Property and Casualty insurance exam
DICE
4 major parts to an insurance policy
HO-2
Broad Named Peril Coverage
HO-6
Condo insurance
HO-8
For older homes
Commercial Lines
Insurance for Business
Personal lines
Insurance for families and individuals
Direct Liability
Insured is the wrongdoer
Fair Access to Insurance Requirements
Insureds meeting underwriting criteria and declined twice by authorized insurers cannot be declined by the plan.
Coverage E
Personal Liability; covers claims for bodily injury to others
Coverage C
Personal Property; 10% of C or $1000 for stuff off premises
HO-4
Renters policy
occurence
an event that happens over time
alien
another country
Admitted Carrier
authorized insurer, issued a certificate of authority to transact business in the state.
Assessment
authorized insurers in the state are required to pay into the fund. The amount they pay is based upon their share of the market in texas
DP-1
basic policy, covers fire, lightning, explosion
Perils
causes a loss
Legal Duty Negligence
owe an obligation to act or not act
2 common methods of rate regulation
prior approval & file and use
strict liability
product defect claims
Domestic
same state
Physical Hazard
something you can physically look at
Binder
temporary contract of insurance. Pending issue of the policy, good for 30 days
proximate cause negligence
the breach of duty is the direct causer of the loss
nonadmitted carrier
unauthorized insurer, not regulated to get certificate of authority, can only transact surplus lines insurance
Flood Limits
250,000 structure, 100,000 contents
Board of Directors
5 members from insurers, 4 from the public
Declarations
6 P's policy number, parties, property description, policy term, policy limits, premium
hazard
Are not causes of loss but are things that increase the chance of a peril happening.
DP-2
Broad, damage by burglars, falling objects, accidental discharge, freezing of home systems, damage caused by ice, sleet, snow
Pure Risk
Chance of loss only (insurance only covers)
Speculative Risk
Chance of loss or gain
Elements of a legal contract
Competent parties, Agreement, Legal Purpose, consideration
HO-5
Comprehensive of all property including mysterious disapperance
Exclusions
Contains property and perils not covered.
Coverage F
Covers Med Pay to others up to 3 years
Property
Covers real property and personal property against damage or loss resulting from covered causes of loss called perils
Coverage D
Loss of use; Fair Rental Value, Additional living expenses
Coverage B
Other Structures: anything not attached to house, 10% of coverage A
Insuring Agreement
Promise to Pay, Perils, Liability
Texas Property and Casualty Insurance Guaranty Association
Protects claimants and policy holders in the event of insurer insolvency
Conditions
Rules of the Game, Insured's duties in a loss, Insurer's subrogation rights, mortgagees rights
Commissioner
Runs Tx Dept of Ins. Appointed by Governor, does not write laws
HO-3
Special and most common coverage
Dp-3
Special, all perils except ones specifically excluded
State regulation
State legislature passes the laws
Insurance
The transfer of risk through a legal contract
Risk
Uncertainty of financial loss
foreign
another state
actual loss negligence
another suffers a loss
law of large numbers
as the number of homogenous loss exposures increases, the more accurate claims can be predicted from the group
morale hazard
attitude of carelessness
open peril
cover all perils except those specifically excluded by the policy
Coverage A
covers dwelling and anything attached plus permanent fixtures
casualty
covers non-property losses (3rd Party)
Moral Hazard
dishonest tendencies
accident
event that is sudden and unexpected
breach of duty negligence
failure to comply with the duty
Direct Loss
immediate physical damage to property
contractual liability
insured assumes another's liability under a written agreement
Vicarious Liability
insured is responsible for actions of wrongdoer
Absolute Liability
liability w/o fault
Named Peril
lists the perils that are covered
indirect loss
loss that happens after the direct loss but due to the loss of use of the property. Also called consequential
proximate cause
the first cause in an unbroken chain of events
