PC exam

Maximum amount payable under additinal coverages in a homeowners policy for Loss Assessment?

$1,000 EXP: Loss assessment pays up to $1,000 charged to th insured owner of a condo or tenant in a building when communal property is damage by a cover peril and the insured is assessed a share of the loss amount to pay

If the building in which a business operates is a total loss. Expenses will cover under Business Income pay: RENT, PAYROLL, NET INCOME Exp: Business income does not pay for expenses that are susceptible to the shutdown ( no building means no electric or gas bill)

-Commercial Building and Business Personal Property Form perils is covered by Broad form not Basic form: Weight of snow , ice or sleet.

Flood for residential policies includes:

-land erosion caused by flooding -overflow of water from or tidal waters -water from the unusual and rapid accumulation of runoff from a heavy rain storm NOT INCLUDED: Sewer backup

Garage Operations

-the ownership, maintenance or use of locations for garage business, including adjoining roads and other accesses -$3,000 in bail bonds, $2,000 max

Chaper 4: Homeowner policies 1,Fire: produces a spark, flame or glow. --Hostile: a fire which escapes from its intended confines (is not controlled); Only direct loss caused by hostile fire is covered under the definition of this peri --Friendly: a fire which burns within its intended confines (is controlled). 2, Lighting:natural discharge of electricity in the atmosphere. Any resulting damage is covered as well as a fire started by a lightning strike. Lightning is such a powerful force in nature that in addition to charring a roof or starting a house fire 3, Windstorm: Direct action of wind. 4:Civil Commotion is an uprising or disturbance by a group of people who then damage the insured property. The anger of the group is not necessarily targeted at the insured property but is more of a collateral damage concept.(Riot and Civil Commotion) 5:Smoke loss is covered when defined as sudden or accidental damage caused by smoke from any source except from agricultural smudging and industrial operations. 6. Hail is any damage caused by the direct action of hail to the insured property 7. Aircraft is covered damage to the insured property caused by contact with airborne items like self-propelled missiles, helicopters, dirigibles, drones, balloons, airplanes, spacecraft or any detached parts thereof. 8,Vehicles peril covers all physical damage to the covered property caused by vehicles as well as objects thrown by vehicles that cause damage to the insured property. It does not matter who the driver is, including if the insured drives their own auto into their own home or garage causing the loss. 9,Volcanic Eruption covers the damage done by lava flow and airborne particles (ash from an eruption) but excludes any damages actually done by earthquake, land shock or land tremors. Any eruptions occurring within a 72-hour period is considered to be a single eruption under this personal lines contract. 10. Explosion means direct damage caused by either on-premises (internal) or off-premises (external) explosions of any kind. 11,Riot is direct damage caused by a group of people acting in a violent or angry manner leading to loss against individuals and property. Essentially this is the same coverage as found under the peril of civil commotion. 12,Vandalism and Malicious Mischief (V&MM) covers loss caused by willful (intentional) and malicious (intending to cause harm) actions. There is no V&MM coverage if the residence dwelling is vacant for 60 (sixty) or more consecutive days. A dwelling under construction is not considered to be vacant. Also excluded is loss caused by theft, burglary, larceny and pilferage. 13. Burglar Damage. Damage caused by burglars to the dwelling or contents is covered under this peril but not the value of any property which is stolen since the peril of theft would pay such loss. The burglar damage peril will pay costs to repair or replace physical damage done to the insured property by a burglar unless the property has been vacant for more than 60 consecutive days. 14. Ice, Snow and Sleet Weight. Damage done to the insured building and contents within are covered when there is damage due to the weight of ice, snow, and sleet. Excluded under this peril is damage done to awnings, patios, pavements, fences, swimming pools, foundations, retaining walls, bulkheads, wharves, docks and piers. 15. Glass Breakage. This peril covers loss to all glass in the building, including windows in storm doors. This peril does not cover glass breakage which results from vacancy for sixty consecutive days or more. (Technically glass breakage is an "other" or "additional" coverage rather than a standard peril but, since it is an immediate specific cause of loss it is included in this section 16. Accidental Discharge includes loss from the escape of water or steam from a plumbing, heating, air conditioning or fire protective sprinkler system and from within household appliances. Also covered is the tearing down or replacing of any part of the building to repair the appliance or system from which the steam or water escaped. Excluded: a plumbing system does not include sump or sump pumps (which can be covered by endorsement for additional premium cost). 17. Falling Objects refers to damage to the exterior of the building as well as to contents within the structure caused by any falling object if the falling object first damages the roof or an exterior wall. Excluded under this peril is loss to awnings, fences, outdoor equipment, masts, towers and antennas. 18. Freezing of Pipes includes loss to plumbing, heating, air conditioning, fire protective sprinkler systems and household appliances when piping freezes and burst allowing liquids to escape. The peril does not cover loss at a location while it is vacant, unoccupied or under construction for sixty consecutive days or longer, unless the insured takes reasonable steps to maintain building heat or shut off the water supply and drain the system or appliance of water. 19. Electrical Damage caused by artificially generated electrical current to insured property is covered when sudden and accidental. However, electronic component damage is excluded 20. Abrupt Collapse of a wall or the entire structure is covered on a direct loss basis if caused by: perils insured against under the policy, hidden decay, hidden animal infestation, hidden insect damage, weight of contents (includes equipment, people and animals), weight of rain collected on a roof and uses of defective methods or materials if the collapse occurs during construction. Collapse does not include bulging, building expansion, settling, cracking or shrinking of foundations. 21. Tearing Apart refers to loss from sudden and accidental tearing apart, cracking or burning or bulging of a steam or hot water system, air conditioning system, fire protective sprinkler systems or from a household appliance for heating water. All such resulting loss is covered. Freezing is not covered unless meeting the definition found under the freezing peril. Once again gradual, preventable or foreseeable loss is not covered because preventing such loss was within the control of the insured.22. Theft includes the attempted theft and loss to property from a known place which is covered when it is likely the property was stolen. The theft peril does not include loss caused by theft under the following circumstances: committed by an insured (the insured cannot steal their own property and then try to claim the loss), from a dwelling under construction (until furnished and occupied), from any part of the residence that has been rented to another party other than an insured, of watercraft and its furnishings while away from the insured premises, of trailers and campers while away from the insured premises and of property from a residence owner by or rented to or occupied by an insured unless that insured is only temporarily living there at the time the theft occurs.

1,Broad form perils: offer coverage on all of the thirteen perils included in the SFP while creating and adding a new set of nine perils 2,Comprehensive Personal Liability (CPL): coverage which pays for bodily injury and property damaged of others caused by the negligence of an insured which is unrelated to business activities of negligence arising out of use by the insured of an automobile. 3, Riot: direct damage caused by a group of people acting in a violent or angry manner leading to loss against individuals and property. 4, Vandalism and Malicious Mischief (V&MM): loss caused by willful (intentional) and malicious (intending to cause harm) actions.

Bill of Laden:

Details which party is responsible for shipped property while transit is typically indicated in a written contract called +When the property is shipped by one party to another via a carrier, the financial resposiblilities of each party are documented in the shipping contract

Doctrin of Concurrent Causation under BOP

Lighting causes a power failure and interrupts business EXP: The Doctrin of Concurrent Causation states that if two perils cause loss simultaneously and one peril is covered but the other is not, the policy must pay the loss. SInce lighting concurrently caused power failure, the loss is covered even though power failure may be excluded under

Hazard:is a physical condition or mindset that create an increased possibility that a peril will actually occur

Moral Hazard: insured displays dishonestly, bad habits, or criminal mindsets, to make the loss look like accident to collect the benefit from the policy

Chapter 2: -1:Surplus Lines Insurance: A person may be unable to acquire needed coverage through an insurer that is admitted or authorized in their state. In this situation, a consumer may be to seek the needed coverage from an insurer that is unlicensed or unauthorized in their state. Insurance companies that offer such policies are called "surplus lines carriers" or "surplus lines insurer". or "Excess Lines" instead of "Surplus Lines". Secure Coverage for substandard or unusual risks -2: Fi

1, Risk: Regarding financial loss. Unintended or unforeseen destruction or reduction of financial or reconimic value. 2 Types: Pure Risk: and Speculative Risk 2, Peril: peril is an immediate specific event which causes a loss +Specified or Named Peril: +Special or Open Peril: ARE NOT EXCLUDED ARE COVER 3, Risk retention: 4, Contractual Transfer: or financial risk 5, Hazard: increase possibility Peril.3 types: +Morales hazard: +Moral Hazard: +Physical Hazard: Physical hazards are physical or tangible (seen, touch,smelled) conditions existing in a manner which makes a loss more likely to occur 6, Loss: an unintended, unforeseen reduction or destruction of financial or economic value. Loss is either Direct or Indirect. Indirect loss is also known as "Consequential" loss. +Direct LOss: 7, Stated/Agreed Value: INsurance company accepted the property owner's stated value 8, Salvage value: s the value of insured property after its useful life has ended. 9, Proximate Cause: which leads to cause a loss 10, absolute liability: poor, wild animal 11, binder: temporary coverage with effect pending the future issuance of a policy -Binders terminate for one of two reasons: 1) Once a written policy is issued it replaces the binder and 2) If the application is rejected by the company, the binder terminates but coverage existed until the moment of application rejection. 12,- blanket: cover multiple locations simultaneously under a single polic -Specific limit refers:one single property at fixed location with specified limits which can include coverage for both a building and business personal property located at the single location. 13,Negligent: person acts careless causes unintentional damage to another

required basic element of a contract

4 elements: --Offer and acceptance. Offer is made....? When the policy had been applied for. Acceptance is made.....? When insurer has been approved coverage and premium has been paid ---consideration: exchange of value. insured provides premium in exchange for insurer providing coverage ---Legal parties ---legal purpose

-Inchmaree: damages caused by a ship's captain when navigating -Pirates, Jettison (intentionally tossing into sea for safety of the rest of the ship) -Barraty (wrongful act committed by crew member) are also covered perils under a Hull policy

Aircraft Hull Insurance: If a business form owns an aircraft, the appropriate risk transfer device is Aircraft Hull Insurance.

CHAPTER 14: Workers Compensation and Employers Liability Policy Review Notes 1,Medical Benefits under the Workers Compensation policy: +paid medical benefits immediately, no deductible owned +includes the concept of physical rehabilitation and metal rehabilitation 2, Workers Compensation: railroad workers, coal miners, dock workers because their efforts are essential to the safety and defense of the nation - a state with a compulsory law requires that all employers must have WC in stipulated coverage amounts -In a state with an elective law employers are not required to purchase WC policies _some categories of workers may exempt the employer from purchasing a WC policy

Employers used befor Workers Compensation Law were instituted. used to deny claims made my workers who injured on the job before workers compensation laws were dropted -Contributory Negligence -Assumption of Risk -Fellow-Servant Ruke

If a painter wished to buy a Business Owner Policy (BOP)

His payroll cannot exceed $300,000 EXP: Contractors such as painters, electricians, drywallers, carpenters, etc. are eligible for the BOP by maximum payroll is $300,000

Declaration state

Premium amount

Cargo Insurance

When freight is in transit over water -Cover all risks: abandoned cargo, infested cargo, cargo rejected by customer, employee dishonestly, damage caused by poor packing -Contingency insurance policy: customer is responsible for damage

Representation

made by the applicant to be of their best knowledge and belief. -Material misrepresentation is a fact that would change underwriting and may void coverage

Premises: the most likely cause for a Commercial General Liability

*****A coverage TRigger: is the event that makes a CGL respond to a claim. If the exposure to loss happen before the retroactive date, there is a occurrence trigger. If the exposure to loss happens on or after the retroactive date there is a claims made trigger **** Occurence: occurence form of CGL cover accidents and losses caused by continuous and repeated exposure over a period of time. The window on liability can extend for decades and there is no specific time limit in which to bring a claim which is payable ****Retroactive Date: the retroactive date of Claims Made policy is the date when a Claims Made policy actually replaces an occurence form and there is no break in coverage. (INsured switches from an Occurence form CGL to Claims Made form, without a break in coverage) *** Claims Made CGL: knows the definite date upon which their potential liability ends. Once a Claims Made policy expires, that insurer is no longer responsible to pay any claim unless notifies under the tails concept of the Basic Extend Reporting Period. Even of notifies under the tails, the insurer still knows the definite time for which any claims presentes to them must be paid (no longer than 5 years from the expiration dates) ***the length of time for a mini-tail under the Basic Extended Reporting Period of a CGL:(mini-tail) 60 days to file a notice of claim after the date the claims made policy terminates. 5 years (midi-tail) period to bring the claim for payment.

Flood Program:

- It is federally subsidized through the use of tax dollars - Private insurance agents who sell flood insurance are paid a commission for doing so -The greatest coverage amount are found in the regular "program" FALSE: Private Carriers share in losses through the WYO Because: Private insurers have no risk of loss whatsoever because the federal goverment reinsures all loss at 100% level to any private carriers who participate in the write your own program

--Business Owner Property : +Small to medium sized business. +Cover Outdoor property in BOP: fire, lightening, explosion, riot, civil commotion and aircraft. Landscape: $500/item, $2,500 fence due to civil commontion, radio and television antenna: $2,500. Shrubs are excluded as personal business but under additional coverage +Limit outdoor sign: $1,000. +Dont have to pay deductible: fire department service charge, fire extinguisher rechange expense, extra expense, business income and civil authority. +Structure of BOP consists 3 sections: Building & Property, Liability, Common Policy Conditions. NOT COVER: autos and vehicles of the business +Cover property moved for up to 30 days. Preservation of property protects property while it is being moved or stored temporarily for up to 30 days on an open perils basic +$1,000 counterfeit bills -business income not pay for labor strikers ---Commerical Package Policy (CPP): +Building: land and building, +larger company. 4 main Elements of CPP: Common Declarations, Common Conditions, 2 or more parts of Coverage, Interline Endorsement. +7 Common Condition: --Cancellation: (10' days notice if nonpayment, 30 days notice of other reasons, 60 days of vacancy or unoccupancy), Cancellation is allowed by both parties --Changes:Assignment os insured right is not allowed within the written consent of the insured --Premiums:Premiums are responsibility of the first named insured --Examination of Your Books and Records:(any time up to 3 years after coverage expires), --Inspections and Survey And Surveys: determine premium cost --Transfer of your Right and Duties: Assignment os insured right is not allowed within the written consent of the insured -Parts of CPP:Commercial Building and Business Personal Property Form +Building +Business Personal Property:machinery and equipment furniture and fixtures stock inventory including raw materials and shipping supplies -Property Excluded under the Commercial Building and Business Personal Property Form: accounts, bills, underground pipes, automobiles held for sale, bridges, roadways, paved surface,

- Maximum $10,000 paid by Commercial Building and BOP for pollution clean up or removal. Must report 180 days - If a business intends to claim debris removal under Commercial Bulding and BOP must report 180 days from the date of physical loss. Loss is limited to the actual expense of the debris removal or a maximum 25% paid for the direct loss + deductible. -CIvil Authority: If local authorities do not allow a business owner access to their business premises due to problems to a nearby property, BI (Business Income) will pay loss after 72 hour wiaitng period for a short period of time depending upon which BI form is used (was 3 weeks but more recent forms pay for 4 weeks) - Extra Expense Funds during first 3 months: 40/80/100 is most commonly paid out 40% the first 30 days, another 40% days 31-60 and then final 20% after 60 days therefore the cumulative distribution is 40/80/100

Exclusions for Section II Coverages

----------The liability arising out of use of the following are excluded under Section II because they are designed to be covered under other existing policy coverages: 1,Motor Vehicles: except if they are in dead storage on premises, used to service the residence or being used to service a handicapped person. Toy vehicles designed for kids under 7 years old are covered. 2,Watercraft: except if stored and would not qualify for a watercraft policy. 3,Aircraft 4,Hovercraft -----------Liability exclusions which apply to Coverage E Only 1,Contractual Liability 2,-Bodily injury or property damage to an insured -3,Damage to property rented to or occupied by, or used under the care, custody and control of an insured -4,Bodily injury to individuals covered unde Workers Compensation -5,Bodily injury or property damage covered under a nuclear energy liability policy -------------------Liability exclusions for bodily injury which apply to Coverage F Only 1,A resident employee whose injury is not sustained during the course of employment or in premises 2,Any person regularly residing on the insured premises 3,Individuals eligible to receive Workers Compensation or disability benefits 4,Any person injured from any nuclear reaction ----Bodily Injury and Property Damage Liability EXCLUSIONS which apply to BOTH Coverage E and to Coverage F 1,Intentional Acts. 2,Business Activitie 3,Professional Liability. 4, War. 5,Communicable . 6, Sexual Molestation 7, Illegal Substance: federal food and drug law. cocaine, LSD, marijuana 8,Nuclear Weapon.

Duties/Rights of Both Parties

---Insurable Interest/Limit of Liability. Regardless of the number of insureds, the most an insurer must pay for a loss is limited to the insured's interest in property at time of loss or to the limit of liability --Insured's Duties After a Loss. Duty to include promptly notifying the company, notify the police when theft loss occurs, notify credit card or fund transfer company in the event of such loss, protect property from further loss, inventory the loss, cooperate with the insurer in settling a claim and submit a signed proof of loss within 60 days of the insurer's request. -Concealment or Fraud. No coverage with be provided to an insured who has committed fraud in obtaining or maintaining insurance coverage either before or after a loss. This includes making false statements, intentionally concealing material facts and engaging in fraudulent conduct. -Liberalization Clause. If an insurer broadens coverage to an existing policy edition all insureds having that original edition located in the same state within 60 days of the broadening are entitled to this better coverage at no extra cost. Subsequent editions and amendatory endorsement do not require liberalization.

Terrorism Risk Insurance Act (TRIA), Secretary of the Treasury must notify Congress no longer than.........after the act of terrorism: 15 days

--If an insurer receives permission to share information with non-affiliated third parties, under the Gramm-Leach-Bliley Act, customer must receive a notice every.......... for as long as the customer relationship lasts: a year --- According to TRIPRA, annual liability loss for insured are capped at: 100 billion

-----3 Dwelling Program forms: Dp-1: Basix Form:Named Perils, ACV loss payment for A,B and C. No E(additional living expense). No landscape coverage or additional living expense. $0 minimum dollar coverage. Against 3 perils: Fire, lightning & any type of internal explosion DP-2: Broad Form:Named Perils, Replace on A, ACV on C DP-3: Special Form:Open Perils, Replacement Cost loss on A,B and ACV on C. VMM burglary and glass breakage excluded when the dwelling has been vacant for more than 60 consecutive days. Not included: law, war, nuclear hazards, water damages, power interruption, eath movement, intentional loss, neglect, and goverment actuond -----5 coverages available for 3 Dwelling Forms: A: Dwelling: Structures attached to the dwelling, supplies or materials for construction or repair of the dwelling. NO lands B: Other structure (detached) C: Personal Property D: Fair Rental Value. --Up to 20% of A in DP-1 can be applied only maximum rate of 1/12 per month, if the lost rental value warrants it. Also an amount paid under coverage D reduces the Coverage A amount dollar for dollar under a DP-1 E: Additional Living Expense ** Dp-2 and DP-3: Coverage D &E are paid in addition to the dwelling amount but only up to a maximum of 20% of Coverage A combined . Not seperate ** Dwelling form: cover single family, two-flat, a four unit residential ( any building with 5 or more units under commercial policy)

--Limit Theft Coverage: covered in premises theft --Broad Theft Coverage: endorsement that covers a DP insured against theft on and off premises ----Dwelling Forms Exclusions (All three forms): Ordinance or law, War, Nuclear hazards loss, Water damage from flood, tidal waves, sewer or drain back, Earth movement, Power Failure and interruption loss, intentional Loss, neglect, Government Action such as destruction, confiscation or seizure ---DP 3 Special Form Exclusions:Birds, vermin, rodents, insects or domestic animals (pets) Wear and tear, marring, rust, mold, rot, contamination Smoke from agricultural smudging or industrial operations Mechanical breakdown Smog Settling, cracking, shrinking, bulging, or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings Wind, hail, ice, snow or sleet damage to antennas, trees, plants, shrubs lawns and trees Theft of property not actually part of the insured dwelling or to a dwelling under construction Freezing, thawing, or damage caused by the weight of ice, snow or sleet to awnings, fences, pavements, patios, swimming pools, foundations, retaining walls, bulkheads, piers, wharves and docks Inherent Vice and latent defects Vandalism and malicious mischief, burglary and glass breakage when the dwelling has been vacant for more than 60 consecutive days.

Insuring Clause:indicates weather perils are named or open, Promise by both parties. Insurer promises must be fair in underwriting and cover loss in a timely manner. Insured must tell the truth on application and pay premium

--conditions: rights and duties of both parties such as subrogation, nonrenewal, liberalization or cancellation. ---Declaration: exp: The declaration page found in a property / casualy contract is the face page of the policy. It states the names of parties(insured), the length of coverage, premium, description of coverage and property and lists all endorsements, name of the insured ---exclusions: the exclusions name the perils, property types and individuals that are not covered in the contract. Limit the scope of benefit, list which types of perils are not covered by the contract, limit the wording of insuring agreements.

CHAPTER 11: Casualty Provisions ********Duties of the INsured: 1,Immediate Notice of loss: writing to company or call agents. FIRST STEP 2,Prevent Further Loss: 3,Damaged and Undamaged Property: must be seperated to determine loss. No duty the insurer to pay or replace property that is not damage or destroyed 4, Inventory the loss: compiling a complete list of destroyed, damaged and undamage property 5, Claim Verification: through checking banks statements receipts and records of the insured must be made available to the company for inspection, if requested. it is a;ways a good idea to store such materials off site or in a fire container 6, Policy Reports: 7, Cooperation by the Insured: insured must assist the company in the claims process 8, Proff of Loss: insured must submit a written and signed proff of Loss form to the insurer . This is FINAL STEP before company payy for covered loss. (FILL out forms and send them back before claim will be paid)

-Artribition: Insured and insurer dont agree on how to settle the claim. Both split cost -Other insurance (PRO RATa LIABILITY): more than one insurer cover on one property at time os a loss. Excess coverage to other insurance -Suborgation: insurer recover from third party -COnsent to Settle a Loss: the liability policy require the written permission of the insured before an insurance company can make a settlement with third parry claimant. This provision is most common'y found in PROFESSIONAL LIABILITY insurance, such as MEDICAL MALPRACTICE COVERAGE. EXP: Benh nhan kien bac si nho wrong teeth

Filed Forms:

-Inland Marine forms which have been preapproved for sale by a department of insurance are referred. -Inland Marine forms that have been reviewed prior to sale by a department of insurance are called filed or controlled forms.

***Speculative risk:-Chance of loss or gain occuring - an example of an uncertainly of loss occurring - Are not insurable *** Specific: coverage a single family home located at a permanent residency or fixed location *** Pure risk: concept of indemnity

-Loss: is an unitended, unforeseen reduction or destruction of financial or economic value. Loss can be Direct or Indirect/Consequential +Direct Loss: due to peril itself. EXP: Lighting storm destroy insured's loss +Consequential Loss: Fire of building make restaurent close and loss revenue -Law of Large Numbers: helps make risk more predictable for the insurer through actuarial science. If a large group of insured pay premiums but only a small number of insured actually suffer losses, the insurer can still pay all expenses and still gain a profit

Installation Floater: Cover installed personal business property and become part of a structure requires an INstallation Floater to cover such property until it is actually installed until the constructor is no longer responsible for the property

-Personal Articles Floater: Personal Property Floater with great values like musical instruments, jewelry and furs to name a few, are properly insured with a personal Artiles Floater: original oil painting by Prominent artist. Artwork difficult to value -Transportation Floater: cover the goods of an insured being transported in a truck owned by the insured

Business Auto Policy (BAP)

-Section 1: physical damage: -Section 2: liability pay for BI and PD loss for all covered autos listed in the declarations -A partner of the named insured for a covered auto owned by them is excluded under BAP -There is Garage and Garage keepers exclusion in BAP -Have supplement payments coverage similar to pap

Garage Policy:

-Section 1: used to list the covered autos with their appropriate symbol -Section 2: Liability coverage -Gara Operations-Coverd Autos is a coverage avaiable under section 2 liability, related to the ownership, maintenance or use of a covered auto the (two coverage are mutually exclusive) >>><<< Gara Operation-Other Than Coverage -Section 3: garagekeepers: provide liability coverage from to owner from damage to his customer - -Garagae Coverage form: provide both comprehensive liability for general liability and auto liability in one policy and is designed for businesses that sell, segice, store, or rovide pucliv parking for autos

CHAPTER 13: Automobie Policies Review Notes- PAP: personal auto policy, BAP: Business Auto Policy 1: Part A: Liability Coverage:(your fault) to third party used covered vehicle. For someone else -Bodily Injury (BI): pay medical expense, lost wages to third party. -Property Damage (PD): pay to third party for damage to the property + rent vehicle -Split limit:per person bodily injury/total bodily injury/total property damage -Combined single limit: cover both BI and PD no matter the number of insureds, claims made, vehicle involved in a single accident. Not seperate between BI or PD just maximum combined total paid in a single accident -Supplement (Additional) payment of PArt A: $200 day for lost wages to attend a legal hearing or trial to insured, $250 bail bonds, all expenses incurred by insurer, cost of bond to release attachments ---Exclusion: body injuty to an employee while working duties but except a live-in maid unless covered by worker's compensation benefits 2: Part B: Medical Payments Coverage Part: limit 1,000 per person, per accident. for you and your passanger. 3 years. Over the named insured family member and any other person occupying the vehicle. Coverage also extends to the insured and family members when struck by an auto as pedestrian but ut does not extend to nonfamily pedestrians 3: Part C: ************Uninsured Motorist Coverage (UM): protect the insured and family of an uninsured driver -A motor vehicle that is not covered for bodily injury liability insurance - A lianility policy or bond did apply at the time of loss but the injury limits loss less than required by state law -Hit and run cannot be identified - At-fault vehicle the owner of the at-fault vehicle cannot be indentified - At-fault vehicle was insured at the time of the accident, but the insurance or bonding company subsequently insolvent or denies coverage **************Underinsured Motorist Coverage (UIM): other driver has insurance but not enough pay your. UIM (of injured driver)-BI limit (of other driver)=UIM payment amount physical damge Coverage -250$ deductible Property 4: Part D: Physical Damage to Your Auto: collision( your fault): you hit something and other than collision(not your fault): you hit animals, flood, not control. - Newly acquires vehicles must reported to the company within 14 days if any covered vehicle in the Declarations was covered under Part D but only 4 days if the policy had no part D coverage --Collision: A car which collides or impacts with another vehicle or fixed object, like a traffic signal post is a collisions. --Other than collision: metal pop out and into auto behind, flip an auto and light it on fire, his car suddenly bursts into flames due to defective fuel line -Collision and other than collision: broken windshield, food damage to the auto -48 hours (2days) waiting period before transportation benefits are paid by the insurer -Exclusion: machanical breakdown, seizure by government authority, using the covered auto as a livery conveyance. 5: Part E: Duties of the Insured. towing. 20/ day. max 600. broken: 24 hours. stolen: 48 hours.

-Territory: drive cover US, Puerto Rico, any province of Canada. No coverage driving in Mexico -Any vehicle which owned or leased for six months or nore which is being regularly used by the insured must be listed in the policy declarations or it is not a covered auto - A temporary Substitute auto: is not owned by the insured bc the covered auto is out of normal use due to breakdown, repair, servicing, loss or destruction -Hired Auto Coverage:protects the owner of a business when they rent a car for business use BC: not cover an employee driving the rented vehicle. -Non-owned coverage: is used by a business to protect the liability due to an auto accident while an employee of the business if performing a task for the company. The vehicle is covered by an employee's own vehicle. _Drive Other Car (DOC): is a commercial auto, when a company is furnished to an individual (officer, partner or employee of the business) and the company car is the only vehicle available for used to the named insured. THe coverage is not necessary if the individual has PAP coverage for their owned covered auto

Ho-8: Named Perils coverage on both Dwelling and Contents is used when the replacement cost of a home is far greater than the market value.

-The HO-8 only offers protection from loss for the following perils: Fire, Lightening, Windstorm, Hail, Explosion, Riot, Civil Commotion, Aircraft, Vehicle (not if caused by the insured), Smoke, Vandalism or Malicious Mischief, Volcanic Eruption and Theft (limited coverage which can be increased). HO-8 does not offer all the perils of HO-2 Broad Form but instead provides a more limited menu of perils. -HO-8 is not Replacement Cost coverage but instead will pay the lesser of: 1) up to the policy limit or 2) the actual amount spent to repair or replace loss to the structure using common construction materials or their equivalents (no fancy or ultra-expensive replacement parts will be used matching those that may have been part of the loss, just commonly available building materials). This is referred to as "functional replacement cost" coverage.

Homeowner policy pay up to 500$ without deductible for credit card, forgery and counterfeit money loss under additinal coverages -+Cover Outdoor property in BOP: fire, lightening, explosion, riot, civil commotion and aircraft. Landscape: $500/item, $2,500 fence due to civil commontion, radio and television antenna: $2,500. Shrubs are excluded as personal business but under additional coverage +Limit outdoor sign: $1,000. ++$1,000 counterfeit bills - Maximum $10,000 paid by Commercial Building and BOP for pollution clean up or removal. Must report 180 days -Flood Program: Under the regular program, the maximum coverage limits for a single family dwelling are $250,000 for the building and $100,000 f

-The fire department charge home owner policy $500 without deductible required - The standard deductible of a Dwelling Policy: $500 -The standard deductible for a Business Owner Policy: $500 -The fire department service charge maximum in a Builder's Risk policy: $1,000 -Eathquake peril that range from 2% to 20% of either A or C amount, depending upon how close or far from a fault line the insured property is located -Medical payment wi;; pay what limit per person, per medical and funeral expenses: $500 -Maximum the Texas Property and Casualty Guaranty Association will pay per claim: $300,000 -To be eligible surplus lines insurer in texas, an insurance company must: have at least 15 million dollars in capital and surplus -$1,000 is the special limit of insurance for new calf under coverage E (under one year one). Per head of livestock is $2,000 - $$$$$

Coverage F

-to others, the coverage applies only to: A. A person on the insured location or on the location with the permission of the insured or B. To a person off the insured location if the bodily injury: -Arises out of a condition on the "insured location" or immediately adjoining property. -Is caused by activities of an insured. -Is caused by a residence employee in the course of the residence employee's employment by the insured. -Is caused by an animal owned by or in the care of the insured.

Under HO-3, Peril is not Cover In addition to the nine common exclusions just listed, the following perils are also excluded from coverage in open perils of both the HO 3 and HO 5 policies for all the following causes: 1,Freezing pipes/systems in vacant dwellings 2,Theft from a dwelling under construction 3,Damage to foundations or pavements from ice and water weight 4,Vandalism to vacant dwellings (vacant for more than 60 consecutive days) 5,Latent defects, corrosion, industrial smoke, pollution 6,Settling, wear and tear of the building (normal maintenance) 7,Domestic Pets owned by insured 8,Latent defects, corrosion, industrial smoke, pollution 9,Mold, fungus or wet rot unless hidden & caused by water overflow or escape from within the dwelling 10,Nesting, infestation and discharge or release of waste products by any animal 11,Weather conditions that aggravate excluded loss 12,Birds, rodents or insects 13,Government and association actions 14,Defective construction, design, and maintenance

1) Ordinance or law requiring the construction repair or demolition of property. If the property owner's maintenance skills are so poor the property is being condemned by a local government, this is no coverage. 2) War- excludes all items of damage relating to war or warlike actions, whether declared, undeclared or civil. Wars do not damage one of two houses on the block, they destroy all homes on the entire block. 3) Nuclear hazards loss due to radiation or radioactive contamination due to any cause. 4) Water damage from floods, tidal wave and tsunami, tides and tidal water, sewer or drain backup, and water which comes through from below the surface of the ground such as seepage or leaks through walls to basements walls or windows and leaks through a swimming pool. Sump pump and drain overflow can be covered by endorsement but flood requires the purchase of a separate flood policy available only through the US government flood insurance program. 5) Earth movement. Excludes direct loss due to earthquake (includes land shock before, during and after tremors) including mudslides, landslides mine subsidence and sinkhole and any other land movement or shifting. HOWEVER, direct loss caused by fire, explosion or theft caused by earth movement is covered. An earthquake coverage endorsement is available for an additional premium charge. 6) Power Failure and Interruption loss not covered unless the interruption is caused by a covered peril. The equipment loss must be located on the insured's premises and damage to that equipment must be caused by an insured peril. 7) Intentional Loss by the insured or at the direction of the insured and any loss resulting from intent of the insured to cause the loss is excluded. It is against public policy for the insured to be paid on a loss caused by the insured intentionally 8) Neglect by the insured which leads to causing loss means the insured was unwilling to preserve or protect their own property, which is a duty of the insured, under reasonable conditions. 9) Government Action such as destruction, confiscation or seizure (of property coverages A, B or C), when ordered by a government or public authority, is not loss covered under the homeowner contract. This exclusion does not apply to government action causing loss taken at the time of a fire to prevent the spread of the fire.

Chapter 15: Commercial Crime 5 Commercial Insuring Agreements. Crime Forms to protect made part og Commercial Package Policy (CPP) or added to Business Owner Policy (BOP) 1,Burglary: requires 3 elements: -Forcible entry or exist into or out of locked premises and -The perpetrator has felonious intent (Intends to commit an illegal act) and -the burglar leaves behind visible signs that they were on the premises -damaged property , property inside the premises 2, Robbery: the robber takes property that does not belong to them by threatening the property owner with harm or violence (robbers are often armed with weapons) if they do not relinquish the property to them (the robber is up close and personal will hurt you unless you give up the goods he wants) 3, Theft: The broad definition means any act of stealing, including both robbery and burglary. Form pay for insured premises, route to deposit the money in the bank, damage done to a locked safe, vault, cash register, cash box drawer inside the premises. Cover an act of stealing of money (travelers checks) and security 4,Forgery and Alteration: pay for loss resulting directly from forgery or alteration of checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in "money". The policy will cover expenses associated with legal action that result when an insured stops payment on valid notes when they have good reason to believe forgery occured, but does not. -Forgery and Alteration: (world-wide coverage): The insuring agreement in the Commercial Crime form covering forgery and alterations is worded 5, employee Dishonesty 6, Mysterious Disappearance (MD):(optional) the property loss is a mystery, it was there then it was not, and it is not known what happened to it. Since it is uncertain if the missing property was stolen ot not, theft loss may or ,ay not be covered depending upon the way the contract is worded and weather or not mysterious disappearance is included in the definition of theft loss cannot be established. MD can be added by endorsement with some insurers

1, Money and Securities +MOney: currency, coins, and bank notes in current use and having a face value, trvelers checks, register checks and money orders held for sale to the public +Securities: negotiable and nonnegotiable instrumentd or contracts representing either "money" or property 2, Property Other than Money and Securities -Robbery or safe burglary of other property: would cover robbery of a employee, while having care and custody of property inside the premises. Excluded: under the Crime coverage forms: an insured who discovers they have been robbed through inventory shortage(cannot prove theft was the cause of loss), inventory stolen by an employee, accounting errors -"Discovery period": no later than 60 days from the end of policy

-60 days: in advance an insurer in TX file a policy form with the commissioner for approval. -10days: Commissioner can extend review period 10 days -10 times the nest assets of underwriters: maximum book of business a TX Lloyds is allowed

1,2,3,4,5,6,19: synbols are covered after the policy begin

-Chaper 3 -Proof of Loss means the insured must submit a written and signed proof of loss form to the insurer within a time specified in the policy from the date of loss or insurer's request. This is the final required step before a company will pay for a covered loss. -Other Insurance (Pro Rata Liability):This clause offers a formula, based on the concept of pro rata liability when coverage by more than one company is in effect on the same property at the time of a loss. 2,Elements of a Contract -Offer and Acceptance -Consideration -Competent parties -Legal purpose

1,Insuring Clause:specific obligation being assumed or promised by the insurance company. state the perils covered, indicating whether they are named or open. -promises between the two parties are exchanged. . The insurance company promises to give fair underwriting and pricing and to pay according to the terms of the coverage for all covered perils while the insured promises to pay all premiums due in a timely fashion and that all statements made to the insurer at application were truthful representations. 2, Exclusions: Exclusions limit the scope of coverage in an insurance contract by specifically listing any causes of loss for which coverage will not exist.extend to include limiting wording of insuring agreements as well as to definitions of perils. U

Chapter 4: Homeowners Policies 1:Home Owner --Even 2,4,6,8=Named Peril. Cover Have to listed. EXAmple: Fire, lighting --Odd 3,5= Open Peril: Cover everything Not excluded. It is best policy ---A,b: replacement cost, C: ACV 2: Type of Homeowner: -------HO 2,3,5: House--- +HO2: Broad Form-Named Peril(A,B,C): A,B replacment, C is ACV +HO 3,5: Open- more coverage. +HO 3: special form.(A,B:open,replacement),(C: name(sameHO2), ACV). +HO 5: Comprehensiveform.(A:open, replacement),(C: open,ACV). +HO5+ C: mysterious disappearance. exp: i dont know if i lost it, stolen. i cant find. i dont know where it it. i dont know what happen ----HO4: Tenant Broad Form, Named (same as HO2) .Cover stuffs inside: C: ACV. No A,B. HO 4 55: cover earthquake ----HO6:Condo Unit Owner For. Named. C: ACV. ---HO8: Modified form. Named. Cover fewer perils under HO2 ---HO-7: Mobile Home Form The mobile home form is very similar to an HO-3, but is designed specifically for mobile or manufactured homes. 3: Coverage of Home owner ------Section 1: Property.A->D: property insurance. $1,000 Deductible A: Dwelling: Main struction: B:Other structure: detach Garage. 10% A C: Content: Stuff inside: Shoes, Clothes, furniture. 50% A forms HO-2, HO-3, HO-5 and HO-8. HO-4, and HO-6 ACV is stated or agreed value. Cover Personal property of the insured that is kept elsewhere. greater of $1,000 or 10% of the Coverage C amount D:Loss of use: ------Section 2: Liability.E->F.Comprehensive Personal Liability (CPL)bodily injury and property damaged of others caused by the negligence of an insured which is unrelated to business activities of negligence arising out of use by the insured of an automobile. Section II is casualty insurance. E: Liability: at your fault, guilty. pay out to someone F: Medical payments to others: . Parties while on or out the premises of the insured. extend caused by animal owned.Have to have medical bill, submit to physical exam as requested. **Additional Coverage for Section 1: No additonal premium cost 1, Debris Removal: 1 occurrence of felled trees $1,000. MAx each tree: $500 and tree must strike the dwelling roof, exterior wall or block a drive way. 2, Landscape: shrubs, trees, plants and lawns: 5% A with max $500 each tree, shrub or plant (Ho-8: only $250) (Ho4, Ho6: 10% C with $500 per item limit) 3, Fire Department Service Charge :$500 4, Property Removed: protect property to different location for up to 30 days 5, Credit Card Forgery:pays up to $500, without deductible 6,Loss Assessment pays up to $1,000 7,Landlord's Furnishings:It pays up to $2,500 for loss to carpeting, household appliances and other household furnishings, but not for theft loss. 8,Building Additions:betterments (tenant improvements.betterments (tenant improvements 9,Ordinance or Law requirements provides an extra 10% limit of the Coverage A amount for improvements to damaged property when building code upgrades result in extra cost for repair. 10,Grave Markers protection pays up to $5,000 (including mausoleums) on or away from the residence premises for loss caused by a peril under Coverage C (whose limits are not increased). ****Additional Coverages of the Homeowner Policy in Section II 1,Claims Expenses:the cost to investigate claims,250 per day for lost wages 2,First Aid Expenses:includes reimbursement for any expenses incurred by the insured for rendering first aid to others as a result of bodily injury actions that are covered under this policy, but it does not cover first aid expenses to any insured 3, Damage to the Property of Others: $1,000 per occurrence for the replacement cost of the property of others that is damaged by an insured except: insured 13 old or older, property that the insured owns or tenant 4, Loss Assessment:$1,000 per occurrence coverage

1: Freezing: If you took maintain heat in the house. --Excludsion: +not cover Earth Movement, it cover if you buy eath moverment endorsement. fire always cover. DP1 +Water damage, outside water in not coverage anf cover if you buy sewer back up endorsement or flood policy from goverment. 2: Major Coverage:A->F 3: Additional coverage not additional premium: tree, shrub. MOney for a lawyer to limit.

Chapter 16: Bonds 1, Surety Bond:is guarantee for performance (a promise) mad by a principal (obligor) to an Obligee (usually a customer or business associate of the principal who had made a promise to perform to the obligee) which is financial backed by a Surety (an insurance company also called the "Guarantor"). There are three parties to this bonding arrangement. FACE AMOUNT CALLED PENALTY ****6 types of guarantees in surety bonding: 1: Federal (assures payment of duties owned to the federal government) 2: Contracts (they guarantee performance expected under a contract) 3: License and Permit (individuals need them to make goverments happy in order to get permits and licenses issued- building contractors 4: piblic official (protect te citizens of local governments if elected officials rob the public blind) 5: Court (known ad judicial bonds) 6: Miscellaneous (hundreds pf possibilities)

2, Fidelity Bonds: offer protection against the dishonest and fraudulent acts of employees, therefore, they guarantee honestly. Face Amount is called the limit of liability. if employee will not honest, the obligee (employer) is paid by the surety for the loss. 3 types of fidelity bonds: +Individual (each cover employee is individually named) +Scheduled (multiple name employees or protects against loss when any employee is engaged with a specific job duty)- as a position schedule bond + Blanket (theft by all employee is covered): 2 types a) Commercial Blanket Bond: the bond limit is the maximum amount will be paid for a single loss regardless of the number or employees involved. This is a "per loss" basic. There is a one-year discovery period b)Blanket Position Bond: The bond limit applies against each employee no matter how many employees are involved in a single loss. This is a "per employee" loss basic. There is two-year discovery period.- 2 years A discovery period: is the length of time the employer has to realize they have suffer a loss under Fidelity Bond.

Risks would not likely be eligible for coverage under a Business Owner Policy?

A manufacturer with potential for large product liability claims should a manufactured product be defective EXP: Most manufacturing risks are not acceptable for BOP, especially those that could result in large product liability losses

conditions both section 1 and 2 Except:

Appraisal EXP: Included: cancellation, subrogation, assignment. --Appraisal is only in Section 1

BUsiness Income Coverage normally begins and ends in which of the following?

BI starts 72 hours after a covered loss occurs and ends when the damage caused by the covered peril should have been repaired or replaced with reasonable speed to a similar quality as to before loss EXP: Business Income Coverage begins 72 hours (waiting period) after a covered lost happens and runs until that point in time when the loss should have been repaired or rebuilt to the same quality as before in when a time reasonable to accomplish such repair or rebuilding --extra expense: an optional extension of coverage is available to the insured to cover newly acquired location up to $100,000

CHapter 9: ------eathquake: homeowner policy excludes loss by eath movement is only availanle as an optional endorsement for extra premium on either homeowner or dwellking policy. singled quake: 72 hours in personal line contract. 168 hours in commercial lines. Deductible 2-20% of Coverage A or Coverage C amount -------Mobile Homes: Same Homeowners POlicy +Coverage C: 40% Coverage A +500 no deductible to remove personal property to avoid damage (The Clause that pays up to $500 of the insured will remove it to avois loss is called Property Removed) ----------Watercraft: (up to 26 feet in length and more than 50 HP outboard, 25 Inboard). Boatowners Policy and the Yacht Policy are more valuable boats (BC homeowner policy has limited boat coverage only for $1,500) *** Boatowners: +Section 1: Coverage A: Cover Property: LOss is cover for direct Loss +Section 2: Liability -Coverage B: Water craft liability: -Coverage C: Medical Expense: -Coverage D: Uninsured Boaters: An insured is paid damages upon bodily injury caused by an uninsured operator or a watercraft. *** Yatch Policy (longer than 26 feet). insure yatch, sailboats, inboard motor +vessel (hull of the boat) +liability +Medical paymets +WORKERS COMPENSATION (FOR THE VESSEL'S CREW FOR OCCUPATIONAL ILLNESS OR INJURY) +Boat Trailer +Land Transportation (damage while being moved on land) ------------Farm Owner: Similar Homeowner Coverage A -> Coverage D. +Coverage E: Schedule Farm Personal Property: Property insured premise -Grain, threshed seed,beans, ground feed -Hay, straw and fodder in buildings or structures, and hay, straw and fodder in stacks, windows ot bales but inly got yhr perils of lighting, wind storm or hail, vehicles or theft -Farm products, materials and supplied. -Trays, boxes and box shook, each item or set in proportion that its value bears to the total value of all such items -Computers and related software used as aids for farm management -Miscellaneous equipment usual or incidental to the operation of a farm, including machinery, vehicles, tool, and supplies +Coverage F: Unscheduled Farm Personal Property. Items away from insured premises. Farm Machinery, Livestock, Farm tools +Coverage G: Other Farm structures: -Farm buildings and structures, fences, outdoor radio, television equipment, antenna, masts, towers, Feed Racks, garage that houses Terry's tractor, corrals. NOT FIELD FENCE +Coverage J: Medical payments: Losses due to farm employees and/or losses that could be filed under workers comp are excluded from coverage.

CHAPTER 10: Casualty Insurance Terms Review Notes -Dynamic Risks: changes in the economy in some soft of risk to the public. -Static Risks: -Fundamental Risks: large scale, impersonal events that caused by group and/or natural occurrences and have great effect on group of people. unemployment, war political, natural diaster: floods, earthquakes, hurricanes -Particular Risks: some soft of loss to the individual specially. For example, sold-out crowd of 50,000 people Hazard: is a physical condition or mindset that create an increased possibility that a peril will actually occur -Morale Hazard: The insured unintentionally -Moral Hazard: dishonest character of the insured, bad habit, or criminal mindset -Physical Hazards: physical condition that makes loss more likely to occur, Physical Hazards are somthing tangible that can be seen, touched, smelled Indemnity: restore or reimburse financial the loss. Not profit or gain by their loss Insurable Interest: an insured must prove to an insurance company that they have a legitimate interest in preserving the property they seek to insure at both the time the coverage is purchased as well as when loss may occur in the future -ACV: replacement cost - depriciation -Replacement cost: exact money amount to replace damaged property NO deductible (Replacement against the principle of indemnity because it is possible for the insured to wind up with more than they had before the loss) -Market Value: The Price at which property will sell in the regular market place when neither seller ot buyer is forced to term. Land included. A homeowen will insure their home on replacement cost basic, not based upon the purchase price of the home -Stated/Agrees Value: Value of the insured's personal property. will be used to determine premium amount. Higher stated value of policy, the higher the premium will be. oil painting by a prominent artist (unique artwork) -Salvage Value: any proceeds from salvage value help the insurer recoup some of the loss paid to the insured (after total loss, then any remnants of property is owned by the insurance company and any remaining value) _negligence: Careless - Liability: A person has liability when their acts in the bodily injury or property damage to another person. -Absolute Liability:when an insured has a hazardous condition present such as harboring a wild animal or having swimming pool. Keep in mind that with absolute liability, there is no negligence that needs to be proven to establish who is responsible for loss -Strict Liability: apply to manufacturer products. If a product is defective the business is liable for all damages and no negligence need to be proven -Vicarious Liability: apply when one person is legally responsible for the actions of another person due to negligent. EXP: Parent responsible for actions of a minor child or employer/employess relationship -Occurence: continuous or repeat condition over time that results in injury or loss. Unexpected, unintended and sudden event causes property damage -Binders: a temporary coverage put in force by agents in effect pending the future insurance of a policy

CHAPTER 17: Professional Liability Insurance Review Notes ***2 categories of professional liability insurance: -Malpractice -E&O **** The coverage required for the state license exam include 4: 1:E&O : protect insurance agents, real estate agents, stockbrokers from not providing information to customers 2:Medical Malpractice: protect people who work in the health care, such as doctors, surgeons, dentists, nurses, hospital. 2 main policies A: Physicians, surgeons and Dentist Professional Liability Insurance B: Hospital Professional Liability Insurance: 3:Directors and Officers (D&O): protects individuals that serve as officers and board of director members for organizations including for profit businesses and non-for-profit concerns. "in wrongful act" -Wrongful act: any breach of duty, neglect, error, misstatement, or other act committed or wrongfully attempted by the insured or alleged to have been committed solely based on their service in the capacity of officer or director. EXCLUDED: punitive damage and fines, salary 4: Employment Practices Liability (EPLI): protection for an employer against claims made by employees covering discrimination, wrongful termination, sexual harassment, and other employment-related allegations 5: Cyber Liability and Date Breach: information is stolen -First Party Respond: cover financial loss relating to date breach for both business and customers _Third Party Defense and Liability: refers to legal expenses incurred 6: employee Benefit Liability: administration of employee benefit

Chapter 18: Umbrella/Excess Liability Insurance Review Notes ******Umbrella/Excess Liability: -is seperate and additional excess limits atop underlying auto or general liability policies that can be purchased by individuals or businesses. Umbrellas do NOT cover business actions under personal coverage or intentional acts - Deductible: is Self-insured Retention is the deductible that must be paid before the Umbrella will cover excess liability losses -Provides excess amounts of liability coverage for both general liability and auto liability ****Commercial Umbrella Liability policies -Excess coverage for businee's auto and liability coveragem

Chapter 12: Commercial General Liability Insurance Review Notes 1: Special Damages: "objective" actual out-of-pocket expenses suffered by injured party include medical expense, lost wages 2: General Damages: "subjective". Compensation for the injured party's "pain and suffering" 3: Punitive Damages: "tortfeasor" . Punishment ot tort action

Commercial General Liability: Protect business against losses form negligent acts of the insured that are not related -Coverage A: Bodily Injury and Property Damage: a person who is injured due to the negligence of the insured on the insured's premises is cover as long as that person is not the insured nor an employee of the insured. Bailed personal property is also not cover under CGL and neither is intentional damage. ******Exclusions to Coverage A: +Intentional acts, work (employee) related loss, Losses relating to auto, aircraft or watercraft accidents, liquor liability,Personal property in care, war losses, pollution discharge, contractual liability, Damage to work product of the insured, Loss, expense or cost incurred by the insured for product recalled due to known defect, loss caused by personal activities -Coverage B:Personal Injury (PI) and Advertising Injury Liability: -Coverage C: is no-fault and therefore legal liability does not have to established in order for the medical benefit to be paid in the event a person suffers bodily injury

Inland Marine (Floaters) -Types of Risk under Inland Marine: +personal floater risks +commercial property floater risk (including property in the custody of a bailee and transportation insurance): bridges, tunnels, other instrumentalities of transportation and communication (piers, wharves, docks, slips, pipelines, power transmission, telephone, radio)' (Not cover for structures or building but rather items of personal or commercial personal property, primarily while in transit or away from the insured premises bring stored elsewhere) - Inland Marine Insurance Policy: the product be eligible for coverage, not building would be covered by a building and business personal property form

Common Carrier: is liable for the loss of goods due to negligence of their driver

A peron is covered in CGL pau for on the behalf of the insured: The person get hurts is not insured nor an employee of insured

Complete Operation Liability: When a contractor does work, completes the task and then afterwards the work fails and causes bodily injury or property damage that is covered by the exposure known as Completed Operations LIability

Federal Crop Insurance

Cover: Weather conditions, such as flood, drought, frost and hail. Disease and damage by insects. fire

Coverage C overage C limits are: 1. money (coins & precious metals, bank notes) $200 2. valuable papers (manuscripts, securities) $1,500 3. trailers, other than watercraft $1,500 4. watercraft and furnishings $1,500 5. theft of firearms $2,500 6. theft of pewter ware, silverware, gold ware, etc., $2,500 7. theft of jewelry, furs, precious stones $1,500 8. loss of portable electronic capable of being powered by a motor vehicle $1,500 9. antennas, tapes, wires, records, disks or other media in or upon a motor vehicle- $250 10. property on premises used for business purposes $2,500 11. property away from premises used primarily for business except those listed in #9 and #10, above, the limit is $1,500 12. personal property located in self-storage facilities is limited to 10% of the Coverage C limit or $1,000, whichever is higher.

Coverage C Not Cover The main exclusions under Coverage C include the following: -Animals, birds, fish, -Aircraft and parts, -Automobiles or motorized vehicles unless the vehicles are used to assist the handicapped to move about the property ground or toy vehicles designed for children under age 7, both of which are covered -Any recording or sound reproducing devices while in a motor vehicle, including tapes, records and discs -The property of boarder's and roomer's when the individuals are not related to the insured, and any property in an apartment which is regularly rented if it is away from the insured premises, -Hovercraft and parts -Business data -Credit card or fund transfer cards other than those coverages provided under Additional Coverages. -Property scheduled and covered elsewhere (refers to Inland Maine Personal Articles Floaters)

Casualty Policy

Dishonest or criminal acts of employees are covered under Crime insurance which is a casualty coverage and not in a property insurance policy like Commercial Building and Business Personal Property

Supplementary (additional) payments:

Do not reduce liability limits. They are paid in addition to the applicable amount of liability lost wages when the insured is required in court and/or cost to post bonds to specific amount ****Supplement Extended Reporting Period Endorsement: (alter the claims made form to an occurence form allowing the insured who selects it a reporting period which is of unlimited duration) IN CGL: it can be double to triple the cost of claims made policy, insured must request in writing, must requested within 60 days from the end date of policy and all additional premium must be paid

In the Flood Program, which entity specifies the flood control measure that certain communities must adopt to be eligible for flood insurance?

FEMA EXP: The Federal Emergency Management Agency sets the flood control measure that must be adopted for eligibility in the flood program

overage D applies when a covered peril renders the insured dwelling uninhabitable, or not fit in which to live forcing the insured to seek temporary shelter elsewhere or to suffer rental loss. Three expenses are covered: 1,Additional Living Expenses - any necessary increase in living expense incurred by the insured to allow the household to maintain its normal standard of living. 2,Fair Rental Value - pays the fair rental value to any part of the premises rented to another minus any expenses that do not continue while the premises are not fit to live in. 3,Civil Authority Prohibits Use - Additional Living Expenses and Fair Rental Value are covered for up to two weeks if the prohibited use of the insured residence was the result of direct damage to neighboring premises by a covered peril.

HO-2,3,5: 30% A HO-4: 30% C HO-6: 50% C HO-8: 10% A

Exclusions:

Limit the scope of benefits list which types of perils are not covered by the contract limit the wording of the insuring agreements -property types and individuals that are not covered in the contract

COVERAGE C: --Personal property located in self-storage : 10% of the Coverage A limit or $1,000, which ever is higher -- Money, coins, medals and bake notes are covered up tp $200 under coverage --If valuable papers are destroyed on the premises by a loss covered by a BOP, what is maximum dollar amount that can be collected to restore such papers? $10,000 are available under the personal property extension of Valuable Papers and Records coverage to cover the costs of research and other reproduction costs. The limit is only $5,000 if the papers that require restoring are not at the described premises

Loss to Pair or Set clause: difference between ACV of the property before and after the loss will be paid. EXP: set dishes is $1,000 before the set broken, leaving a value of only one $400. How much will the homeowner policy pay under the Loss to a Pair: $1,000-$400= $600

Indemnity

Make insured whole after a loss. Idea to restore a person to the financial position they were before loss occurred. Insured never get profit from the loss

Breakdown under Equipment Breakdown Policy?

Mechanical failure including rupture or bursting caused by centrifugal force EXP: Direct covered loss such as failure of pressure or vaccum equipment, mechnical failure by centrifugal force and electrical failure.

following businesses would be eligible for Business Owner policy

Mike's Chiecken to Go exp: Fastfood restaurants occupying less than 7,500 square feet of floor space can qualify for the BOP

Fire: type of loss occur before liquidated demand is put place to settle the total loss (the total loss must be by fire)

Motor Vehicle Safety Responsibility Law: The name of the Financial responsibility law in Texas

Blanket Coverage

N owns three homes in 2 different states. If N wanted to have one policy that covers all of the properties, N should buy: BC: BLANKET COVERAGE is more than one property at one or more locations under one contract.

NFIP:

National Flood Insurance Program: "There is a deductible applied to the building and another to the contents under both the emergency and the regular programs" EXP: A separate deductible is applied to each of the coverage, building and contents. In the emergency program the deductible is $2,000 and the deductible for the regular program is selected by the insured within the range of $1,000 up to $5,000. In the amounts of $500 for the regular program and $1,000 for the emergency program.

An insureer may cancel a Business Owner policy with just 5 days notice for all of the following activities Except:

Nonpayment of premium -- Insured is vacant for more than 60 days -- There has been no water or electrical connection to the insured building for more than a month --The insured has not paid the property on the described property in more than one year

Workers Compensation PArt 2: Employers' Liability: Other third-party situations include the spouse or family members who sue the employer because the worker is no longer the same person they used to be. dual-capacity. PArt 3: Other States: expand business to one or more additional states and will be employing workers in those new states, they must contact the insurance company promptly to add the required states to the policy General Information Page -Exclusive Remedy: injured or ill worker and the worker could not sue the employer to recover compensatory damages or go outside of the WC process -PREMIUM DETERMINATION:

PArt 1: --WorkersCompensation (WC): when they suffer bodily injury (by accident and including death) and by illness or disease, 1,Lost Wages 2,Medical 3,Disability 4,Work Related vs. Non-Work-Related:employee was not engaged in work or work related activities at the time off their loss, then they cannot be paid through the WC coverages, the loss is deemed to be "non-work-related

In a property insurance contract, the declarations state:

Premium amount exp: The declaration page found in a property / casualy contract is the face page of the policy. It states the names of parties(insured), the length of coverage, premium, description of coverage and property and lists all endorsements

Replacement Cost

Provides benefit that are the exact amount of money to replace destroyed property at the time loss occured - replaced with new item at current replacement prices at the time of loss

HO-2: Named peril. Exp: automobiles or motorized vehicles are excluded unless the vehicles are used to assist the handicapped or are a toy vehicle designed for children under age 7 -- Additional coverage in a homeowners policy will pay up to $2,500 for a loss to landlord furnishings caused by FIRE a covered loss for items like carpet, appliances and other household furnishing. However, theft loss is not covered

Section 2: Cover E: personal liability, Cover F: Medical payments to Other coverage -Provide form of coverage: HO2,6,5. Not: HO4. (Because: Renters do not own dwelling -HO5: comprehensive form is open perils coverage. Insect damage is not covered if the insured had reason to know of the situation. Only a collapse due to hidden decay by termites would be covered. -HO4: or tenant Broad form offers (personal property, loss of use) coverage under section one and not coverage for dwelling or other detach structures (No Coverage A and B), liability under section 2 -HO3 and HO5: both are open cover all perils: eath movement cause by an explosion ++included: direct loss of earth movement, : fire, theft or explosion +++ exclusion on both: war, ordinance or law, nuclear hazards, floods, intentional loss, neglect, earth movement caused by an explosion -HO2: extended coverage perils: windstorm, civil commtion, vadalism. EXcept: burglar damage.( Burglar damage is a broad form peril and is part of the acronym BIF AFFECT)

Vicarious Liability:responsible for the action of another

Strict liability: applies to a business that manufactures products. If a product is defective the business is liable for all damages and no negligence need be proven

Falling objects

The hellicopter falls from the sky, crashes through the roof of the insured's home and destroy his dining room set EXP: the exterior of the building as well as contents within are damaged due to falling objects if the falling object damages the roof or an exterior wall. -- Excluded under this peril is loss to awnings, fences, outdoor equipment, masts, towers and antennas

Jeweler Block Policy

Through the jewels were not a bailment since the representative was delivery a purchase, the policy specifically covers bailment

Flood Insurance

Under the regular program, the maximum coverage limits for a single family dwelling are $250,000 for the building and $100,000 for the contents With deductible as stated in the declarations that applies to separately to both coverages.

concelment:failure to disclose a known fact that is being hidden by applicant

Warranty: statements only used in commercial policies

Emergency program:

When a community required to do so has agreed to adopt flood control measured set forth. The coomunity elifible for: Emergency program EXP: After initially agreeing to adopt required flood prevention measures a qualify community is eligible for the emergency program

*** coverage B of BOP: business personal property including personal property leased by insured ***Cover A of BOP: Outdoor, Addition under construction, equipement that is permanently built into the corner of an inside room of the insured premises ***Structure of Bop Coverages -Section I Coverages A & B Coverage A - Buildings Coverage B - Business Personal Property -Section II Liability: Business Liability Medical Payments -Section III: which of the following insured property would be covered under a replacement cost basic in a business owner policy under Coverage B?

a copier leased by the insured exp:Coverage B of BOP pays for loss to business personal property of the insured including personal property leased by the insured for which the imsured is contractually liable.

peril

a peril is an immediate, specific cause of loss such as, fire, lighting, explosion.

Endorsement:

add rider to policy BC: Endorsement is a written change made to a policy at or after issue. Endorsement must be made in writing and they can be applied tp a contract to ass or delete coverage

For coverage to exist for losses to business personal property under a Business Owner Policy, the property must be located:

at the property described or in the open or in a vehicle that is within 100 feet of the premises

Builder 'sRisk policy ends are TRUE, EXCEPT:

before the structure being built is finished Correct: -60 days after when building is put to its intended used -90 days after construction is completed -the builder's interest in the property has concluded

Proximate Cause:

begins with negligence and sets in motion an unbroken series of events that leads to loss

HO-8 (modified coverage form)

homeowner forms pays for loss on a functional replacement cost basic. EXP: The purpose of Modified for coverage HO-8 is to restore the insured property to its market value because the replacement cost is far greater. Common building materials that offer the same function as the otherwise ulta-expensive replacement materials are used to restore the property but in;y yo its market value.

HO policy

insured's food accidently slips off the brake when turing into their driveway and the car takes out half way of the home's living room. EXp: HO cover physical damage to covered property caused by vehicles. This peril does not cover auto accidents or auto liability incidents. Those coverage would be found under auto insurance

Law of large number

insurer pay all expenses and still gain a profit

Actual Cash Value loss

is a loss valuation that reinforces the principal of indemnity because it takes into consideration the idea of usage over time. ACV is determined by taking current replacement cost minus depreciation which prevents profit from loss

endorsement

is a written change made to a policy at or after issue

direct loss

is when property damage or destroy by a peril that is covered under policy. there is direct loss due to the peril itself

if a loss occurs, first step an insured take to file a successful claim

notice of claim EXP: final step: Proof of Loss

Market value

price at which property will sell in the regular marketplace when the seller nor buyer is force to term. In addition, the value of land is also included into the price which no other valuation method includes. The only policy which commonly includes MArket value is HO-8, Modified Form. -HO-8: does not pay replacement cost

Multi-line Policy

property and liability coverage EX: A homeowner policy (HO) is considered a multi-line policy because it consists of two section: Section 1: Property Section 2: liability coverage

Gramm-Leach-Bliley Act:

protect privacy of consumer information

Policy application

sent to underwriting before coverage can being - is printed form which all applicant answer and information is recorded, signed, and forwarded to the insurer to being underwriting

Inspection Report

underwriters view an insured's history of claims and underwriting maps on the insured's property -determine the nature of the general area located. underwriting maps on the insured's property

Open Peril

will cover all losses, unless they are specifically excluded for coverage. Open Peril are usually called "Special form coverage" - Cover any specific immediate losses unless they are excluded in the policy