Fl Insurance Agent Licensing Exam

License requirements

18 US Citizen 3 hrs. of ethics 40 classroom hrs background check passing exam score of 70%

For a dwelling with limits of $250,000 or more, the insurer must offer hurricane deductibles of

2%, 5%, or 10% of the policy dwelling limits

two unique symbols under the Garage Coverage Form

30 and 31

Misrepresentation

An agent failing to make the prospect aware of relevant facts 2nd degree misdemeanor

Agency

A business location where an individual, firm, partnership, corporation, association, or other entity, but not an employee, that engages or employs individuals to engage in any activity that may be performed only by a licensed insurance agent

Trees, Shrubs, and Other Plants

A limit OF 5% OF Cov A, with a maximum of $500 applying to any one tree, shrub, or plant not included in the DP-1 form

Proof of Loss

A formal statement made by the insured and provided to the insurer that provides necessary details for the insurer to determine its liability under a policy.

Binder

A legal agreement issued by an insurance company or a producer that provides temporary proof of insurance until the insurer is able to issue an insurance policy Binders are issued for specific time periods (maximum of 60 days ) and automatically end when the policy is issued. contain the name of the insurer, the amount and type of insurance, and the perils insured against

Bailee

A person or any organization to which property has been entrusted, usually for repairs, servicing or storage

Bailor

A person or organization that entrusts property to a bailee

Physical Hazard

A physical condition that increases the probability of loss; use, condition, or occupancy of property

Endorsement

A policy form that alters or adds to the provisions of a property and casualty insurance contract

Concurrent Causation

A principle holding that when two perils simultaneously cause a loss (i.e., they are both considered the proximate cause of loss), the insurer must pay the loss even if one of the perils is excluded by the policy.

Dual Interest

A property insurer must transmit claims payments directly to the primary policyholder, payable to the primary policyholder only

Unoccupancy

A property that contains personal property but has no occupants

Vacancy

A provision in a property policy that eliminates or limits coverage for buildings that don't contain sufficient personal property to support intended occupancy or use

Inherent Vice

A quality within property that causes it to damage or destroy itself. Examples include rust, rot and the fading of paint **not covered by insurance

Law of Agency

A relationship between two or more parties where one party (the agent or producer) acts on behalf of the other party, known as the principal or insurer

Financial Anti-Terorrism Act (The USA Patriot Act)

Imposes record keeping and government reporting requirements on banks, financial institutions and non-financial businesses for specific financial transactions and customer financial records

Contract of Adhesion

One party writes the contract, without input from the other party

Dwelling Forms General Exclusions

Ordinance or Law Neglect Earth movement War Water damage Nuclear Hazard Power failure Intentional Loss

Coverage B

Other structures, applies to other structures on the described location if they are separated or detached from the dwelling by clear space, a fence, or a utility line. Examples include a detached garage, shed, pool, and an outdoor storage building. No coverage is provided for structures rented to others 10% of the Coverage A

Mutual Insurance Company

Owned by policyholders, non-taxable dividends as a return of unused premium (not guaranteed)

Stock Insurance Company

Owned by stockholders, taxable corporate dividend as a return of profit (not guaranteed)

Law of Large Numbers

As the number of units in a group increases, the more likely it is to predict a particular outcome. Must be calculable, measurable, Accidental losses, premiums must be affordable

4 Parts of a property policy

Declarations Insuring Agreement Conditions Exclusions

Moral Hazard

Dishonest tendencies that increase the probability of a loss; certain characteristics and behaviors of people.

Comparative Negligence

Damages are reduced in proportion to the degree of the claimant's negligence.

Negligence

Failure to use ordinary care. For example, running a red light

Contributory Negligence

Prevents recovery for damages caused by a negligent party if the claimant was negligent to any extent

Estoppel

Prevents the denial of a fact, if the fact was admitted to be true previously

Causes of Loss - Basic Form

Provides coverage for the following causes of loss (perils): fire, lightning, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler, leakage, sinkhole collapse, and volcanic action

Coverage D

Fair Rental Value, insurance for indirect losses The policy pays the fair rental value of that part of the described location that is rented to others, or held for rental to others, at the time of a loss IF the rental unit is unfit for its normal use because of a direct loss covered by the policy. 20% of coverage A, paid for up to 2 weeks

Right of Salvage

The right of the insurer to take possession of damaged property after paying for its loss.

Division of Rehabilitation and Liquidation of the DFS

Responsibility of performing duties as receiver of any FL insurer placed into receivership Plans, coordinates, and directs the conservation, rehabilitation, and liquidation of insolvent insurance companies, unlicensed insurance companies, and unlicensed insurance entities.

Special Damages

are an award to an injured party for actual and known expenses such as bills, loss of earnings, and the cost of repairing or replacing damaged property pays tangible loss or damage

General Damages

are an award to an injured party for pain, suffering, mental anguish, disfigurement, and similar types of losses. calculated objectively

Department of Commerce Division of Unclaimed Funds

Sends written notice to apparent owner of unclaimed property, which refers to abandoned and remains unclaimed for 3-5 years

Preferred Provider Organization (PPO)

are selected groups of hospitals and medical practitioners in a given area. Each group has a contract with a traditional insurance company or Blue Cross/Blue Shield to provide services at a prearranged cost

common carrier

business individual or organization that carries persons or property for a fee, from one place to another The persons or property being transported are, or belong to, the general public

Market Value

The price a willing buyer would pay for property purchased from a willing seller

Proximate Cause

The primary cause of loss first event in the unbroken chain of events that resulted in loss

Builders Risk Coverage

coverage insures buildings and structures that are in the course of construction, along with machinery, equipment, supplies, and fixtures that will eventually become part of the insured buildings and structures

claims-made form

coverage is triggered if an "occurrence" takes place AFTER the retroactive date AND is REPORTED within the policy period Step 1. Did the loss occur AFTER the retroactive date? Step 2. Was the loss REPORTED during the policy period?

Contractors Equipment Floater

coverage provides open perils coverage on the insured's equipment, such as mobile tools, equipment, and machinery, including forklifts, compressors, generators, and small hand tools

Employee Theft or Dishonesty

covers acts of theft by an employee that result in loss of, or damage to, money, securities, and other property

Surgical Expense Insurance

covers fees of physicians for performing surgery

Computer Fraud

covers losses when a computer is fraudulently used to transfer money, securities, and other property from the insured premises, banking premises, OR to a person or place outside the insured premises

Installation Floater

covers movable property, such as electrical, plumbing, or heating equipment to be installed in a building . Insurance is provided during installation, and sometimes after installation, until construction has been completed and the property has been accepted by the owner OR when the interest of the insured ends

HO-2 (Broad Form)

covers the dwelling, other structures, and personal property on a named perils basis (16) valuation is on a replacement cost basis

Financial Rating Services

evaluate and rate the financial stability of insurance companies ratings are available to the public ex. A.M. Best Company, Standard & Poor's, Moody's Investment Services, Weiss Insurance Rating, Fitch Ratings.

peril of vandalism or malicious mischief

may also be included with the payment of an additional premium (VMM)

Florida Insurance Guaranty Association

nonprofit legal entity All insurers authorized to conduct business in Florida must be members of the association

Foreign Insurer

not organized under the laws of this state, but in one of the other states or jurisdictions within the United States

HO-3 (Special Form)

the dwelling and other structures (Coverages A and B) are insured on an open perils basis Personal property (Coverage C) is insured on a named perils basis that includes the same 16 named perils in the Broad Form (HO-2). Coverage C losses are valued on an actual cash value basis

cost of bail bonds

Up to $250

Violation of cease and desist order

Up to $50,000 fine

Willful violation of the Insurance Code

Misdemeanor of the 2nd degree (imprisonment up to 60 days)

Hurricane Deductible

$500, 2%, 5%, or 10% of the policy dwelling limits

Admitted

(Authorized) insurer is authorized by this State's Commissioner of Insurance to do business in this State. It has received a Certificate of Authority to do business in this State.

Extended Reporting Period

(Tail Coverage)-form contains a provision for the extension of time during which claims must be reported

Non-admitted

(Unauthorized) insurer has either applied for authorization to do business in this state and was declined or they have not applied. They are not authorized to transact insurance in this state.

Dept of Financial Services

(together with the Office of Insurance Regulation) implements rules for enforcement of laws called "quasi-legislative or quasi-judicial power

After the policy has been in effect for 90 days, no policy may be canceled by the insurer, except for

-A material misstatement -Nonpayment of premium -Failure to comply with underwriting requirements established by the insurer within 90 days of the effective date of coverage -A substantial change in the covered risk

Exempt Workers

-Agricultural workers, such as farm and ranch laborers. -Domestic employees. -Casual laborers -Independent Contractors -Sole such as Owners, Partners, and Corporate Officers.

Medical Payments Exclusions

-Any insured (other than a volunteer worker) -Any person hired by the insured or the insured's tenant -A person who normally occupies any portion of the insured premises -Injuries that should be covered by Workers' compensation and similar laws -Athletic activities -Injuries within the products-completed operations hazard

Personal Jewelry Floater

-Coverage may be written on a valued or actual cash value basis -Pair and sets clause -Newly acquired items are automatically insured if they are the same class of property already insured by the floater for 30 days

DP-2 (Broad Form)

-DP-1 perils, EC perils, and VMM -Damage by Burglars -Falling objects -Weight of ice, snow, or sleet -Accidental discharge or overflow of water or steam -Sudden and accidental tearing apart, cracking, burning, or bulging -Freezing -Sudden and accidental damage from artificially generated electrical current Dwelling= replacement cost, Personal Property= ACV

Musical Instrument Floater

-No coverage is provided if the covered instruments are played for remuneration, or a fee. Anyone playing for hire must purchase an endorsement and pay an additional premium. -The insured must report newly acquired items within 30 days

Covered Injuries

-The injury must occur while the employee is at work or working. -The employee is working the hours he/she is designated, or expected, to work. -The employee is performing the duties that he/she was employed to do. -The injury must arise from a risk that is reasonably related to employment

Cameras Floater

-The insured items are scheduled, with the exception that blanket coverage is provided on items such as shades, filters, etc. -Automatic coverage is provided on newly acquired items for 30 days at a limit of insurance up to 25% of the limit designated on the schedule

Personal Umbrella Policy

-coverage is liability insurance provided on an excess basis. -Each contract is unique and may contain provisions and language not found in other policies. -coverage may be issued as an endorsement added to a homeowners policy or as a standalone policy

Fine Arts Floater

-covers such items as paintings, etchings, pictures, tapestries, rare manuscripts, and antiques -automatic coverage for 90 days -valued, or agreed, basis

Medical Payments

-paid due to the bodily injury, caused by an accident on the insured's premises or because of the insured's operations. -The accident must take place in the coverage territory and during the policy period. -Expenses include first aid administered at the time of the accident, and expenses that have been incurred and reported within one year of the date of the accident. -These payments are made regardless of fault

Boatowners Policy

-provides open perils coverage for the hull, motor, trailer, equipment, and accessories manufactured for marine use -provides Watercraft Liability, Medical Payments for passengers, and Uninsured Boaters coverages. (Does not include Personal Injury Liability).

Causes of Loss - Special Form

provides coverage for risks of Direct Physical Loss unless the peril or cause of loss is specifically excluded or limited

Retroactive Date

A date specified in the Declarations, after which an occurrence must take place to be covered. If an occurrence takes place before this date, it's not covered, even if a claim is made during the policy period

Misrepresentations

A false statement contained in the application; usually does not void coverage or the policy

National Flood Insurance Program (NFIP)

A federal program that enables certain property owners to purchase flood insurance FEMA

Hostile Fire

A fire that burns outside its intended boundaries, or becomes uncontrollable ex. wildfire

Friendly Fire

A fire that was intentionally set and stays within its intended boundaries ex. fireplace

Hazard

A specific condition that increases the probability, likelihood, or severity of a loss from a peril.

Accident

A sudden, unforeseen, unintended, and unplanned event from which loss or damage results

Appraisal

Addresses disputes about the amount of a loss. If the insurance company and insured cannot agree on the amount of a loss * usually decided by an umpire

Coverage E

Additional Living Expenses, The policy pays any necessary increases in living expenses incurred by the named insured when a covered loss makes the unit in which the named insured lives uninhabitable. 20% of coverage A

Rebating

An agent may not offer or extend anything of value to a client that is not already a part of the contract, as an incentive to purchase insurance Example - Offering to pay the client's first 3 months of premiums if they buy the policy

Controlled Business

An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees no more than 50% of his/her total business within a 12-month period

Adverse Selection

An imbalance created when risks that are more prone to losses than the average (standard) risk are the only risks seeking insurance within a specific marketplace. For example, only those living in earthquake-prone areas seek to buy earthquake insurance.

Reinsurance Companies

An insurance company that assumes all or a portion of a risk from a primary or ceding insurance company. Agreement is b/w the original insurer and the reinsurance company (if insured has claim it is filed with the original insurer)

Domestic Insurer

An insurer organized under the laws of this state, whether or not it is admitted to do business in this state.

Supplemental Extended Reporting Period (SERP)

An optional reporting period of unlimited duration may be purchased by endorsement if requested within 60 days of the end of the policy term. a)covers claims arising from occurrences that took place after the retroactive date and before the end of the policy term, regardless of when the claim is made. b)Cost may be up to 200% of the CGL's annual premium. c)Premium for this optional coverage is a one-time charge and is fully earned at issuance. d)can't be cancelled and no refunds are made

Morale Hazard

Attitude that increases the probability of a loss. Example: Indifference or carelessness of leaving one's house or vehicle unlocked.

Apparent

Authority created when the producer exceeds the authority expressed in the agency contract

Express

Authority that is written into the producer's agency contract

Implied

Authority the public assumes the producer has.

Contract of Utmost Good Faith

Both parties bargain in good faith when forming and entering into the contract. The two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive has been made.

Fund Transfer Fraud

Covers loss of funds resulting from a fraudulent instruction that directs a financial institution to transfer, pay, or deliver funds from the insured's transfer account

For a dwelling with limits between $100,000 and $250,000, the insurer may, in lieu of offering a policy with a $500 hurricane deductible, offer a policy that:

Contains up to a 2% hurricane deductible

Homeowners section II

Cov. E= Personal Liability Cov. F= Medical payments to others

Homeowners Section 1

Coverage A= dwelling; Coverage B= other structures; Coverage C= personal property; Coverage D= loss of use

Medical Payments Coverage

Coverage for the bodily injury of third parties sustained on an insured location or as a result of the insured's activities not an admission of liability

Peak Season Limit of Insurance

Coverage is provided for a specified increase in the business personal property limit of insurance during a designated period of time, such as the Christmas shopping season

Elements of Negligence

Duty is owed Violation of Duty Violation of Duty is Proximate Cause Foreseeable Consequence all must be present

Coverage A

Dwelling, applies to the dwelling described in the declarations, used principally for residential purposes, including structures attached to the dwelling, such as an attached garage, carport, breezeway or deck. also includes materials and supplies on or next to the described location used to construct, alter, or repair the dwelling or other structures at the described location *covered at a Specific limit, replacement value

Pure Comparative Fault

Each party to the action will be evaluated and determined to be a certain percent at fault. The degree of fault could range from 0% to 100%. No recovery is received if a person is injured while under the influence of drugs or alcohol and more than 50% at fault.

Coercion

Example - A bank or credit union will not give a loan unless the borrower buys insurance from a specific company

The Truckers Coverage Form

For insureds in the business of transporting property of others

Bureau of Financial Investigations

Functions as a criminal justice agency. Supervises methods of obtaining business, including agent licensing and control of unfair trade practices Conducts investigations to protect consumers from financial entities that violate state laws and rules Will refer any records to show violations to state or federal law enforcement or prosecutorial agencies

Terrorism Risk Insurance Act

Funds coverage for potentially catastrophic events due to acts of terrorism. Provides coverage for the peril of commercial property and liability insurance Established in the Dept. of the Treasury

Noncancelable

Greatest degree of protection as the insurer cannot cancel the policy, change the benefits, increase the premium, and renew the policy, at the option of the insured

Risk Retention Group

Group-Owned insurers that primarily assume and spread the liability related risks of their members Each member assumes a portion of the risk financially ex. Theme parks, go cart tracks, water slides

Strict Liability

If a claimant can prove that a product caused the injury, the manufacturer will be held liable whether or not the product was defective.

Property Removed

If property is being removed from the described location to protect it because it is endangered by a covered peril, coverage is provided for direct loss by any peril while removed. Under the DP-1 form, coverage is provided for 5 days while removed; under the DP-2 and DP-3 forms, coverage is provided for 30 days while removed. This coverage does not increase the limit of insurance that applies to the property being removed.

Improvements, Alterations, and Additions

If the insured is a tenant, he or she may use up to 10% of the Coverage C limit of insurance for a covered loss to improvements, alterations, and additions made or acquired at the insured's expense to that part of the described location only occupied by the named insured In the DP-1 form, coverage is included in the limit of insurance; in the DP-2 and DP-3 forms, it's additional insurance.

Causes of Loss - Broad Form

Includes the perils contained in the basic form, plus 3 additional causes of loss: falling objects, weight of ice/snow/sleet, water damage caused by accidental discharge

Permanent total disability

Injury that prevents an employee from being able to do any work for the rest of their life

Principle of Indemnity

Insured is restored to the same financial or economic condition that existed prior to the loss. Insured should not profit from an insurance transaction

Guaranteed Renewable

Insurer must renew the policy to a stated age, typically, 65, but may increase the premium in the underwriting class

Twisting

Knowingly making any misleading representations or incomplete or fraudulent comparisons or material omissions with respect to any insurance policy for the purpose of inducing a person to lapse a policy

6 Types of insured contracts

Lease Easement An obligation to indemnify a municipality, except in connection with work for a municipality Sidetrack Agreement Elevator maintenance agreement

Coverage F - Medical Payments to Others

Legal liability, negligence, and fault do not trigger this coverage ascertained within 3 years from the date of an accident causing bodily injury

Financial Responsibility Limits of Liability

Min. 10/20/10

Agency criteria

Must have a licensed and appointed full-time agent in charge of each agency location Must complete an application for an agency license, which must be renewed every 3 years That fails to file an application for licensure may be levied an administrative penalty of up to $10,000

Maintaining a license

New agents- 24 hrs of continuing education every 2 yrs Old agents- 2 hrs of continuing education every 2 yrs

Certificate of Authority

No person can act as an insurer and no insurer or its agents, attorneys, subscribers, or representatives can directly or indirectly transact insurance in Florida unless authorized by a Certificate of Authority issued to the insurer by the Office of Insurance Regulation

Coverage C

Personal Property, applies to household and personal property usual to the occupancy as a dwelling if it is owned by the insured or by members of the insured's family who reside with the insured As a coverage giveback, the insured may use up to 10% of the Coverage C limit of insurance for loss caused by an insured peril to covered property anywhere in the world

Dread Disease

Policies purchased to cover a specific disease, such as cancer or heart disease

Arbitration

Process whereby a disputed claim is decided by a neutral third party

Citizens Property Insurance Corporation (CPIC)

Property insurers may make agreements to share fairly insurance for applicants unable to get insurance through ordinary methods

Commissioner of the Office of Insurance Regulation (OIR)

Regulates the following areas of insurance industry: Licensing Rates Policy forms Market conduct Claims Certificates of Authority

Director of the Office of Financial Regulation (OFR)

Regulates the following: Banks, credit unions, savings association, international bank agencies Financial service companies Securities industry

Sliding

Representing to the applicant that a specific coverage or product is: Required by law in conjunction with the purchase of insurance when such coverage or product is not required Freely included in the policy when in fact there is a charge required

Speculative Risk

Situations where there is a chance or possibility for loss, no loss or gain (i.e., gambling)

Speculative Risk

Situations where there is a chance or possibility for loss, no loss, or gain (i.e., gambling).

Pure Risk

Situations where there is no chance for gain, only loss. ex. the possibility of damage to property caused by a fire or other natural disaster

Liberalization Clause

Specifies that if the insurer broadens coverage with no increase in premium, that broadening of coverage will apply to existing policies without the need for an endorsement

No Benefit to Bailee

Specifies that no coverage applies if loss payment benefits a bailee

Pro Rata Liability

Specifies the process to be followed when more than one policy covers the same loss

Other Insurance

Specifies the process to be followed when more than one policy covers the same loss. Each policy pays no more than its share of the loss

Warranties

Statements in the application or stipulations in the policy that are guaranteed true in all respects. If later discovered untrue or breached (past, present or future), coverage (and sometimes the contract) is voided.

Chief Financial Officer (CFO)

The administration of state law is the responsibility of... Head of the dept. of financial services

Theft

The broadest of the crime coverages, includes any act of stealing

Peril

The cause of a loss

Permanent Partial Disability

The condition that exists when an injured employee is not expected to fully recover, but is able to do some work

Actual Cash Value (ACV)

The cost to repair or replace property at its replacement value, minus depreciation.

Functional Replacement Value

The cost to replace property with other property that performs the same function with similar efficiency, although the replacement property is not identical to the property being replaced.

Replacement Value

The cost to replace property with property of like kind and quality, at current pricing, without a deduction for depreciation

Fire Resistive

The entire building and roof are constructed of reinforced concrete and steel. Must have at least a 2-hour fire resistive rating

Aleatory

The exchange of value is unequal. Insured's premium payment is less than the potential benefit to be received in the event of a loss

Conditions

The insureds duties and obligations are spelled out in this section

Insuring Agreement

The insuring agreement states the insurance company's promise to pay the insured States what Perils are covered

Vicarious Liability

The liability assigned to one party for the conduct of another, based solely on a relationship between the two. Examples include employer/employee relationships and parent/child relationships.

Contingent Liability Exposure

The liability of others arises when a business is held legally liable for the actions, or failures to act, of other parties, such as sub-contractors or independent contractors

Mysterious Disappearance

The loss of property when the cause of loss is not known. This is NOT theft, burglary, or robbery.

Modified Fire Resistive

The materials used in the walls, floors, and roof of a structure must have a fire resistive rating of at least 1 hour, but less than 2 hours

Per Occurrence Limit

The most the policy will pay for all losses arising out of any one occurrence, regardless of other policy limits.

Combined Single Limit

The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits.

Aggregate Limits

The most the policy will pay for all losses submitted during the policy period, regardless of other policy limits.

Per Person Limit

The most the policy will pay for loss to any one person injured in any one loss, regardless of other policy limits.

Debris Removal

The policy pays the insured's reasonable expenses for the removal of debris of covered property if the property is damaged by an insured peril. Debris removal expense is included in the limit of insurance that applies to the damaged property.

Burglary

The taking of property from inside the premises or a locked safe or vault by a person who commits forcible entry into, or exits from, the property of another while trespassing

Robbery

The taking of property from the care and custody of a person who has been caused or threatened with bodily harm

Concealment

The willful holding back or secretion of material facts pertinent to the issuance of insurance (or a claim), even if the applicant or insured was not about the subject. Concealment results in denial of coverage and may void the policy.

Interline Endorsements

These endorsements coordinate the coverage contained in one coverage part of the policy with other coverage parts to prevent duplication

Money Orders and Counterfeit Money

This covers the insured's acceptance in good faith of money orders and counterfeit money received in exchange for merchandise or services during the course of conducting regular business activities

Ordinance or Law Coverage

This endorsement responds if the enforcement of any building, zoning, or land use law

Basic Extended Reporting Period (BERP)

This extended reporting period is a provision in a claims-made form and allows claims to be reported after the policy term for a specific period of time, such as 60 days after the policy's expiration or cancellation date

Unfair Trade and Marketing Practices

Twisting Churning Rebating Defamation Misrepresentation

Fire Department Service Charge

Under each of the dwelling forms, the policy will pay up to $500 for the named insured's liability assumed by contract or agreement for fire department charges incurred when the fire department is called to save or protect covered property from an insured peril Coverage does not apply if the property is located within the limits of the city, municipality, or protection district furnishing the fire department response This is additional insurance and the policy deductible does not apply.

Declarations

Unique to policyholder Describes basic info: Who, What, Where, When, How much

Waiver

Voluntary surrender of a known right, claim or privilege

Proof of Loss

WRITTEN AND MUST BE GIVEN WITHIN 90 DAYS OF LOSS

Mobile Home Insurance

Written by adding an endorsement to an HO-2 or HO-3 policy OR may be insured on a homeowners policy

contract carrier

a business individual or organization that carries persons or property for a fee, from one place to another The persons or property being transported are only those of certain customers and NOT the general public

Write Your Own (WYO Program)

a cooperative effort involving FEMA and the private sector that allows existing property and casualty insurance companies to write, issue, and service flood insurance under their own names

Health Maintenance Organization (HMO)

a noninsurance alternative that provide comprehensive health services to its members for a prepaid fixed fee

Crop/Hail Insurance

a specialized policy that protects the insured against reduced yield because of a covered loss to crops before they are harvested This is private insurance, not reinsured by the federal government. provides named perils coverage

Tort

a wrongful act, other than a breach of contact, that violates a duty or the rights of another and for which compensation may be sought from the responsible party.

ISO Homeowner 2011 policy

adds an Additional Coverage for Fungi, Wet or Dry Rot, or Bacteria

Workers' Compensation laws

all work related injuries and occupational diseases became the responsibility of the Employer. This insurance became the sole source of remedy and the employee no longer had the right to sue the employer for damages

Merchant Marine Act of 1920 (the Jones Act)

allows insured seamen to make claims for injuries suffered during the course of employment regulates maritime commerce in U.S. waters, transportation of cargo, and the rights of seamen.

Subrogation

allows the insurer to recover from the party that caused a loss any amounts paid to an insured

HO-4 (Contents Broad Form)

also known as the renter's or tenant homeowners policy doesn't provide any coverage for the dwelling or other structures insures personal property under Coverage C against loss from the 16 named broad form perils found, valued on ACV basis

Hurricane warning

an alert that is given 36 hours in advance to residents that lets them know a hurricane is possible

Hurricane watch

an alert that is given 48 hours in advance to residents that lets them know a hurricane is possible

Temporary Partial

an employee is able to do some work, but is unable to earn his/her usual wage until full recovery

Federal Employees Compensation Act

applies to all U.S. civilian employees

The Federal Employers Liability Act (FELA)

applies to interstate railroad workers

Defense Base Act

applies to workers on military bases

The U.S. Longshoremen and Harbor Workers' Compensation Act

applies to workers who load, unload, build, or repair ships (but not to the crew of the ship)

wind mitigation credits

applies to: Roof Covering Roof Deck Attachment Roof-Wall Connection Opening Protection Roof Shape Secondary Water Resistance

Lay Up Warranty

applies when the insured boat is in storage and allows for a return of premium due to the reduced risk of the boat not being used when laid up. If the insured operates the yacht during the lay-up period (or lives on it), no coverage is provided.

Financial Services Commission

appoints the Commissioner of the Office of Insurance Regulation (OIR), composed of the Governor, CFO, Attorney General, and Commissioner of Agriculture

Surety

arty guaranteeing the duty, performance, or honesty of the Principal. issues the bond

three common law defenses

assumption of risk, fellow servant rule, contributory negligence

service charge

cannot exceed $3 per installment, or $36 per year

Absolute liability

claimant does not have to prove fault in order to collect damages

Occurrence

continuous or repeated exposure to the same general harmful conditions.

Defenses against negligence

contributory negligence, comparative negligence, assumption of risk

Motor Carrier Act of 1980

deregulated the trucking industry

Yacht Policy

designed for larger vessels, many of which have crew members which includes in addition to Hull Insurance, Protection and Indemnity and Medical Payments insured does NOT have coverage if the boat is navigated outside the designated territory

Fidelity Bonds

designed to cover an employer from direct loss due to fraudulent and dishonest acts (namely theft) by their employees

Garage Coverage Form

designed to provide automobile liability and physical damage coverage, as well as general liability insurance for businesses that are engaged in the sale, service, parking, or storage of automobiles

The Truckers Coverage Form and the Motor Carrier Coverage Form

designed to provide insurance for the unique exposures of common carriers and contract carriers

DP-3 (Special Form)

dwelling and other structures is provided on an open perils basis, personal property is covered for the broad form (dp-2) named perils Dwelling= replacement cost, Personal Property= ACV

Producer or Agent

employee of the insurer, - A person or agency appointed by an insurance company to represent it and to present policies on its behalf

Surety Bonds

guarantee that specific obligations will be fulfilled

Office of Insurance Regulation

headed by the Commissioner of the Office of Insurance Regulation

DP-1 Extended Coverage

if additional premium is paid then includes the following perils: wind/hail, explosion, riot, aircraft, vehicles, smoke, volcanic eruption

Temporary Total

injury from which an employee is expected to recover and return to work, but is unable to do any work while recovering benefit amount-66% or 2/3

Personal Articles Floater (Scheduled Article Floater)

insure "individual" items of personal property on a scheduled basis. Claims are normally settled on an "actual cash value basis" with some exceptions provided worldwide

Alien Insurer

insurer organized under the laws of any jurisdiction outside of the United States

Forgery or Alteration

insures against the forgery or alteration of checks, drafts, promissory notes, and similar items regarding the payment of a sum of money that are made or drawn by the insured or someone acting on behalf of the insured.

Churning

is the practice whereby policy values (such as cash value) in an existing life insurance policy, annuity contract, and/or any riders, are used to purchase another insurance policy or annuity contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation

Domicile

jurisdiction were an insurer is formed or incorporated

National Association of Insurance Commissioners (NAIC):

legislative and regulatory recommendations, Has no legal authority to enact or enforce insurance laws.

Personal Injury Liability

libel, slander, false arrest, invasion of privacy, and copyright infringement

Motor Carrier Coverage Form

provides coverage for business exposures due to the transportation of goods owned by others for hire AND transporting their own property

Occupational Disease

must arise out of the course of employment and be caused by conditions that are particular to that employment

Business Personal Property owned by the insured

only insured if it is located in or on a building described on the Declarations OR within 100 feet of it

Principal

party owing the duty, performance, or honesty and is usually the party purchasing the bond

Third-party Automobile Claims

payment of the claim will be made jointly to the owner of the damaged vehicle and the first lienholder of record

DP-1 (Basic Form)

perils insured against are fire, lightning, and internal explosion losses to dwelling, other structures, and contents are paid on an ACV basis

Major Medical Insurance

policies provide protection against catastrophic losses -Deductibles up to 10% of maximum limit -High maximum limits of $10,000 to $1 million -Percentage participation/Coinsurance percentages of 20% or 25% -Internal limits for room charges and surgical services

Discovery Form

provides coverage for losses that are discovered during the policy period, but that did not necessarily occur during the policy period. typically, though not always, require the use of a Retroactive Date

Loss-Sustained Form

provides coverage for losses that both took place and were discovered during the policy period OR that took place within the policy period and were discovered within one year of the termination of the policy period

Fair Credit Reporting Act

protects consumer privacy, while ensuring data collected is confidential, accurate, relevant and used for a proper and specific purpose

Fair Access to Insurance Requirements (FAIR)

provide basic property insurance to property owners who are unable to secure coverage Farm property isn't eligible

Accident Insurance

provide coverage for expenses arising from accidents, and may include loss of income, loss of time, and dismemberment coverage

Unit-Owners Form (HO-6)

provides named perils coverage to the owner of a condominium or cooperative unit under Coverage A - Dwelling and Coverage C - Personal Property *no coverage b

Personal Effects Floater

provides open peril coverage for items worn or carried by tourists and travelers. The coverage applies worldwide, but not at the insured's home.

HO-5 (Comprehensive Form)

provides the broadest coverage of any of the homeowners forms Coverages A - Dwelling, Coverage B - Other Structures, and Coverage C - Personal Property provide insurance on an open perils basis Losses to the dwelling and other structures are valued on a replacement cost basis, losses to personal property are valued on an actual cash value basis

Broker

represents the insured, negotiates insurance contracts with insurers, on behalf of the applicant.

Physicians Coverage

reimburses the insured for nonsurgical care provided by a physician. The benefits are payable for physician services in the hospital, physician's office, or patient's home.

Difference in Conditions (DIC) Insurance

requires the use of a special form designed to fill in the coverage gaps contained in a property policy There is no standard policy form normally carries a high deductible, such as $10,000 or more

Bill of Lading

serves as both a contract and a receipt for goods accepted into the carrier's care

2 or more hurricanes during the calendar year

the insurer may apply a deductible to a subsequent hurricane which is the greater of the remaining amount of the hurricane deductible or the amount of the deductible that applies to perils other than a hurricane

Loss Payment

the insurer must: - within 14 calendar days, review and acknowledge receipt of the communication -Within 10 working days after an insurer receives proof of loss statements, the insurer must begin investigating -Within 90 days after an insurer receives notice of a property insurance claim from a policyholder, the insurer must pay or deny the entire or portion of the claim

Errors and Omissions (E&O) Insurance

typically written for professionals who provide services, such as insurance agents, adjusters, real estate agents, architects, accountants, attorneys, surveyors, and appraisers, whose negligent acts or omissions may result in financial harm to a third party

Business Auto Coverage Form

used to cover owned, leased, hired, rented, or borrowed private passenger autos, trucks, trailers, and semitrailers that are owned or used by the insured

Modified Form (HO-8)

used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost ex. 3 story Victorian home

occurrence form

vinsurance coverage is triggered when an "occurrence" takes place during the policy period and within the coverage territory. Step 1.Did the loss occur during the policy period? If the answer is yes, coverage is triggered

Health insurers must reimburse all claims

within 45 days after receipt of the claim by the health insurer