NFIP directly. NOTE: You must be located in a flood zone to purchase flood insurance.

Physical Hazard

Anything that poses a risk and can be seen, heard, touched, tasted, or smelled e.g. weak tree limbs, worn-out brakes

All of the following are NOT eligible businesses under the BOP program, EXCEPT: A small liquor store. A 4 story apartment building with 60 total units. An 8 story office building with less than 100,000 square feet. A small family-owned auto body shop

Apartment buildings with 6 stories and up to 60 units is acceptable in the BOP program.

The purpose of the Businessowners Program is designed for the owner of _______________. Fireworks stands. Apartment buildings. Mobile car wash units. A home based small business.

Apartment buildings. NOTE: The purpose of the Businessowners Program, also referred to as a BOP, is to provide a package policy that covers a variety of exposures for the small to medium-sized business. This policy is designed for the owner of apartment buildings, offices and retail stores with moderate risks.

Debris Removal (Pays expenses to remove debris, ash, fallen trees, etc. following covered loss)

Applies to both the loss and clean up exceed declared limits Increase Coverage A limit by 5% Maximum for tree removal: $500 per tree $1000 Maximum

a person or organization that has temporary possession of someone else's personal property

Bailee

all of the following are true regarding OK Assigned Risk Plan, EXCEPT... a) Assigned Risk offers older drivers a guaranteed method to purchase insurance and is endorsed by AARP b) Assigned Risk is available to drivers because of poor claims experience c) Assigned Risk is based on the financial ability to pay the premiums d) Assigned Risk applicants cannot be denied coverage

Assigned Risk applicants cannot be denied coverage

This defense states that the employee knew in advance the risks associated with the job and was paid a salary to assume those risks.

Assuming risk. NOTE: Assumption of Risk was a common defense used by employers to reduce or eliminate claims payments.

What is Assumption of Risk?

Assumption of Risk applies when a person knowingly exposes himself or herself to danger or injury. When a person assumes this risk, he or she may be prevented from recovering from a negligent party. This doctrine is frequently associated with injuries incurred by spectators at sporting events.

When may the insurer examine books and records of an insured:

At any time and for up to three years after the policy expires. NOTE: The insurer may examine books and records at any time and for up to 3 years, as premiums are determined based on the audit information provided by the insured.

things that attract children to traspass a property that can bring up aliability claim if they get hurt such as swimming pools, trampolines etc

Attractive Nuisance

DP-Improvements and Alterations

Available for tenants who make improvements 10% of C

Risk management strategies

Avoiding, transferring (e.g. buying insurance), reducing, sharing (e.g. reinsurance), retaining (covering loss by oneself hence not buying insurance)

An uninsured motorist vehicle under the Personal Auto Policy includes all of the following EXCEPT: A. Hit and run vehicle whose driver cannot be identified; B. A vehicle newly acquired by the named insured; C. A vehicle insured by the company that is insolvent; D. A vehicle to which no liability bond or insurance policy provides coverage at the time of the accident.

B. A "newly acquired vehicle" is not included in the definition of uninsured motorist coverage.

A stolen car is covered under which of the following personal auto coverges? A. Collision; B. Comprehensive; C. Uninsured motorist; D. P.D. liability

B. A stolen car is covered under the Other Than "Collision" coverage.

An auto liability policy with a single limit of $30,000 would pay which of the following amounts in the event of a $10,000 loss to the insured vehicle and a $25,000 bodily injury settlement to a third party? A. $10,000; B. $25,000; C. $30,000; D. $35,000

B. In this question, we are not concerned about the damage to the "insured's" vehicle but rather the coverage that would apply under the liability portion of the PAP.

Under the P.A.P., a covered auto includes all of the following EXCEPT: A. Temporary substitute; B. Non-owned auto; C. Private passenger auto listed in the Declarations; D. An owned trailer

B. The PAP is excess coverage on a non-owned vehicle. If the insured drives a non-owned vehicle and has an accident, the insurer of the owner of the vehicle would be primary.

Which of the following would be covered under a PAP? A. A truck the insured rented that is over 10,000 gross vehicle weight; B. A three wheeled vehicle used in a medical emergency; C. A motor cycle; D. A large rented motor home

B. The PAP makes an exception under the exclusions and provides coverage for a vehicle that has less than four wheels to be covered in case of a medical emergency.

Damage to a windshield by a bird would be covered under: A. Collision; B. Comprehensive; C. Liability; D. All of the above.

B. This is an example of an Other Than "Collision" loss.

The insured has suffered a boiler explosion and desperately needs a replacement as soon as possible. What coverage would respond to assist the insured: A. Replacement coverage; B. Expediting expenses; C. Extra expense coverage; D. Loss of income coverage

B. This is the purpose of expediting expense coverage.

An auto liability policy with split limits of 10/20/5 would pay how much in the event of a $10,000 loss to the other person's damaged vehicle? A. $0; B. $5,000; C. $10,000; D. $20,000

B. This split limit provides a maximum of $5,000 for property damage to another vehicle caused by the insured.

all of the following are liability exposures under the Commercial General Liability Policy EXCEPT... a) BI b) premises c) operations d) product liability

BI

Someone who has the care, custody, or control of somebody else's stuff, but you get it back. *Limit depends on whether the item is an indoor or outdoor item. *Indoor: Treated like own stuff...either 50% of A or as declared. *Outdoor: The most they will pay is $1000 *No Theft Coverage*

Bailee

An auto liability policy wiht split limits of 15/30/5 would pay what maximum amount in the event of a covered bodily injury loss to three people? A. $5,000; B. $15,000; C. $30,000; D. $45,000

C. The limit of $30,000 is the maximum that can be paid for all injured persons and no more than $15,000 per person.

The maximum amount of coverage provided for spoilage to covered property caused by contamination under an Equipment Breakdown policy is: A. $5,000; B. $10,000; C. $25,000; D. The policy limits.

C. The policy provides a $25,000 limit that applies to spoilage to covered property contaminated by ammonia as a result of a breakdown to covered equipment.

Automatic coverage is provided for newly acquired equipment for: A. 30 days; B. 60 days; C. 90 days; D. 120 days

C. The policy provides up to 90 days of coverage provided the insured reports the newly acquired property to the insurer within 90 days of acquisition.

The purpose of "underinsured motors" coverage is to: A. Provide coverage for a "hit and run" driver.; B. Pay for injuries sustained by insureds who have been injured when the at-fault driver carries auto limits less than the financial responsibility of the state in which the insured was injured.; C. Provide coverage for the insured when the at-fault driver carries less coverage than that needed to pay for the insured's injuries.; D. Provide coverage when the at-fault driver's insurance company denies the claim.

C. The purpose of "underinsured motorists" coverage is to pay the difference between the at-fault driver's coverage and the actual damages sustained by the insured, up to the limit of the underinsured motorists coverage limit.

Publicly managed risk pool; funded by premiums insurance companies contributions and re-insurance; available only for residential units; insurance companies must offer earthquake coverage to all new applicant's dwelling owner's, homeowner's, renter's or condo owner's.

CEA

What are the key differences between CGL and Professional Liability?

CGL has longer reporting periods, no requried consent to settle, and no deductibles.

PACKAGE POLICIES

COMBINE PROPERTY AND CASUALTY COVERAGES SO THAT ALL RISKS, BOTH FOR PROPERTY LOSSES AND LIABILITY LOSSES ARE COVERED IN ONE POLICY.

EXCLUSIONS

CONTRACTURAL PROVISIONS THAT DENY COVERAGE FOR CERTAIN PERILS, PERSONS, PROPERTY, OR LOCATIONS.

1-60 Days--Can be cancelled for broad variety of reasons 61+ Days--Policy can only be cancelled for: *Misrespresentation *Substantial change in risk being insured *Non-payment for premiums

Cancellation Clause

GAP insurance

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

NO LIMIT This is the insurance company's cost to defend the insured duty to defend Ends once claim payment reaches policy limit Claims Expenses include: *Defense Costs *Bonds required--except Bail Bonds *Post judgement Interest *Loss of Earning and reasonable expenses incurred by the insured (paid to insured) $250 per day---1st Party Coverage

Claims Expenses aka Defense

policy condition that requires an insured to pay part of a loss if the amount of insurance carried on property is less than a specified percentage of the value of the property at the time of loss

Coinsurance

the amount not paid by the insuraqnce company b ecause the insured failed to comply with the coinsurance condition

Coinsurance Penalty

What is provided under "other coverages" of a DP-3 that is NOT provided under "other coverages" of a DP-1?

Collapse

What is Contributory Negligence?

Common law defense against negligence that states that if an individual contributes to his or her own loss in any way, then another cannot be held liable for the loss.

Legal liability of another party that the business firm agrees to assume by a written or oral contract.

Contractual Liability

The Building Covers: *Foundation *All Attached Structures *All Attached Fixtures *All Materials to be used for construction or alterations that are next to or on top of the home. (Waiting to be used)

Coverage A

DP1 Parts

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Coverages NO Coverage F

What is in Coverage C?

Coverage C is Personal Property. There is broader coverage for personal property under the HO program than under the Dwelling Property Program as shown. 1. Full limit of Coverage C applies to personal property anywhere in the world. Covers personal property owned or used by the insured. For example, 30% of coverage A for 3-4 family dwelling, 25% for a family dwelling.; 2. Under the HO-2, HO-3, HO-5 and HO-8, a percentage of Coverage A applies to Coverage C depending on the number of units as an additional amount of insurance. Under the HO-4 and HO-6, the insured establishes an amount of coverage based on the actual events.; 3. If the named insured requests, the following personal property can be covered under the insured Coverage C amount: a. personal property of others while it is located at the insured's premises; b. personal property of a guest or residence employee at a residence occupied by the insured.; 4. For personal property kept at an insured's residence other than the residence premises shown on the Declarations page, coverage is the larger of $1000 or 10% of Coverage C.; 5. When the insured moves to a newly purchased primary residence, contents is pro rata between the locations for 30 days in case of a loss.; 6. The following personal property is excluded under Coverage C.

$200 for money, bank notes, gold and silver; $1500 on securities, accounts, deeds, evidences of debt, letters of credit; $1500 on watercraft, including their trailers, furnishings and equipment; $1500 for trailers and semi-trailers not used with watercraft; $1500 for theft of jewelry, watches, furs, precious stones; $2500 for theft of firearms; $2500 for theft of pewterware, goldware, silverware; $2500 for property on the residence premises used at any time or in any manner for any business purpose; $500 for property away from the residence premises, used for business purposes; $1500 on electronic apparatus and accessories while in or upon a motor vehcile, but only if the apparatus is equipped to be operated by power from the motor vehicle's electrical system while still capable of being operated by other power sources; $1500 on electronic apparatus and accessories used primarily for "business" whiel away from the residence premises and not in or upon a motor vehicle.

Coverage C provides "Special Limits of Liability" on some property. What is covered?

Which DP coverage is an indirect loss coverage that covers the fair rental value of property held for rental to others following a direct loss from an insured peril?

Coverage D

a deductible in a Dwelling Policy would apply to all of the following EXCEPT... a) Coverage A (Dwelling) b) Coverage B (Other Structures) c) Coverage C (Personal Property) d) Coverage D ( Loss of Rental Income)

Coverage D (Loss of Rental Income)

HO8...10% of Coverage A HO2...20% of Coverage A HO3...20% of Coverage A HO4...20% of Coverage C HO6...40% of Coverage C

Coverage D Limit

Additional living expenses

Coverage E

Personal Liability

Coverage E

Under Section II of a HOP, bodily injury and property damage liability are included in which coverage?

Coverage E

What coverage in a HOP would cover injury to a guest by the insured's dog?

Coverage E provides personal liability for bodily injury or property damage arising from an occurence

Bodily Injury (BI) of others Property Damage (PD) of others

Coverage E: Personal Liability

Medical Payments to others

Coverage F

Coverage F - Medical payments to others.

Coverage F is "good will" coverage that pays the medical bills incurred by others in an accidnet, regardless of the fault or liability of the insured. The minimum limit of $1000. Coverage F will pay for the following as long as they are claimed within three years of the date of the accident, and the loss occurs to a guest, other individuals or residence employees: medical and surgical care; x-rays; dental services; ambulance, hospital and professional services; funeral services.

Forgery or ALteration

Coverage for loss due to forgery or alteration of checks, drafts, prom notes, or similar instruments made for or drawn by or on the named insured or insured's agent

The Ordinance or Law endorsement can be added to allow for:

Coverage in the event of a building ordinance upgrade requirement. NOTE: This coverage would allow for payment in the event an insured had a covered loss in which there was a building ordinance upgrade requirement.

pedestrians, bicyclists, or occupants of other vehicles.

Coverage is available to you and your not only while occupying insured vehicles but also while

What is the limit for glass coverage under the Glass Coverage Form/endorsement?

Coverage provided without limitation and settled on an ACV basis. NOTE: There is no limitation per plate or occurrence with this endorsement, but it is settled on ACV unless specified otherwise.

A Claims Made reporting form states that:

Covered claims are those reported within the policy period and occur no earlier than the retroactive date. NOTE: Remember, a Claims Made form most always has a retroactive date in which claims can still be covered prior to the inception date of the policy.

Vandalism/Malicious Mischief Optional Endoresment (DP1)

Covers Vandalism and Malicious Mischief

ITP - Robbery or Safe Burglary of Other Property

Covers actual or attempted robbery of a custodian or safe burglary of other property inside the premises

ITP extension for containers (robbery)

Covers actualy or attempted robery or safe burglary of a locked safe or vault inside the premises

ITP extension for damage to premises (robbery)

Covers actualy or attempted safe burglary or robbery of other property, covers the premises

Employer's liability coverage covers what type of claims?

Covers common law claims brought by employees not covered under Part 1.

Earthquake Endorsement **Earthquake coverage is excluded from all HO policies**

Covers earthquakes, land shock waves and land tremors associated with earthquakes. 72 hour occurence period Deductible is a % of either Coverage A or Coverage C Limits---whichever is higher. Deductible can never be less than $250

Boarder

Someone who rents space within your home.

also known as gap Ins. fill in the gaps of a property Policy. when written to supplement an underlying policy DIC normally carries a high ded. of $10,000 ormore. form is often written to provide coverage in an event of earthquakes, flood, collapses and subsidence.

Difference in Condition(DIC) Insurance

Physical Hazard

Distinct characteristic arising from material, structural, or operational features that increases a chance for loss (i.e being next to explosives.)

DP Coverages: Coverage A

Dwelling *The structure *All attached structures and all attached fixtures *The foundation *Materials used for construction and alteration Basis of Recovery aka Loss Valuation *DP1--- ACV *DP2 ---Replacement Cost *DP3----Replacement Cost Limit: As Declared

***All the same Broad Perils as Homeowners except for Theft*** *Instead of Theft it is Building Damage Caused by Burglars **All the Exclusions are the same**

Dwelling Broad Perils

*Monoline Policy---Covering PROPERTY only *Usually sold to older homes and homes needing renovations

Dwelling Policies

*Residence must be located within the Standard Territorial Definition *Must be either 1-4 family home (if owned), Mobile Homes, Manufactured Home, Rowhouse (attached homes), or rental premise *If renting within residence, no more than 5 boarders *Must be principally used as a residence, and not a farm or business (Incidental businesses are covered--schools, studios, home offices)

Dwelling Policy Eligibility (To Purchase Policy all of the following must be true)

1. Insurers may be unwilling to write HO-3 in this situation because it creates a moral hazard. 2. HO-8 Section I Conditions specified if insured makes repairs after a loss, insurer will not pay more than cost of "common construction materials and methods" that are "functionally equivalent to and less costly than obsolete, antique, or custom construction." 3. If insured doesn't repair, insurer pays market value at time of loss.

E. HO-8 Modified Coverage Form used when replacement cost of an owner-occupied dwelling significantly exceeds market value ex: large older house with obsolete construction or features that are expensive to replace. VS HO-3

This bill states that CIGA may be financed with a bond not to exceed $5 billion at any one time. Other States Insurance is Part Three (3) of the Workers Compensation policy and covers:

Employees who travel out of state on work assignments and provides the statutory limits of the state in which they are working. NOTE: This part of the Workers Compensation policy allows extended coverage to employees who travel out of state on work assignments. The policy must disclose the other states that MAY need to be covered, and the insurer must be notified immediately if an employee is traveling.

Who is insured:

Named Insured Resident relatives living with the insured Anyone under the age of 21 and in the care of the insured or their resident relatives Residence employees Bailees of the insured's animals or watercraft

When a covered loss occurs and two policies are in force for the same property, with the same terms and conditions, how will the loss be settled?

Each company will pay their share of the loss on a pro rata basis. NOTE: Only when the policies have the SAME terms and conditions will they pay their portion on a pro rata basis. If the terms and conditions of the two policies are DIFFERENT, then one is primary and the other excess. Payment is determined by the companies involved, considering inception dates, coverage, etc.

NFIP & CROP Insurance - Federal Insurance Plan, Social Security

Earthquake coverage may be sold separately or as an endorsement

Insurance Commisioner

Elected by the public

Which of the following is NOT a common advantage of the Claims Made form? Eliminates stacking of limits. Minimizes gaps in coverage. Minimizes inflation effects on policyholders. Eliminates the possibility of a loss due to the insured`s negligence.

Eliminates the possibility of a loss due to the insured's negligence. NOTE:There is no way to eliminate the possibility of a loss or claim when the insured is negligent.

Dwelling $100,000 Contents $100,000

Emergency Program for NFIP Insures a residental and nonresidental

applies after a community has agreed to but has not yet completed the process to adopt flood control measures.coverage is provided on a 1-4 fam. dwelling

Emergency program for NFIP

An employee adds an extra zero to their paycheck. This is covered under:

Employee Dishonesty NOTE: Employee's dishonest acts are covered under Employee Dishonesty coverage.

Inflation-Guard Endorsement

Endorsement added at the insured's request to a homeowners policy to increase periodically the face amount of insurance on the dwelling and other policy coverages by a specified percentage.

The FAIR plan does all of the following, EXCEPT: Provides for equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market by the establishment of a FAIR plan. Establish a list of all surplus line insurers that have met the recognized requirements for such title and shall issue a master list at least semiannually. Encourages maximum use of the normal insurance market provided by admitted insurers and licensed surplus line brokers. Assures stability in the property insurance market for property located in California.

Establish a list of all surplus line insurers that have met the recognized requirements for such title and shall issue a master list at least semiannually. NOTE: This list is the LESLI list and has nothing to do with the FAIR plan

Estoppel

Estoppel occurs when misleading actions of an insurance company agent result in the insured being stopped from performing according to the provisions of the contract.

covers items such as painting, Rare Manuscripts and antiques. provides automatic coverage for newly acquired items for up to 90 Days

Fine Arts Floater

Insurance policy that insurs only against perils specifically listed on the policy

Named Peril or Specified Peril Policies

Who is You, Yours?

Named insured.

What are the Exclusions (of a Liability Contract)?

Exclusions are exposures for which the insurer is unwilling to provide coverage.

All Homeowner Policy Exclusions apply to All Dwelling Policies

Exclusions on a Dwelling Policy

A Named Peril policy in Ocean Marine insurance refers to "perils on the sea" and "perils of the sea". These perils do NOT include: Barratry Explosion Jettison Sinking

Explosion is not a named peril.

True of False: professional liability coverage for bonds does not result from negligent acts

FALSE; it does result in negligent acts in the performance of profession services

the buyer takes interest in the property as soon as the trip begins

FOB(free on Board) cargo Ins. Point of departure

LEGAL PURPOSE

FOR A CONTRACT TO BE VALID IT MUST NOT BE FOR AN ILLEGAL SUBJECT OR CONTRARY TO PUBLIC POLICY.

What is not covered in HO-8?

Falling objects, weight of ice, snow or sleet, discharge of water or steam, sudden accidental rupture, freezing of plumbing, artifically generated electrical current.

Farm property is eligible for HO insurance. True or False?

False. Farm property is NOT eligible.

Mobile Homes are not covered under HO insurance. True or False?

False. Mobile homes are eligible with the attachment of the modbile home endorsement. HO-5.

According to a new development, AB 227 Chapter 635 regarding Workers Compensation and the California Insurance Guaranty Association, which of the following is NOT true? The term insolvency was expanded to include the inability to meet a company`s financial obligations. Fines for filing fraudulent Workers Compensation claims were increased to a minimum of $5,000.00 This bill also states that the Commissioner must publish the rates for the top 50 Workers Compensation carriers. This bill states that CIGA may be financed with a bond not to exceed $5 billion at any one time.

Fines for filing fraudulent Workers Compensation claims were increased to a minimum of $5,000.00. NOTE: The fines for fraudulent claims was increased from $50,000 to $150,000.

$500

Fire Department Service Charge

What is Aleatory?

For an insurance contract to be aleatory, it means that it is contingent on an uncertain event (a loss). Insureds who pay premium but have no losses will not receive claim payments under the policy. However, they will have peace of mind knowing they are covered if a loss occurs. On the other hand, insureds who suffer a loss often receive a great deal more from the insurer than they have paid in premiums. Therefore, there is unequal value. The insured pays a lower premium than the ultimate obligation of the insurer in case of a covered claim.

Only covered if the either is done: *Leave the heat on OR *Drains the water from the pipes

Freezing of Plumbing Systems (Frozen Pipes)

an indirect loss coverage that protects the shipper who is required to prepay freight charges and or import duties in the event that the voyage is not completed or that the goods have sustained partial damage & the shipper is not able to secure a refund of the duty on the damaged goods.

Freight Insurance

Garage Coverage Form Section I -Covered Autos Section II - Limits of Liability

Garage Coverage Form is a form that covers the automobile and general liability loss exposures of auto dealers. -CA - usually written on blanket basis - does not cover WC or liab arising from pollution. Completed Operations losses are subject to mandatory $100 deduct

Garage Coverage Form - Section III - Garagekeepers Coverage

Garage Keepers Insurance covers the insured's liability for damage by a covered cause of loss to autos left in the insured's care while the insured is attending, servicing, repairing, parking, or storing the autos. -Uses sames physical damage cov. as Business Auto

A parking garage would be BEST insured under which form(s):

Garagekeepers Direct Coverage (Primary) NOTE: it provides coverage whether or not the insured is legally liable, and it will pay before the customer`s own policy pays.

This coverage applies only when the insured is found legally liable for the damage to a customer's vehicle:

Garagekeepers Legal Liability NOTE: This coverage applies only when the insured is found legally liable for the damage to a customer's vehicle. For instance, if an employee test-drove a repaired customer vehicle and hit a fence, the insured is at fault and the policy would pay.

a partial loss where the loss is apportioned or shared among all who benefited by the sacrifice such as throwing cargo overboard to save the ship.

General Average

Declarations

General Information page. Contains a lot of the specific information relating to a particular policy-and policy holder. It includes names of the people covered by the policy, the dates its in effect and the vehicle covered.

HO-4 does not cover the structure. This form is designed to cover the contents of a tenant living in a non-owned structure. This could be an apartment or a dwelling. Since the tenant does not own the structure the form does not provide coverage except for the improvements and betterments that the tenant may have made to the structure at his or her expense. This form provides the named "broad perils."

HO-4 Contents Broad Form covers what?

Considered an insured location Covers losses covered under Coverage C $5000

Gravemarkers (Not covered by HO8)

Fidelity Bond

Guarentees an employee's honest discharge of duty and protects the insured against dishonest employees

Which of the following policy forms automatically provides replacement cost valuation for Coverage C- Personal Property? a) HO 6- Condominium Policy Form b) HO 4- Tenants Policy Form c) HO 5- Comprehensive Policy Form d) HO 8- Modified Policy Form

HO 5- Comprehensive Policy Form

2road Form Perils Covered, Replacement, Coverage A Dwelling

HO-2

1. Lower premium than HO-3. Similar limits for dwelling & other structures. Fewer causes of loss: named perils for personal property, building, and other structures. 2. Only HO-2 Section I - Perils Insured Against is different than HO-3 a. HO-3 is special form (open perils ) coverage for Coverage A & B, whereas HO-2 is named perils coverage for Coverage A & B. b. Both HO-2 & HO-3 have named perils coverage for Coverage C c. Both HO-2 & HO-3 - Coverage D is triggered by any loss covered under the other coverages that make the building unusable. 3. HO-2 named perils have most common insurable perils homeowners need and resemble HO-3's named perils. 4. The difference between HO-2 & HO-3 named perils is in the burden of proof: a. HO-2 named perils=insured must prove the loss was due to covered cause b. HO-3 Coverage A&B special form = insurer must prove the loss was due to excluded cause

HO-2 Broad Form = homeowner/occupant vs HO-3

Lightning, Windstorm or hail, Explosion, Riot or civil commotion, Aircraft, Vehicles, Smoke, VMM, Theft, Volcanic eruption, Falling objects, Weight of ice or snow or sleet, Discharge of water or steam, Sudden or accidental rupture, Freezing of plumbing and related systems, artifically generated electrical current.

HO-2, HO-3, HO-4 & HO-6 cover what perils?

Provides open-peril coverage except for exclusions. HO-3 is Open Peril/Broad Peril . All of the structures are covered on an "open-peril" basis. This means that if a cause of loss is not excluded, then coverage would apply. The burden of proof is up to the insurance company to prove that the loss is excluded. Contents coverage applies on a Broad Peril basis.

HO-3 Special Form covers what?

What is the difference in HO-3?

HO-3 covers the same personal property as HO-2, HO-3, HO-4, HO-5, HO-6, but the dwelling coverage is "open peril."

Which HO form does not provide coverage for real property?

HO-4 NOTE: HO-4 tenant form does not cover the dwelling or other structures (real property).

1. Usually renters but some homeowners might purchase HO-4 if home does not qualify for coverage under another homeowners form. Ex: retired couple living in apartment building with > 4 apartments which they own and insure under commercial policy - so contents are covered under the HO-4 policy. 2. HO-4 & HO-3 have the same named perils for Coverage C - Personal Property, but HO-4: a. Coverages A&B aren't in HO-4 Section I Property. Typically renter doesn't insure dwelling or other structures. b. HO-4 Coverage C - limit selected by insured; Whereas HO-3, HO-2, & HO-5 Coverage C limit is typically 50% of Coverage A limit. c. HO-4 Coverage D is automatically 30% of Coverage C Personal Property limit, whereas HO-2 & HO-3 use 30% of Coverage A Dwelling & Other Structures limit. d. HO-4 has additional coverage for building additions & alterations - limit up to 10% of Coverage C. e. HO-4 does NOT cover landlord furnishings because on insurable interest by renter. f. HO-3 & HO-4 have additional coverage for "ordinance or law" imposing new responsibility on property owner. HO-4 limit is up to 10% of building additions and alterations limit. Whereas HO-3 limit is up to 10% of Coverage A Dwellings & Other Structures

HO-4 Contents Broad Form = renters vs. HO-3

Personal Liability Insurance

Liability insurance that protects the insured for an amount up to policy limits against a claim or suit for damages b/c of bodily injury or property damage caused by the insured's negligence. This coverage is provided by Section II of the homeowners policy.

1. Condo ownership deed (declaration or master deed) establishes owner's rights ​a. Deed contains insurance requirements & describe insurance for jointly owned property. b. Insurance can cover owner's entire unit, including fixtures, plumbing, wiring or partitions OR only "bare walls" i.e. building structure and walls supporting the structure. 2. HO-6 covers units owner's property exposures NOT covered by the condo insurance; DIFFERING from HO-3 in the following ways: a. HO-6 defines residence premises as the unit where insured resides. HO-3 includes 1-4 family dwelling where insured resides. b. HO-6 Coverage A Section 1 Property Coverage includes: 1. alterations, appliances, fixtures and improvements part of building within unit 2. items of real property that pertain exclusively to insured unit 3. property that is the unit owner's responsibility under condo or co-op association's property owners' agreement and 4. structures owned solely by the insured at the residence location c. HO-6 Coverage A Dwelling has basic limit of $5,000. May not be adequate if insured has extensive property exposures that condo association insurance does not cover. d. HO-6 DOES NOT HAVE Coverage B Other Structures because Coverage A applies to other structures owned solely by insured. e. HO-6 Coverage C Personal Property limit is selected by insured and not a % of Coverage A. f. HO-6 Coverage D Loss of Use has automatic limit at 50% of Coverage C limit rather than 30% of Coverage A limit. g. HO-6 Section I Perils Insured Against has named perils coverage for Coverages A & C like HO-2. h. HO-6 Section 1 Conditions - Coverage A losses are settled on replacement cost basis as long as repairs made within reasonable time. HO-6 does not require Coverage A limit as a % of replacement cost LIKE HO-3 does. 3. HO-6 Additional Coverage reflects unique aspect of condo unit ownership: a. Trees, shrubs, and other plants solely owned by named insured on grounds at insured unit covered at 10% of Coverage C limit.HO-3 limit is up to 5% of Cov. A. b. Glass or safety glazing material only covered if part of insured's unit.

HO-6 Unit-Owners Form covers condo or co-op owners exposures who jointly own buildings with others and individually own specific units within buildings vs HO-3

HO-6 is the Unit-owners Broad Form, for condo owners. It covers the structural portio of the condo owned by the insured as well as his or her contents plus any improvements and betterments. Like the HO-4 form, property is covered by the "broad perils."

HO-6 covers what?

M8dified Form

HO-8

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Broad Perils) Cov C: Contents (Broad Perils)

HO2 (II) Broad

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Special/Open) Cov C: Contents (Broad Perils)

HO3 (III) Special

Limits: Cov A: Buildings (As Declared) Cov B: Other Structures (10% of A) Cov C: Contents (50% of A) Cov D: Loss of Use (20% of A) Basis of Recovery: Cov A & Cov B: All Structures (Replacement) Cov C: Contents (ACV) Covered Perils: Cov A & Cov B: All Structures (Special/Open) Cov C: Contents (Special/Open)

HO5 (V) Comprehensive

Coverage D Limit

HO8...10% of Coverage A HO2...20% of Coverage A HO3...20% of Coverage A HO4...20% of Coverage C HO6...40% of Coverage C

Coverage C Limits

HO8...50% of Coverage A Limit HO2...50% of Coverage A Limit HO3...50% of Coverage A Limit HO5...50% of Coverage A Limit HO4...As Declared HO6...As Declared

Coverage A Basis Of Recovery

HO8...Functional Replacement Cost HO2...Replacement Cost HO3...Replacement Cost HO5...Replacement Cost HO4...Dwelling Not Covered---Tenant Policy HO6...Replacement Cost

Coverage B Basis of Recovery

HO8...Functional Replacement Cost HO2...Replacement Cost HO3...Replacement Cost HO5...Replacement Cost HO4...Dwelling Not Covered--Tenant Policy HO6...Replacement Cost

*Interior damage only if exterior damaged first. *Watercraft only covered if completely indoors.

Hail

The California Insurance Code defines 24-Hour Coverage as jointly issuing a Workers Compensation policy with a ________.

Health care policy NOTE: The California Insurance Code defines 24-Hour Coverage as jointly issuing a Workers Compensation policy with a medical insurance plan or health care policy and group disability policy, but not life insurance.

*Covers liability of a home based business *Covers unattached structures used for business *Raises limits to $10,000 *Provides for indirect losses such as loss of income and extra expenses incurred to keep business running after a covered loss.

Home Business Optional Endorsement

Property covered under its own specific policy Exclusion

Homeowner has a Prohibitive Other Insurance Clause

What are the Optional Liability Endorsements - Section H?

Homeowner policies may be endorsed to extend the personal liability and medical payments coverages to include insurance for peope, property, situations, or activities which are not normally covered. Endorsements may be used to cover the interestof an additional insured, or to cover the exposure related to an additional premises. An endorsement may also be used to insure the liability exposure arising from an additional residence rented to others (like a summer home). Another optional coverage is an endorsement that extends Coverages E and F to include the business pursuits of the named insured, and such coverage for teachers may be written to include or exclude liability for the corporal punishment of students.

$1,000 Per Occurrence

Homeowner's Coverage to Property of OTHERS is paid up to:

ACV= Replacement minus Depreciation

Homeowner's Personal Property is PAID on the Valuation Formula of:

Replacement Cost Basis, as long as 80% Co-Insurance requirement is met

Homeowner's Real Property Valuation is PAID on:

*The residence must be located within the standard territorial definition. *It must be a one or two family home if owned, or any rental premise. *The premise must be owner occupied if owned and tenant occupied if rented. *If renting space within your premise, no more than two boarders. *The home must be principally used as a residence, not a business or a farm

Homeowners Policy Eligibility

C. Multi-line policies--they combine property and casualty coverage in the same policy. A multi-line policy packages several coverages related to a specific type of exposure and it reduces the number of policies that one has to purchase.

Homeowners policies are what type of policy? A. Single-line policy; B. Broad coverage policy; C. Multi-line policy.

Under Farm Property Coverage Form, Coverage C includes which type of property?

Household Personal Property

Mobile homes are covered by the HO-2, HO-3 or HO-5 form when the mobile home endorsement is attached to the policy. Coverage is subject to all the applicable provisions of the Homeowners form except for the following: 1. Definitionof Residence Premises--refers to the mobile home and other structures on land owned or leased by the insured. The mobile home must be designed for year-round living; 2. Dwelling--Coverage A that applies to the mobile home on the residence premises shown in the Declarations. This includes structures and utility tanks attached to the mobile home and items installed on a permanent basis, including floor coverings, appliances, dressers, and cabinets.; 3. Other structures--which is coverage B, provides 10% of Coverage A, or minimum of $2000 if less; 4. Property removed--if the insured mobile home is endangered by an insured peril and removal of personal property is necessary to avoid damage, the policy will pay up to $500 for expenses to remove and return the covered property; 5. Section I - Conditions--If the 80% to value is carried, replacement cost applies to all property under Coverage A, which includes replacement cost for carpeting and household appliances, but does NOT include awnings, outdoor antennas and outdoor equipment whether or not attached to the buildings which are settled on an ACV basis.; 6. Settlement options--by paying an additional premium, the insured can purchase an endorsement which give the insurer the option to settle covered property losses in the following ways: Pay the cost of repairing the damage; Replace the damaged property with similar property, but not necessariily from the same manufacturer; Pay the insured the lower of the differece between: the actual cash value of the property befoe and after the loss; Pay with cost of replacing the damaged property with similar property; pay the cost to repair the damaged property.

How are Mobile Homes covered?

The Personal Property Endorsement of the HO policy will not pay more than 25% of the amount of insurance for fine arts; These objects must be reported to the company within 90 days and pay an additional premium.

How much of newly acquired fine arts are covered?

covers physical damage to the ship itself including fittings and machinery of the vessel. coverage may be written on an open or named peril and typically is written to cover a particular voyage or for 1 year.

Hull Insurance

Valued Basis

Hull and Cargo Ins. are typically wriiten on a:

Necessary and pre-approved legal fees Postage, telephone, photocopy, notarization costs, reapplication fees Travel expenses when pre-approved and necessary Lost wages with special limits **Extended Reporting Period: As most victims cannot determine when actual theft occurred, this endorsement will provide benefits for a loss discovered during the policy period, regardless of when the loss actually occurred.

Identity Fraud Expense Endorsement

An endorsement to a homeowners policy that reimburses crime victims for the cost of restoring their identity and cleaning up their credit reports.

Identity Theft Endorsement

The following are the only vehicles covered for liability: *Vehicles of the handicapped (wheelchairs) *Vehicles used to maintain the premise *Golf carts---only while playing golf

Liability of Vehicles Exclusions

What is Capacity to Contract?

In order for the contract to be binding, all parties must have the necessary capacity to enter into the contract. Cases where capacity has been deemed insufficient include: Minors, mental incomptence, and those who sign a contract while under the influence of drugs or alcohol. An exception to the status of minors and contracts exists in life insurance. For a minor to contract for life insurance, he/she needs to be at least 15 yrs. old.

the person, business, or other entity named in the declarations to whom the policy is issued

Named Insured

All of the following are covered perils on a crop insurance policy, EXCEPT: Drought Insect Infestation Tornado Inherent Vice

Inherent Vice NOTE: Inherent Vice is the tendency of a product to self destruct. (Ex. Fruit)

WC now limits chiropractic and physical therapy to:

Injuries after 1/1/2004 now limit chiropractic and physical therapy to 24 visits.

Personal Injury

Injury for which legal liability arises (such as for false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, violation of the right of privacy, and unlawful entry or eviction) and which may be covered by an endorsement to the homeowners policy. Also included in the coverage by a personal umbrella policy.

Which of the following describes an insurer who has enough financial resources only to provide for all of its liabilities and for all reinsurance of all outstanding risk

Insolvent

The CPP Common Condition that relates to establishing premium is:

Inspections & Surveys NOTE: Inspection & Survey condition address insurability and premium to be charged.

A credit-based score based on an individual's credit record and other factors that is highly predictive of future claim costs; insureds with low insurance scores generally file more homeowners and auto insurance claims than insureds with good credit and higher insurance scores.

Insurance Score

Insurance

Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event.

Credit insurance

Insures persons engaged in business against loss resulting from extending credit and insurance against loss from the failure of persons to meet existing or contemplated obligations to the insured.

What is NOT included under Part F-General Provisions of the PAP?

Insuring Agreement

Self defense is covered

Intentional Injury Exclusion

a deliberate act or omission such as assult, battery,trespassing etc. (Never Covered)

Intentional Tort

Barratry is defined as:

Intentional misconduct of a master or crew without the knowledge of the shipowner, resulting in damage or injury. NOTE: This term is used only to indicate wrongful, intentional acts committed by a crew or master and without the owners knowledge.

Pure risk

Involves only two possible outcomes: loss or no loss. No possible gain or profit is involved with a pure risk, and this is the only type of risk insurance companies are willing to accept.

Speculative risk

Involves the possible opportunity for loss or gain. Speculative risks are not insurable e.g. playing the lottery, gambling

What is Boiler and Machinery coverage for?

It covers machinery that is critical to the operation of the business, and hence there is extra expense necessary to expidite the repair of this property.

What does the Legal Liability Coverage form do?

It covers the insured's legal liability for loss or damage to the property of others while it is in the insured's care, custody, and control and is caused by a covered peril.

What form would cover tenants for financial loss resulting from the cancellation of a lease due to property damage?

Leasehold Interest Coverage Form NOTE: This covers tenants for financial loss that results from cancellation of a lease following direct damage to the leased premises.

Garage Coverage Form - Section III - Garagekeepers Coverage on a: -Legal Liab Basis -Direct Excess Basis -Direct Basis

Legal Liab Basis -cov applies only if the garage is legally liable for damage -Garage Keepers Direct Excess Option modifies garage keepers coverage to include coverage in situations when the insured is not legally liable for loss to a customer's auto; this additional coverage applies in excess of what customers can collect under their own insurance. Garage Keepers Direct Primary Option modifies garage keepers coverage so that it will pay all covered losses on a primary basis, regardless of whether the insured is legally liable and regardless of whether customers can recover under their own insurance.

Section 2 Coverage's

Liability Coverage E- Personal Liability 100,000 per occurrence Coverage F- Medical Payments to others 1,000 each person

Homeowners Coverage E:

Liability in $100,000s; SAME coverage for ALL Homeowner's Policies

Experience Rating

Method used to determine rate based on insured's loss experience.

Workers Compensation statutory benefits means:

Minimum and maximum benefits, waiting periods, etc. are established by state law and all Workers Compensation policies sold in this state must meet these requirements. NOTE: The state of California requires employers who are not exempt from coverage to purchase Workers Compensation insurance and stipulates the benefits, etc. that are required by law.

Symbol 19

Mobile Equipment Subject to Compulsory or Financial Responsibility of Other Motor Vehicle Insurance Law Only

How are Mobile Homes covered?

Mobile homes are covered by the HO-2, HO-3 or HO-5 form when the mobile home endorsement is attached to the policy. Coverage is subject to all the applicable provisions of the Homeowners form except for the following: 1. Definitionof Residence Premises--refers to the mobile home and other structures on land owned or leased by the insured. The mobile home must be designed for year-round living; 2. Dwelling--Coverage A that applies to the mobile home on the residence premises shown in the Declarations. This includes structures and utility tanks attached to the mobile home and items installed on a permanent basis, including floor coverings, appliances, dressers, and cabinets.; 3. Other structures--which is coverage B, provides 10% of Coverage A, or minimum of $2000 if less; 4. Property removed--if the insured mobile home is endangered by an insured peril and removal of personal property is necessary to avoid damage, the policy will pay up to $500 for expenses to remove and return the covered property; 5. Section I - Conditions--If the 80% to value is carried, replacement cost applies to all property under Coverage A, which includes replacement cost for carpeting and household appliances, but does NOT include awnings, outdoor antennas and outdoor equipment whether or not attached to the buildings which are settled on an ACV basis.; 6. Settlement options--by paying an additional premium, the insured can purchase an endorsement which give the insurer the option to settle covered property losses in the following ways: Pay the cost of repairing the damage; Replace the damaged property with similar property, but not necessariily from the same manufacturer; Pay the insured the lower of the differece between: the actual cash value of the property befoe and after the loss; Pay with cost of replacing the damaged property with similar property; pay the cost to repair the damaged property.

Coverage Form C, Theft, Disapperance and Destruction covers the following:

Money and securities outside the premises when in the custody of an armored vehicle company or a messenger.

Morale Hazard

Morale hazard deals with a person's state of mind. Morale hazards are similar to moral hazards because they deal with the way people think.

*The mortgage company or bank will receive a notices of cancellation *The mortgage company or bank must pay any outstanding premium *The mortgage company or bank can still be paid on a claim, even if the insured invalidates the policy *The bank or mortgage company must notify the insurer of any change in property ownership or interest *The mortgage company or bank must submit a Proof of Loss if the insured fails to do so.

Mortgage Clause/Loss Payable Condition Clause (When a bank or mortgage company is added to the policy as an additional insured, this clause provides then with certain rights as well as certain responsibilities)

The lender on a home is called?

Mortgagee, or a mortgage holder.

Definitions (of a Liability Contract)?

Most liability policies contain definitions to clarify the terms used through the policy.

Motor Carrier Coverage Form

Motor Carrier Coverage Form covers businesses that use autos to transport property of other or, in some cases, their own property. (Diff with this and Truckers is that truckers are for hire)

Earthquakes, tremors, sinkholes, excavating, grating, backfilling, landslides, as well as the cost of earth

Movement of Land Exclusion

What are conditions under Section 1?

Must have an insurable interest; Must report a claim; Loss settlement is paid on ACV; etc.

A Builders Risk policy:

Must reflect a Coverage A limit of 100% of the value of the property. NOTE: The Builders Risk policy has a 100% coinsurance clause.

Earthquake coverage may be sold separately or as an endorsement

NFIP & CROP Insurance - Federal Insurance Plan, Social Security

PURE RISK

NO CHANCE OF GAIN OR PROFIT AND ONLY CHANCE OF LOSS.

Claims Expenses aka Defense

NO LIMIT This is the insurance company's cost to defend the insured duty to defend Ends once claim payment reaches policy limit Claims Expenses include: *Defense Costs *Bonds required--except Bail Bonds *Post judgement Interest *Loss of Earning and reasonable expenses incurred by the insured (paid to insured) $250 per day---1st Party Coverage

condition found in some property in surance contracts that states that a bailee is not covered under an insured's policy while the bailee has possession of the insured's property

No Benefit to Bailee Condition

Watercraft if stolem

No Coverage

ship must sail the course that was filed with the insurer at time polciy was underwritten exception to this is that ship can change course to avoid a storm which could damge the ship or cargo, to save human life & to obtain medical relief for persons on board.

No Deviation In Voyage

Once you give any property to the bailee, the bailee is responsible for that property, and your policy would no longer provide benefits for a loss

No benefit to Bailee Exclusion

Neglect Exclusion

No coverage for damages after a loss if the insured did not reasonable try to protect property form further loss, or to protect it from loss

Landlord's Furnishings (Not Covered by HO8, HO4, HO6) **Covers loss of furnishings owned by the insured, but rented within their residence

No theft coverage $2500

*The insureer must provide at least 45 days written notice, but not more than 60 days of notice. *Non-renewals can only be done annually on the anniversary date of the policy (All insurance policies must wait one year to non-renew a policy)

Non-renewal Clause

situation that exists when the same property is covered by more than one policy, but the policies are not identical as to the extent of coverage provided

Nonconcurrency

All of the following are major differences between DPs and HOs, except: Theft coverage Occupancy requirements None are exceptions Worldwide coverage

None of these are exceptions. NOTE: The DP and HO policies are different in each one of these areas.

type of insurance policy for which a flat premium is charged every time the policy is renewed

Nonreporting Policy

Structures under Construction Exclusion

Not covered for any peril except collapse of structure during construction due to poor workmanship or materials. Not covered by HO8

No benefit to Bailee Exclusion

Once you give any property to the bailee, the bailee is responsible for that property, and your policy would no longer provide benefits for a loss

An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, which results in bodily injury or property damage during the policy period. (See also "Accident")

Occurrence

What is Occurrence?

Occurrence is an accident, including repeated or continuous exposure to similar harmful conditionsl

Adverse selection

Occurs when people seek insurance at the last minute, when they really need it.

Intentional tort

Occurs when someone deliberately acts in a way that causes harm to another person, regardless of whether he/she intended to injure that person. Intentional torts include libel (a written statement that causes a person personal injury), slander (a verbal statement that causes a person personal injury) and false arrest (wrongful physical restraint of another person's freedom).

Unintentional tort

Occurs when someone doesn't provide proper care for another person.

All of the following may be written on a monoline basis, EXCEPT: Ocean Marine Inland Marine Boiler & Machinery General Liability

Ocean Marine NOTE: Ocean Marine is a completely separate policy type.

Symbol 4

Owned Autos Other than Private Passenger Autos Only

Symbol 5

Owned Autos Subject to No-Fault

Symbol 6

Owned Autos Subject to a compulsory uninsured motorist law

Symbol 3

Owned Private Passenger Auto Coverage Only

Symbol #2

Owned autos only

Symbol #4

Owned autos other an private passenger `

Symbol #3

Owned private passenger autos only

Garage Operations refers to:

Ownership, maintenance, or use of a garage premises and autos in the insured`s care. NOTE: Operations can mean the liability exposure of an owned premises, the repairs and use of customer vehicles, as well as the sale of parts at an insured premises.

Jewelry, Furs, Cameras, Musical Instruments, Silverware, Golf Equiptment, Fine Art, Stamps, Coins.

P.A.F. Insurable Property

Property covered for damage caused by earthquake & flood, excludes wear & tear, vermin & insect damage, and inherent vice.

PAF & PPF - Personal Property Peril Covered - Open Peril

NAMED PERILS

PERILS SPECIFICALLY COVERED ON PROPERTY INSURED.

SALVAGE

PROPERTY TAKEN OVER BY AN INSURER TO REDUCE ITS LOSS.

The loss of one part of a set is not a loss to the entire set

Pair or Set Clause

DP-Glass/Saftey Glazing NOT DP1

Part of Coverage A Limits

DP- Debris Removal

Part of Coverage A Limits Adds 5% to Limit

NFIP (flood insurance) is found where?

Participating communities, areas designated on a flood map.

The modular concept refers to:

Parts of a package policy. NOTE: Modules are the coverage parts that make up a package policy, such as GL or Auto.

3rd Party

Pays person sueing you

Reasonable Repairs

Pays reasonable costs incurred by the insured for repairs necessary to protect covered property from further loss after a covered loss. **Any money spent to avoid the loss getting worse**

What is Valued Contract?

Pays stated amount in the event of a claim.

The four major exposures to an auto-related business owner that are covered on a Garage plan are:

Premises Operations, Completed Operations, Product, and Auto Liability. NOTE: These 4 areas are covered only on the Garage Coverage form.

survey of the insured's financial records to gather information used to calulate the premium, such as exposures and limits

Premium Audit

All of the following are exclusions under the CGL policy EXCEPT: Professional liability coverage. Liquor Liability coverage. Products and Completed Operations coverage. Auto Liability coverage.

Products and Completed Operations coverage. NOTE: Products and Completed Operations coverage is provided under the CGL policy and would be necessary coverage for someone like a contractor.

PAF & PPF - Personal Property Peril Covered - Open Peril

Property covered for damage caused by earthquake & flood, excludes wear & tear, vermin & insect damage, and inherent vice.

Homeowner has a Prohibitive Other Insurance Clause

Property covered under its own specific policy Exclusion

Which is not included in a Business Auto physical damage coverage? Property damage liability Vandalism Specified causes Transportation expense

Property damage liability. NOTE:Property damage liability is not a physical damage coverage. It is liability coverage.

$1000 or 10% of C...Whichever is Greater

Property in another home owned but not insured under this policy

30 Day Coverage

Property moved to a new residence within 30 days

Transportation coverage on the BOP would apply to which of the following? Property of a customer is damaged while being transported by vessel. A vessel is stranded while transporting property of others to the insured's business location. Property of the insured, while being transported by vehicle to a business location, is involved in an accident damaging the insured's property. A vehicle owned by the insured is damaged when a bridge collapses.

Property of the insured, while being transported by vehicle to a business location, is involved in an accident damaging the insureds property. NOTE:Transportation coverage is for the insured's property only and may be in a vehicle, vessel or train at the time of loss.

Coverage B of the Commercial Building and Personal Property coverage form covers all of the following EXCEPT: Furniture and office supplies Property off the premises Postage Meters Copy Machines

Property off the premises. NOTE: Property off premises is not included in the policy but added with an extension of coverage. This need would be expressed by the insured and added by way of extension. An additional premium charge would apply.

No special limit applies

Property when insured is the Bailee if indoors

No Coverage

Property when insured is the Bailee if stolen

Ocean Marine liability is known as:

Protection & Indemnity is ocean marine liability.

Valuable Papers and Records Coverage

Provides coverage's for maps, mortgages, and court documents. It also provides the standard additional coverage for collapse, when caused by the perils specified.

Umbrella Policies

Provides insurance protection when liability limits on other policies have been exhausted or not covered under underlying policy; requires Self-Retention when claim is not covered under underlying policies

What is Warranty?

Something that becomes part of the contract and is a statement that is considered to be a guarantee.

Medical books in a Doctors library at home would be best insured under:

Pysician & Surgeons. NOTE: The Physician & Surgeons marine form is where you would insure the books.

RISK REDUCTION

REDUCING THE CHANCE OF LOSS WITH SAFETY TECHNIQUES.

UNOCCUPIED

REFERS TO PROPERTY WHICH MAY BE FURNISHED OR HAVE FURNISHINGS IN IT BUT IS NOT OCCUPIED OR BEING LIVED IN.

COMPETENCY

RELATES TO THE FITNESS OR ABILITY OF EITHER OF THE PARTIES TO THE CONTRACT.

Homeowner's Section I is :

Real & Personal Property, Coverage's provided : A, B, C & D

Pays reasonable costs incurred by the insured for repairs necessary to protect covered property from further loss after a covered loss. **Any money spent to avoid the loss getting worse**

Reasonable Repairs

Admitted Insurer

Reconized by the department of Insurance to transact insurance: approved or authorized.

Comprehensive

Refers to six causes of loss to the covered auto including fire, earthquake, flood.

cost to repair a damaged or destroyede items of property, may be the basis of reimbursement for a loss

Repair Cost

Formula for Actual Cash Value

Replacement Cost minus Depreciation.

What does Section II of a HOP cover for damage to property of others?

Replacement cost of the property damage is paid up to the limit of $1,000, and payment is made regardless of fault. This coverage EXCLUDES property which is previously covered in Section I.

A.Limit of Liability. The company's limit of liability, Coverage E, for all damages resulting from any one "occurrence" will not be more than the Coverage E limit. $100,000 for each occurrence.; B. Severability of Insurance--The insurance applies separately to each "insured"? this condition will not increase our limit of liability for any one "occurrence". In other words, the liability limit applies per insured but the maximum that can be paid on behalf of all insureds for one covered claim cannot exceed the coverage E liability limit.; C. Duties after an "occurrence" -- This clause spells out the duties of the insured if there is a claim. Reporting of the claim in a timely fashion, cooperate with the insurer are some examples.; D. Duties of an injured person--Coverage F--Medical payments to others--the injured person or someone acting for the injured person will: Give the company written proof of claim; authorize the company to obtain copies of medical records, the injured person will submit to a physical exam; E. Payment of Claim---Coverage F--Medical payments to others--Payment of claim is not an admission of liability by an insured or the insurer. ; F. Suit against the insurer: No action can be brought against the insurer unless there has been full compliance with all of the terms under section II. No one will have the right to join the insurer as a party to any action against the "insured." Also, no action with respect to Coverage E can be brought against the insurer until the obligation of such "insured" has been determined by final judgment or agreement signed by the insurer.; G. Bankruptcy of an "insured"--bankruptcy or insolvency of an "insured" will not relieve the insurer of their obligation under the policy; H. Other insurance--This insurance is excess over other valid and collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply to this policy; I. Policy Period--The policy applies only to bodily injury or property damage which occurs during the policy period; J. Concealment or Fraud--the insurer does not provide coverage to an "insured" who, whether before or after a loss has: Intentionally concealed or misrepresented any material fact or circumstance, Engaged in fraudulent conduct, Made false statements relating to this insurance.

Section II -- Conditions. What are they?

Earthquake endorsement; Inflation Guard Endorsement; Personal Property Replacement Cost; Scheduled Personal Property Endorsement--called a Floater.; Ordinance or Law Endorsement; Sinkhole Collapse Endorsement; Condominum Endorsements; Sewer Backup Endorsement; Home business endorsement; Identity Fraud Expense Coverage.

Section VII. What are Homeowner's Endorsements?

_________is what the insured must pay before the Umbrella policy will respond if there is no coverage on the underlying policy or if the underlying insurance lapsed or was cancelled for some reason.

Self-insured retention NOTE: The deductible or SIR (self-insured retention) is what the insured must pay before the Umbrella policy will respond if there is no coverage on the underlying policy or if the underlying insurance lapsed or was cancelled for some reason. This SIR can be $10,000 to $25,000 or even higher.

Exclusive Agent

Sells one insurance company products only.

All of the following are exclusions on the Commercial Causes of Loss Special form policy EXCEPT: Insects, Birds, Rodents and other animals Faulty workmanship Wear & Tear Sinkhole collapse refill

Sinkhole collapse refill NOTE: Sinkhole Collapse is covered on all 3 Causes of Loss forms, but the cost to fill the hole is not covered.

The oral dissemination of a falsehood that damagees anothers reputation

Slander

Intentional Torts

Slander, Libel, Invasion of privacy.

Personal Injury means:

Slander, libel, defamation of character. NOTE: Personal Injury is a "you hurt my feelings, reputation ..." coverage; not bodily injury coverage.

*Fireplaces are not covered *Agricultural or Industrial smudging excluded. *Puffbacks are covered

Smoke

Purposely personal use for smoke. (ex used to keep crops from freezing)

Smudging

Under Truckers Coverage the definition of a trucker is:

Someone in the business of transporting the property of others by vehicle (auto or truck) for a fee.

Bailee

Someone who has the care, custody, or control of somebody else's stuff, but you get it back. *Limit depends on whether the item is an indoor or outdoor item. *Indoor: Treated like own stuff...either 50% of A or as declared. *Outdoor: The most they will pay is $1000 *No Theft Coverage*

Is Broad Theft Endorsement on a Dwelling Policy for coverage of on-premises, off-premises theft, or for coverage of both?

The Broad Theft Endorsement to a Dwelling Policy covers theft which occurs both on or off the insured premises.

Coverage A

The Building Covers: *Foundation *All Attached Structures *All Attached Fixtures *All Materials to be used for construction or alterations that are next to or on top of the home. (Waiting to be used)

What is the definition of a business auto?

The Business Auto is defined as a private passenger auto, truck, or trailer owned by the named insured or used in connection with the business, and only as defined in the declarations page.

What must happen in order for coverage to be available is the purpose of: Mortgage holders clause Insuring Agreement Coverage forms The Cause of Loss Forms

The Cause of Loss Forms. NOTE: The cause of loss forms specified the peril that triggers coverage

A provision contained in Hull Ins. that covers collision damage to another Vessel

The Collision Or Running Down Clause

Which of the following statements is false in regard to crime coverage?

The Employee Theft Coverage Form covers only employee theft of money and securities.

An owner of an auto repair business would be best covered under which of the following? A Business Auto policy with Non-Owned Autos as a specified symbol. A Garage Liability Coverage form. A Commercial General Liability form. A Commercial Property coverage form.

The Garage Coverage form. NOTE: The Garage Coverage form is specifically designed for a business with temporary care, custody, or control of customer vehicles.

1. HO-5 modifies HO-3 to provide special form coverage for the dwelling and other structures AND for Coverage C -personal property. 2. HO-5 covers loss to personal property by any peril UNLESS excluded 3. HO-5 has same exclusions as Coverages A & B plus additional exclusions that only apply to personal property: a. Breakage of certain valuable or fragile articles UNLESS caused by a named peril similar to HO-3. b. Damaged caused by dampness or temperature extremes UNLESS directly caused by rain, snow, sleet, or hail. c. Loss due to refinishing, renovating, or repairing property other than watches, jewelry & furs. d. Loss to personal property caused by collision; other than collision with a land vehicle; or the sinking, swamping, or stranding of watercraft. e. Government authorities' destruction, confiscation, or seizure of personal property 4. The HO-5 broadens personal property coverage in some areas by not excluding exposures excluded by HO-3. 5. HO-5 special limits of $1,500 for jewelry and furs, $2,500 for firearms and for silverware that are stolen, lost, or misplaced. HO-3 does not cover misplaced or lost items. a. lost & misplaced items are subject to a dollar limit & deductible b. intentional loss exclusion applies to both HO-5 & HO-3

The HO 5- Comprehensive Form - provides broadest property coverage of any standard, unendorsed homeowners form. vs - HO-3

May be added to insure the liability exposure arising out of a home day care business conducted by an insured on the residence premises. However, this endorsement excludes coverage for bodily injury or property damage arising out of sexual molestation, corporal punishment, or physical or mental abuse.

The Home Day Care Coverage Endorsement is what?

What is the Insuring Agreement (of a Liability Contract)?

The Insuring Agreement outlines the promises made by the insurance company to the insured. These will vary by type of liability policy. All will contain a duty to defend the insured.

The workers compensation policy was developed by:

The National Council on Compensation (NCCI) developed the W/C policy.

The establishment of Workers Compensation laws:

The establishment of Workers Compensation laws made it possible for an employer and employee to maintain a working relationship free from hidden agendas.

Which NFIP coverage pays more to the insured, the standard or Emergency?

The Standard.

The Commercial General Liability policy "territory" includes:

The United States, its territories and possessions, Puerto Rico and Canada. NOTE: The territory description for the CGL is the same as for the Personal Auto Policy.

In certain states of the U.S., Workers Compensation Insurance can be purchased only from the state. This insurer would be known as a) a private insurer b) a competitive state fund c) a monopolistic state fund d) a capitalistic state fund

a monopolistic state fund

Peril

The actual cause of a loss e.g. fire, wind, hail, accident, or theft.

Diminution in Value

The actual or perceived loss in market value or resale value which results from a direct or accidental loss

What does it mean if an agent license is inactive?

The agent can still transact insurance business in CA, but not in any other state until it is reactivated.

What are Aggregate Limits (of Liability Policy)?

The aggregate limit is the limit stated in the policy that represents the total amount for all claims paid during the policy period. The aggregate limit provision is found in the general liability and garage liability policies. Once the aggregate has been met, the insured is without coveage. For example, If the insured had an aggregate limit of $1,000,000 and a per accident limit of $500,000 after two claims of $500,000 are paid, the insured has exhausted the coverage until the policy is renewed.

be a blood or legal relationship and reside in household

The be qualified as a family member they individual must

You have liability only and borrow a car and collide with another. Which pays?

The borrowed car's insurance is primary.

Flat Cancellation

The cancellation of an insurance policy or bond as of its effective date, before the insurer has assumed liability. This requires the return of paid premium in full since the insured has never been covered under the policy

Pro Rata Cancellation

The cancellation of an insurance policy or bond with the return of unearned premium credit being the full proportion of premium for the unexpired term of the policy or bond, without penalty for interim cancellation

Legal Hazard

The chance of a certain risk ending up in court.

What are Conditions?

The conditions outline the duties of each party in case of a loss as well as other items that require clarifications.

What is Principle of Indemnity?

The contract must restore the insured to the financial position previously held before the loss. This is also known as indemnification.

Liability Loss Exposure

The degree of loss a person/organization faces in regard to lawsuits brought by a third party.

Property Loss Exposure

The degree of loss a person/organization faces in regard to property.

What is true of a Mobile Home endorsement to an HOP?

The endorsement changes or extends the definition of Coverage A under an HOP to be inclusive of a motor home. If written to endorse an HO-2, It affords Broad form (named) peril coverage to the mobile home, if added to an HO-3, it affords open peril coverage to the mobile home.

What are General Conditions of the Homeowner Policy?

The following General Conditions apply jointly to Section 1 & 2: 1. No coverage for insureds that intentionally conceal or misrepresent any material fact.; 2. Waiver or change to the policy must be in writing. This is usually done by use of an endorsement.; 3. Cancellation: a. insured may cancel at any time for any reason; b. Insurance company may cancel for reasons listed below in the Law Supplement text; 4. Non-renewal is when the insurer cancels on the anniversary of the policy by giving 30 days notice. Nonrenewal is also subject to state laws. ; 5. When the insured cancels the policy, the unearned premium is returned to the insured on short-rate basis. ; 5. When the insured cancels the policy, the unearned premium is returned on pro-rata basis; 7. If an insured dies during the policy period, the legal representatives of the deceased will be protected by the Homeowner's Policy.; 8. Assignment--a policy holder cannot give his policy to another person without written permission from the insurance company; 9. Liberalization: If the insurer makes a change which broadens coverage under the current edition of the policy without additional premium charge, that change will automatically apply to this insurance as of the date the insurer implements the change, provided this implementation date falls within 60 days prior to or during the policy period stated in the Declarations of the policy.; 10. Subrogation-The insured may waive in writing before a loss all rights of recovery against any person. if not waived, the insurer may require an assignment of rights of recovery for a loss to the extent that payment is made by the insurer. Before a loss has occurred the insurer may waive his rights of recovery.

What are Coverage E- Personal Liability EXCLUSIONS?

The following are NOT covered: 1. property damage to property rented to, occupied by, used by, or in the care, custody or control of an insured except the following property damage which is covered: fire, smoke, explosion; 2. Bodily injury to people covered by workers' compensation or disability insurance; 3. Bodily injury or property damage to an insured; 4. Contractural liability except where you've signed a contract.

What is excluded as personal property under Coverage C?

The following personal property is EXCLUDED under Coverage C: a. animals, birds and fish; b. automobiles and other motorized vehicles (except motorized vehicles pertaining to the service of the premises or for use of the handicapped, such as a wheelchair); c. Electronic apparatus (including accessories, antennas, or tapes, wires, records, discs) designed to be used with a motorized vehicles electrical system and in or upon the vehicle. Note: $1000 coverage is provided when such items are not in or upon a vehicle; d. Aircraft and parts (hobby aircraft is covered); e. Property of roomers/boarders not related to the insured; f. Property located in an apt. regularly rented by an insured other than the insured premises; g. Property rented or held for rental to others off the 'residence premises"; h. business data, including data stored in books of acocunt, drawings, electronic data processing tapes, discs, other software media. The cost of blank recordingor storage media and of pre-recorded computer programs available on the retail market is covered; i. Credit cards or fund transfer cards except as provided in "Additional coverages"--up to $500 for forgery/counterfeit.; j. Property scheduled elsewhere. Note: If a piece of jewelry is separate insured under a personal articles floater; coverage is completely taken out of hte homeowner policy; k. Loss of water or steam.

All of the following are true about the cancellation of a commercial policy, EXCEPT: The first named insured may cancel the policy at any time. The insurer must be able to prove the delivery of a notice of cancellation. All refunds will be mailed to the first named insured on the policy. 10 days notice must be given for non-payment of premium and 45 days notice for all other reasons.

The insurer must be able to prove the delivery of a notice of cancellation. NOTE: No proof of delivery is needed. Only proof of mailing.

Liability

The liability coverage is the same for each H.O. Policy

Aggregate limit refers to:

The most an insurer will pay in any one policy period. NOTE: Aggregate limit is the most an insurer will pay for all losses within the policy period. This limit refreshes at renewal.

On a commercial package policy, "You" and "Your" refers to:

The named insured and resident spouse. NOTE: Not just anyone can be considered covered on the policy. They must be NAMED or be a resident spouse.

Surety Association of America

a rating bureau for surety bonds

The difference in perils covered on the Commercial Property policy and the Standard form Businessowners policy is:

The peril of Transportation. NOTE: Transportation (property in transit) is an added peril on the BOP and is a needed coverage for a business owner.

The 2 types of Inland Marine policy forms are Filed and Non-filed. All of the following are true about the advantages of a Filed form, EXCEPT: The forms are more standardized. They can usually be added to a package policy. They are regulated by the Department of Insurance. The rates are cheaper than non-filed forms.

The rates are cheaper than non-filed forms. NOTE: The rates are simplified due to being more "class" rated, but they are not necessarily cheaper.

"Insured Location" means:

The residence premises. The parts of other premises, other structures and grounds used by the insured as a residence, and which is shown in the Declarations; Any premises used by the insred in connection with the premises; Vacant land owned or rented by the Insured; Land owned by or rnted to an "insured" n which one, two, three, or four famly dwelling is being built as a residence of the insured; Individual or family cemetary plots or burial vaults.

Safe Burglary

The unlawful taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry upon its exterior; includes the unlawful taking of the entire safe or vault from inside the premise.

The valuation clause on an Inland Marine forms states all of the following except: The cost of replacing the property with substantially identical property. The values will be established base on the higher of the above. The cost of restoring the property. The actual cash value of the property.

The values will be established base on the higher of the above. NOTE: For all Inland Marine forms a Valuation Clause states that, in the event of a loss, values will be established based on the lesser amount.

True or False: Surety bonds can't be canceled once issued.

True; coverage remains in effect until the obligation is fulfilled. bond expires when the obligation is fulfilled

Personal Property Floater- PPF

UNSCHEDULED, UNLISTED or BLANKET coverage on personal property

Lloyd's Association

a voluntary association of individuals or groups of individuals who agree to share in insurance contracts; each individual or syndicate is individually responsible for the amounts of insurance they write ex. Lloyds of London

Fellow Servant Rule

The was a defense against negligence that argues that the negligent act of one worker that harmed another should seek recovery from that employee and not the employer.

The broadest form of crime coverage is:

Theft

Jewelry and Furs: $1500 All Firearms: $2500 Gold, Silver, Platinum, Pewterware: $2500 ***HO8---No matter what is stolen the policyholder will only get $1000.

Theft Limits

The following statement is true in regard to crime coverage.

Theft included burglary, robbery, and any act of stealing.

$2500

Theft of Firearms (If peril is other than theft, regular limits apply)

$1500

Theft of Jewelry and Furs (If peril is other than theft, regular limits apply)

$2500

Theft of gold, silver, and pewterware (If peril is other than theft, regular limits apply)

DP Endorsement$

Theft-Broad Form for Renter, Theft-Limited Form for Landlord, Personal Liability-Same Coverage as in HO's ($=for an additional premium)

What are Liability Policy Limits?

There are 3 ways in which the limits of a liability policy insuring agreement may be expressed: 1. single limit; 2. split limits; 3. aggregate limits. See next for definitions.

Which of the following statements are true regarding Blanket Insurance? Coverage amount would apply to each location individually There is no specific limit of insurance on any particular item or property. There is a single limit of insurance for property at various locations or several types of property at one location. Coverage A & B are specific dollar amounts

There is a single limit of insurance for property at various locations or several types of property at one. NOTE: Blanket insurance is a single limit of insurance for property at various locations or several types of property at one location.

Which of the following is false about the Supplemental Extended Reporting Period (SERP): It provides an unlimited time for reporting claims that occurred after policy expiration. There is no additional charge for this coverage. It may cost up to 200% of the annual premium for this tail coverage. This tail coverage must be requested in writing at least 60 days prior to the termination of a policy.

There is no additional charge for this coverage NOTE: There is an additional charge for this tail coverage, but it may not be in excess of 200% of the annual premium.

What is the deductible for losses covered under a Scheduled Personal Property Endorsement?

There is no deductible applied for losses covered under the endorsement

What is Contract of Adhesion?

There is unequal bargaining strenth between the parties; therefore, any ambiguous langauge will bring a court decision in favor of the insured. When we say that insurance contracts are adhesion contracts, we mean that one party has greater power over the other party in drafting the contract. The provisions of the contract are prepared by one party, the insurer. The other party, the insured, does not take part in the preparation of the contract.

Commercial Excess Liability policies are unlike Personal Umbrellas in that:

There may not be an underlying policy that pays primary, their deductibles are typically much higher, and they cover commercial business risks.

Fraternal Organization (Fraternal Insurance Company)

These companies are social organizations or societies that are usually engaged in charitable acts.

Which of the following statements is FALSE about the Motor Carrier Act of 1980? This act makes purchasing an insurance policy a requirement for anyone transporting hazardous materials. It states federal regulations regarding the minimum financial responsibility limits for carriers of hazardous and non-hazardous property. All interstate common carriers must have a certificate of insurance filed with the Interstate Commerce Commission showing proof of insurance. This act states that the minimum financial responsibility for carriers of radioactive materials is $5 million.

This act makes purchasing an insurance policy a requirement for anyone transporting hazardous materials. NOTE: The minimum financial responsibility laws may be satisfied by purchasing of a bond instead of an insurance policy.

Personal Injury Optional Endorsement

This adds Personal Injury Liability to the policy *Would now cover such things as libel, slander, etc.

Liability arising out of Business Pursuits or Professional Services Exclusion

This applies on and off premises This includes watching children in your home as a business which is also referred to as Home Care Business

Legal insurance

This coverage is a prepaid service that entitles a group member to a schedule of benefits for certain legal services - such as those for adoptions, probates and divorces - at a stipulated premium.

Government Action Exclusion

This includes destruction, confiscation, or seizure of property by the government or a public authority, or orders of demolition

Watercraft Liability

This is VERY limited, and is only covered if: *Inboard Motors of 50HP or less *Outboard Motors of 25HP or less *Non-motorized boats less than 26 feet in length

De-mutualization

This is the process through which a mutual insurer becomes a stock company.

Recission

This is the revocation of a contract.

Risk

This is the uncertainty or chance of a loss occurring.

Insurable Interest

This means that, before something or someone can be insured, the insured must establish that he or she actually owns or has interest in it.

Churning

This occurs when a producer makes false statements to convince the policy holder to cancel their present policy in order to sell him or her, another one.

Twisting

This occurs when a producer makes false statements with regards to policy comparison or false statements about the financial condition of a company in order to sell its products.

Rebating

This occurs when a producer returns a financial benefit to a client as an inducement to purchase insurance from him or her.

What is a Constructive Total Loss?

This occurs when the damage to repair exceeds the value of the vehicle after repairs have been made. The vehicle is considered to be a "constructive total loss." Constructive total loss applies to other types of property losses as well.

Reinsurance

This occurs when the insurer transfers all or part of its risk to another insurer in order to protect itself from major or catastrophic losses.

Conditional contract

This type of contract is conditional because the company only pays on condition of a loss.

Insured

This would include the owner and permissive users

What is Vicarious Liability?

When you are legally liable for the actions of others. For ex., parents, employers (for employees).

The HO-1 basic form has been withdrawn in most states.

Which Homeowner form has been withdrawn in most states?

What is the purpose of insurance?

To transfer risk.

A civil or PRIVATE WRONG CREATED by one person against another, other than breach of contract (Breach of contract not a tort)

Tort

Business Auto Cov Form - Section III - Physical Damage Coverage Towing & Labor Coverage Glass Breakage Coverage Extensions

Towing & Labor Coverage is coverage for necessary towing and labor costs due to the disablement of a covered private passenger auto; coverage requires that the labor must be performed at the place of disablement. Glass - loss cause by hitting a bird or animal, or falling objects Cov Ext - up to $20 per day, max of $600 for temp transportation. Expenses begin 48 hours after theft

This coverage form that extends liability and physical damage to vehicles and trailers on a primary basis is named ___________.

Trailer Interchange coverage NOTE: This coverage form extends Liability and Physical Damage to these vehicles and trailers on a primary basis. This is referred to as Trailer Interchange coverage.

Trailer interchange coverage applies to which commercial auto form(s)?

Trailer interchange coverage applies to both the truckers and motor carrier form.

Limit: 5% of Coverage A $500 maximum per plant ***Excluded perils: Wind, Hail, Smoke***

Trees, Shrubs, and Other Plants

The Truckers Coverage form is most similar to what other form of coverage?

Truckers Coverage is similar to the Non-Owner Personal Auto policy in that it covers vehicles not owned by the insured.

True or False; there is no expiration for fidelity bonds

True. they have to be canceled

1. Claims expenses--the following will pay: 1. The cost of investigating a claim; 2. Premiums for bonds requried in a suit the company defends; 3. Reasonable expense incurred by the insured at the company's request, including loss of earnings, subject to a predetermined $250 per day.; 4. Interest on judgment that accrues after the judgment.; 5. First Aid--the company will pay for the first aid expense incurred by an insured for first aid to to others; 6. Damage to Property of Others. The Insurer will pay up to $1000 for accidental damage to property of others caused by the insured, excluding. For example, if you borrow a neighbor's lawnmower and destroy it, it will be covered. If you break the scope on a neighbor's gun, it is covered up to $1000.; 7. Loss Assessment--provides up to $1000 per occurrence for the insured's assessment as a member of a group of property owners when assessed because of bodily injury or property damage, or liability for an act of a director or trustee if the director or trustee is elected by members of a corporation or association of property owners.

What are Additional Coverages under Section II--Liability?

The following are NOT covered: 1. property damage to property rented to, occupied by, used by, or in the care, custody or control of an insured except the following property damage which is covered: fire, smoke, explosion; 2. Bodily injury to people covered by workers' compensation or disability insurance; 3. Bodily injury or property damage to an insured; 4. Contractural liability except where you've signed a contract.

What are Coverage E- Personal Liability EXCLUSIONS?

The following exclusions apply only to Coverage F (Medical Payments to Others): 1. To a residence employee not sustained in the course of employment or occurring off-premises.; 2. to any person eligible to receive workers compensation or disability coverage; 3. From any nuclear reaction; 4. To anyone residing on the insured premises (boarders, tenants).

What are Coverage F - Exclusions?

The following General Conditions apply jointly to Section 1 & 2: 1. No coverage for insureds that intentionally conceal or misrepresent any material fact.; 2. Waiver or change to the policy must be in writing. This is usually done by use of an endorsement.; 3. Cancellation: a. insured may cancel at any time for any reason; b. Insurance company may cancel for reasons listed below in the Law Supplement text; 4. Non-renewal is when the insurer cancels on the anniversary of the policy by giving 30 days notice. Nonrenewal is also subject to state laws. ; 5. When the insured cancels the policy, the unearned premium is returned to the insured on short-rate basis. ; 5. When the insured cancels the policy, the unearned premium is returned on pro-rata basis; 7. If an insured dies during the policy period, the legal representatives of the deceased will be protected by the Homeowner's Policy.; 8. Assignment--a policy holder cannot give his policy to another person without written permission from the insurance company; 9. Liberalization: If the insurer makes a change which broadens coverage under the current edition of the policy without additional premium charge, that change will automatically apply to this insurance as of the date the insurer implements the change, provided this implementation date falls within 60 days prior to or during the policy period stated in the Declarations of the policy.; 10. Subrogation-The insured may waive in writing before a loss all rights of recovery against any person. if not waived, the insurer may require an assignment of rights of recovery for a loss to the extent that payment is made by the insurer. Before a loss has occurred the insurer may waive his rights of recovery.

What are General Conditions of the Homeowner Policy?

1. Losses that are expected or intended; 2. Business pursuits of an insured; 3. Losses for the insured's failure to render professional services; 4. The ownership, maintenance, use, loading and unloading of motor vehicles. Liability coverage is provided for the following: A trailer not towed by or carried on a motorized land conveyance; a motorized land conveyance designed for recreational use off public roads; Not owned by an insured; Owned by an insured and on an insured location; A motorized golf cart when used to play on a golf course--covered off the premises; A vehicle or conveyance not subject to motor vehicle registration which is used to service an insured's residence, like running a lawnmower; designed for assisting the handicapped; in dead storage on an insured location. 5. the ownership, maintenance, use, loading or unloading of watercrafts listed below. Anything with inboard-outboard motor power uner 50 hp is covered; a sailing vessel under 26-ft is covered. ; Does not include ownership, maintenance, use, loading, unloading or an aircraft; Does nto include war-including accidental discarge of nuclear weapons; Does not include the transmission of a communicable disease; Does not include sexual molestation, corporal punishment, physical or mental abuse; Does not include the sale, mfg, delivery or transfer or possession by any person of a controlled substance.

What are Section II - Liability Exclusiosn?

Must have an insurable interest; Must report a claim; Loss settlement is paid on ACV; etc.

What are conditions under Section 1?

Homeowner policies may be endorsed to extend the personal liability and medical payments coverages to include insurance for peope, property, situations, or activities which are not normally covered. Endorsements may be used to cover the interestof an additional insured, or to cover the exposure related to an additional premises. An endorsement may also be used to insure the liability exposure arising from an additional residence rented to others (like a summer home). Another optional coverage is an endorsement that extends Coverages E and F to include the business pursuits of the named insured, and such coverage for teachers may be written to include or exclude liability for the corporal punishment of students.

What are the Optional Liability Endorsements - Section H?

HO-2 (Broad Form); HO-3 (Special Form); HO-4 (Contents Broad Form also known as the "Tenants Form"); HO-5 (Deluxe Form-open peril coverage for buildings and contents); HO-6 (Condominium Unit-Owners form); HO-8 (Modified Coverage Form)--the most limited form.

What are the current Homeowner Forms?

The legal representatives of the deceased will be protected by the Homeowner's Policy.

What happens if the insured dies during the policy period?

Covered under the HO-4 and the HO-6 only.

What is Building additions and alterations?

Covers physical loss to covered property involving abrupt falling down or caving in of a building, or any part of it caused by perils insured against in the policy, hidden decay, hidden vermin or insect damage, weight of contents, weight of rain. Does not include settling, cracking, shrinking, bulging, or expansion of a building.

What is Collapse?

HO-2, HO-3 & HO-5 provide replacement cost provided the insured carry 80% coverage.

Which forms provide for replacement coverage?

Fire, lightning, Windstorm or hail (interior damage); Explosion; Riot and civil commotion; Aircraft damage; Vehicle damage; Smoke; Vandalism and malicious mischief; Theft and attempted theft; Volcanic eruption; Falling objects-like a tree falling on a house; weight of ice or snow or sleet that damages property; accidental discharge of water or steam from heating or AC system; Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, ac system, sprinkler system or appliance for heating water; Freezing of plumbing, heating, ac, provided the insured maintains heat in the building and shuts off the water and drains of all systems of water; Sudden and accidental damage from artificially generated electrical current--such as Lightning; Collapse--caused by hidden decay, hidden insect or vermin damage, weight of contents, animals or people, weight of rain collecting on roof, use of defective material or methods in construction.

What is covered in the HO-2 Broad Peril Form?

The following personal property is EXCLUDED under Coverage C: a. animals, birds and fish; b. automobiles and other motorized vehicles (except motorized vehicles pertaining to the service of the premises or for use of the handicapped, such as a wheelchair); c. Electronic apparatus (including accessories, antennas, or tapes, wires, records, discs) designed to be used with a motorized vehicles electrical system and in or upon the vehicle. Note: $1000 coverage is provided when such items are not in or upon a vehicle; d. Aircraft and parts (hobby aircraft is covered); e. Property of roomers/boarders not related to the insured; f. Property located in an apt. regularly rented by an insured other than the insured premises; g. Property rented or held for rental to others off the 'residence premises"; h. business data, including data stored in books of acocunt, drawings, electronic data processing tapes, discs, other software media. The cost of blank recordingor storage media and of pre-recorded computer programs available on the retail market is covered; i. Credit cards or fund transfer cards except as provided in "Additional coverages"--up to $500 for forgery/counterfeit.; j. Property scheduled elsewhere. Note: If a piece of jewelry is separate insured under a personal articles floater; coverage is completely taken out of hte homeowner policy; k. Loss of water or steam.

What is excluded as personal property under Coverage C?

Other structures. Coverage B covers: 1. Structures located on the insured's premises that are separated from the dwelling by a clear space, or connected only by a fence, utility line or similar connections, i.e. detached garage or shed. No coverage for structures used for business or for buildings rented to nontenants unless used as a private garage; 2. Coverage B--a percentage of coverage A, depending on the number of dwelling unites and is an additional amount of the insurance. 10% coverage for 1-2 family dwelling, or 5% on a 3-4 family dwelling; 3. Under HO-6, owned garages or storage buildings are covered for a stated amount. If coverage is needed; 4. Under HO-8, Coverage B cannot be increased by endorsement. Just 10% of coverage A.

What is in Coverage B?

Coverage C is Personal Property. There is broader coverage for personal property under the HO program than under the Dwelling Property Program as shown. 1. Full limit of Coverage C applies to personal property anywhere in the world. Covers personal property owned or used by the insured. For example, 30% of coverage A for 3-4 family dwelling, 25% for a family dwelling.; 2. Under the HO-2, HO-3, HO-5 and HO-8, a percentage of Coverage A applies to Coverage C depending on the number of units as an additional amount of insurance. Under the HO-4 and HO-6, the insured establishes an amount of coverage based on the actual events.; 3. If the named insured requests, the following personal property can be covered under the insured Coverage C amount: a. personal property of others while it is located at the insured's premises; b. personal property of a guest or residence employee at a residence occupied by the insured.; 4. For personal property kept at an insured's residence other than the residence premises shown on the Declarations page, coverage is the larger of $1000 or 10% of Coverage C.; 5. When the insured moves to a newly purchased primary residence, contents is pro rata between the locations for 30 days in case of a loss.; 6. The following personal property is excluded under Coverage C.

What is in Coverage C?

For an additional premium, an endorsement may be attached to provide up to $5000 of coverage for losses caused by water which backs up thru sewers or drains or which overflows from a sump pump. A special deductible of $250. applies to this coverage.

What is sewer backup endorsement?

This is very broad coverage. It's designed to cover businesses being run out of the home, i.e. real estate office, beauty parlor, CPA, etc. There is coverge for business income, extended business income, extra expense, and loss of business income because of the action of civil authority. Liability coverage is on an aggregate basis and includes coverage for premises operations, advertising injury and personal injury. Coverage for the products/completed operations hazard is limited to the amount shown for coverage E.

What is the Home Business Insurance Endorsement?

The endorsement provides scheduled coverage for such things as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, stamps, coins. All other property is covered on an all risk basis, subject to limitations and exclusions. The policy does not insure loss, from any cause, to property on exhibition at fair grounds or premises of national or international expositions unless the premises are covered by this policy. If postage stamps or rare and current coins collections are covered, the following are excluded: Fading, creasing, denting, scratching, tearing or thinning; transfer of colors, inherent defect, dampness, shipping by mail other than registered mail.;

What is the Personal Property Endorsement--called a Floater?

For an additional premium, coverage for sinkhole collapse may be attached to the policy. Loss by "sinkhole collapse" means actual physical damage caused by sudden settlement or collapse of the earth supporting insured property resulting from underground voids created by the action of water on limestone or similar rock formations.

What is the Sinkhole Collapse Endorsement?

HO-3 covers the same personal property as HO-2, HO-3, HO-4, HO-5, HO-6, but the dwelling coverage is "open peril."

What is the difference in HO-3?

HO-5's dwelling and personal property is OPEN PERIL.

What is the difference in HO-5?

THE TWO PARTIES IN INSURANCE

• INSURER • INSURED

Named Insured Resident relatives living with the insured Anyone under the age of 21 and in the care of the insured or their resident relatives Residence employees Bailees of the insured's animals or watercraft

Who is insured:

Yes.

Will a resident spouse be covered if they are not listed as a spouse but are listed as a driver?

No-Fault

Worker's Compensation is an example of this as the injured employee receives definite benefits in exchange for the right to sue the employer while the employer gained claim certainty in exchange for the ability to use common law defenses against negligence.

*Mandatory in NY State *Provides workers compensation to residence employees

Workers Compensation Certain Residence Employees

Workers Compensation claims settle based on:

Workers compensation pays statutory benefits not damages.

DOI

Writes the code

Endorsement

Written agreement attached to a policy to add or subtract insurance overages.

Twisting

a form of misrepresentation in which the agent convinces the client to cancel an already existing policy to buy another from the agent and is to the detriment of the client

the named insured on a Commercial General Liability Policy is Petes Paint Store. Medical payments would provide coverage for which of the following? a) a gallon of paint falls off the shelf and hits a customers foot b) a painter over-sprays paint, damaging several cars in a parking lot c) an employee suffers from fume inhalation while painting d) a subcontractor falls off a ladder at a customers house

a gallon of paint falls off the shelf and hits a customers foot

What is the penalty for not carrying the amount required in a co-insurance clause?

You become a co-insurer and pay a portion of the loss.

File and Use State

a company may begin using new forms and rates as soon as they have filed with the Dept of Insurance