property and casualty study gudie:Ad banker
Commercial Auto Liability -
For exposures pertaining to vehicles owned, used, leased, or hired by the business.
Scheduled Personal Property Endorsement
Homeowner's policy endorsement that provides open peril, scheduled coverage for 9 optional classes of property
what is an complete package of yacht ?
Hull Insurance, Protection and Indemnity and Medical Payments.
Issue Age
Insured's original age on the policy issue date.
Part B - auto
Medical Payments
Employer's Liability -
Provides liability insurance for the business in the event an employee sues the business for injuries that fall outside Workers' Compensation statute.
Representations
Statements made by the applicant on the application that are believed to be true to the best of the knowledge and belief of the applicant; may be withdrawn prior to policy issuance.
Combined Ratio
Sum of the loss ratio and expense ratio.
Part F - General Provisions
The General Provisions of the personal auto policy apply to all sections of the policy. They spell out the obligations of both the named insured and the insurance company
Theft
The broadest of the crime coverages, theft includes any act of stealing.
Conditions
The conditions section states the obligations of the parties to the contract, as well as any other conditions of coverage. The insureds duties and obligations are spelled out in this section. 1. Policy Period - Specifies that coverage only applies to losses occurring when the policy is in force. 2. Concealment or Fraud - Specifies that coverage may not apply if an insured makes a material concealment, misrepresentation, or fraud in the application pertaining to the claim. 3. 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. 4. Cancellation - Specifies the terms under which the policy can be cancelled by the insurer and the named insured. 5. Nonrenewal - Addresses the requirements of the insurer if it elects not to renew a policy. 6. Assignment - Specifies that the insured may not transfer rights of ownership without the insurer's prior written consent. 7. Subrogation - States the insured must transfer to the insurance company its right of recovery against any party causing a loss after it accepts payment from the insurer for a loss. Subrogation allows the insurer to recover from the party that caused a loss any amounts paid to an insured. It also: a. Prevents the insured from collecting twice for the same loss. b. Helps the insurer control expenses and premiums. c. Ultimately holds the responsible third party accountable for the loss. 8. Changes - Any changes to the policy must be made in writing by the insurer. 9. Insurable Interest and Limit of Liability - The insurer will not be responsible for payment of loss in an amount greater than the financial interest of an insured. 10. Restoration/Non-reduction of Limits - Specifies the sum and circumstances under which an insurer charges the insured, usually a business firm, to restore a policy to its initial face value or not reduce limits of coverage after the insurer has paid a claim either to the insured business or a third party on behalf of the business. 11. Duties in the Event of Loss - Specifies the obligations of the insured in the event of a loss. With respect to any loss, these obligations include: a. Giving prompt written notice to the insurer, including a complete description of how, when, and where the loss or damage occurred. b. Notifying the police if a theft occurred. c. Cooperating with the insurer in the investigation and settlement of the loss. d. Protecting property from further damage. e. Preparing an inventory of the damaged property. f. Allowing the insurer to inspect any damaged property and examine books and records. g. Submitting proof of loss to the insurer, including: 1) The time and cause of loss. 2) Any other insurance that may cover the loss. 3) Any appropriate receipts, evidence, or affidavits to support the loss. 12. Loss Settlement - Specifies which loss valuation method will apply to the property insured under the policy. A 13. Appraisal - Addresses disputes about the amount of a loss. If the insurance company and insured cannot agree on the amount of a loss, either party may request an appraisal. Each party selects its own appraiser and the appraisers select an umpire. Agreement by any two parties settles the loss. Each party pays the cost of its own appraiser and shares the costs of the umpire and the appraisal. Appraisal is a dispute resolution method and is not used to determine whether the policy provides coverage for a loss. 14. 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. 15. Legal Action Against Us - Specifies that no one may bring suit against the insurer until all terms and conditions of the policy have been complied with. 16. Loss Payment - Specifies how the insurer will make payment for loss and any applicable time frames that must be honored when submitting proof of loss and other claim documents. 17. Abandonment of Property - Specifies that the insurer is not obligated to accept any property abandoned by an insured. 18. Mortgage Clause - Specifies how the policy protects the mortgagee's financial interest. (A mortgagee has insurable interest in real property.) Payment is made to mortgagees only up to its insurable interest in covered property and in order of precedence. The mortgagee must comply with requirements if the insured's claim is denied and the mortgagee wishes to collect under the policy: a. It must pay any premium due under the policy on demand if the insured fails to do so. b. It must notify the insurer of any change in ownership, occupancy, or substantial change in risk of which the mortgagee is aware. c. It must submit a proof of loss to the insurer if the insured fails to do so. Under cancellation requirements, the insurer must provide the mortgage holder (mortgagee) with advance written notice (typically 10 days) before cancelling or nonrenewing coverage, giving the mortgagee the opportunity to pay the premiums. 19. No Benefit to Bailee - Specifies that no coverage applies if loss payment benefits a bailee. 20. Recovered Property - Specifies the procedure to be followed when lost or stolen property is recovered after the insurer has made payment under the policy. Each party shall notify the other of any recovery and, under most property policies, the insured has the right of keeping the claim payment or returning the claim payment and retaining right to the property after adjustments have been made for any damage. 21. Bankruptcy - Specifies that bankruptcy or insolvency of the insured does not relieve the insurer of any of its duties or obligations under the policy. 22. Death - Specifies that in the event of the named insured's death, the insurer will extend coverage to the legal representative of the deceased with respect to the premises and property covered under the policy at the time of the named insured's death. 23. Loss Payable Clause - Specifies how the policy protects the interests of a loss payee. A loss payee has insurable interest in personal property
Crop Hail Insurance the replanting provision does what ?
The policy includes a replanting provision designed to reduce both the insured's and the insurer's losses.
Waiver
Voluntary surrender of a known right, claim or privilege.
DIC When written to supplement an underlying policy, DIC coverage normally carries a high deductible, such as what ?
When written to supplement an underlying policy, DIC coverage normally carries a high deductible, such as $10,000 or more.
Compulsory -
Workers' Compensation are controlled by state employers are required to provide Workers' Compensation benefits to their employees - either via insurance or self-insurance.
Monopolistic States
Workers' Compensation insurance is only available through a state fund.
The Financial Privacy rule requires
financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter.
incorporated
has legal seperation
If the Commissioner's office becomes vacant
he Governor must act as Commissioner for the remaining portion of the term.
"Act of Terrorism" is defined by who ?
is defined as any act certified by the Secretary of Treasury, in cooperation with the Secretary of Homeland Security and Attorney General.
Farm Property Coverage Form coverage d
loss of use
Contractors Equipment Floater
open peril coverage
Farm Property Coverage Form coverage c
personal property
All examinations, hearings, and investigations may be conducted by
the Commissioner
Negligence
the failure to use ordinary care. it is a wrongful act that is not criminal or a breach of contract that violates a duty or the rights of another and for which the injured party may demand compensation. It is the failure to use the same degree of care a reasonable and prudent person would use when given the same knowledge and set of circumstances.
Compliance Year
- The second year of the biennial compliance period.
Premium Assumptions
1. Must charge an adequate premium for the risk based on the same factors used in evaluating the risk. 2. Premium rates are considered inadequate when they do not cover projected losses and expenses. 3. Rates must not be excessive or unfairly discriminatory.
Musical Instrument Floater
1. 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. 2. The insured must report newly acquired items within 30 days.
The dwelling forms do not insure for loss caused directly or indirectly by any of the following -
1. Ordinance or Law - 2. Earth Movement - 3. Water Damage - 4. Power Failure - 5. Neglect - 6. War - 7. Nuclear Hazard -
homeowners exclusions
1. Ordinance or Law - 2. Earth Movement - 3. Water Damage - 4. Power Failure - 5. Neglect - 6. War - 7. Nuclear Hazard - 8. Intentional Loss - 9. Governmental Action -
Terrorism Risk Insurance Act started in what year ? enacted in _____ response to terriorists
1. Terrorism Risk Insurance Act of 2002 (TRIA) - Enacted in direct response to the terrorist attacks New York City and Washington, D.C. on September 11, 2001.
If there is reason to believe a person has violated any part of the Act, the Commissioner will issue and serve a statement of charges and notice of hearing to be held not less than_____days after the date of service at a fixed time and place
10
The Additional Coverage for business income pays for the actual loss of business income for up to how many months after the date of the direct physical damage to the property?
12
bop additional coverages Business Income
12 months after the date of direct physical loss or damage. ordinary payroll expenses are paid only for 60 days following the direct physical loss or damage,
Whenever an insurer changes the coverage, other than at the request of the insured, or changes the premium rate, the insurer must give the insured at least _____days' advance written notice of the coverage or premium rate change.
15
The statute of limitations to file a Workers' Compensation claim is
2 YEARS
bop how much for bonds and lost wages
250 and 250
BOP Personal Effects
2500
Forgery or Alteration
2500
Nonresident License
30 days
Resident License
30 days
Participating policy
A participating policy enables you as a policy holder to share the profits of the insurance company. These profits are shared in the form of bonuses or dividends. It is also known as a with-profit policy.
A Voyage policy,
which covers the vessel for a specific voyage
Fine Arts Floater is covered on what basis
written on a valued, or agreed, basis.
Inaccuracies
Agency must forward to applicant inaccurate information given out within previous 2 years.
Occurrence
An accident includes continuous or repeated exposure to the same general harmful conditions.
unincorporated
An unincorporated association is a group that does not have separate legal personality from its members
Executives
Oversee the operation of the business
Personal Contract
Owner cannot transfer or assign ownership of an insurance policy (property and casualty) to another person.
Non-Personal Contract
Owner may transfer or assign ownership of a life or health insurance policy to another person.
The following is not considered employment covered by Workers' Compensation:
Part time, seasonal agricultural work Domestic services
The BOP will make loss payment, at the insurer's options what are they
Payment for the value of the lost or damaged property. Payment for the cost to repair or replace the lost or damaged property. Take all or part of the property at an agreed or appraised value. replace damaged property with of like kind and quality
Special
Provides open perils coverage for insured property other than livestock, poultry, other animals, bees, fish, worms, hay, and plants, trees or shrubs. The special form will not pay for dishonest or criminal acts committed by the insured or employee, and release or escape of pollutants or contaminants unless caused by a specified cause of loss.
Loss
Reduction, decrease, or disappearance of value. The basis of a claim for damages under the terms of an insurance policy
Admitted vs. Non-admitted
Refers to whether or not an insurer is approved or authorized to write business in this State. a. The domicile does not impact whether an insurer may be admitted to do business in this State.
Foreseeable Consequence
Requires the injured party to prove the actual injuries or damages were a reasonably foreseeable consequence at the time the negligent action or inaction occurred
Mandatory Rates
Some states require that mandatory rates be used for certain lines of insurance.
Biennial Compliance Period -
The 24-month period during which an agent or adjuster must comply with continuing education requirements.
Exclusion and Limitations
The applicable Causes of Loss Form shown in the Declarations contains the applicable coverage exclusions and limitations.
Noncombustible
The buildings and its walls, floors, and structural framework are constructed of noncombustible materials.
Loss Exposure
The condition of being at risk for a loss. Purely by existing, property and people are at risk for loss.
Actual Cash Value (ACV
The cost to repair or replace property at its replacement value minus depreciation.
coverage stops when ?
The coverage stops when the crop is harvested (1 growing season).
if the insured does this the boat would not be covered ?
The insured does NOT have coverage if the boat is navigated outside the designated territory. If the insured wishes to change or broaden the navigation territory, the insurer must issue an endorsement
Premium Payments -
The insured will pay the entire premium when due.
private insurers
The word "private" is used to describe any health insurance plan that is not run by the federal or state government
Any agent, physician, applicant, or person who knowingly makes any false or fraudulent statements or representations on an insurance application for the purpose of obtaining any fees or commissions from a company engaged in the business of insurance will be guilty of
a Class 1 misdemeanor.
Dram Shop Liability laws
a business selling or serving alcohol to an intoxicated person , or contributing to the intoxication of an individual, may be held liable for bodily injury caused to or by the actions of that individual.
Broker
a. A licensed individual who negotiates insurance contracts with insurers, on behalf of the applicant. b. Represents the applicant or insured's interests, not the insurer, and thus does not have legal authority to bind the insurer. c. A broker's license is not applicable in all states
Managing Risk (STARR)
a. Analyzing exposures that create risk and designing programs to minimize the possibility of a loss. b. Ways of managing risk:
Insurer obligations
a. Insurer is not responsible for correcting inaccuracies on any reports. b. If an applicant is denied coverage because of inaccurate information they are entitled to certain rights
Insurer (Principal)
a. Insurer is the source of authority from which the producer must abide. b. Insurer is responsible for all acts of a producer, when producer is acting within the scope of its authority. c. Producer may be personally liable when his/her actions exceed the authority of the agency's contract.
Crop-hail insurance is rated on a
acreage basis
Valuation method of bop is
actual cash value
BOP Accounts Receivable
applies to Business Personal Property to apply to the direct physical loss of records of accounts receivable up to $10,000 at the described premises, and up to $5,000 away from the described premises
The Federal Employers Liability Act (FELA) applies to who
applies to interstate railroad workers.
An automatic seasonal increase
applies to the limit of insurance for business personal property. If no percentage is shown on the declaration, the policy automatically provides a limit increase of 25% for seasonal fluctuations in value. values during the 12 months immediately preceding the loss
General Damages
are an award to an injured party for pain, suffering, mental anguish, disfigurement, and similar types of losses. General damages are paid for losses that cannot be calculated objectively and assigned a specific dollar value.
Special damages
are an award to an injured party for actual and known expenses such as bills, loss of earnings, and the costs of repairing or replacing damaged property. Special damages are paid for tangible loss or damage.
By the Insured - The final premium will be based on the time the policy was in force and increased by the insurer's short rate cancellation table.
b. By the Insured - The final premium will be based on the time the policy was in force and increased by the insurer's short rate cancellation table.
the building where a loss occurs has been vacant for 60 or more consecutive days
before a loss, no coverage is provided for losses caused by vandalism, sprinkler leakage, building glass breakage, water damage, theft, or attempted theft.
Frame
building that has a roof, floor, and supports of combustible material, usually wood, and combustible interior walls.
Short Rate Cancellation
cancellation of insurance that incurs a financial penalty. Sometimes when the insured cancels the policy before its expiration date, a short-rate cancellation is issued. The insurer retains a portion of the unearned premium to cover costs.
FAIR plans are utilized when existing homeowners or dwelling property coverage is being
cancelled or non-renewed due to loss history or the property owner or the property fail to meet other underwriting guidelines of an insurer.
Acting without a License
class 1 misdemeanor
Consent Withdrawal
conditions of consent are not continually met, the consent may be withdrawn
Business income and extra expense
coverages are automatically included, and the policy pays the actual loss sustained incurred by the insured for up to 12 consecutive months during the period of restoration following a direct loss.
Truckers Coverage Form
covers exposures of motor carriers for hire who transports goods to others
hull insurance
covers physcial damage there are 2 types of coverage A Voyage policy A Time policy
Section II - Business Liability
covers sums for which the insured becomes legally liable to pay as damages caused by an occurrence that takes place in the coverage territory during the policy period for bodily injury, property damage, or personal injury and advertising injury, including liability assumed under an insured contract, and defense costs
Emergency Program NFIP
(for communities in the earliest stage of participation in the NFIP) Coverage becomes effective on the 30th calendar day after the applicant completes the application and pays the premium
Cameras Floater are normally what ?
1. The insured items are scheduled,
bop additional coverages eletronic data
10,000
Certificate of Insurance
A document that shows evidence that specific types of insurance were purchased by the insured, at certain limits, and that they were in place on the date the certificate of insurance was issued. A certificate of insurance is not proof of insurance, as a binder is.
Friendly Fire
A fire that was intentionally set and stays within its intended boundaries
Labor and Materials Bond
A guarantee that bills for labor and materials called for in a construction contract will be paid when due. This bond can be written separately or as part of a Performance Bond.
Surety Bonds (Performance Bonds: contract bonds: Labor and Materials Bond
A guarantee that bills for labor and materials called for in a construction contract will be paid when due. This bond can be written separately or as part of a Performance Bond.
Direct Loss
A loss that causes direct damage to property without an intervening cause
Indirect Loss or Consequential Loss
A loss that is not the direct result of a peril
Insurance Regulation at the Federal Level The McCarran-Ferguson Act of 1945
determined that the federal government can not regulate insurance in areas over which states have the authority to do so.
officers to defend themselves personally from claims The most common forms of liability for insuring these
fiduciary responsibilities are Directors & Officers (D&O) Liability and Fiduciary Liability.
Camera Floater Automatic coverage is provided on newly acquired items for how many days ?
for 30 days at a limit of insurance
The BOP automatically provides coverage
for special form causes of loss, or open perils coverage
Reciprocal Insurance Company is a
group-owned insurer whose main activity is risk sharing.
Surety Bonds (Performance Bonds) License and Permit Bond Motor vehicle dealer bonds
guarantee that the dealer performs according to law.
Surety Bonds (Performance Bonds court bonds fiduciary bonds
guarantee the honest and faithful performance of executors, trustees, and other fiduciaries. This type of bond is often required by statute in order to protect the interests of those for whom the fiduciary acts.
bop medical expenses the expenses must be
incurred within 1 year of the date of the accident
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.
Specialty liability insurance
is available for businesses that have a higher than average exposure for being legally liable for causing economic or indirect loss. These policies are written on non-standard forms with unique policy provisions and conditions.
A chose in action
is the right to sue a person to recover property, money, goods, or debts.
Surety Bonds (Performance Bonds court bonds- Required by the court to enforce certain behaviovor two types are ?
judicial bonds fiduciary bonds
Commercial Ocean Marine Insurance
no coinsurance provision on this policy
Career Agency System -
Agents are recruited, trained and supervised by either a managing employee or General Agent who is contracted with the insurance company
Self-Insurance Plans and Employer Groups all states except who
All states, except North Dakota and Wyoming, allow employers to self-insure
Punitive Damages
An award to an injured party, in addition to compensatory damages, to punish and discourage a wrongdoer from repeating negligent acts or omissions. Most liability policies do not provide coverage for punitive damages
temporary Total
An injury, from which an employee is expected to recover and return to work, but is unable to do any work while recovering. a percentage of the employee's average weekly wage, subject to minimum and maximum limits. In most states, it is 66 2/3%.
Property Other than Money and Securities
Any tangible property, other than money and securities, which has intrinsic value.
Morale Hazard
Attitude that increases the probability of a loss. Example: Indifference or carelessness of leaving one's house or vehicle unlocked.
Reciprocal Insurance Company The exchange of insurance is affected through an
Attorney-In-Fact.
Every person with an odd-numbered birth year must meet continuing education requirements in a
odd-numbered compliance year
Motor Truck Cargo Owners Coverage Form
open perils The property is owned by the insured. The property is covered property The property is located in or on a land vehicle OWNED or OPERATED by the insured AND is in transit at the time of loss.
criminal tort
or civil battery, depending on the facts of the case; Intentional infliction of emotional distress; False imprisonment; Trespass to land (real property) or trespass to chattels (personal property)
Prior to the issuance of a license as a broker, the applicant must
post a $15,000 surety bond in favor of the state of North Carolina. The bond may not be terminated unless at least 30 days' prior written notice is given by the surety to the licensee and the Commissioner.
equipment Breakdown Coverage( Boiler & Machinery Coverage) COVERS WHAT
property damage expediting expenses business income and extra expense spoliage newly acquired premises ordinance or law coverage errors and omissions brands and labels
Aircraft liability
provides coverage for bi and pd that arises out of the ownership or use of an aircraft. A combined single limit of coverage is purchased and applies per occurrence. In addition, policyholders may also purchase a sublimit of coverage that limits loss payments to a single person or passenger. For example, an aircraft liability policy may have a $1 million per occurrence limit with a sublimit of $100,000. This means that if a loss occurs, the most the policy will pay is $1 million for all claims arising from the loss, and the most it will pay per person or passenger is $100,000.
3. The Jones Act or Merchant Marine Act of 1920 applies to
sailors injured by the negligence ofothers.
Bill of Lading
serves as both a contract and a receipt for goods accepted into the carrier's care
An individual licensed as an insurance producer in another state who moves to North Carolina and applies for a resident insurance producer license in this state for the same kinds of insurance is exempt from education and examination requirements if
the license application is received within 90 days after the person's license in the former state is cancelled
Merchant Marine Act of 1920 (the Jones Act)
Because Workers' Compensation laws do not apply to seamen, the Jones Act allows insured seamen to make claims for injuries suffered during the course of employment. It also regulates maritime commerce in U.S. waters, transportation of cargo, and the rights of seamen
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.
Self-Storage Facilities eligible risks bop
Buildings are limited to 2 stories in height. Cold storage or storage of industrial materials, chemicals, pollutants, and waste do not qualify.
Joisted Masonry
Buildings with outside walls of masonry or fire-resistive construction rated for not less than one hour and with combustible floors and roofs
Compulsory
where Workers' Compensation benefits are mandated by state law, employers are required to provide Workers' Compensation benefits to their employees - either via insurance or self-insurance.
A Time policy
which covers the vessel for a specific period of time (usually 12 months). Named perils include perils of the sea, jettison, piracy, fire and explosion, and lightning.
Errors and Omissions (E&O) Insurance
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
North Carolina Motor Vehicle Reinsurance Facility Additional ceding privileges for motor vehicle insurance will be provided by the Board of Governors up to the following:
§ $100,000 for bodily injury per person § $300,000 for bodily injury for 2 or more persons in any one accident § $50,000 for property damage per accident § $2,000 for medical payments per person, except for motorcycles
North Carolina Motor Vehicle Reinsurance Facility The Facility provides 100% reinsurance as follows:
§ $30,000 for bodily injury per person § $60,000 for bodily injury for 2 or more persons in any one accident § $25,000 for property damage per accident § $1,000 for medical payments per person, except for motorcycles and uninsured motor vehicles 100 DEDUCTIBLE UNISURED MOTORISTS
Post-Assessment Insurance Guaranty Association (Guaranty Fund)
§ Automobile Insurance Account § Workers' Compensation Account § Account for all other applicable insurance
A receipt for a premium must:
§ Be dated § State the name and address of the agency, agent, broker, or limited representative § State the name of the insurer § Be signed by the person accepting the payment
An agent, broker, or limited representative charging a policy or service fee must:
§ Display a notice about the fee in their place of business § Obtain a separate consent, in writing, from an applicant for each service fee § Give an applicant a dated receipt for the service fe
Insurance coverage may only be terminated for the following reasons:
§ Nonpayment of premium when due to the insurer or producing agent § The named insured has moved out of this State and become a nonresident § A member company has terminated an agency contract or the agent has terminated the contract if they represented the company when taking the original application § The named insured is no longer an eligible risk
The purpose of the umbrella policy contains three elements
■ It provides an additional layer of liability insurance after the limits of underlying primary policies are exhausted due to paid claims. ■ It provides coverage on a broader basis than the primary policies. ■ It drops down to provide first-dollar coverage when the underlying primary policies don't provide coverage.
Boatowners Policy does not include what coverage
Does not include Personal Injury Liability
Executive Branch
Enforces laws
Components of a Commercial Package Policy
Every CPP includes a Common Policy Declarations and Common Policy Conditions
The Commissioner may suspend, revoke, or refuse to renew a license if the producer:
Fails to respond to Department inquiries within 7 calendar days Requests an extension or waiver under false pretenses Refuses to cooperate with the Department in an investigation or inquiry
Negligence
Failure to use ordinary care.
Poultry
Fowl kept by the insured for use or sale.
Part F - auto
General Provisions
Reciprocity
If consent is granted by any state, other states must allow the applicant to work in their states as well
Business
Includes trade, profession, or occupation. The courts have determined that business activities have two components: they are continuous in nature and offer the opportunity for profit.
1. Conventional & Open Market:
Insurance agents write coverage on your business only.
Severability of Insurance
Insurance applies separately to each insured; however, this condition doesn't increase the limit of liability per any one occurrence
Notice of Loss
Insured must notify the insurer in writing as soon as possible in the event of any loss or occurrence. The written notice should include the named insured, policy number, and details about the time, place, circumstances of the occurrence, and names and addresses of any claimants and witnesses.
Specific Limit
Insures a single item of property for a single limit of insurance. For example, a fire policy insures one dwelling for $100,000.
WYO NFIP what is the percentage of flood policies with WYO
It is estimated that over 90% of the flood insurance policies in force are maintained by WYO companies. The remaining policies are written and maintained directly by FEMA.
Essential Property Insurance for Beach Area Property
It is the market of last resort, not the first market of choice.
who developed the Workers' Compensation and Employers Liability Insurance Policy
NCCI
Types of Insureds
Named Insured - The person or organization designated on the Declarations page of the policy. If property is being insured, the named insured should be the owner of the property. If vehicles are being insured, the named insured should be the party or entity to which the vehicle is titled and registered. The named insured receives the broadest coverage of all persons or organizations protected by a policy
Securities
Negotiable and non-negotiable instruments or contracts representing money or other property, including tokens, tickets, revenue stamps, and other stamps in current use, and evidences of debt in connection with charge or credit cards
Suit Against Us -
No action can be brought against an insurer later than 3 years after the date of the loss. Further, the insured must have fully complied with all terms under the policy.
how much time of notice is needed to cancel a policy due to non payment
Notice of at least 10 days is required for cancellation due to non-payment of premium
what polices are covered by TRIA What are not covered ?
Only commercial property and casualty insurance is covered by the Program; personal lines insurance and life and health insurance are not covered.
Difference in Conditions (DIC) Insurance
1. DIC insurance requires the use of a special form designed to fill in the coverage gaps contained in a property policy. .
To appoint a licensed individual as its agent, the appointing insurer must file a notice of appointment within
15 days after the first insurance application
An insurer must provide claim forms to a claimant within
15 days of receiving notice of loss. If the insurer
how much time is needed to provided for a non renewal
20 days advance written notice must be provided
Class Rating
A rate charged to a group of policyholders who have similar exposures and experience.
Individual Rating
A rate used for a policyholder because a large enough pool of similar risks is not available to any other type of rate. Primarily used for commercial and specialty risks because of the number of unique variables involved.
motor truck cargo coverage - bill of lading form Released
A released bill of lading is issued when the carrier and shipper agree that the carrier's responsibility is limited to the value stated on the bill of lading The cost for transporting a shipment via a released bill of lading is cheaper than shipping via a straight bill of lading.
An insurer's representative may not: §
Accept a gratuity for recommending an insurance provider § Buy salvage from a claimant § Advise a claimant not to seek legal advice § Delay a claim settlement § Recommend a particular motor vehicle repair service without informing the claimant that they are under no obligation to use the recommended service and may use the service of their choice
Legal Action Against Insurer
All parties must comply with policy provisions before any suit may be brought against the insurer. Also, no one has the right to enjoin the insurance company as a party to any action against an insured
Occurrence
An accident includes continuous or repeated exposure to the same general harmful conditions
Independent Agency
An agent or agency that enters into agency agreements with more than one insurer. It may represent an unlimited number of insurers. b. Agency retains ownership of the business written. c. An independent contractor that is paid a commission and covers the cost of agency operations.
Permanent Partial
An injury after which an employee is able to do some work, but will never fully recover. An employee can still earn a wage, but not as much as he/she would have earned if the injury had not occurred.
Foreign Insurer
An insurer not organized under the laws of this state, but in one of the other states or jurisdictions within the United States, whether or not it is admitted to do business in the state or jurisdiction.
Domestic Insurer
An insurer organized under the laws of this state, whether or not it is admitted to do business in this state
Insurable Events
Any event, past or present, that may cause loss or, damage or create legal liability on the part of an insured. 6. Insurable Interest
Excess Insurance
Any form of insurance coverage that provides protection against certain perils or causes of loss ONLY after loss or damage exceeds a stated amount or the limits stated in specific policies or self-insurance. Excess insurance may be written over primary, excess, or umbrella insurance.
Bankruptcy of an Insured
Bankruptcy or insolvency of an insured does not relieve the insurer of its obligations under the policy.
Bodily Injury
Bodily harm, sickness, or disease, including death that results
Part D Auto
Coverage for Damage to Your Auto
CHIAA stands for what
Crop Hail Insurance Actuarial Association (CHIAA)
The parts of a policy include:
D Declarations I Insuring Agreement C Conditions E Exclusions
Crop, Hail, Insurance what does it cover
Fire, lightning, wind. Freezing, drought, insects and disease
Financial Rating Services
Independent financial rating services evaluate and rate the financial stability of insurance companies. 2. These companies assign rating codes to show financial strength or weakness of each company rated. 3. The ratings are available to the public. 4. Producers are responsible for placing business with insurers that are financially sound. 5. Examples of rating services include: A.M. Best Company, Standard &Poor's, Moody's Investment Services, Weiss Insurance Rating, and Fitch Ratings.
auto -Part A
Liability Coverage
Contract Law
Pertains to the formation and enforcement of contracts
Direct Writing System
Producer or Agent is an employee of the insurer. b. Insurer owns the accounts. c. The agent may be paid a salary, salary plus bonus, or commission
Private Passenger Auto
Shall be deemed to be owned by a person if the auto is owned or leased under contract for a continuous period of at least 6 months.
NCCI
The National Council on Compensation Insurance
The Truckers Coverage Form
The Truckers Coverage Form covers business exposures of motor carriers for hire who transport the goods of others
Peril
The cause of a loss
Statute of Limitations
The length of time during which legal proceedings may be initiated. This time period is established by federal or state law and usually begins on the day an event occurs.
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
Surety (Guarantor)
The party guaranteeing the duty, performance, or honesty of the Principal. The Surety issues the bond, is also called the Guarantor, and is usually an insurance company
Crop Hail Insurance the payment of an insured does what ?
The payment of an insured loss reduces the total amount of available insurance
Causes of Loss Forms
There are three Causes of Loss forms available to specify the perils covered under the property coverage parts of the policy. More than one Causes of Loss Form may be attached to the coverage part with different causes applying to different locations or classes of property. Most exclusions in the commercial property policy are found in the causes of loss form
Crop/Hail Insurance this is _______ insurance ?
This is private insurance, not reinsured by the federal government. This policy provides named perils coverage.
Contributory Negligence
Used to argue that the employee was partially at fault and therefore was not eligible to recover benefits from the employer
Coverage H (Bodily Injury and Property Damage Liability)
a. Coverage H pays sums the insured becomes legally obligated to pay for losses arising from bodily injury or property damage. Fire damage liability is included. b. Coverage includes products liability from the sale of farm products.
Additional Coverages farm
a. Coverages A, B, C, E, F, and G: 1) Debris Removal 2) Reasonable Repairs 3) Damage to Property Removed for Safekeeping 4) Fire Department Service Charge
The legislative branch does what ?
writes and passes state insurance laws, or statutes, to protect the insuring public.
Limits of Insurance bop The most the policy will pay for damage to outdoor signs attached to the building is
$1,000 per sign per occurrence
The Internet Liability and Network Protection Policy insuring agreement c
(Replacement Or Restoration Of Electronic Data
(ceding company)
(ceding company) transfer of risk to other insurers (reinsurance insurer)
Errors and Omissions
- Coverage pays for loss or damage not otherwise payable due to an unintentional error or omission.
BOP Newly Acquired or Constructed Property
- Each building is insured for up to $250,000 for up to 30 days. Business personal property at each building is covered for up to $100,000 for up to 30 days.
. Common Law
- Law practiced as the result of judicial or court decisions (i.e., case law and precedents).
Fellow Servant Rule -
- Removed the employer's negligence if a fellow employee contributed in any way to the loss.
Recovery From Others (Subrogation
- The insurer reserves the right to recover its payments from anyone liable for causing injury
workers comp laws Assumption of Risk
-Assumption of Risk - This defense placed all the risk on the employee as being responsible for knowing the work conditions prior to employment
Additional Coverages - The coverages extend the insurance provided and are automatically included at no extra cost to the insured
1) Debris Removal - Pays the expense of removing debris following a covered loss and is subject to a maximum of 25% of the coverage applying to direct physical loss. However, in the event of a total loss where the limit of insurance on the building is exhausted, the policy will pay up to an additional $10,000 for debris removal 2) Preservation of Property - Provides open peril coverage for a maximum period of 30 days on insured property that is being moved or temporarily stored at another location because of endangerment by a covered peril. 3) Fire Department Service Charge - Provides, as an additional amount of insurance, up to $1,000 for the payment of fire department service charges when the department is called to protect insured property. No deductible applies to this coverage. 4) Pollutant Clean up and Removal - Pays the insured's expense, up to $10,000 aggregate limit, for each described location in a policy period, to extract pollutants from land or water at the described premises if the discharge or escape of the pollutants is caused by or results from a covered cause of loss. 5) Increased Cost of Construction - In the event of damage to a covered building for a loss to which Replacement Cost Optional Coverage applies, the insurer will pay the increased costs, up to a $10,000 aggregate limit, incurred to comply with enforcement of an ordinance or law regulating the repair, rebuilding, or replacement of damaged parts. 6) Electronic Data - Pays up to $2,500 aggregate in any one policy year, regardless of the number of locations, for the cost to replace or restore electronic data that has been destroyed or corrupted by a covered cause of loss. e. Coverage Extensions - If a coinsurance percentage of 80% is shown in the Declarations, the insured may extend the insurance provided by the Commercial Property Coverage Part as follows: 1) Newly Acquired or Constructed Property a) Coverage may be extended to cover new buildings to be constructed on the described premises, and newly acquired or constructed property at other locations. The coverage limit is $250,000 at each building. b) Coverage may be extended to cover newly acquired business personal property, up to $100,000 at each building. c) This automatic coverage ends at the earliest of the following 3 circumstances: (1) The policy expires. (2) The end of 30 days. (3) The values of the newly acquired or constructed property are reported to the insurance company. 2) Personal Effects and Property of Others - Personal effects of the insured and the personal property of others in the insured's care, custody, and control are covered for up to $2,500 at each described premises. Coverage does not include loss by theft 3) Valuable Papers and Records - Cost of Research a) Pays for loss or damage by a covered peril that requires the replacement or restoration of lost information on valuable papers and records. b) The maximum amount paid is $2,500 at each described premises, unless a higher limit is shown in the Declarations. 4) Property Off Premises a) A limit of $10,000 of coverage is extended for the insured's covered property (other than stock) while it is temporarily at a location the insured does not own, lease, or operate. b) This includes property located at a fair, trade show, or exhibition. c) Exclusions from coverage include property that is in or on a vehicle or in the care, custody, or control of the named insured's salesperson if the salesperson is not at a fair, trade show, or exhibition. 5) Outdoor Property a) The insured may extend a maximum amount of $1,000 to cover loss to outdoor fences, detached signs, antennas, trees, shrubs, and plants. A sublimit of $250 applies to any one tree, shrub, or plant. b) The perils covered by this extension are fire, lightning, explosion, riot or civil commotion, and aircraft. 6) Non-Owned Detached Trailers a) Extends insurance that applies to the insured's business personal property to apply to loss or damage to trailers the named insured does not own, provided the trailer is used in the insured's business, is in the insured's care, custody, or control at the described premises, and the insured has the contractual responsibility to pay for loss or damage to the trailer. b) The most the insurer will pay for loss or damage is $5,000 unless a higher limit is shown in the Declarations. c) Loss or damage is not covered while the trailer is attached to any motor vehicle or during hitching or unhitching operations
ratio for exempt employees are workers comp
1-3
the emergency the maximum amount of coverage for contents in a single-family dwelling
$10,000 and $100,000 on other residential and non-residential buildings.
BOP Valuable Papers and Records
$10,000 at the described premises, and up to $5,000 away from the described premises.
what is the maximum payout for TRIA what is the deductible %
$100 billion (cap on annual liability) and no insurer that has met its insurer deductible shall be liable for the payment of any portion of that amount that exceeds $100 billion. The insurer deductible is 20% of all covered losses.
The Regular Program offers how much
$250,000 maximum amount of coverage on residential buildings and $500,000 on non-residential buildings. Coverage becomes effective on the 30th calendar day after the applicant completes the application and pays the premium
The Emergency Program offers
$35,000 maximum amount of coverage on 1- to 4-family on dwellings and 100,000 on other residential and non-residential buildings
Post-Assessment Insurance Guaranty Association (Guaranty Fund) Each member must pay the Association a nonrefundable initial membership fee of
$50.
The license of a person failing to meet continuing education requirements will lapse. The license will be reinstated when the person has completed the continuing education requirements and paid an administrative fee of
$75. This must be done within 4 months after the end of the person's previous compliance year.
The Internet Liability and Network Protection Policy insuring agreement E
(Business Income And Extra Expense
The Internet Liability and Network Protection Policy insuring agreement d
(Cyber Extortion)
The FAIR Plan
(Fair Access to Insurance Requirements) is an association that provides adequate basic property insurance to owners of insurable property in the state. It encourages the improvement of properties located in the state and arrests the decline of properties. It is the market of last resort. The FAIR Plan applies to all geographic areas of the state except the beach area.
The Internet Liability and Network Protection Policy Insuring Agreement A
(Website Publishing Liability)
Additional Insured
- A person or organization not ordinarily protected by a policy but which, through the addition of an endorsement to the policy, is granted status as an insured. Under a property policy, an additional insured is often a co-owner of real property. Under a liability policy, an additional insured is often a party to an indemnification or hold harmless agreement.
Liability and Medical Expenses Limits of Insurance bopGeneral aggregate
- All losses, except those that fall within the products-completed operations hazard, including medical expenses personal injury and advertising injury offenses committed; aggregate limit is twice the Liability and Medical Expenses limit shown in the Declarations.
bop Transfer of Rights of Recovery Against Others to Us
- If any person or organization for whom the insurer makes payment under the policy has rights to recover damages from another, those rights are transferred to insurer to the extent of insurer's payment.
bop Transfer of Your Rights and Duties under this Policy
- Insured's rights and duties under this policy may not be transferred without insurer's written consent except in the case of death of an individual Named Insured.
The Running Down Clause
- Part of a hull policy that provides coverage for legal liability of the shipper or carrier for claims arising out of collisions caused by the shipper or carrier. This clause covers the negligence of the shipper or carrier that results in damage to the property of others
Fellow Servant Rule workers comp
- Removed the employer's negligence if a fellow employee contributed in any way to the loss
Non-concurrent Exclusions
- The following exclusions apply, however, if an ensuing loss is otherwise covered by the policy, it will not be excluded: weather decisions; acts or decisions, including the failure to act or decide, of any person, group, organization, or governmental body; faulty, inadequate, or defective planning, zoning, development, surveying, sighting, design, workmanship, repair, construction, renovation, remodeling, grading, compaction, materials used in repair, and maintenance.
Combined Single Limit
- The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits. For example, the per occurrence limits on homeowners and general liability policies provide coverage for the sum of all bodily injury liability and property damage liability claims that arise from one occurrence
Equipment Breakdown Protection Coverage Form Period of Restoration
- The period of time that begins at the time of the "breakdown" or 24 hours before the insurer receives notice of the "breakdown," whichever is later, and ends 5 consecutive days after the date when the damaged property is repaired or replaced with reasonable speed and similar quality
Remuneration
- The premium for each work classification is determined by multiplying a rate and a premium basis. The premium basis is employee remuneration
Assumption of Risk
- This defense placed all the risk on the employee as being responsible for knowing the work conditions prior to employment
Business Income - Report of Values (BM 15 31)
- This endorsement is no longer widely used, but when it is used it is completed and signed by the named insured or its authorized representative and sent to the insurer in order to establish "actual" total net profits, fixed charges, and expenses for the immediate 12-month policy period that is expiring and to The endorsement is used to determine the amount of the insurer's payment to the insured in the event of a loss of income
Contributory Negligence workers comp
- Used to argue that the employee was partially at fault and therefore was not eligible to recover benefits from the employer.
Fiduciary Responsibilities -
-care and loyalty -exhibiting due diligence when handling the money and property of the corporation. conduct may require directors and officers to defend themselves personally from such claims, and to face substantial liability exposure. The most common forms of liability for insuring these fiduciary responsibilities are Directors & Officers (D&O) Liability and Fiduciary Liability.
Four Elements of a Legal Contract
. COMPTENT PARTIES Legal Purpose Agreement - One party must make and communicate an offer to the other party and the second party must accept that offer. a. Offer - The offer for entering an insurance contract is the application submitted by the applicant. b. Acceptance - The acceptance of an insurance contract takes place when the insurance company agrees to issue insurance. A counteroffer by the insurance company is not acceptance until the applicant accepts the counteroffer. 4. Consideration a. Something of value is exchanged; the exchange of an act for a promise. b. The consideration made by the applicant is the premium payment. c. The consideration made by the insurer is its promise to pay for covered losses
Crop Hail Insurance what the deductible amount
. The policy is typically written with deductibles (normally a 5% yield reduction). Policies can be written to cover a percentage of expected yield, such as 50% or 100%.
Producer's Responsibilities to the Insurer:
1) Fiduciary duty to the insurer in all respects, especially when handling premium funds. 2) Must keep premium funds in a trust account separate from other funds and forward to insurer promptly. 3) Must report any material facts that may affect underwriting. 4) Responsible for soliciting, negotiating, selling, and cancelling the insurance policies with the insurer. 5) Duty to only recommend the purchase of suitable policies
Producer's Responsibilities to Insurance Applicant or Insured:
1) Forward premiums to insurer on a timely basis. 2) Seek and gain knowledge of the applicant's insurance needs. 3) Review and evaluate the applicant's current insurance coverage, limits and risks. 4) Serve the best interests of the applicant or insured, although producers represent the insurer. 5) Recommend coverage that best protects the insured from possible loss and NOT the most profitable coverage from the perspective of the producer
Life & Health policies
1) Insurable interest must exist at the time of application, but not at time of loss. 2) Coverage is determined based on the possibility of an economic or financial loss due to an accident, sickness, or death of the insured. 3) The amount of insurance that may be purchased varies based on the type of coverage. In some cases, no coverage limit apply.
All Policies
1) Insurable interest must exist in every enforceable insurance contract. Depending upon the contract, it must exist at the time of application or at the time of loss. 2) Requires the potential for an insured to suffer financial or economic hardship in the event of a loss
After the policy has been in effect for 60 days the insurer may cancel for only what reasons
1) Non-payment of premium. 2) The policy was obtained through fraud or material misrepresentation 3) Suspension or revocation of the driver's license of the named insured, any driver who is a household resident of the named insured, any driver who regularly uses a Your
National Flood Insurance Program (NFIP)
1. A federal program that enables certain property owners to purchase flood insurance. The Federal Insurance Administration administers the program under the Federal Emergency Management Agency (FEMA). The federal government makes payment for, or subsidizes, all flood losses. 2. Flood policies are available from participating private insurers who participate in the Write Your Own (WYO) Program, and directly from the NFIP. Agents do not have authority to bind coverage with the NFIP, but all licensed agents and brokers may write flood insurance with the NFIP. 3. Communities in flood-prone areas must have established an approved flood control program in order to participate in the NFIP and are called participating communities. If a property owner lives in a community that is not a participating community, the property owner CANNOT purchase flood insurance, regardless of the degree of flood risk. 4. Flood policies provide protection for direct loss to insured property such as a dwelling and its contents. Flood is defined as a general and temporary condition of partial or complete inundation of land. The land MUST be normally dry land and the flood must involve: a. 2 or more acres of the insured's land, OR the insured's entire piece of property AND an adjacent piece of property. b. The inundation of land may be the result of: ■ Overflow of inland or tidal waters, such as a tidal wave generated by a hurricane. ■ Unusual and rapid accumulation or runoff of surface waters. ■ Mudflow caused by accumulation of water. ■ Collapse or destabilization of land along a shoreline resulting from erosion or the effect of waves or water currents exceeding normal, cyclical levels. 5. Dwellings eligible for coverage must have 2 or more rigid outside walls, a fully secured roof, and be affixed on a permanent foundation. Coverage is available for both the building and personal property, however, NO coverage is provided for personal property in basements. 6. Exclusions include personal property located in basements, loss of profits, loss of access to property, business interruption, additional living expenses, ordinance or law, earth movement, theft, fire, explosion, wind, freezing, and damage to lawns, trees, shrubs, plants and growing crops. 7. The NFIP also does not cover money, securities, livestock, wharves, piers, bridges, docks and other structures on or entirely over water.
Risk Retention Groups (RRG)
1. A group-owned insurer that primarily assumes and spreads the liability related risks of its members. 2. Licensed in at least one state and may insure members of the group in other states. 3. Owned by its policyholders. 4. Group must be made up of a large number of homogeneous or similar units. 5. Membership is limited to risks with similar liability exposures such as theme parks, go cart tracks, or water slides. 6. Must have sufficient liquid assets to meet loss obligations. 7. Each member assumes a portion of the risks insured.
Stock Insurance Company
1. A stock company is owned by stockholders or shareholders. 2. Directors and officers direct the company operations and are elected by stockholders. 3. Stockholders receive taxable corporate dividends as a return of profit when declared by the Directors. 4. Dividends are not guaranteed. 5. Traditionally stock insurers issue Non-Participating policies.
Aviation insurance is a specialty coverage offered by select insurers. Two basic coverages are aircraft hull and aircraft liability.
1. Aircraft hull insurance provides insurance for physical damage to the airplane. Coverage is offered at 3 different levels, or causes of loss. The premium for each type of coverage increases as the number of perils covered increases. a. Ground only provides coverage when the hull is on the ground and not in motion; covered losses would include fire, theft, vandalism, etc. b. Ground including taxi provides coverage when the hull is on the ground and not in motion PLUS losses that occur during taxi; for example, a collision with another plane when taxiing on a runway. c. All risk provides coverage when on the ground, during taxi, and in flight. 2. Aircraft liability insurance provides coverage for the insured's legal liability for bodily injury or property damage that arises out of the ownership or use of an aircraft. A combined single limit of coverage is purchased and applies per occurrence. In addition, policyholders may also purchase a sublimit of coverage that limits loss payments to a single person or passenger. For example, an aircraft liability policy may have a $1 million per occurrence limit with a sublimit of $100,000. This means that if a loss occurs, the most the policy will pay is $1 million for all claims arising from the loss, and the most it will pay per person or passenger is $100,000.
Self-Insurance Plans and Employer Groups
1. All states, except North Dakota and Wyoming, allow employers to self-insure upon satisfying certain statutory requirements that are a guarantee of their ability to meet their obligations. 2. Large employers are sometimes attracted to self-insurance plans because losses can be predictable and benefits are capped by statute. 3. Employers must obtain a Self-Insurance Certificate and may also purchase excess insurance or reinsurance. 4. Some states also require the employer to purchase a surety bond
Automatic Increase in Insurance Endorsement
1. An automatic pro rata increase in the Coverage A and B limits of insurance is applied by the percentage shown on the endorsement. This endorsement is used to help offset inflation and may also be referred to as the Inflation Guard Endorsement. 2. The increases are calculated per day, and will increase the dwelling coverage, as well as the premium, annually when the policy renews. If a loss occurs throughout the year, coverage is based on a pro-rated basis.
Reinsurance Companies
1. An insurance company that assumes all or a portion of a risk from a primary or ceding insurance company. 2. Reinsurance transfers risk among insurance companies. 3. The insurer requesting reinsurance is the primary or ceding company. 4. The Insurer sharing in the risk is the reinsurance company. 5. Consumer inquiries must originate with the ceding company, which then obtains reinsurance.
Causes of Loss - Basic Form
1. Causes of Loss - Basic Form The 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. The exclusions contained in the Causes of Loss - Basic Form include ordinance or law, earth movement; governmental action, nuclear hazard, utility services, war and military action; water or fungus, wet or dry rot, and bacteria. A special exclusion exists for business income and extra expense coverages. a. Vandalism does not include coverage for theft but does cover building damage caused by the breaking or exiting of burglars. b. Smoke does not include coverage for smoke from agricultural smudging or industrial operations. The basic causes of loss form contains a Limitation provision that specifies loss of animals is covered but only if they are killed or their destruction is made necessary. c. The basic form includes the Additional Coverage - Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria. The Limit of insurance is up to $15,000 for all covered losses that take place during the 12-month period that begins with the policy's inception date
Earthquake Endorsement
1. Coverage for a loss caused by earthquake, including land shock waves or tremors before, during, or after a volcanic eruption, is provided to property insured under Coverage A (Dwelling), B (Other Structures), and C (Personal Property). 2. A single earthquake is defined as 1 or more earthquake shocks that occur within a 72-hour period. percentage of Coverage A (Dwelling) or Coverage C (Personal Property), whichever is greater, is included. The total deductible will not be less than $500.
NFIP how do the work deductibles
1. Coverage is provided on 1- to 4- family dwellings under the (Dwelling Form). Each type of property loss is subject to a deductible. The deductible applies separately to the building and to personal property, including any attached structure and debris removal expense.
Personal Jewelry Floater
1. Coverage may be written on a valued or actual cash value basis. 2. The floater contains a "Pair and Sets Clause". If a covered loss occurs to an item that is part of a set, the value of the remaining item(s) is reduced based on the difference between the value of the total set and the value of each item individually. This is because each item is worth more as a "set" than on its own. For example, if a pair of diamond earrings is valued at $2,000, and a loss occurs to one earring, the value of the pair drops by more than 50%. If one earring by itself is valued at $800, the total loss is $1,200. The "Pair and Sets Clause" specifies the conditions and the policy limit should this type of loss occur. 3. When insuring most items on a floater, the insured must submit an appraisal that documents both a description of the property to be insured and its value. Some insurers require appraisals for all insured items; others only require appraisals for items insured in excess of a certain amount, such as $2,500. An appraisal is usually required at or before the time insurance is bound. 4. Newly acquired items are automatically insured if they are the same class of property already insured by the floater. The limit of coverage is no more than a specific percentage of the value shown on the schedule. Automatic coverage for newly acquired items is only provided for 30 days
Exclusions Applying to Coverages E and F
1. Expected or intended injury 2. Coverage is excluded for bodily injury or property damage arising out of, or in connection with, a business conducted from an insured location OR engaged in by any insured, Coverage is excluded for bodily injury or property damage arising out of the rendering of or failure to render, professional services. 4. No coverage is provided for bodily injury or property damage arising out of a premises owned, rented by, or rented to others by an insured if the premises isn't an "insured location." 5. No coverage is provided for bodily injury or property damage arising from any type of war, warlike act, or destruction, seizure, or use for a military purpose—including accidental discharge of a nuclear weapon. 6. Bodily injury or property damage arising out of the transmission of a communicable disease by an insured is excluded. 7. Bodily injury and property damage arising out of sexual molestation, corporal punishment, or physical or mental abuse is excluded. 8. Bodily injury or property damage arising out of the use, sale, manufacture, delivery, transfer, or possession of a controlled substance is excluded. An exception to the exclusion exists for the legitimate use of prescription drugs by a person following the orders of a licensed physician.
Fidelity Bonds (Honesty Bonds)
1. Fidelity Bonds are designed to cover an employer from direct loss due to fraudulent and dishonest acts (namely theft) by their employees. They are commonly referred to as "dishonesty insurance." 2. Several types of Fidelity Bonds are designed for the needs of employers. a. An Individual Bond is used when an employer wishes to bond a single employee. b. A Name Schedule Bond is used when an employer wishes to bond several employees who are all named in the bond. c. A Position Schedule Bond is available to employers that desire to bond a specific position, regardless of who fills the position, or how often the person filling the position is replaced.
Fraternal Benefit Societies
1. Fraternal benefit societies are primarily social organizations that engage in charitable and benevolent activities that provide life and health insurance to their members. 2. Membership typically consists of members of a given faith, lodge, order, or society. 3. They are usually organized on a non-profit basis.
Other Insurance
1. If more than one policy is in place and provides UM, the total amount the insured may collect cannot exceed the highest limit applying to any one vehicle. For example, if the insured's limits are 100/300 and the limits on the other policy are 50/100, the most the insured may collect is 100/300. 2. If the loss occurs while the insured is occupying a non-owned vehicle, the policy covering the non-owned vehicle is primary, and the insured's coverage is excess. 3. If more than one policy applies, the insurer pays only its share of the loss, which is the proportion that its limit of liability bears to the total amount of all applicable coverage
Other Insurance
1. If other auto liability insurance is in place at the time of the loss, the personal auto policy will only pay its share of the loss. That share is the proportion the policy's limit bears to all insurance in place. For example, if the policy provides $100,000 of property damage liability insurance and another policy also provides $100,000 of property damage liability insurance, the insured's policy will only pay ½ of the liability loss. Because the total insurance in place is $200,000 and the limit of liability provided by the insured's policy is $100,000, the insured's policy pays ½ of the total insurance in place. 2. This policy pays liability losses on an excess basis for non-owned vehicles. For example, the covered loss involves a car the insured borrowed from his neighbor. The insurance in place on the neighbor's car must pay first (it's primary insurance) and then this policy will pay (it's excess insurance).
Appraisal
1. If the insured and the insurance company are unable to agree about the amount of a loss, either party may demand an appraisal. Each party selects, and pays for, its own appraiser. 2. The appraisers prepare separate appraisals of the actual cash value and amount of loss. If they fail to agree, they select an umpire to whom they submit their differences. 3. If any two of the three parties agree, that decision is binding. The insured and insurer share the expenses of the umpire and appraisal
Part E - Duties After an Accident or Loss
1. In the event of a covered loss, Persons submitting claims to the insurance company are required to: a. Notify the insurer promptly about how, when, and where the accident or loss occurred. In addition, the insurer must be provided with the names and addresses of anyone with injuries or anyone who witnessed the accident or loss. b. Cooperate with the investigation and settlement of any claim. c. Promptly send to the insurer any copies of notices or legal papers received. d. Submit to a physical exam as reasonably required by the insurer. e. Authorize the insurer to obtain copies of medical reports and other pertinent records. f. Submit a proof of loss when required by the insurer. 2. When seeking Uninsured Motorists Coverage, the insured must promptly notify the police if a hit-and-run driver is involved and provide legal papers if a lawsuit is filed. 3. An insured making a claim under Part D must protect the property from further damage, notify the police promptly if the vehicle is stolen, and allow the insurer to inspect and appraise the damaged vehicle before its repair or disposal
Part B Exclusions auto
1. Is occupying a vehicle with fewer than 4 wheels. 2. Is occupying a vehicle being used as a public or livery conveyance. A share-the-expense car pool is NOT public or livery conveyance. 3. Is occupying any vehicle that is located for use as a residence or premises - for example living in one's car or a permanently located motor home or trailer used as a residence. 4. Sustains bodily injury in the course of employment and Workers' Compensation benefits are either required or available. 5. Is occupying or struck by a vehicle owned by the insured that is not a "your covered auto" and is either owned by the insured OR furnished to the insured or available for the insured's regular use, such as a company car. 6. Is occupying or struck by a vehicle owned by a family member that is not a "your covered auto" and is either owned by a family member OR furnished to a family member or available for the family member's regular use, such as a company car. 7. Is using a vehicle without having a reasonable belief that he/she is entitled to drive the car. 8. Is using a vehicle while engaged in business; however, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles. This exclusion applies to the business use of trucks and other commercial vehicles. occupying a vehicle located inside a racing facility for the purpose of competing, practicing, or preparing for a race or speed contest
Lloyds of London
1. Lloyds of London is not an insurance company, but consists of groups of underwriters called Syndicates, each of which specializes in insuring a particular type of risk. 2. Lloyds provides a meeting place and clerical services for syndicate members who actually transact the business of insurance. 3. Members are individually liable for each risk they assume. 4. Coverage provided is underwritten by a syndicate manager such as an attorney-in-fact or individual proprietor.
Assigned Risk Plan (Residual Market Plan
1. Many states offer employers unable to purchase coverage in the voluntary market the opportunity to obtain coverage in a Workers' Compensation Assigned Risk Plan.
Underwriting Factors
1. Nature of the risk. 2. Hazards that are present. 3. Claims history. 4. Other factors that depend upon the type of risk being insured.
Gramm-Leach-Bliley Act (GLBA, a.k.a. the Financial Services Modernization Act of 1999)
1. Repealed parts of the Glass-Steagall Act of 1933 to allow the merger of banks, securities companies, and insurance companies. It also established the Financial Privacy Rule and Safeguards Rule for the protection of consumers' privacy.
Federal Workers' Compensation Laws
1. The Federal Employers Liability Act (FELA) applies to interstate railroad workers. 2. 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) . 3. The Jones Act or Merchant Marine Act of 1920 applies to sailors injured by the negligence of others.
The Motor Carrier Act of 1980
1. The Motor Carrier Regulatory Reform and Modernization Act, known as the Motor Carrier Act of 1980, deregulated the trucking industry. This deregulation affected price and entry controls in U.S. transportation, no longer allowing rate bureaus to interfere with a motor carrier's right to charge its own rates.
Second Injury Fund
1. The Second Injury Fund pays compensation on behalf of an employer to an employee who has already suffered a prior disabling injury, and now sustains a subsequent injury, and the combination of the two injuries creates a greater disability than the second injury would have created by itself.
Write Your Own (WYO Program
1. The WYO Program is 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.
Multi-Peril Crop Insurance (MPCI) coverage is written by ?
1. The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC).
Multi-Peril Crop Insurance (MPCI)
1. The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC). 2. Coverage may be provided for approximately 200 different types of crops, but 5 major crops account for 90% of the liability assumed (corn and maize, cereal grains, soybeans, tobacco, and cotton). 3. Covered causes of loss include: adverse weather conditions, fire, insects, plant disease, wildlife, earthquake, and volcanic eruption
Watercraft Liability Endorsement
1. The endorsement amends the liability exclusion pertaining to certain types of watercraft liability. 2. The exclusion is deleted and replaced with a revised exclusion, which states that Coverage E and F don't apply to "watercraft liability" if the involved watercraft is being: a. Operated in or practicing for any prearranged or organized race, speed contest, or competition. Sailing vessels and predicted log cruises are not excluded. b. Rented to others. c. Used to carry people or cargo for a charge. d. Used for any "business" purpose. 3. If the watercraft is a sailing vessel or one powered by an inboard or inboard-outdrive engine or motor, Coverages E and F don't apply to bodily injury sustained by any employee in the course of employment. Such exclusion applies if the employee's principal duties are in connection with the maintenance, operation, or use of a watercraft designated in the endorsement.
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement
1. The endorsement covers the insured's liability exposure in the event that a third party claims illness as a result of exposure to mold and the insured is deemed liable for the illness. 2. The basic liability limit is currently $50,000 on an annual aggregate basis during the policy period for all fungi, wet or dry rot, or bacteria related damages. Insurers can also offer a higher optional liability coverage limit of $100,000
Home Day Care Endorsement
1. The endorsement extends Section I and II coverages to the home day care "business" described in the schedule provided it is conducted by an insured on the residence premises. 2. The endorsement typically imposes a policy year aggregate limit for the sum of personal liability and medical payments to others losses. The limit corresponds to the Coverage E limit shown in the Declarations, with a per person per accident sublimit for day care- related medical expenses equal to Coverage F. 3. The endorsement does not cover injury to any employee arising out of the "business
Home Business Endorsement
1. The endorsement provides for both business property and liability coverages for a variety of home businesses. 2. The business must be owned by the named insured, or by a partnership, joint venture, or organization comprised solely of the named insured and resident relatives. 3. Includes coverage for premises operations, advertising injury, and personal injury. 4. There is no coverage for professional services
Insuring Agreement
1. The insurer will: a. Pay damages for bodily injury or property damage for which any insured becomes legally responsible. b. Settle or defend any claim or suit asking for such damages. c. Pay all defense costs it incurs, in addition to the liability limits. The insurer's duty to settle or defend ends when the limit of liability is exhausted. 2. The insurer will not defend or settle any suit or claim that is not covered under this policy. 3. The policy defines insured in Part A as: a. The named insured or any family member for the ownership, maintenance, or use of any auto. b. Any person using the covered auto with permission. c. A person or organization, for "your covered auto," if legally responsible for an insured
Limit of Liability auto
1. The insurer's limit of liability for loss is the lesser of the actual cash value (ACV) of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality. 2. In the event of a total loss, adjustments will be made for depreciation and physical condition when determining the ACV. 3. If a repair or replacement results in better than like kind or quality, the insurer will not pay for the amount of the betterment. 4. There is a maximum limit of $1,500 for a non-owned trailer and $1,000 for certain electronic equipment.
Earthquake Endorsement MISCELLANEOUS PERSONAL LINES COVERAGE
1. The peril of earthquake, or earth movement, is excluded on virtually all property policies. It may be added to most homeowners policies by endorsements and, in some jurisdictions, such as California, may also be purchased as a separate policy. 2. Included in the peril of earthquake are earth movement, land shock waves or tremors, landslide, mudslide, mudflow, sinkhole, and the rising, sinking, or shifting of the earth. 3. All earth movements occurring within a 72-hour period are considered a single occurrence of earth movement
Coverage F - Medical Payments to Others
1. The policy will pay necessary medical expenses that are incurred or medically ascertained within 3 years from the date of an accident causing bodily injury. 2. Legal liability, negligence, and fault do not trigger this coverage. Medical payments to others is a goodwill coverage and designed to discourage the submission of liability claims. 3. Medical expenses are the reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices, and funeral services. 4. Coverage does not apply to the insured or regular residents of the insured's household (except residence employees). 5. Coverage applies to: a. A person on the insured location with the permission of an insured. b. A person off the insured location if the bodily injury: 1) Arises out of a condition on the insured location or the immediate surroundings. 2) Is caused by the activities of an insured. 3) Is caused by a residence employee in the course of employment by the insured. 4) Is caused by an animal owned by or in the care of an insured.
Underwriter
1. The underwriter's primary responsibility is the selection of risks to be insured. The underwriter also determines the classification, and premium rate if a risk is accepted by the insurer. 2. Underwriting protects the insurer against adverse selection and risks that are more likely than average to suffer losses. 3. Goal is to select risks that fall into the normal range of expected losses. 4. Field underwriter is the producer. 5. Line and staff underwriters are employed by the insurer.
Auto Medical Payments Coverage
1. This endorsement allows the insured to purchase Medical Payments Coverage. The commercial auto forms do not automatically include this coverage. 2. Coverage is written with a limit per person, per accident, and pays up to the limit for necessary medical and funeral expenses resulting from bodily injury incurred within 3 years of an accident
Joint Ownership Coverage Endorsement (PP 03 34
1. This endorsement amends the definition of "you" and "your" to refer to 2 or more individuals, other than husband and wife, who reside in the same household, or to nonresident relatives who jointly own the insured vehicle. 2. Non-resident relatives - 2 or more persons related by blood, marriage, or adoption who reside in separate households. This includes a ward or foster child.
Voluntary Compensation Endorsement
1. This endorsement is used when an employer wishes to provide Workers' Compensation benefits to employees, although the law does not require the employer to provide coverage.
Extended Non-Owned Coverage for a Named Individual (PP 03 06)
1. This endorsement provides coverage by removing or altering some of the Personal Auto Policy's exclusions or limitations. 2. The endorsement covers non-owned autos furnished or available for the insured's regular use. 3. The endorsement provides excess liability coverage, for the individual named on the endorsement and for the business use of a commercial type vehicle that the named insured does not own. 4. The endorsement can be used to provide excess liability coverage for the use of a vehicle as a public or livery conveyance. 5. An extra premium charge applies for liability and medical payments purchased by this endorsement.
Excess Electronic Equipment Coverage
1. This endorsement provides coverage for electronic equipment that is permanently installed in the vehicle in a location not used by the auto manufacturer. Coverage increases the policy limit from $1,000 to the amount shown on the endorsement. 2. Includes $200 of coverage for tapes, records, discs, and other media used with covered excess electronic equipment
Limited Mexico Coverage
1. This endorsement provides coverage on an excess basis and only for losses and accidents that occur in Mexico and within 25 miles of the U.S. border. In addition, coverage only applies if the insured's visit to Mexico is of 10 or fewer days duration. 2. Coverage only applies if existing liability insurance is in place, and was issued by a licensed insurance company organized in Mexico. 3. No coverage is provided for anyone who is a citizen or resident of Mexico.
Named Non-owner Coverage for a Named Individual
1. This endorsement provides liability, medical payments, and uninsured motorists coverage for individuals who do not own vehicles, but often borrow or rent autos. The endorsement is also designed for individuals who need to prove financial responsibility. Definitions are amended by this endorsement, which also amends certain exclusions. Part D - Coverage for Damage to your Auto is NOT provided by this endorsement. 2. The endorsement covers only the person named in the endorsement; a spouse and family members may be included if that option is selected on the endorsement. The endorsement provides only Liability, Medical Payments, and Uninsured Motorists Coverages.
Towing and Labor Costs Coverage Endorsement (PP 03 03)
1. This endorsement provides payment, at the designated amount, for towing to a garage or for labor performed at the site of disablement.
Fine Arts Floater
1. This floater covers such items as paintings, etchings, pictures, tapestries, rare manuscripts, and antiques. The floater provides automatic coverage for 90 days for newly acquired items.
Personal Effects Floater
1. This floater provides open peril coverage for items worn or carried by tourists and travelers. 2. The coverage applies worldwide, but not at the insured's home.
Crop/Hail Insurance is a specialized policy that protects the insured against reduced yield because of a covered loss to crops before they are harvested.
1. This is private insurance, not reinsured by the federal government. named perils coverage. Fire, lightning, wind. Freezing, drought, insects and disease 4. coverage begins at 12:01 a.m. following the date the application is signed, provided the crop is clearly visible above the ground. However, this will vary by insurer and state. Changes will be addressed in the state law chapter if applicable. 5. The policy is written with deductibles (normally a 5% yield reduction). Policies can be written to cover a percentage of expected yield, such as 50% or 100%. If a crop is expected to yield 10,000 bushels but yields only 5,000, the policy will cover the unrealized 5,000 bushels 6. The coverage ceases when the crop is harvested (1 growing season). 7. The payment of an insured loss reduces the total amount of available insurance. 8. The policy includes a replanting provision designed to reduce both the insured's and the insurer's losses. The insurer may reimburse the insured up to 20% of the amount of insurance. The reimbursement does not reduce the amount of insurance available for the crop. 9. Exclusions - These may vary by company but common exclusions include: a. Until normal visible (crop must be above ground) b. Failure to harvest a mature crop c. Non-owned property (share crop) d. Loss from injury to buds, blossoms or blooms, unless the crop is affected e. Injury to leaves, vines, etc unless crops are also damaged or affected f. Injury to trees, bushes, fruit or nut crops
Liability and Medical Expenses Limits of Insurance bop your product definition
1. Warranties and representations relating to the fitness of the product. 2. Warnings and instructions for safe use of the product. 3. Containers for the product
Payment of Loss
1. When paying for losses covered under Part D, the insurer may make payment in cash or by repairing or replacing the stolen or damaged property. 2. If making payment in the form of cash, the insurer will include any sales tax that applies to the stolen or damaged property. 3. If stolen property is recovered, the insurer has the option of keeping the stolen property (at agreed or appraised value) or returning it to the named insured. If the insurer returns the stolen property, it must pay for any damage that resulted from the theft.
Under Coverage C, Personal Property: § The _____ limit (paragraph f of the policy) is subject to a maximum of ____ for loss by theft of firearms and related equipment § The _____ limit (paragraph g of the policy) is subject to a maximum of $______ for loss by theft of high-value metal wares (solid or plated) such as gold, silver, platinum, or pewter. This includes flatware, hollowware, tea sets, trays, and trophies made of or including silver, gold, or pewter. This part of the endorsement does not apply to ____.
10% 10,000 25 10,000 H08
bop additional coverages Increased Cost of Construction
10,000
bop additional coverages Interruption of Computer Operations
10,000
BOP Personal Property Off Premises
10,000 Business Personal Property while it is in transit or at premises the insured does not own, lease, or operate. This extension does NOT cover money, securities, valuable papers and records, or accounts receivables.
A violation of privacy regulation is punishable by License suspension or revocation fine up to ____________per violation fine up to ___________ if the violations occur with a frequency that constitutes a general business practice A legal action regarding illegal disclosure of private information must be brought within 2 years from the date the alleged violation is or should have been discovered.
10,000 50,000
The Personal Auto Policy was designed to provide insurance for eligible vehicles that are owned by one or more individuals. Eligible vehicles are private passenger vehicles including cars, SUVs, passenger vans, and pickups with a gross vehicle weight of
10,000 pounds or less.
The North Carolina Rate Bureau sets rates for specific types of employment based on each .
100
bop additional coverages Money Orders and Counterfeit Paper Currency
1000
bop additional coverages Extra Expense
12 consecutive months after the date of direct physical loss or damage. This additional coverage is not subject to the limits of insurance in Section I.
bop additional coverages Limited Fungi, Wet Rot, and Dry Rot
15,000
the Commissioner may issue a temporary license, without regard to education, experience, or exam requirements, for up to
180 days:
This endorsement limits Section I, Coverage C, Special Limits of Liability to ___for business property used in a home day care business on the residence premises. It also increases coverage to ___ on home day care business property which is 'away from the premises'.
2,500 500
Fraud and False Statements (Fraudulent Insurance Act)
2. In 2001, the NAIC adopted model legislation for the prevention and enforcement of insurance fraud. 3. A fraudulent act involves a misstatement of material fact by a person who knows or believes that statement to be false. The statement is made to another person who relies on its accuracy to make a decision or to act and is subsequently harmed by relying on the deliberately false statement. 4. State fraudulent insurance acts do not modify the privacy of any individual; they protect producers, brokers, and insurers in the event fraudulent information is provided by consumers. 5. Insurance applications and claim forms must contain a disclosure about how false statements and fraud will be treated by the insurer. A sample warning is, "Any person who knowingly presents false or fraudulent information on an insurance application or claim for the payment 6. If a person engaged in the business of insurance whose activities affect interstate commerce the following penalties apply: a. A fine of no more than $50,000, imprisonment for up to 10 years, or both. b. If the violation jeopardized the safety and soundness of an insurer and , imprisonment can be for up to 15 years. c. If the amount embezzled or misappropriated does not exceed $5,000, violators will be fined up to $50,000 or imprisoned for up to 1 year, or both. 7. If a person uses threats, force or attempts to impede/obstruct the administration of the law during any proceeding involving the business of insurance before any insurance regulatory official, he/she will be fined up to $50,000 or imprisoned up to 10 years, or both. 8. Any individual who has been convicted of a felony involving dishonesty who then willfully engages al to engage in the business of insurance, and whose activities affect interstate commerce, will be fined up to $50,000 or imprisoned up to 5 years, or both.
TRIA was intended for what ?
2. TRIA was intended to respond to the chaos the 9/11 terrorist attacks caused in the insurance industry as well as to assure that commercial property and liability insurance would continue to be able to provide coverage for the peril of terrorism
No later than ______of each year, the Bureau files the rates for nonfleet private passenger motor vehicle insurance. No later than ______ the Bureau files a schedule of credits for policyholders based on the presence of mitigation and construction features and on the condition of buildings that it insures in the beach and coastal areas of the state
2/1 5/1/210
Appraisal - If the insurer and the insured cannot agree on a loss amount, either one may request an appraisal. When one party makes this request, the other party must choose a disinterested appraiser within ____ days. The two appraisers select an impartial umpire and if they cannot do so within ____days, either the insured or
20 15
Multi-Peril Crop Insurance (MPCI) covers how many types of crops ? what are the 5 major crops covered ? what is the % of those 5 crops
200 different types of crops, but 5 major crops account for 90% of the liability assumed (corn and maize, cereal grains, soybeans, tobacco, and cotton).
The Bureau files with the Commissioner copies of the rates, loss costs, classification plans, rating plans, and rating systems used by its members. Each rate or loss costs filing will become effective on the date specified in the filing, but not earlier than _______days from the date the filing is received by the Commissioner. A filing is open to public inspection immediately after it is submitted to the Commissioner.
210
The Bureau is authorized to provide rates and policy forms for insurance against property damage to rented private passenger motor vehicles. Property damage includes damage or loss to the rented vehicle of at least _____ This includes loss of use and any costs or expenses related to the damage or loss that the renter is legally obligated to pay. The vehicle must be rented on a daily-rate basis for no more than _____ consecutive
250 21
Subclassification plan surcharges must be applied to a policy for ____ policy years. An insurer may provide for premium surcharges for insureds that have less than _______years' driving experience as licensed drivers.
3 3
Complete at least _____ ICECs in ethics during each biennial compliance period Complete at least _____ ICECs on flood insurance and the National Flood Insurance Program, or any successor programs, every other biennial compliance period
3 3
xamination of Your Books and Records - Insurer may examine and audit the books and records as they relate to the policy during the policy period and up to
3 years afterward
TRIA was what type of program allowed the _____ to share in terrorism losses
3. TRIA was a temporary program that allowed the federal government to share in terrorism losses with private insurers in the event a certified act of terrorism took place
An insurer or agent must notify a person at least________ days before disclosing private information, and they must notify the Commissioner if a person's application for coverage has been denied.
30
Member insurers must be notified of the assessment at least ____ days before it is due. Member insurers may not be assessed in any year on any account an amount greater than ____% of that member insurer's net direct written premiums for the preceding calendar year on the kinds of insurance in the account.
30 2
Giving Notice to Employer and Filing Claims In order to obtain benefits, an employee must give the employer written notice of the accident within ___- days of the accident. In instances of occupational disease, notice should be given within ____ days of being diagnosed by a competent medical authority. This requirement does not apply to asbestosis, silicosis, or lead poisoning
30 30
A producer must report to the Commissioner any administrative action taken against the producer in another state or by another governmental agency in North Carolina within
30 days after final disposition
A license applicant may request a review by the Commissioner within
30 days after receiving notice that the license application has been denied. An applicant who disagrees with the outcome of the review may request a hearing within 30 days.
An insurer that terminates a producer's appointment must notify the Commissioner within
30 days after the termination's effective date
Post-Assessment Insurance Guaranty Association (Guaranty Fund The Association is obligated to pay covered claims—those existing before, and arising within
30 days after, an insurer's insolvency—of more than $50 and less than $300,000, subject to the following exception
The Association is obligated to pay covered claims—those existing before, and arising within
30 days after, an insurer's insolvency—of more than $50 and less than $300,000, subject to the following exceptions: § The Association will not pay any amount exceeding the insolvent insurer's obligation § Workers' Compensation claims will be paid in full § Unearned premiums will be remitted, up to $10,000 per request § If occurring before the 30 days after insurer insolvency, the Association's obligation ends when the policy expires or the insured replaces their policy
If the Declarations page indicates that NO Collision or Other than Collision coverage applies to at least one vehicle, the insured has _____ days
4 days to report for coverage to apply. Automatic coverage ends after 4 days if the insured doesn't report
The policy defines non-owned auto as
4. The policy defines non-owned auto as: a. Any private passenger auto, pickup, van, or trailer not owned by, furnished, or available for the regular use of the named insured or a family member, while being used by the named insured or a family member. b. Any auto or trailer being used as a temporary substitute for the covered auto, while the covered auto is out of normal use due to: ■ Breakdown ■ Repair ■ Servicing ■ Loss ■ Destruction
If an insured whose policy is transferred to the Facility finds coverage from another insurer (other than a premium finance company), and if that insurer cancels the insured's policy within ____days, that insurer must provide a pro rata premium refund
45
bop Liberalization - If the insurer adopts any revision that would broaden coverage under the policy without additional premium within
45 days prior to, or during, the policy period, the broadened coverage will immediately apply to the policy
A licensee must keep records of the courses they have attended within the past ______ years
5
bop cancalation the insurer may cancel the policy when and how long
5 days before the effective date of cancellation if vacant 60 days b) After damage by a covered cause of loss, if permanent repairs to the building: (1) Have not started; and (2) Have not been contracted for within 30 days of initial payment of loss.
Every insurer or its agents must maintain a record of all written complaints for at least
5 years after the complaint's final disposition
bop additional coverages Business Income from Dependent Properties
5,000
Violation of the placement of business by unauthorized insurers may result in the following fines: For the first offense, a fine not more than ______ For the second and subsequent offenses,_________ for each violation Each day during which a violation occurs constitutes a separate violation
5,000 10,000
If the Commissioner finds that the filing does not comply with requirements, they must give notice to the Bureau within ____ days after the date of the filing. The notice to the Bureau must include how the filing fails to meet the requirements, and the Commissioner must set a hearing date within _____days of the hearing notice being mailed to the Bureau.
50 30
If an approved course is taken in a classroom setting, each instruction period must be at least
50 minutes in order to count for one hour of CE credit.
BOP Deductible
500
Refrigerated Property Coverage (HO 04 98) This endorsement provides ____ for property stored in refrigerators or freezers on the residence premises, if the failure is caused by an interruption of electrical service or the mechanical failure of the refrigeration unit. The deductible for damages covered under this endorsement is ____ This endorsement can be used with all standard HO forms except ____
500 100 H08
A licensee age ____ or older who has been continuously licensed in the line of authority for at least _____years and either holds a professional designation for that line or certifies annually that they are an inactive agent taking no part in agency operations is exempt from the continuing education requirement
65 25
An insurer or agent may not knowingly overinsure property (i.e., issue more insurance on a property than the fair value of the property), or issue a policy with a term longer than _____ years.
7
No policy form for insurance transactions may be used unless it has been filed with the Commissioner by the Bureau and it has either been approved or______days have elapsed and the form has not been disapproved.
90
The applicant has _______days to request reasons for the adverse underwriting decision and the response must be made within ____ days of being received.
90 21
Yacht Policy
A Yacht policy is designed for larger vessels, many of which have crew members.
Surety Bonds (Performance Bonds) License and Permit Bond -
A bond required by municipalities or other public bodies as a condition for granting a license or permit to engage in a specified activity. The bond guarantees that the party seeking the license or permit will comply with applicable laws or regulations
License and Permit Bond
A bond required by municipalities or other public bodies as a condition for granting a license or permit to engage in a specified activity. The bond guarantees that the party seeking the license or permit will comply with applicable laws or regulations. Examples include: Contractor's license bonds guarantee that a contractor complies with laws pertaining to his/her trade. b. Tax bonds guarantee a business complies with laws pertaining to payment of taxes. c. Broker's bonds, such as insurance, mortgage, or title agency bonds guarantee that the broker performs according to law. d. Motor vehicle dealer bonds guarantee that the dealer performs according to law
Flat Cancellation
A cancellation of insurance that is retroactive to the effective date of the policy. No coverage is provided and the insurer must refund the policy premium paid by the insured
Hold Harmless Agreement
A contractual agreement that transfers the liability of one party to another party; it is used by landlords, contractors, and others as a way to avoid or reduce risk.
Misrepresentations
A false statement contained in the application; usually does not void coverage or the policy. If material to the issuance of coverage, meaning the insurer would not have issued coverage had the misrepresentation not been made, coverage does not apply. In some cases, a material misrepresentation may void the policy
1. Self-Insured Fund:
A form of "blanket coverage" for Workers' Compensation insurance where the business pays into a large fund that provides coverage for the business and all other contributors who pay into the fund. Each business' contribution to the fund is based on their number of employees, payroll, and the rate assigned to them by the North Carolina Rate Bureau.
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
Bid Bond
A guarantee that the contractor making the bid will, upon acceptance of the bid by the contractor's customer (the Obligee), proceed with the contract and replace the Bid Bond with a Performance Bond. Failure to do so results in default and the Surety will pay the contractor's customer (the Obligee) the difference between the contractor's bid and the next highest bid.
Surety Bonds (Performance Bonds: contract bonds: bid bond
A guarantee that the contractor making the bid will, upon acceptance of the bid by the contractor's customer (the Obligee), proceed with the contract and replace the Bid Bond with a Performance Bond. Failure to do so results in default and the Surety will pay the contractor's customer (the Obligee) the difference between the contractor's bid and the next highest bid.
Performance Bond
A guarantee that the contractor will perform, as agreed in the contract. If the contractor defaults, the Surety will pay the Obligee the value of the bond, which is usually the value of the contract.
Surety Bonds (Performance Bonds: contract bonds: performance bond
A guarantee that the contractor will perform, as agreed in the contract. If the contractor defaults, the Surety will pay the Obligee the value of the bond, which is usually the value of the contract.
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. Binders contain the name of the insurer, the amount and type of insurance, and the perils insured against
Tabular Method -
A loss reserve based upon the estimated length of an insured's or claimant's life or expected disability.
Average Value Method
A loss reserve established based on average settlements of particular claim types.
Case Reserve Method
A loss reserve established for each claim, when reported
Loss Ratio Method
A loss reserve formula based upon the expected losses for a particular class or line.
Schedule Rating
A method of rating property and liability risks by using charges and credits to modify a class rate based on the nature of the particular risk being rated.
Mutual Insurance Company
A mutual company is owned by policyholders (who may be referred to as members). 2. A Board of Trustees or Directors directs the company operations and is elected by policyholders. 3. Policyholders receive non-taxable dividends as a return of unused premium when declared by the directors. 4 Dividends are not guaranteed. 5. Traditionally, mutual insurers issue Participating policies.
Particular Average -
A partial loss sustained by a specific vessel or cargo. The loss is NOT shared by anyone other than the party with insurable or financial interest in the loss
General Average -
A partial loss sustained voluntarily, but done so to save a vessel or cargo from a total loss. An example of a general average loss is throwing cargo overboard prevent a vessel from sinking. When a general average loss occurs, the owners of the vessel and all cargo share proportionally in the loss.
Bailee
A person or any organization to which property has been entrusted, usually for repairs, servicing or storage. Because bailees are legally responsible for property in their care, property insurance policies specifically exclude coverage for property in the care of a bailee.
Insured
A person or organization protected by an insurance contract.
Bailor
A person or organization that entrusts property to a bailee.
Family Member
A person related to the named insured by blood, marriage, or adoption who is a resident of the named insured's household. A family member includes a ward or foster child.
Valued Policy
A policy that states the value of property as the amount shown on the Declarations page and will pay that full face value in the event of a total loss, regardless of the actual cash value.
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
Residual Markets
A private coverage source of last resort for businesses and individuals who have been rejected by voluntary market insurers.
Pro Rata Cancellation
A proportionate cancellation of insurance that refunds premium to the insured based on the precise number of days coverage was in effect. The earned premium is the premium charged and retained by the insurer for the number of days coverage was in place; the unearned premium is the premium refunded to the insured for the number of days coverage was not in place.
Coinsurance
A provision contained in most policies insuring commercial property, and is used to encourage the insured to purchase and maintain insurance to value, and to establish the basis of payment in the event the insured fails to maintain a specified percentage of that value. The higher the coinsurance percentage the insured agrees to purchase, the lower the rate that the insured pays for the insurance. Coinsurance applies only in the event of a partial loss, as total losses typically are paid in accordance with the Valued Policy Law.
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.
Activities by Lenders and Temporary Contracts
A provision that it may not be cancelled within a term of the binder except with 10 days' written notice to the mortgagee The amount of insurance bound The binder must be accompanied by a paid receipt for one year's premium
Inherent Vice
A quality within property that causes it to damage or destroy itself. Examples include rust, rot and the fading of paint. Inherent vice is not covered by a property policy.
Experience Rating
A rate based on the policyholder's actual loss history when compared to the loss history of similar risks.
Loss Cost Rating
A rating organization provides insurers with the portion of a rate that does not include provisions for expenses or profit. a. The expense and profit components to develop the final rate must be added by individual insurers based upon their projections. b. Loss cost rating is used on risks for which the insurer may not have enough data to develop the rate, other than for expenses and profit
A reciprocal insurer is_______ , and is formed by individuals, firms, and business
A reciprocal insurer is unincorporated, and is formed by individuals, firms, and business corporations that exchange insurance on one another
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. b. The agent or producer binds the actions and words of the principal.
Newly Acquired Auto reporting
A replacement auto for another with all coverages except collision and comprehensive (other than collision) is covered for liability and medical payments for the remainder of the policy period, even if the insured does not report the replacement.
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
Accident
A sudden, unforeseen, unintended, and unplanned event from which loss or damage results.
Tort
A tort is a wrongful act, other than a breach of contract, that violates a duty or the rights of another and for which compensation may be sought from the responsible party. Torts may result from either criminal or civil activity. Torts are either intentional, or unintentional. An intentional tort is a deliberate act that harms another and for which the injured party is permitted by law to sue the wrongdoer. An unintentional tort, also known as negligence, is an act, or failure to act that is committed without the same level of care a reasonable individual would have exhibited given the same knowledge and set of circumstances. Liability insurance provides coverage for most unintentional torts and excludes intentional torts.
Voidable Contract
A valid contract that for reasons satisfactory to a court, may be set aside by one of the parties. An example is an insurer may void or revoke coverage for misrepresentation or fraud.
Trailer
A vehicle designed to be pulled by a private passenger auto or a pickup or van. Trailer also includes a farm wagon or farm implement while it's being towed by a private passenger auto pickup, or van
Parol Evidence Rule
A written contract may not be altered without the written consent of both parties
subrogation
After an insurer pays a loss, it is granted the insured's rights to seek recovery from the party responsible for the loss. For example, if Bob is legally responsible for injuring Sue in a car accident, Sue's insurance company may seek reimbursement from Bob for the claim payments it made to Sue.
Liability and Medical Expenses Limits of Insurance bop Products-completed operations aggregate -
All claims for bodily injury, and property damage that occur during the policy period and fall within the products completed operations hazard; aggregate limit is twice the Liability and Medical Expenses limit shown in the Declarations.
Indemnity Contract -
An agreement to pay on behalf of another party under specified circumstances, such as when a loss occurs.
Void Contract -
An agreement without legal effect because it was made illegally or it was declared void by the courts because it doesn't contain all the elements of a legal contract
Attractive Nuisance
An artificial condition on land that attracts children, such as a swimming pool, and requires the owner to exhibit a special duty of care. Legally, children are considered invitees to the premises if it contains an attractive nuisance even when they are not expressly invited.
A" Rating or Judgment Rating
An individual rate that doesn't use loss history as a component and that is derived largely from the underwriter's evaluation and best judgment the risk poses to the insurer.
Temporary Partial
An injury after which an employee is able to do some work, but is unable to earn his/her usual wage until full recovery. Benefits are usually calculated as a percentage of the difference in the wages
Permanent Total
An injury that prevents an employee from being able to do any work for the rest of his/her life. Benefits are subject to the same weekly benefit percentage and the same minimum and maximum limits as Temporary Total. In most states, benefits are paid for life.
Alien Insurer
An insurer organized under the laws of any jurisdiction outside of the United States, whether or not it is admitted to do business in this state.
Occupational Disease
An occupational disease must arise out of the course of employment and be caused by conditions that are particular to that employment. coal miner who develops respiratory problems will likely be eligible for benefits
Watchperson
Any person the insured retains specifically for the purpose of having care and custody of property inside the premises and who has no other duties.
Strict Liability Applies to ____ ?
Applies to Products If a claimant can prove that a product caused the injury, the manufacturer will be held liable whether or not the product was defective. 3. Liability may be asserted even in the absence of negligence. For example, the manufacturer of a dangerous product is always legally liable if the product causes injury or damage
Self-Insured Retention -
As with personal umbrella policies, a commercial umbrella policy has a self-insured retention, which is a form of cost-sharing that applies when the policy drops down to act as primary coverage because the underlying primary policy doesn't cover a loss.
Retention
Assume the responsibility for loss. ■ Self insure the entire loss or a portion of the loss. Choosing deductibles is a method of risk retention. ■ It might be economically practical for an insured to not insure each exposure to loss and instead insure only those risks that threaten financial stability security
Apparent Consent
Authority created when the producer exceeds the authority expressed in the agency contract. This occurs when the insurer does nothing to counter the public impression that such authority exists. An example would be the producer's acceptance of premiums on a lapsed policy.
express consent
Authority that is written into the producer's agency contract. An example would be the producers binding authority if written in the contract.
Implied consent
Authority the public assumes the producer has. An example would be the business activities of providing quotes, completing applications and accepting premiums on behalf of the insurer.
Ineligible Risks bop
Automobile repair and service station unless these operations are incidental to an otherwise eligible risk. 2. Restaurants, bars, and grills are ineligible (unless fast-food restaurant or others with limited cooking). 3. Places of amusement are not eligible. 4. Manufacturers are ineligible.
Compensatory Damages
Awarded to the injured party for the actual loss sustained. Damages are Special or General.
Part F - General Provisions
Bankruptcy Bankruptcy or insolvency of an insured does not relieve the insurer of its obligations under the policy. If the insured declares bankruptcy, the insurer must still comply with all obligations of the policy. Changes No changes may be made unless they are contained in a written endorsement issued by the insurance company. The insurer may also adjust the policy premium if changes occur that affect information that determines premium rates, such as number or type of vehicles insured, drivers of insured vehicles, the overnight locations of vehicles, and insurance coverages, deductibles, and limits of liability. If the insurer makes a change that broadens coverage under the current edition of the insured's policy, and the change doesn't generate a premium charge, the change automatically applies to the insured's policy. . Fraud No coverage is provided for any insured who commits fraud, makes fraudulent statements, or engages in fraudulent activity with respect to a claim for any accident or loss. Legal Action Against the Insurer No legal action may be taken against the insurance company by anyone unless he/she has complied fully with the policy. In addition, no one may sue the insurance company until it agrees in writing that the insured has a legal obligation to pay for damages. Right to Recover Payment If the insurance company makes a claim payment, the person on behalf of whom payment was made must assign its rights to recover damages from another party to the insurance company. If a claimant recovers from another party after the insurer has made payment, that claimant must reimburse the insurance company. Policy Period and Territory The policy only provides coverage for accidents and losses that occur during the policy period and within the policy territory. The policy territory is the United States of America, its territories and possessions, Puerto Rico, and Canada, and while being transported between their ports. Mexico is NOT in the policy terriory
Breach of Trust
Based on fiduciary relationship of parties and the wrongful acts violating the relationship
Bonds
Bonds are contracts that involve three parties: 1. Principal (Obligor) - 2. Surety (Guarantor) - 3. Obligee -
Conditional Contract
Both parties must perform certain duties and follow rules of conduct to make the contract enforceable. The insurer must pay claims if the insured has complied with all the policy's terms and conditions
Masonry Noncombustible
Buildings with exterior walls of masonry (not less than 4 inches thick) or made of fire-resistive construction with a rating of not less than one hour and noncombustible floors and roofs
Contract Carrier (Trucker and Motor Coverage)
Business, individual, or organization that carries persons or property for a fee, from one place to another. Persons or property being transported are only those of certain customers and NOT the general public.
Mobile Home Insurance
C - Personal Property is generally written at 40% of Coverage A, The mobile homeowners policy may be written on an open perils basis with losses to the mobile home valued on a replacement cost basis, with other items of property being valued on an actual cash value basis. the upset, stranding, or sinking for up to 30 days while the mobile home is being moved to a new location.
Cargo Insurance
Cargo Insurance - Covers physical damage losses to merchandise while in transit. Cargo insurance can be written on an open perils basis. Certain there are two types FOB (Free On Board) Point of Shipment FOB Point of Destination
Farm Property Coverage Form
Causes of Loss - The insured may choose either Basic, Broad, or Special Form causes of loss. a. Basic: ■ Fire or Lightning ■ Windstorm or Hail ■ Explosion ■ Riot or Civil Commotion ■ Aircraft ■ Vehicles ■ Smoke ■ Vandalism ■ Theft ■ Sinkhole Collapse ■ Volcanic Action ■ Collision (Coverages E & F only) ■ Earthquake Loss to Livestock ■ Flood Loss to Livestock b. Broad - Includes the Basic Causes of Loss, plus the following: ■ Electrocution of Covered Livestock ■ Attacks on Covered Livestock by Dogs or Wild Animals ■ Accidental Shooting of Covered Livestock ■ Drowning of Covered Livestock From External Causes ■ Loading/Unloading Accidents ■ Breakage of Glass or Safety Glazing Material ■ Falling Objects ■ Weight of Ice, Snow, or Sleet ■ Sudden and Accidental Damage to Heating or Air Conditioning Systems ■ Accidental Discharge or Leakage of Water or Steam From a System or Appliance Containing Water ■ Freezing of Plumbing, Heating, Air Conditioning, Fire Protective Systems, or Appliances ■ Sudden and Accidental Damage From Artificially Generated Electricity c. Special - Provides open perils coverage for insured property other than livestock, poultry, other animals, bees, fish, worms, hay, and plants, trees or shrubs. The special form will not pay for dishonest or criminal acts committed by the insured or employee, and release or escape of pollutants or contaminants unless caused by a specified cause of loss. 2. Exclusions - The forms do not cover losses caused directly or indirectly by ordinance or law, earth movement (other than sinkhole collapse), government action, intentional loss, nuclear hazard, off-premises services, war and military action, or flood or surface water. 3. Additional Coverages a. Coverages A, B, C, E, F, and G: 1) Debris Removal 2) Reasonable Repairs 3) Damage to Property Removed for Safekeeping 4) Fire Department Service Charge
Section II Additional Coverages The following coverages are provided and payments are made in addition to the limit of liability appearing on the declarations
Claim Expenses (Supplementary Payments) - Includes the insurer's expenses for defending a claim, along with reasonable expenses incurred by an insured at the insurer's request. Also covered as claim expenses are premiums on bonds required in a suit defended by the insurer, the insured's actual loss of earnings up to $250 a day for assistance in the investigation or defense of a claim or suit, and post-judgment interest. 2. First-Aid Expenses - Includes expenses incurred by an insured for rendering first aid to others who sustain bodily injury covered under the policy. No coverage is provided for first aid to an insured. 3. Damage to Property of Others - Pays up to $1,000, at replacement cost, for property damage to property of others caused by an insured. Payment is made regardless of negligence. For example, damage caused by an insured to a borrowed lawn mower. Coverage does not apply to property damage: a. Covered under Section I of the policy. b. Caused intentionally by an insured who is 13 years of age or older. c. To any property owned by an insured. d. To property owned by or rented to a tenant of an insured or a resident of the named insured's household. e. Arising out of a business engaged in by an insured; acts or omissions in connection with premises owned, rented, or controlled by an insured that is not the insured location; the ownership, maintenance, occupancy, operation, use, loading or unloading of aircraft, hovercraft, watercraft, or motor vehicles. 4. Loss Assessment - Provides Up to $1,000 of coverage for the insured's share of loss assessments charged by a corporation or association of property owners, during the policy period. The loss assessment must be the result of bodily injury or property damage not otherwise excluded by the policy or liability for an elected director, officer, or trustee who serves on the board of the association or corporation without being compensated.
The person making the sale will be guilty of a _______if they do not know the insurer is unauthorized _______felony if they knew or should have known the insurer was not authorized
Class 1 misdemeanor Class H
Any person who presents a written or oral statement that contains false or misleading information material to a claim to procure or deny benefits is guilty of a
Class H felony. The person must have the intent to injure, defraud, or deceive an insurer or insurance claimant
Making willful misstatements of information in financial or other required statements is a
Class I felony, punishable by a fine of not less than $2,000 and not more than $10,000.
Commercial Property Insurance
Common Policy Declarations Common Policy + Commercial commercial equip farm property Property inland marine breakdown & liability commericial general commer crime commer auto liability = commercial package policy
Beach Area -
Commonly called the Outer Banks, the area of North Carolina from south and east of the inland waterway, from the South Carolina line to Fort Macon (Beaufort Inlet), to south and east of Core, Pamlico, Roanoke, and Currituck sounds to the Virginia state line.
Loss of Consortium
Compensation for loss of companionship of a spouse.
TRIA WHO provided temporary financial compensation to insured parties during its crisis of recovery from the terrorist attacks.?
Congress provided temporary financial compensation to insured parties during its crisis of recovery from the terrorist attacks.
Applicants who have been convicted of a felony must apply for
Consent to Work in the business of insurance—prior to applying for an insurance license. b. Producers must apply for consent in their resident state. c. Officers and employees must apply for consent in the state where their home office is located. d. Prohibited persons (convicted felons) must apply for consent in order to discover if they are permitted or prohibited from the insurance business.
Surety Bonds (Performance Bonds
Contract Bonds - Guarantee that contractors perform according to a construction contract. If a contractor fails to perform according to the contract, the Surety is responsible to the Obligee for the bond limit, which usually equals the value of the completed contract.
Contract Bonds
Contract Bonds - Guarantee that contractors perform according to a construction contract. If a contractor fails to perform according to the contract, the Surety is responsible to the Obligee for the bond limit, which usually equals the value of the completed contract. The following types of contract bonds may be required in connection with a contract
Surety Bonds (Performance Bonds) License and Permit Bond - the 4 types of bonds are ?
Contractor's license bonds Tax bonds Broker's bonds Motor vehicle dealer bonds
Surety Bonds (Performance Bonds) License and Permit Bond Contractor's license bonds
Contractor's license bonds guarantee that a contractor complies with laws pertaining to his/her trade.
eligible risks bop contractors
Contractors Eligible contractors include those whose total annual payroll does not exceed $300,000, and no more than 10% of total annual gross sales comes from subcontracted work
Within 30 days after an insurer receives a written request from a client to correct, amend, or delete personal information about the client, the insurer must either:
Correct, amend, or delete the disputed information; or Notify the client of its refusal to make such corrections, the reason for the refusal, and the individual's right to file a formal statement with the insurance institution
Farm Property Coverage Form
Coverage A Dwellings provides insurance for the residential dwellings owned and occupied by the insured. It includes attached structures. Coverage B Other Private Structures provides insurance for detached private garages and other private structures. These structures must be used personally - and not for farm purposes. Coverage C Household Personal Property provides insurance for household personal property owned by the insured and family members while on the premises. Coverage D Loss of Use provides insurance for additional living expense and fair rental value. Coverage E Scheduled Farm Personal Property provides insurance for specific types of property if a designation appears on the Declarations for that type of property. For example, grain and hay, farm products, poultry (other than turkeys), and computers and related equipment used for farm management. Coverage F Unscheduled Farm Personal Property provides insurance for all items of farm personal property on the insured location except for those specifically excluded. A few types of property are covered off-premises, however, coverage is not provided for household or personal property usual to a dwelling (that type of property is insured under Coverage C). Coverage G Other Farm Structures provides insurance for described farm buildings and structures and their attached sheds and permanent fixtures. Also covered are silos if described on the Declarations, portable fences and structures, corrals, pens, chutes, etc.
Coverage I (Personal and Advertising Injury Liability)
Coverage I provides for payment of sums the insured becomes legally obligated to pay for losses arising from personal or advertising injury, to which the insurance applies. An offense must be related to the farming business. For example, the insured unknowingly libels a neighbor's farm products.
Part D - Coverage for Damage to Your Auto
Coverage Part D of the personal auto policy addresses coverage for damage to the insured's auto, also known as physical damage coverage. Part D provides first-party property damage coverage for the insured's covered autos and also provides some coverage for non-owned vehicles being operated or used by the insured and family members. Insuring Agreement 1. Part D - Coverage for Damage to Your Auto pays for direct and accidental damage, regardless of fault, subject to the policy's exclusions - and those contained in this coverage part. Covered vehicles are Your Covered Auto and non-owned autos. Part D of the policy is the only section that defines non-owned auto. a. A deductible applies and will be the amounts shown on the Declarations for Collision coverage and Other Than Collision coverage, which is also known as comprehensive coverage. The deductibles for Collision and Other Than Collision coverages need not be the same. b. If this coverage pays for damage to a non-owned auto, the broadest coverage appearing on the Declarations will apply
Exclusions Only Applying to Coverage F - Medical Payments to Others
Coverage does not apply to bodily injury: 1. To a residence employee if the bodily injury occurs off an insured location AND NOT in the course of the residence employee's employment by the insured. 2. To any person who is eligible to receive benefits voluntarily provided or required by law under any Workers' Compensation, occupational disease law, or non-occupational disability law. 3. From any nuclear reaction, nuclear radiation, or radioactive contamination—regardless of how caused. 4. To any person other than a residence employee of an insured who regularly resides on any part of the insured location. This includes roommates and tenants as well as any insured.
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. Coverage is provided for the payment of necessary medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, and funeral expenses. Payments are made regardless of the insured's negligence. This coverage is provided to discourage liability claims and lawsuits and, when payments are made, are not an admission of liability.
Part C Exclusions auto
Coverage is NOT provided when any insured sustains bodily injury under the following circumstances: 1. An insured or family member is injured when occupying, or struck by, a vehicle owned by the named insured or a family member and the vehicle is not insured by this policy. 2. An insured or a legal representative settles an Uninsured Motorists Bodily Injury Liability claim and that settlement impairs the insurance company's ability to recover payments made to any insured. 3. An insured is occupying a "your covered auto" while it is being used as a public or livery conveyance. 4. An insured is using a vehicle without a reasonable belief that he or she is entitled to drive it. Family members always have a reasonable belief of entitlement to drive a "your covered auto" under this coverage. 5. While insured by Workers' Compensation or disability insurance. No payment will be made under this coverage for injuries that might benefit any insurer, or self-insurer, under any Workers' Compensation or disability benefits law. This means that if Workers' Compensation or disability insurance is in place, that coverage must pay before this coverage applies. 6. If the insured is legally responsible for punitive or exemplary damages, this coverage does not apply
Loss Assessment
Coverage up to $1,000 is provided for the named insured's share of loss assessment charged during the policy period by a corporation or association of property owners. The assessment must be made because of direct loss to property owned collectively by all members AND that was caused by a Peril Insured Against under this policy. This coverage is additional insurance.
Multi-Peril Crop Insurance (MPCI) what are the covered losses
Covered causes of loss include: adverse weather conditions, fire, insects, plant disease, wildlife, earthquake, and volcanic eruption
Transit Coverage Forms: Annual Transit Coverage Form
Covered property is the insured's personal property or the property of others in the insured's care, custody, or control. Property must be in transit when shipped by any type of carrier or vehicle, or in any land vehicle owned or operated by the insured. Coverage applies while covered property is in the custody of the carrier for hire until it's either delivered to its destination or returned to the insured. can be written on a named or open peril
Inchmaree Clause
Covers direct damage caused by the bursting of boilers, breaking of propeller shafts, or loss due to faults or errors in navigation by the crew. When this clause is added to the policy, it broadens the types of losses that are covered for the hull.
Applicant challenge
Credit reporting agency must reinvestigate within 6 months, if applicant challenges accuracy.
The rates for crop hail insurance are developed by the
Crop Hail Insurance Actuarial Association (CHIAA
Comparative Negligence
Damages are reduced in proportion to the degree of the claimant's negligence. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant may only recover 95% of damages
Exclusive or Captive Agency System
Deals with the insured through an exclusive or captive agent. a. Agent represents solely one company or group of companies having common ownership. b. Insurer retains ownership rights to the business written by the agent. c. The agent is an employee or a commissioned independent contractor. d. Insurer may or may not provide office and agency support services
farm deductible
Deductible - The standard deductible is $250
Mobile Home Insurance
Depending upon the insurer, insurance for mobile homes may be insured on a homeowners policy by adding a Mobile Home endorsement. If the insurer doesn't allow the addition of such an endorsement to its homeowners policy, a separate Mobile Homeowners policy must be written. 2. Under ISO (Insurance Services Office) rules, an owner occupied mobile home may be covered under an HO-2 or HO-3 by endorsement. The endorsement amends the definition of Coverage A (Dwelling) to include a mobile home. Tenants of a mobile home may insure their personal property under an HO-4 if the insurer's underwriting guidelines permit.
Motor Carrier Regulatory and Modernization Act (the Motor Carrier Act of 1980
Deregulated the trucking industry by prohibiting any entity from interfering with a motor carrier's right to set its own rates. Motor carriers and private motor carriers that transport property are required to establish evidence of financial responsibility in the form of insurance, a bond, a guarantee, or qualification as a self-insurer.
Loss Ratio
Determined by dividing Paid Losses + Loss Reserves by Total Earned Premiums.
Expense Ratio
Determined by dividing an insurer's Total Operating Expenses by Written Premiums.
Directors and Officers Liability (D&O)
Directors and Officers Insurance is typically written to protect the directors and officers of a corporation or other legal entity for wrongful acts committed while acting in their capacity as directors and officers for the organization.
Moral Hazard
Dishonest tendencies that increase the probability of a loss; certain characteristics and behaviors of people. Example: An insured burns down his/her own house to collect the insurance payout.
Personal Producing General Agent
Does not recruit career agents. b. Sells insurance for carriers it is contracted with and maintains its own office and staff.
during how many days can a insurance cancel for any reason
During the first 60 days of a new policy, an insurer may cancel the policy for any reason
Part E Auto
Duties After an Accident or Loss
Elements - In order for an act or failure to act to be negligent, it must contain 4 elements
Duty Owed - Violation of Duty - Violation of Duty is Proximate Cause - Foreseeable Consequence -
Avoidance
Elimination of the risk. ■ Avoid the activity that gives rise to the chance of loss. ■ After potential areas of hazards have been identified, it may be found that some exposure to risk can be eliminated, but it is impossible to avoid all risk.
what is the fine if someone embezzlement
Embezzlement in the amount of $100,000 or more is a Class C felony; less than $100,000 is a Class H felony.
Equipment Breakdown Coverage
Equipment Breakdown Coverage, formerly known as Boiler & Machinery Coverage, is insurance for loss due to the equipment breakdown of most types of equipment, such as boilers, machinery, refrigeration systems, air conditioning systems, electrical equipment, etc. The resulting Business Income and Extra Expense loss is often covered, as well. Equipment Breakdown is excluded in most standard property insurance policies. Coverage may be added by endorsement to a policy or written as a monoline policy. The primary form of coverage is the Equipment Breakdown Protection Coverage Form and, while individual policies and endorsements provide the same basic coverage, their forms vary among insurers.
The most common forms of professional liability insurance are
Errors & Omissions (E&O) and Medical Malpractice
Coastal Area -
Except for any area defined as beach area, all of the following counties: § Craven county § Jones county § Every county (except Bertie county) that borders the ocean
Fiduciary Responsibilities who is insured
Executive officers and directors Stockholders and trustees Volunteer workers and employees
Gross Negligence
Failure to exhibit any sort of care through recklessness or deliberate indifference to the well-being of others. For example, driving while under the influence of alcohol.
Fidelity Bonds (Honesty Bonds)
Fidelity Bonds are designed to cover an employer from direct loss due to fraudulent and dishonest acts (namely theft) by their employees. They are commonly referred to as "dishonesty insurance
Financial Responsibility
Financial Responsibility When the policy is certified as future proof of financial responsibility, the policy shall comply with the law to the extent required
No deductible for bop ?
Fire Department Service Charge, Business Income, Extra Expense, and Fire Extinguisher Recharge Systems
Exclusions On Coverage E - Personal Liability
For any loss assessment, except as provided under the Additional Coverage, Loss Assessment. 2. Under any contract entered into by an insured. Exceptions exist if the contract is a written contract that relates directly to the ownership, maintenance, or use of an insured location or the liability of others is assumed by the named insured prior to an occurrence. 3. Property damage to property owned by an insured. 4. Property damage to property rented to, occupied by, used by, or in the care of an insured. This is the care, custody, or control exclusion and an exception exists for property damage caused by the perils of fire, smoke, or explosion. Keep in mind that the Additional Coverage, Damage to Property of Others, provides $1,000 of coverage, on a replacement cost basis, to minimize this exclusion. 5. Bodily injury to anyone eligible to receive benefit from any Workers' Compensation, occupational disease law, or non-occupational disability law. 7. Bodily injury to the named insured or any insured.
Fiduciary Responsibilities things that are covered
Fraud or breach of contract Conflict of interest Malpractice or neglect Government investigation Errors and omissions Cyber risks, such as: Business-to-Business (B2B) exposures Business-to-Consumer (B2C) exposures Internet Service Providers (ISP), mobile, cellular exposures Internal technology infrastructure exposures Corporate "brochure" web site exposures
Actuarial Department
Gather and interpret statistical information used in rate making. An actuary determines the probability of loss and sets premium rates.
Government insurers step in ( ) when private insurers are unable to provide protection relative to the catastrophic nature or unpredictability of a risk.
Government insurers step in (as a last resort) when private insurers are unable to provide protection relative to the catastrophic nature or unpredictability of a risk.
Aircraft hull insurance provides insurance for physical damage to the airplane. Coverage is offered at 3 different levels,
Ground only Ground including taxi all risk
Crop, Hail, and Windstorm Insurance
Growing crops are excluded from coverage in the Farm Property Coverage form; therefore, a separate line of insurance is available. Crop insurance is a specialized policy that protects the insured against reduced yield because of a covered loss to crops before they are harvested
Loss Settlement - Under HO-___________, buildings covered at replacement cost will be repaired according to their value before the loss. Replacement cost means the least of the following amounts: § Limit of liability under the policy § Replacement cost of the part of the building needing replacement. Materials of like kind and quality will be used. Actual amount spent to repair or replace the entire building
H02,3,5
bop surcharge for vacant building
If a loss caused by other perils occurs in or to a vacant building, a penalty of 15% will be applied to the loss payment
Your Covered Auto
If a vehicle meets any of the following four definitions, it is a "your covered auto." a. Any vehicle shown in the Declarations. b. A newly acquired auto. c. Any trailer that the named insured owns. d. Any auto or "trailer" the named insured doesn't own while being used as a temporary substitute for any other vehicle described in this definition,
No Benefit to Bailee
If other insurance is in place, or if another party is available to make payment for a covered loss, this policy only pays its proportionate share of the loss (as we've seen in the other coverage parts). 2. If a loss occurs and the covered auto is a non-owned auto, this policy will pay on an excess basis. Primary coverage is considered insurance provided by the vehicle's owner, any other property coverage that may be in place, and any other source of recovery, such as the insurance purchased by the driver of the vehicle
Other Structures on the Residence Premises - Increased Limits
If the Coverage B limit of insurance is inadequate to insure all other structures on the residence premises (10% of Coverage A)
If the Declarations page indicates that either Collision or Other than Collision coverage applies to at least one vehicle, the insured has ________days for coverage to apply. Automatic coverage ends after ______-days if the insured doesn't report.
If the Declarations page indicates that either Collision or Other than Collision coverage applies to at least one vehicle, the insured has 14 days to report for either coverage to apply. Automatic coverage ends after 14 days if the insured doesn't report. 3) If the Declarations page indicates that NO Collision or Other than Collision coverage
Resumption of operations -
If the insured is able to use damaged or undamaged property to resume operations after a covered business income loss—and doesn't do so—the policy will reduce the amount of the business income loss payment to the extent of the resumption of operations that should have been made
Arbitration
If the insurer and the insured do not agree on the recovery of damages or the amount recoverable by the insured, each party may select an arbitrator (at each party's expense) who then jointly select a third arbitrator (with the expense split equally by each party). A decision agreed upon by the arbitrators will be binding as to the insured's entitlement to, and the amount of, damages.
Other Insurance
If there is other applicable auto Medical Payments insurance, the insurer will pay only the proportion that its limit of liability bears to the total of all applicable limits. However, coverage for non-owned vehicles shall be excess over any other collectible auto insurance providing payment for medical or funeral expense
Two or More Auto Policies
If two or more policies issued by the same insurer apply to the same accident, the maximum limit of liability that will be paid will not exceed the policy with the highest limit.
Financial Anti-Terrorism Act (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 (a part of the Bank Secrecy Act).
Supplementary Payments
In addition to the limit of liability, the insurer also makes other payments: 1. If a bail bond is required because of an accident, the policy will pay up to $250 for the cost of the bail bond so long as the accident resulted in a covered bodily injury or property damage claim. 2. If defending a suit, the insurer will pay premiums on appeal bonds and bonds to release attachments. 3. Any interest that accumulates after a judgment has been entered will also be paid by the insurer if it defends a suit. 4. The policy pays up to $200 a day for loss of earnings because the insurer requests attendance at hearings or trials. This does not include loss of other earnings. 5. The policy will also pay for reasonable expenses incurred at the insurer's request. This does NOT include traffic fines.
Non-participating policy
In non-participating policies the profits are not shared and no dividends are paid to the policyholders. This type of policy is also known as a without-profit or non-par policy.
Ordinance or Law -
Increased costs due to law enforcement regulating the use, construction, demolition, remodeling, renovation, or repair of property - including removal of debris. Under the Dp-2 and DP-3 forms, this exclusion doesn't apply to the Other Coverage, Ordinance or Law.
Causes of Loss - Special Form
Instead of providing coverage for named causes of loss, the special form provides coverage for risks of Direct Physical Loss unless the peril or cause of loss is specifically excluded or limited. Coverage under the special causes of loss form is on an open perils basis. The Limitations section of the special causes of loss form contains language not found in the basic and broad forms, such as: a. No coverage is provided for most damage to steam boilers and equipment due to events inside the boilers and equipment. b. No coverage is provided for damage to the interior of a building caused by rain, snow, sleet, ice, sand, or dust unless the exterior of the building or structure first sustains damage. c. No coverage is provided for inventory shortage. d. No coverage is provided for the following, unless specifically endorsed: fragile articles and builders machinery, tools, and equipment. e. Special limits of insurance apply to the following classes of personal property: $2,500 for furs and fur garments; $2,500 for jewelry, watches, jewels, precious and semi-precious stones, gold, silver, etc.; $2,500 for patterns, dies, molds, and forms; and $250 for stamps, tickets, and letters of credit.
Insurers
Insurance companies or Carriers) manufacture and sell insurance coverage by way of insurance policies or contracts
Other Insurance
Insurance is excess over any other collectible insurance, except insurance written specifically as excess insurance over this policy
Coverage E - Personal Liability
Insurance is provided for claims made and suits brought against an insured because of bodily injury or property damage caused by an occurrence for which the insurance applies. 1. The policy pays up to the limit of liability for the damages for which an insured is legally liable, including prejudgment interest awarded against an insured. 2. The policy provides a defense, at the insurer's expense, even if the suit is groundless, false, or fraudulent. The insurer may investigate and settle any claim or suit it decides is appropriate. The duty to defend ends when the policy limits have been exhausted by payment of a judgment or settlement. Payments for defense costs are made in addition to the limit of liability appearing on the declarations
Principle of Indemnity
Insured is restored to the same financial or economic condition that existed prior to the loss. b. Insured should not profit from an insurance transaction
Attained Age
Insured's age at any point in time at issuance, renewal or conversion.
Risk Sharing Plan
Insurers agree to apportion among themselves those risks that are unable to obtain insurance through normal channels. 4. Coverage is typically written as Workers' Compensation, personal auto liability or property insurance on real property.
Prior Approval
Insurers cannot use rates until approved by the Department of Insurance, or until a specific time period has expired after the filing
Blanket Limit
Insures property located at more than one location OR more than one type of property at the same location OR both. For example, the $1 million blanket limit applies to two separate buildings at two separate locations, as well as the business personal property contained in each building.
Part B - Medical Payments Coverage auto
Insuring Agreement 1. The insurer will pay reasonable expenses incurred for necessary medical and funeral services caused by an accident, sustained by an insured, and incurred within 3 years of the accident. 2. Unlike Liability Coverage, Medical Payments Coverage does NOT require an insured to be legally responsible for causing injuries. 3. The policy defines insured in Part B, as: a. The named insured or any family member occupying any auto or as a pedestrian when struck by a motor vehicle designed for use mainly on public roads. These vehicles do NOT have to be owned by the insured and include any type of trailer. b. Any other person, such as a passenger, while occupying the insured auto
Fraud
Intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. Contains 5 elements: ■ False statement, made intentionally and that pertains to a material fact. ■ Disregard for the victim. ■ Victim believes the false statement. ■ Victim makes a decision and/or acts based on the belief in, or reliance upon, the false statement. ■ The victim's decision and/or action results in harm.
Sharing
Investments of a large number of people may be pooled by use of a corporation or partnership.
Property Damage Liability
Legal liability arising from physical damage to tangible property, including loss of use of that property, caused by the acts of an insured. Property damage liability expenses include the actual cost of repair or replacement of the damaged property as well as the inability to use damaged property (loss of use
Bodily Injury Liability
Legal liability arising from physical injury, including sickness, disease, and death caused by the acts or omissions of an insured. Bodily injury liability expenses include medical bills, lost wages, mental anguish, pain and suffering, etc.
Personal Injury Liability
Legal liability arising from specific offenses committed by an insured that results in injury other than bodily injury or property damage. Examples of personal injury include libel, slander, false arrest, invasion of privacy, and copyright infringement. Personal injury is generally understood to affect one's reputation or emotional well-being and is not bodily harm or property damage.
Part A Exclusions auto
Liability coverage is not provided for any insured who: a. Intentionally causes bodily injury or property damage. b. Causes property damage to property he or she owns or is transporting. c. Causes property damage to property rented to, used by, or in the care of that insured. An exception exists for damage to a residence or private garage - this is the care, custody, or control exclusion. d. Is responsible for causing bodily injury to an employee (of that insured) during the course of employment by that insured. e. Owns or is operating a vehicle while it's being used as public or livery conveyance (meaning it has been hired out to the general public). A vehicle used in a share-theexpense car pool is not considered a public or livery conveyance. f. Is employed or engaged in the business of selling, repairing, servicing, storing, road testing or parking motor vehicles. An exception exists if the vehicle is being used by an insured, a family member, or a partner or employee of these. For example, Mary's son is a mechanic. If he's test-driving Mary's car and crashes it, the exception to the exclusion applies - meaning he has coverage. However, if his co-worker crashes Mary's car, the exception doesn't apply because the co-worker is not related to Mary, nor is he her partner or employee. g. Is using a vehicle while employed or engaging in business. However, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles. h. Is using a vehicle without the reasonable belief that he or she is entitled to drive it. Family members always have a reasonable belief of entitlement to drive a "your covered auto" under this coverage. 2. Liability coverage is not provided for the ownership, maintenance, or use of: a. Vehicles that have fewer than four wheels, such as motorcycles. b. Vehicles designed mainly for use off public roads, such as snowmobiles or ATVs. An exception applies for off-road vehicles used by an insured in a medical emergency, "trailers," or non-owned golf carts. c. Vehicles owned by the insured that are not insured on this policy OR not owned by the insured but are furnished to the insured or available for the insured's regular use, such as a company car. d. Vehicles owned by a family member that aren't insured by this policy OR not owned but are furnished to a family member or available for the family member's regular use, such as a company car. e. Vehicles located inside a racing facility for the purpose of competing, practicing, or preparing for a race or speed contest.
fine arts floater exclusions are ?
Loss caused by the restoration or repairing process. Breakage that is not caused by fire, lightning, explosion, aircraft, collision, windstorm, earthquake, flood, malicious mischief, theft, or derailment or overturn of a conveyance. Mysterious disappearance.
Occupying
Means in, upon, getting in, getting on, getting out, or getting off a vehicle.
Reduction
Minimizing the chance of loss, but not preventing the risk. For example, sprinkler systems, burglar alarms, pollution controls and safety guards on machinery. ■ Pooling or spreading the risk among a large number of persons or entities
Private versus Government Insurers
Most insurance is written through private insurers. However, there are instances where governmental-based insurers step in to offer an insurance alternative when private insurers are unable to provide protection. This usually relates to the catastrophic nature of the risk, capacity to handle the risk, and lack of desire to engage in a line of insurance where experience to evaluate necessary premium intake to offset potential loss is lacking.
eligible risks bop motels
Motels Buildings are limited to 3 stories in height; the motel may not be seasonal in its operation, and may not contain a bar or cocktail lounge.
motor truck cargo forms there are 2 types of cargo forms
Motor Truck Cargo Carrier's Legal Liability Form. The Motor Truck Cargo Owner's Form.
Part D Exclusions auto
No coverage is provided for: ■ An insured vehicle being used as a public or livery conveyance. The exclusion does not apply to a share-the-expense car pool. ■ Damage solely a result of wear and tear, freezing, equipment breakdown, or road damage to tires. These are all maintenance issues and are excluded under other types of property insurance. ■ Losses due to war or nuclear hazard. Electronic equipment, unless it's permanently installed in the vehicle. Examples of electronic equipment include radios, stereos, tape decks, CD systems, navigation systems, Internet access systems, computers, telephones, televisions, two-way mobile radios, scanners, and CB radios. ■ Tapes, records, disks, or other media used with electronic equipment. ■ A total loss to Your Covered Auto due to destruction or confiscation or non-owned auto by government or civil authorities. ■ A trailer, camper, or motor home if it isn't shown on the Declarations, unless the vehicle is a non-owned trailer, or is acquired during the policy period and the insured reports the purchase within 14 days. ■ A non-owned auto when used by the insured or a family member who doesn't have a belief of entitlement to use the non-owned auto. ■ Loss to radar and laser detection devices and equipment. ■ Custom furnishings and equipment in any pickup/van. Custom furnishings and equipment include special carpeting and insulation, furniture or bars, height-extending roofs, and custom murals, paintings, decals, and graphics. The following items are not considered custom furnishings or equipment: any cap, bed liner, or cover in or upon any pickup. ■ A non-owned auto being used in the auto business. ■ Any auto when located at a racing facility for organized racing. ■ Under Part D if either state law or the rental agreement prevent the rental car company from recovering damages from the insured. Many insurers automatically cover a rental vehicle with the same coverage as the insured has on his/her own personal auto policy. If the insured only has liability coverage on a personal auto policy and rents a car for vacation, the rental car is not fully insured by the insured's PAP. The insured will need to fill this gap by buying the rental agency's insurance or upgrading his or her own policy
eligible risks bop
Office buildings that are occupied primarily for office purposes that do not exceed 6 stories in height or contain more than 100,000 square feet in total area.
Contract of Adhesion
One party writes the contract, without input from the other party. One party (insurer) prepares the contract and presents it to the other party (applicant) on a "take-it-orleave- it" basis, without negotiation. Any doubt or ambiguity found in the document is construed in favor of the party that did not write it (insured).
Unilateral Contract
Only one party is legally bound to the contractual obligations after the premium is paid to the insurer. Only the insurer makes a promise of future performance, and only the insurer can be charged with breach of contract.
Farm Property Coverage Form coverage G
Other Farm Structures provides insurance for described farm buildings and structures and their attached sheds and permanent fixtures. Also covered are silos if described on the Declarations, portable fences and structures, corrals, pens, chutes, etc
Part C - Uninsured Motorists Coverage (UM)
Part C - Uninsured Motorists Coverage (UM) provides insurance to insured persons injured in accidents that are caused by another party. The other party must be legally responsible for bodily injury to an insured that arises out of the ownership, maintenance, or use of an "uninsured motor vehicle." If the other party is NOT legally responsible (or not at-fault), this coverage doesn't apply. 1. The insurer will pay damages that an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury. Unless the policy specifically states that Uninsured Motorist Physical Damage (UMPD) is also provided, this section of the policy only applies to bodily injury damages. 2. In addition to the definition of "insured" that applies to the entire policy, the definition of "insured" for UM means: a. The named insured or any family member. b. Any person occupying a "your covered auto." c. Any person who is entitled to recover damages because of bodily injury sustained by an insured and covered by the policy. For example, if Sue sustains bodily injury in an accident caused by an uninsured motorist, her children will be entitled to recover damages for loss of care when Sue is unable to care for them because she broke both her legs in the accident. 3. Part C - Uninsured Motorists Coverage contains a definition for "uninsured motor vehicle." An uninsured motor vehicle is one that: a. Doesn't have insurance or a bond in place at the time of the accident. b. Has insurance in place at the time of the accident. However, the bodily injury liability limits are less than those required by the financial responsibility or compulsory insurance laws in place in the state where the insured's "your covered auto" is principally garaged. c. Is a hit-and-run vehicle. The owner or operator of the vehicle can't be identified AND must hit: 1) The named insured or a family member. 2) A vehicle occupied by the named insured or a family member; or 3) "Your covered auto." d. Has insurance, but the insurer either denies the claim or becomes insolvent.
Personal Inland Marine Insurance
Personal Inland Marine coverage can be attached by endorsement to a Homeowners or Dwelling Policy; it may also be written as a separate policy. Personal Inland Marine Insurance is a form of coverage used to insure moveable property against direct loss. Since moveable property is known as floating property, the word floater is often used.
Personal Umbrella Policy
Personal umbrella coverage is liability insurance provided on an excess basis. Each contract is unique and may contain provisions and language not found in other umbrella policies. Personal umbrella coverage may be issued as an endorsement added to a homeowners policy or as a standalone policy.
Property Damage
Physical injury to, destruction of, or loss of use of tangible property
Rehabilitation Benefits
Physical therapy and vocational training are utilized with the objective of returning the injured employee to work as soon as possible.
1. Assigned Risk Market:
Policies from this market are for businesses with insufficient histories or that have been unable to obtain insurance through the open market because of their risk level.
Assignment
Policy owners may not assign or transfer their rights under an insurance contract without the written consent of the insurer.
2. A Joint Underwriting Association or Joint Reinsurance
Pool requires insurers writing specific coverage lines in a given state to assume the profits/losses accruing their share of the total voluntary market premiums written in that state
Intervening Cause
Prevents or limits recovery from the wrongdoer when a second, distinctly separate negligent act occurs after the original negligent act, but before damage occurs, and interferes with the chain of events that brings about the loss. The intervening cause must be unexpected and unforeseen.
Contributory Negligence
Prevents recovery for damages caused by a negligent party if the claimant was negligent to any extent. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant is not permitted to collect damages
Contributory Negligence -
Prevents recovery for damages caused by a negligent party if the claimant was negligent to any extent. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant is not permitted to collect damages
Assumption of Risk
Prevents recovery if the claimant knowingly assumed the risk.
Estoppel
Prevents the denial of a fact, if the fact was admitted to be true previously
Liability and Medical Expenses Limits of Insurance bop what are the 2 aggregate limits
Products-completed operations aggregate General aggregate
Policy Triggers -
Professional liability policies that written on claims-made forms of coverage - either pure claims made or claims-made and reported. The pure claims-made form requires claims to be made during the policy period. Claims-made and reported forms require claims to be both made AND reported during the policy term.
NFIP National Flood Insurance Program homes are insured on what basis
Property is insured on an actual cash value basis, except 1- to 4-family residences and residential condominiums may be insured on a replacement cost basis.
The Internet Liability and Network
Protection policy provides liability coverage on a claimsmade basis for risks that are specific to business use of the internet, such as network security, electronic publishing liability, and loss of data
Fair Credit Reporting Act (15 USC 1681-1681d)
Protects consumer privacy. a. Ensures data collected is confidential, accurate, relevant and used for a proper and specific purpose. b. Protects the public from overly intrusive information
Other Than Collision (OTC, Comprehensive)
Provides coverage on an open perils basis, which means all causes of loss other than a collision loss and not excluded in the policy. OTC, or Comprehensive, includes but is not limited to the following causes of loss: ■ Missiles or falling objects ■ Fire ■ Theft or larceny ■ Explosion or earthquake ■ Windstorm ■ Hail, water, or flood, including a flash flood ■ Malicious mischief or vandalism ■ Riot or civil commotion ■ Contact with a bird or an animal ■ Breakage of glass (If caused by an accident, this loss may be applied to collision coverage instead, in order to avoid a double deductible)
Brands and Labels
Provides coverage to allow the named insured to either stamp a brand of "salvage" or remove the label from damaged goods and re-label at the insurer's expense.
Fiduciary Liability Insurance
Provides errors and omissions insurance for businesses with respect to their administration of employee benefit plans, such as pensions, profit-sharing, and medical insurance. The Employee Retirement Income Security Act of 1974 (ERISA) increased the legal liabilities of fiduciaries that, in turn, increased many business' exposures to fiduciary liability claims.
Commercial General Liability -
Provides liability insurance for the business' premises, operations, products, and completed operations—along with a few other exposures
File and Use
Rates must be filed with the state insurance regulatory authority (Department of Insurance) and may be used as soon as they are filed.
Facultative Agreements
Reinsurance agreement that allows ceding and reinsurance companies the opportunity to negotiate coverage for individual risks.
Treaty Agreements
Reinsurance agreement that covers all risks contained in the subject line(s) of business automatically.
Renewal -
Renewal terms and statement of premium due must be given or mailed not less than 45 days before the expiration date of a policY
Disallowed information
Report must not include lawsuits over 7 years old or bankruptcies over 10 years old.
elements of negligence Foreseeable Consequence
Requires the injured party to prove the actual injuries or damages were a reasonably foreseeable consequence at the time the negligent action or inaction occurred.
Violation of Duty is Proximate Cause
Requires the injured party to prove the alleged wrongdoer's negligent actions or inactions were the proximate cause of actual injuries or damages.
elements of negligence Violation of Duty is Proximate Cause
Requires the injured party to prove the alleged wrongdoer's negligent actions or inactions were the proximate cause of actual injuries or damages.
Violation of Duty
Requires the injured party to prove the alleged wrongdoer not only owed a duty but also violated that duty. Basically, the alleged wrongdoer didn't exhibit reasonable care.
elements of negligence Violation of Duty
Requires the injured party to prove the alleged wrongdoer not only owed a duty but also violated that duty. Basically, the alleged wrongdoer didn't exhibit reasonable care.
Duty Owed
Requires the injured party to prove the alleged wrongdoer owed a duty to the injured party or to the public
elements of negligence duty owed
Requires the injured party to prove the alleged wrongdoer owed a duty to the injured party or to the public.
Underwriting Department
Responsible for the selection of risks (persons and property to insure) and rating that determines actual policy premium
Farm Property Coverage Form coverage e
Scheduled Farm Personal Property provides insurance for specific types of property if a designation appears on the Declarations for that type of property. For example, grain and hay, farm products, poultry (other than turkeys), and computers and related equipment used for farm management.
Direct Mail or Direct Response Company
Sells insurance policies directly to the public with licensed employees or contractors. b. A marketing system utilizing direct mail, newspapers, magazines, radio, television, internet, web sites, call centers and vending machines
Speculative Risk
Situations where there is a chance for loss, gain, or neither loss nor gain to occur. An example of speculative risk is gambling. Speculative risk cannot be insured
Pure Risk
Situations where there is no chance for gain; the only outcome is for nothing to occur or for a loss to occur. 2) Pure risk can be insured. Examples include: a) The possibility of damage to property caused by a fire or other natural disaster. b) The possibility of financial loss as a result of death
Exempt Workers FOR WORKERS COMP
Some states exempt workers based on job duties. Examples include: a. Agricultural workers, such as farm and ranch laborers. b. Domestic employees. c. Casual laborers - Those whose work is non-recurring or irregular. d. Independent Contractors - Plumbers, electricians, and landscapers who work under contract for more than one employer. The definition of independent contractor varies by state, as do requirements for Workers' Compensation and exempt status. e. Sole - Owners, Partners, and Corporate Officers
Attorney-In-Fact.
Someone who has power of attorney to act for another. MAY NOT act for another after that persons death.
Pro Rata Liability
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 and the method of sharing varies by contract. Some policies require sharing of losses by the ratio of applicable limits of insurance each insurer writes with respect to the total of all limits available for the loss (pro rata). Other policies require the insurers to share the loss by contributing equal shares until each insurer has paid its limit of insurance (contribution by equal shares
Warranties
Statements in the application or stipulations in the policy that are guaranteed true in all respects. If warranties are later discovered untrue or breached (past, present or future), coverage (and sometimes the contract) is voided.
Surety Bonds (Performance Bonds)
Surety bonds guarantee that specific obligations will be fulfilled. If the principal defaults, the surety must perform the contract, duty, or obligation of the principal, or indemnify the obligee for actual loss.
Terrorism Risk Insurance Act and its Extensions of 2005 and 2007 TRIA expired on ? the name of the TRIA ACT the second time is
TRIA expired on December 31, 2005 and was extended for two years, with changes, under the Terrorism Risk Insurance Extension Act of 2005 (TRIEA). It was extended with changes a second time
Terrorism Risk Insurance Act and its Extensions of 2005 and 2007 The TRIA ACT PROVIDES FOR WHAT PROGARM? the program is established by who ?
The Act provides for a Terrorism Insurance Program established in the Department of the Treasury. The Secretary of the Treasury administers the Program. act of terrorism
The BOP's Section III - Common Policy Conditions
The BOP's Section III - Common Policy Conditions include Cancellation, Changes, Concealment, Misrepresentation and Fraud, Examination of Your Books and Records, Inspection and Surveys, Insurance under Two or More Coverages, Liberalization, Other Insurance, Premiums, Transfer of Rights of Recovery Against Others to Us, and Transfer of Your Rights and Duties under this Policy
personal Boatowners Policy
The Boatowners policy is a package policy that provides both property and liability coverage and is similar in design to the homeowners policy. The coverage it provides is similar to that provided by the personal auto policy. The policy is generally used to insure boats that can be towed by a car. a.
Declarations
The Declarations Page describes basic information about the policy including: 1. Who - Names the insurer and insured, including legal representatives in the event of the insured's death. 2. What - A description of the property being insured and other parties having insurable interests, such as a mortgagee. 3. Where - The location of insured property and the named insured's mailing address. 4. When - The effective and expiration dates of the policy. 5. How Much - The limits of liability insuring covered property and the annual premium for each type of coverage.
the FIO IS NOT A what ? Insurance is primarily regulated by who?
The FIO is not a regulator or supervisor. Insurance is primarily regulated by the individual States. 3. Insurance producer and company trade associations also exist to provide education, support, networking and lobbying for insurance companies and producers.
Farm Insurance
The Farm Forms have evolved to keep pace with the changes in farming operations. Unlike the farms of the past, farms today often are large business operations. In addition to the exposure of a farm dwelling, most modern farms are characterized by a heavy investment in land, buildings, livestock, and farm equipment. Farm insurance includes Farm Property Coverage, and Farm Liability Coverage. Additional specialized forms include the Mobile Agricultural Machinery and Equipment Form and the Livestock Coverage Form.
First Named Insured
The First Named Insured is the person or organization whose name appears first on the Declarations. The First Named Insured is granted rights and responsibilities by the policy that are not granted to other insureds. In commercial lines, many policies spell out those duties and responsibilities
Mobile Agricultural Machinery and Equipment Coverage Form
The Mobile Agricultural Machinery and Equipment Form provides insurance for mobile devices used in the everyday operation of a farm, including accessories, tools and spare parts specifically designed and intended for such mobile devices. The insured chooses the specific causes of loss form to apply. Are Not covered below aircraft, watercraft, automobiles, motorcycles, mobile homes, snowmobiles, trucks, vehicles licensed for use primarily on public roads, irrigation equipment, contraband, etc.
The Motor Carrier Coverage Form
The 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.
Motor Vehicle Liability
The Motor Vehicle Liability exclusion applies to all coverages in Section II. No coverage is provided for "motor vehicle" liability if at the time of an occurrence, the "motor vehicle" involved in the loss was registered for use on public roads or wasn't registered but was required to be registered. In addition, no coverage is provided for vehicles that are being operated in or practicing for racing, rented to others, used to carry people or cargo for a fee, or used for any business purpose. Exceptions to the exclusion, meaning coverage is given back, exist for the following: a. Vehicles in dead storage on an insured location, meaning they are physically unable to be driven, because their batteries have been removed and they're up on blocks. b. Vehicles used solely to service an insured's residence. c. Vehicles designed to assist the handicapped, so long as the vehicle is being used to assist a handicapped person, or it is parked on an insured location. d. A motorized golf cart used on a golfing facility for purposes approved by the facility or within a private residential community and used as approved by the community. e. Vehicles designed for recreational use off public roads IF they are not owned by an insured OR are owned by an insured and used on an insured location. 2. Aircraft Liability - No coverage is provided for "aircraft liability" as defined in the policy. 3. Hovercraft Liability - No coverage is provided for "hovercraft liability" as defined in the policy.
Cede or Cession -
The act of transferring the risk of loss from the individual insurer to all insurers through the operation of the facility.
Salvage Value
The amount for which property can be sold at the end of its useful life. In property insurance, the salvage value is the scrap value of damaged property.
Split Limits
The amounts of coverage for bodily injury and property damage are separate. Split limits are expressed using 3 separate limits: a bodily injury (BI) limit per person, a bodily injury (BI) limit per accident, and a separate limit for property damage (PD) per accident. If Part A of a policy is written with limits of 100/300/50, the policy will provide coverage of $100,000 per person for BI with a maximum BI aggregate limit of $300,000 per accident. Additionally the policy will provide a $50,000 limit for PD per accident.
Personal Articles Floater (Scheduled Article Floater
The basic form used to insure "individual" items of personal property on a scheduled basis a. Claims are normally settled on an "actual cash value basis" with some exceptions. b. Coverage is provided worldwide, with some exceptions. c. Coverage is provided on an open perils basis with very few exclusions. Typical exclusions are wear and tear, insects or vermin, intentional loss, and war. Specific classes of property have additional exclusions.
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. This valuation method is typically used with older property (such as a Victorian home) for which the replacement value exceeds the insured's ability or willingness to purchase coverage.
Replacement Value -
The cost to replace property with property of like kind and quality, at current pricing, without a deduction for depreciation. Many property policies providing loss valuation at replacement value require covered property to be insured to a certain percentage of its replacement value, such as 80%
Rate
The dollar amount charged for a particular unit of insurance, such as $5 per $1,000 of insurance.
covered injuries for workers comp
The employee is working the hours he/she is designated, or expected, to work. 3. The employee is performing the duties that he/she was employed to do. 4. The injury must arise from a risk that is reasonably related to employment
Fire Resistive
The entire building and roof are constructed of reinforced concrete and steel. Must have at least a 2-hour fire resistive rating.
reciprocal insurer
The exchange of insurance is affected through an Attorney-In-Fact.
Aleatory Contract
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. The insurer's payment in the event of a loss may be much greater, or much less (e.g., $0 in the event a loss doesn't occur), than the insured's premium payment.
Non- Concurrency/ Non-Concurrent Policies
The existence of two or more policies covering the same exposures that don't have the same policy periods. Non-concurrency may create a coverage gap when underlying liability policies and an umbrella policy are non-concurrent because if an underlying liability policy exhausts its aggregate, it may violate the umbrella's underlying limits requirement.
Concurrency/ Concurrent Policies
The existence of two or more policies covering the same exposures, having the same policy periods, and the same coverage triggers. For example, if an auto policy and an umbrella policy are written with the same policy dates, they are considered to be concurrent.
Exclusions farm
The forms do not cover losses caused directly or indirectly by ordinance or law, earth movement (other than sinkhole collapse), government action, intentional loss, nuclear hazard, off-premises services, war and military action, or flood or surface water
The insurance companies share of losses in excess of the deductible (amounts paid or losses exceeding insurer's deductible) is _______, %while the federal government is responsible for ___%
The insurance companies share of losses in excess of the deductible (amounts paid or losses exceeding insurer's deductible) is 15%, while the federal government is responsible for 85%.
Agreed Value
The insurance company and insured agree to a specific value of a particular property before the policy is issued. If a total loss occurs, the insurer will pay the Agreed
Insurance Regulation at the State Level
The insurance industry is regulated primarily at the state level. The Commissioner, Director, or Superintendent of Insurance is typically appointed by the Governor, and the Commissioner has the power to issue rules and regulations to help enforce these statutes
Doctrine of Dual Capacity
The insurance protects the insured against damages which applies when an employee is injured by a product the employer manufactures.
Custodian
The insured or any of the insured's partners or employees, while having care and custody of covered property while inside the premises, excluding any person while acting as a watchperson or janitor.
Messenger
The insured, or any of the insured's partners or employees, while having care and custody of covered property while outside the premises
Crop Hail Insurance the insurer may reimburse the insured up to what ? the reimbursement ______ reduce the amount of insurance availble
The insurer may reimburse the insured up to 20% of the amount of insurance. The reimbursement does not reduce the amount of insurance available for the crop.
Transportation Expenses
The insurer will pay, without application of a deductible, a maximum of $20 per day, up to $600, for transportation expenses incurred because of a collision or comprehensive loss. If the damaged auto is a non-owned auto, coverage only applies if the insured is legally responsible for the loss. 2. If the loss is caused by a total theft of the covered auto or a non-owned auto, the insurer will only pay expenses incurred during the period beginning 48 hours after the theft, and ending when the auto is returned to use or the insurer pays for the loss. 3. If the loss is caused by a peril other than theft of the auto, the insurer will only pay expenses beginning when the auto is withdrawn from use for more than 24 hours
Insuring Agreement
The insuring agreement states the insurance company's promise to pay the insured. This promise is usually broad and the other sections of the policy restrict or limit the scope of coverage provided by the policy. Property insurance policies state in the insuring agreement what perils are covered.
Violent Crime Control and Law Enforcement Act of 1994 (18 USC 1033, 1034)
The largest crime bill in U.S. history expands funding to federal agencies such as the FBI, DEA, and INS and includes provisions that address (among other topics) domestic abuse and firearms, gang crimes, immigration, registration of sexually violent offenders, victims of crime, and fraud. 1. The Act made it a felony for a person to engage in the business of insurance after being convicted of a state or federal felony crime involving dishonesty or breach of trust. a. Violations include willfully embezzling money, knowingly making false entries in any book, report or statement of the business, threatening or impeding proper administration of the law in any proceeding involving the business of insurance.
Limits of Insurance bop building increase % is
The limit of insurance for Buildings will automatically increase by 8% unless
Limit of Liability auto
The limit of liability shown in the Declarations is the maximum the insurer will pay for each person injured in any one accident. This is the most the policy will pay regardless of the number of insureds, claims made, vehicles or premiums shown in the Declarations, or vehicles involved in the accident. If the loss is covered under more than one Part of the policy, payment will not be duplicated.
Limit of Liability
The limit of liability shown in the Declarations is the maximum the insurer will pay in any one accident. This is the most the insurer will pay regardless of the number of insureds, claims made, vehicles or premiums shown in the Declarations, or vehicles involved in the accident. If the loss is covered under more than one Part of the policy, payment will not be duplicated
Combined Single Limit
The limit of the policy may be applied to bodily injury (BI) and/ or property damage (PD). A combined single limit policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD).
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
The Regular Program offers how much
The maximum amount of coverage for contents in a residential building is $100,000 and $500,000 on non-residential buildings
Limit of Liability
The maximum limit paid under Part A - Liability Coverage is shown on the policy's Declarations. That limit applies per accident for all bodily injury and property damage arising from that one accident, including damages for care, loss of services, and a death. 1. The limit shown in the Declarations is the most the insurer will pay in any one accident, regardless of the number of: a. Insureds b. Claims made c. Vehicles or premiums shown in the Declarations d. Vehicles involved in the accident 2. If the loss is covered under more than one part of the policy, payment will not be duplicated
The method of valuation
The method of valuation for the building and business personal property is replacement cost, provided that at the time of the loss the limit of insurance on the lost or damaged property is at least 80% of the full replacement cost of the property
Aggregate Limit
The most the policy will pay for all losses submitted during the policy period, regardless of other policy limits. a. Each loss payment made under a per occurrence limit or per person limit reduces the aggregate limit of liability. b. For example, if a commercial general liability policy has a medical payments coverage per person limit of $5,000, a liability per occurrence limit of $1 million and a $2 million general aggregate limit, payment of a $3,000 medical payments claim would use up $3,000 of the general aggregate limit, leaving $1,997,000 available for the payment of future claims submitted during the balance of the policy term.
Split Limits
The most the policy will pay for loss of different types that occur as a result of any one loss, regardless of other limits. For example, the limits of liability on an auto policy for bodily injury might be represented as 100/300/100 ($100,000 is the per person limit for bodily injury liability, $300,000 is the per occurrence limit for bodily injury, and $100,000 is the per occurrence limit for property damage liability).
Limits of Insurance
The most the policy will pay for loss or damage in any one occurrence is the limit of insurance shown in the Declarations. a. The most the policy will pay for loss or damage to outdoor signs attached to the building is $2,500 per sign in any one occurrence. b. The limits applicable to the Fire Department Service Charge and Pollutant Clean Up and Removal Additional Coverages are in addition to the limits of insurance
Per Occurrence Limit
The most the policy will pay for loss to any one person injured in any one loss, regardless of other policy limits. For example, the limit of liability for medical payments coverage on an auto policy is a per person limit
BOP Outdoor Property
The most the policy will pay is $2,500, but not more than $1000 for any one tree, shrub, or plant.
You and Your
The named insured listed in the declarations, and the spouse if a resident of the same household. The named insured should always be the person or persons to whom the vehicle is titled and registered, unless it's a leased vehicle
Transfer of Your Interest in This Policy
The named insured may not transfer or assign his/her interest in the policy without the insurer's written consent. However, if the named insured dies, the resident spouse will automatically become the named insured. By the same token, if the named insured dies, his/her legal representative will automatically become the named insured but only with respect to legal responsibility for maintenance or use of any Your Covered Auto. This automatic coverage is provided until the end of the policy period.
Loss Payment -
The named insured, or another person named in the policy or who is legally entitled to receive payment, will receive payment for losses within 60 days after the amount is finally determined
Loss Reserves
The net premiums plus interest reflects possible future contract obligations. An accounting measurement of an insurer's future obligation to its policyholders.
Assignment
The owner of a liability policy cannot transfer policy ownership without the insurer's written consent. For example, a business owner cannot sell his business and then transfer ownership of the business' general liability insurance policy to the new owner without the written consent of the insurance company
Principal (Obligor
The party owing the duty, performance, or honesty and is usually the party purchasing the bond. The Principal is also called the Obligor and is usually the insurance agent's client or insured.
Obligee
The party paid by the Surety if the Principal fails to perform (because this is the party harmed by the principal's dereliction of duty). If the Principal fails to perform as agreed, the (Surety) must perform in lieu of the Principal because of the requirements of Suretyship. Suretyship is the assumption of liability for the obligations of another; in other words, a guarantee. The Surety has a legal right of action against the Principal in the event of default until the amount of the loss is recovered. The defaulting Principal MUST repay the Surety.
The period of restoration
The period of restoration
concealment or Fraud
The policy does not provide coverage to an insured who, whether before or after a loss, has intentionally concealed or misrepresented any material fact or circumstance, engaged in fraudulent conduct, or made false statements relating to this insurance.
Termination
The policy may be terminated by either the named insured or the insurance company. 1. Cancellation a. The named insured may cancel the policy for any reason by either returning it to the insurer or giving the insurer advance written notice of the date the cancellation is to take effect. b. During the first 60 days of a new policy, an insurer may cancel the policy for any reason by mailing notice to the named insured shown on the Declarations. Notice of at least 10 days is required for cancellation due to non-payment of premium, and at least 20 days advance written notice for all other reasons. c. After the policy has been in effect for 60 days, the insurer may cancel only for the following reasons: 1) Non-payment of premium. 2) The policy was obtained through fraud or material misrepresentation, meaning the application contained false information and, had the insurer been provided with accurate information, would not have issued the policy. 3) Suspension or revocation of the driver's license of the named insured, any driver who is a household resident of the named insured, any driver who regularly uses a Your Covered Auto. d. State law will supersede this provision. 2. Non-renewal - The insurer may elect to non-renew a policy; if non-renewing the policy, the insurer must give the insured written notice before the end of the policy period. At least 20 days advance written notice must be provided (some states require 30, 45 or 60 days notice). 3. Automatic Termination - The policy automatically terminates if the insured, or a legal representative, fails to accept or pay for a renewal or continuation of the policy. In addition, coverage automatically terminates if the named insured secures other auto insurance on an auto shown on the Declarations 4. Other Termination Provisions a. Proof of mailing of any notice constitutes sufficient proof of notice. b. If the policy is cancelled, the insured may be entitled to a premium refund. If so, the insurer will send the refund. c. The effective date of cancellation stated in the notice will become the end of the policy period.
Policy Period
The policy only applies to bodily injury or property damage that occurs during the policy period.
Farm Property Coverage Form
The policy will pay for direct physical loss or damage to covered property at the insured location or elsewhere, as specifically provided, caused by, or resulting from, a covered cause of loss. For
bop additional coverages Pollution Cleanup and Removal
The policy will pay up to $10,000 per location for pollution cleanup and removal due to a covered loss occurring during each separate 12 month period.
bop additional coverages fire department surcharge
The policy will pay up to $2,500
Remuneration
The premium for each work classification is determined by multiplying a rate and a premium basis. The premium basis is employee remuneration
Market Value
The price a willing buyer would pay for property purchased from a willing seller.
Proximate Cause
The primary cause of loss. If only one peril caused the loss, the proximate cause is the first event in the unbroken chain of events that resulted in loss. If more than two perils caused or contributed to the loss, the proximate cause is the peril having the most significant impact in generating the loss or damage.
Motor Truck Cargo Carrier's Legal Liability Form
The property is owned by others and is covered property The insured has accepted the property for transportation as a contract or common carrier. The insured has issued a bill of lading or a shipping receipt. The insured is legally liable for loss or damage to the cargo.
Crop, Hail, Insurance who makes the rates
The rates for crop hail insurance are developed by the Crop Hail Insurance Actuarial
Right of Salvage
The right of the insurer to take possession of damaged property after paying for its loss. The salvage belongs to the insurer.
The role of a state's executive branch
The role of a state's executive branch is to enforce the existing statutes that have been put in place. enforce laws
FOB (Free On Board) Point of Shipment
The seller is responsible for damages until the property is placed safely on a vessel (to be shipped) or when a bill of lading has been issued. The buyer is responsible for damages from that point on.
FOB Point of Destination
The seller is responsible for damages until the property reaches its final destination (which includes the shipping) and is delivered based on the terms of the contract.
Deductible
The specified amount of each loss that the insured must bear. In property insurance (and with a per claim, or per occurrence, deductible), the insurer subtracts the deductible from the amount of loss when making payment. By accepting a larger deductible, the insured's premium may be reduced. An insurer may require a larger deductible as an underwriting tool to limit small claims
Burglary
The taking of property from inside the premises or a locked safe or vault by a person who commits forcible entry into, or exit 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
eligible risks bop Convenience Food/ Gasoline Stores
The total annual gross receipts from the sale of gasoline must not exceed 75% of the total annual gross receipts. Auto service repair, car wash operations, and propane or kerosene tank filling operations are not allowed.
Premium
The total cost for the amount of insurance purchased. $50,000 of coverage = $5 rate x 50 (per $1,000 of insurance) for a $250 premium.
Collision
The upset of the covered vehicle or a non-owned auto, or its impact with another vehicle or object, such as a tree. Collision is the single named peril in the policy.
Manual Rating
The use of rates contained in a manual published by the insurer or those of the rating organization of which it is a member.
Retrospective Rating
The use of rates that adjust the policy premium to reflect the current loss experience of the policyholder. Premium adjustments are subject to minimums and maximums. Deposit Premium is the required initial premium paid into the policy that is subject to adjustment. A premium audit will be used to determine the actual premium based on the risk exposures
Merit Rating
The use of rates that rewards a policyholder that takes measures to decrease the probability of loss by the implementation of safety programs, loss control programs, etc.
there is no what in a DIC policy
There is no standard policy form
3. Interline Endorsements
These endorsements coordinate the coverage contained in one coverage part of the policy with other coverage parts to prevent duplication
Windstorm Insurance Coverage
These states are Alabama, Delaware, wind and/or wind and hail associations that provide a marketplace of last resort for those who are unable to purchase insurance for the peril of wind on their primary property policies. In these and other states, some insurers require mandatory wind deductibles of a certain dollar amount, such as .
Payment of Claim - Coverage F - Medical Payments to Others
This condition states that payment under Coverage F is not an admission of liability.
Underinsured Motorists Coverage (UIM)
This coverage is slightly different from Uninsured Motorists Coverage, and may be required by state statutes as part of the Uninsured Motorists Coverage. In other states, coverage is optional or added by endorsement. Underinsured Motorists Coverage (UIM) protects the insured against drivers who do have auto liability insurance, but whose coverage limits are inadequate or insufficient to respond to claims. The coverage pays only up to the amount that exceeds the limit of liability of the at-fault party
Special Provisions Coverage (HO 32 32) Business -
This endorsement amends the definition of 'business' to include any full- or part-time activity of any kind that is engaged in for economic gain
Absolute Windstorm or Hail Coverage (HO 32-94)
This endorsement can be used for all HO forms, and it deletes the windstorm or hail exclusion. It does not apply to direct loss by fire or explosion resulting from windstorm or hail. The policy provisions covering fire/explosion will then apply.
Miscellaneous Type Vehicle Endorsement (PP 03 23)
This endorsement changes the policy by adding a definition for "miscellaneous type vehicle," which means a motor home, motorcycle, or other similar type vehicle, ATV, dune buggy, or golf cart. In addition, to the definitions section of the policy, the endorsement amends "your covered auto" and "newly acquired auto" to include any "miscellaneous type vehicle" shown on the endorsement. The definition does not include snowmobiles. 2. Various exclusions under Parts A, B, and D are also amended to remove exclusions for damage to, and injuries arising out of, vehicles having fewer than 4 wheels and vehicles designed mainly for off-road use.
Business Income - Report of Values (BM 15 31
This endorsement is no longer widely used, but when it is used it is completed and signed by the named insured or its authorized representative and sent to the insurer in order to establish "actual" total net profits, fixed charges, and expenses for the immediate 12-month policy period that is expiring and to also "estimate" what the same values are expected to be for the upcoming 12-month policy period. The endorsement is used to determine the amount of the insurer's payment to the insured in the event of a loss of income.
Scheduled Personal Property Endorsement (Personal Article Floater)
This endorsement is used to increase limits of liability for certain categories of personal property and to broaden the perils insured against that apply to that property. 2. Coverage is provided on an open-perils basis and contains very few exclusions; including wear and tear, insects or vermin, war, and nuclear hazard. Some additional exclusions and restrictions apply for fine arts, postage stamps, coins, and the breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains, and similar fragile articles. 3. Newly acquired property of a class already insured on the endorsement is automatically covered. The insurer must be notified within 30 days (90 days for fine arts) if new property is acquired. 4. Scheduled property is insured worldwide. 5. The Section I deductible does not apply to this endorsement
Optional Limits Transportation Expenses Coverage
This endorsement is used when the insured wishes to increase the limits of liability for transportation expenses that are provided in the personal auto policy ($20 per day, $600 maximum). 2. The vehicle is described on the schedule along with the increased daily limit and the increased maximum limit. 3. The endorsement does NOT change or broaden the insurance that is provided for Transportation Expenses in Part D - Coverage for Damage to your Auto.
Designated Insured
This endorsement may be added to any of the auto coverage forms. It contains a schedule that lists a person or organization that is considered an insured under the liability coverage provided by the policy but does NOT change any of the provisions of the policy.
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement
This endorsement provides a basic property limit option of $10,000 on an annual aggregate basis during the policy period for: a. Loss caused by fungi, wet or dry rot, or bacteria. b. Cost of: 1) Testing the air or property to confirm the existence of fungi, wet or dry rot, or bacteria. 2) Removal of fungi, wet or dry rot, or bacteria. 3) Tearing out and replacing any part of the building or other covered property to gain access to fungi, wet or dry rot, or bacteria. 2. Insurers also can offer higher optional coverage limits of $25,000 and $50,000.
Motor Carrier Policies of Insurance for Public Liability (Form MCS-90
This endorsement provides evidence of financial responsibility, on behalf of the motor carrier, to the Interstate Commerce Commission (ICC). The endorsement must be included on all policies, and a policy must meet the financial responsibility requirements of the Department of Transportation. The form must be carried in the cabin of the vehicle and must show:
Identity Theft Expense
This endorsement will pay up to $15,000 for expenses resulting from an instance of identity fraud discovered during the policy period. 2. The endorsement does not cover losses arising out of business activity. It carries a $500 deductible and the insured must notify the insurer within 60 days of the loss.
Identity Theft Expense
This endorsement will pay up to $15,000 for expenses resulting from an instance of identity fraud discovered during the policy period. The endorsement does not cover losses arising out of business activity. It carries a $500 deductible and the insured must notify the insurer within 60 days of the loss.
Actual Cash Value (BM 99 59)
This endorsement, when added to the Equipment Breakdown Protection Coverage Form, changes the property damage method of valuation to state that the insurer will pay the lesser of: a. The cost to repair or replace the damaged property with property of the same kind, capacity, size, or quality on the same site or another site, whichever is less costly. b. The actual cash value of the damaged property. Note The valuation of covered property will be as of the time of the"breakdown", and the insurer will not pay for damaged property that is obsolete or useless to the insured
Trip Transit Coverage Form -
This form is used by those who do not make regular shipments, but wish to insure a single shipment. Covered property is the property described in the Declarations and that isn't otherwise excluded. Coverage applies while covered property is in the custody of the carrier for hire or in any vehicle owned or operated by the insured while in transit. Both forms can be written on an open or named perils basis.
Federal Insurance Office (FIO)
This office monitors the insurance industry and identifies issues and gaps in the state regulation of insurers. It also monitors access to affordable insurance by traditionally underserved communities and consumers, minorities, and low- and moderate-income persons.
The purpose of the North Carolina Rate Bureau is:
To assess and recommend rates for property and casualty insurance against loss to residential contents and real property with not more than four housing units,
Self-Insurer
To self-insure means to assume the financial risk one's self. This is generally an option only for large companies who may even reinsure for risks above certain maximum limits.
Tort Law
Torts are civil wrongs; they're not crimes or breaches of contract. They result in injuries or harm that constitute the basis of a claim by a third party.
Transfer
Transferring the risk from one party to another, such as from a consumer to an insurance company. ■ Transfer the uncertainty of loss via a contract.
Newly Acquired Auto Under Part D, Coverage for Damage to your Auto automatic coverage begins on the date when ?
Under Part D, Coverage for Damage to your Auto automatic coverage begins on the date the named insured becomes the legal owner of the vehicle.
Part C (auto)
Uninsured Motorist (UM
Farm Property Coverage Form coverage F
Unscheduled Farm Personal Property provides insurance for all items of farm personal property on the insured location except for those specifically excluded. A few types of property are covered off-premises, however, coverage is not provided for household or personal property usual to a dwelling (that type of property is insured under Coverage C).
Crop Hail Insurance exclusions are ?
Until normal visible (crop must be above ground) Failure to harvest a mature crop Non-owned property (share crop) Loss from injury to buds, blossoms or blooms, unless the crop is affected Injury to leaves, vines, etc unless crops are also damaged or affected Injury to trees, bushes, fruit or nut crops
Landlord's Furnishings
Up to $2,500 coverage is provided for appliances, carpeting, and household furnishings owned by the named insured and located in each apartment on the residence premises that is rented to others. Coverage is provided for the 15 named perils (the Coverage C perils, with the exception of theft). b. This coverage does not increase the limit of insurance applying to the damaged property
Fungi refers to any type or form of fungus, including mold, mildew, or any mycotoxins, spores, scents, or by-products produced or released by fungi. Under Section I only, of applicable HO forms, this endorsement covers:
Up to $5,000 for damage under Coverages A, B, C, and D resulting from or consisting of fungi, wet/dry rot, or bacteria that is the direct result of an insured peril The necessary increase in costs incurred to maintain a normal standard of living when the "residence premises" is uninhabitable due to a loss caused by,
Other BOP Additional Coverages are
Water Damage, Other Liquids, Powder, or Molten Material Damage, Pollution Cleanup and Removal, and limits on electronic data, interruption of computer operations, and fungi, wet rot, and dry rot
section II of Boatowners Policy covers what
Watercraft Liability, Medical Payments for passengers, and Uninsured Boaters coverages.
Reasonable Expectations Doctrine
What a reasonable and prudent policy owner would expect; the reasonable expectations of policyowners are honored by the Courts although the strict terms of the policy may not support these expectations.
Out of State Coverage auto
When a "your covered auto" is being driven outside the state in which it is principally garaged (and also within the coverage territory), Part A - Liability Coverage extends to provide coverage as required by the financial responsibility or compulsory insurance laws of that state or Canadian province. For example, if the insured's policy doesn't provide Personal Injury Protection (PIP) coverage and the state in which the vehicle is being driven requires it, the insured's personal auto policy will provide PIP coverage at required limits while the insured is in that state.
Defenses
When a claimant accuses an insured of negligence, the insured may use one of several defenses a. Common Law - Law practiced as the result of judicial or court decisions (i.e., case law and precedents). 1) Contributory Negligence - Prevents recovery for damages caused by a negligent party if the claimant was negligent to any extent. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant is not permitted to collect damages. 2) Assumption of Risk - Prevents recovery if the claimant knowingly assumed the risk. 3) Intervening Cause - Prevents or limits recovery from the wrongdoer when a second, distinctly separate negligent act occurs after the original negligent act, but before damage occurs, and interferes with the chain of events that brings about the loss. The intervening cause must be unexpected and unforeseen. b. Statutory Law - Written law enacted by legislatures. 1) Comparative Negligence - Damages are reduced in proportion to the degree of the claimant's negligence. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant may only recover 95% of damages. 2) Statute of Limitations - The length of time during which legal proceedings may be initiated. This time period is established by federal or state law and usually begins on the day an event occurs.
No-Fault Liability
When a no-fault liability system or law is in place, the injured party collects insurance benefits from his or her own insurance as if it were first-party coverage, thus eliminating the process of determining negligence or legal liability. No-fault laws vary by state and typically apply to auto insurance. 1. Most no-fault laws restrict the rights of the injured party to sue unless the injuries are severe (e.g., paralysis or death) and meet certain conditions. These conditions are called a threshold and can be either a monetary limit (e.g., $5,000) or described verbally (e.g., death, facial injuries, or broken bones). 2. Some no-fault laws allow the insured to choose whether their policy operates under a nofault or tort basis. Other states allow policyholders to "add-on" no-fault benefits to their auto policies that are otherwise subject to tort liability. 3. Some states refer to their no-fault laws and coverage as personal injury protection (PIP).
Liberalization
When coverage under a particular form of insurance issued by an insurer is broadened without an additional premium charge, it automatically applies to all policies currently in effect. For example, Carrier A adds coverage enhancements to its Special Form homeowners policy, without an additional charge. Those changes automatically apply to all policies currently in effect.
eligible risks bop wholesalers
Wholesalers Buildings and business personal property for businesses operating as wholesalers provided that no more than 25% of annual gross sales are derived from retail operations, and no more than 25% of the total floor area is open to the public.
Windstorm Insurance Coverage
Windstorm damage is covered under the peril of wind in standard property insurance policies. In some states, endorsements may be added to property policies to exclude coverage for the peril of wind or windstorm. These states are Alabama, Delaware, Florida, Georgia, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, South Carolina, and Texas. Because these states are at high risk for wind loss caused by hurricane, they have established wind and/or wind and hail associations that provide a marketplace of last resort for those who are unable to purchase insurance for the peril of wind on their primary property policies. In these and other states, some insurers require mandatory wind deductibles of a certain dollar amount, such as $2,500 or higher, based on the geographic location of property (such as within a certain distance of the sea coast) or prior wind losses
Competitive States -
Workers' Compensation insurance is available through private insurers as well as any state fund that may exist
Competitive States
Workers' Compensation insurance is available through private insurers as well as any state fund that may exist.
Statutory Law
Written law enacted by legislatures 1) Comparative Negligence - Damages are reduced in proportion to the degree of the claimant's negligence. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant may only recover 95% of damages. 2) Statute of Limitations - The length of time during which legal proceedings may be initiated. This time period is established by federal or state law and usually begins on the day an event occur
An agent or limited representative who signs a blank contract or insurance policy is guilty of
a Class 3 misdemeanor and upon conviction will be punished by a fine of $1,000 - $5,000.
Hostile Fire
a fire that leaves its intended place, such as a spark that escapes a fireplace and sets the carpet on fire
Any order or decision made, issued, or executed by the Commissioner will be subject to
a judicial review in the Superior Court if a petition is filed within 30 days from the date of delivery of the order or decision. The judicial review does not apply to an order regarding financial impairment or a decision that the premium rates charged
common carrier
a party that agrees, for a fee, to transport goods for anyone who applies, provided the goods are lawful and fit for shipment
Risk
a. A condition where the chance, likelihood, probability or potential for a loss exists. b. Uncertainty concerning a loss.
Producer (Agent)
a. A person or agency appointed by an insurance company to represent it and to present policies on its behalf. b. A producer possesses three types of authority
Newly Acquired Auto
a. A private passenger auto. b. A pickup or van, for which no other insurance policy provides coverage, if the auto: 1) Has a gross vehicle weight of 10,000 pounds or less. 2) Is not used for delivery or transportation of goods and materials, unless such use is incidental to the insured's business of installing, maintaining, or repairing furnishings or equipment, For example, if the insured is a plumber; he may use his pickup or van for the transportation of his tools.
Adverse Selection
a. 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. b. High-risk exposures tend to seek or continue insurance at a higher participation rate than the average risk exposures do.
b. By the Insured - The final premium will be based on the time the policy was in force and increased by the insurer's short rate cancellation table.
a. By the Insurer - The final premium will be calculated pro rata for the time the policy was in force.
commercials condition
a. Cancellation - Who may cancel and when written notice must be given. The First Named Insured has the right to cancel the policy. The insurance company may also cancel the policy, subject to insurance regulations and the contents of the insurance contract. b. Changes - The First Named Insured has the right to request policy changes. Changes can only be made, in writing, with the consent of the insurer. c. Examination of Your Books and Records - The insurer may examine the insured's books and records anytime during the policy period and up to 3 years afterward. d. Inspections and Surveys - The insurer has the right, but is not obligated, to make inspections and surveys at anytime. These surveys are for purposes of underwriting and rating and are not safety inspections. e. Premiums - The First Named Insured is responsible for the premium payments and will be the recipient of any return premiums. f. Transfer of Your Rights and Duties Under This Policy - The insured's rights may not be transferred without the written consent of the insurer, unless the insured dies, and then rights are automatically transferred to the insured's legal representative.
The available Coverage Parts - The Coverage Parts available on a Commercial Package Policy include:
a. Commercial Property, which may consist of one or more of the following: 1) Building and Personal Property Coverage Form 2) Commercial Builders Risk Coverage Form 3) Condominium Association Form 4) Condominium Unit-Owners Coverage Form 5) Business Income Coverage Form 6) Extra Expense Coverage Form 7) Legal Liability Coverage Form b. Commercial Inland Marine Coverage Part c. Equipment Breakdown (formerly called Boiler & Machinery) d. Farm Property and Liability Coverage Part e. Commercial General Liability Coverage Part f. Commercial Crime Coverage Part g. Commercial Automobile Coverage Part
Coverage J (Medical Payments
a. Coverage J provides third-party payments for reasonable medical expenses arising out of an accident, if the expenses are incurred and reported within 3 years of the accident date. b. The Medical Payments limit applies per person, and payment is made regardless of fault
Coverage - The Building and Personal Property Coverage Form describes how property coverage applies to the following classes of property: buildings, business personal property of the insured, and personal property of others. There is no liability coverage provided by this form.
a. Covered Property 1) Building or structure described in the Declarations, including: a) Completed additions; outdoor fixtures; and permanently installed fixtures, machinery, and equipment. For example, a print shop that owns four commercial printers that are affixed to the cement floor would insure the printers as building items rather than items of business personal property. b) Personal property owned by the named insured and used to service and maintain the insured buildings, structures, and premises. Lawn mowing and snow removal equipment not otherwise excluded fall into this category of business personal property. Also included are materials and supplies of the business that are on the premises or within 100 feet of the premises. c) If the named insured is making an addition to an insured building or structure, or conducting alterations or repairs on an insured building or structure, the materials, equipment, supplies, and temporary structures used in connection with these activities are insured as building items if they are located on the described location or within 100 feet of it. 2) Business Personal Property owned by the insured - Some business personal property is only insured if it is located in or on a building described on the Declarations OR within 100 feet of it (i.e., in the open or inside a vehicle). Covered business personal property includes: ■ Furniture and Fixtures - Such as office furniture and shelving. ■ Machinery and Equipment - Such as refrigerators and telephone systems. ■ Stock - Merchandise held in storage or for sale, raw materials, and supplies used for packing or shipping such stock. ■ Any other personal property owned by the named insured and used in the named insured's business. ■ Tenants' improvements or betterments made to the part of a building occupied, but not owned, by the named insured. ■ Leased personal property for which the named insured has a contractual obligation to insure, unless insured elsewhere on the policy 3) Personal Property of Others - For coverage to apply, the property must be in the care, custody, or control of the named insured AND be located in or on a building shown on the Declarations, in the open (or in a vehicle) within 100 feet of the described premises. Any claim payment will be made only to the owner of the insured property. b. Property Not Covered - Although most classes of property may be insured on the Building and Personal Property Coverage Form, certain classes of property are not covered. They are either uninsurable or must be insured separately. Types of property not covered on the Building and Personal Property Coverage Form include: ■ Accounts, bills, currency, food stamps, or other evidences of debt, money, notes, and securities are not covered. ■ Animals, unless they are owned by others and boarded by the named insured OR owned by the insured when they are "stock" and inside buildings. ■ Autos held for sale, including cars, trucks, motorcycles, motor homes, etc. ■ Bridges, roadways, sidewalks, patios, and other paved surfaces. ■ Contraband, stolen property, or property used in the course of illegal transportation or trade. ■ The cost of excavations, grading, backfilling, or filling. ■ The foundations of buildings, structures, machinery, or boilers if the foundations are below the lowest basement floor or the surface of the ground if there is no basement. ■ Land, including land on which covered buildings and structures are located, water, growing crops, and lawns. ■ Personal property while it is being transported in the air or on water. ■ Bulkheads, pilings, piers, wharves, or docks. ■ Property insured by this policy under another coverage part, or property specifically insured on another policy. ■ Retaining walls that are not part of a building and underground pipes, flues, and drains. ■ Electronic data, including information, facts, and computer programs and the cost to replace or restore such information. ■ Vehicles and self-propelled machines, including aircraft and watercraft, if they're licensed for use on public roads OR are operated principally away from the described premises. ■ Property manufactured, processed, or warehoused by the insured. ■ Rowboats and canoes out of water at the described location. ■ Motorized vehicles that are not autos and are held for sale by the insured. ■ When outside of buildings: grain, hay, straw, other crops; fences, radio and TV antennas and their wiring, masts or towers; trees, shrubs, or plants that are not "stock." c. Covered Causes of Loss - The Building and Personal Property Coverage Form requires the insured to select one or more of the cause of loss forms to be attached. These forms vary and allow the insured to select the appropriate form for a particular class or type of property. For example, the insured may want building items to be insured under a special causes of loss form and business personal property to be insured under a broad causes of loss form. 3) Personal Property of Others - For coverage to apply, the property must be in the care, custody, or control of the named insured AND be located in or on a building shown on the Declarations, in the open (or in a vehicle) within 100 feet of the described premises. Any claim payment will be made only to the owner of the insured property. b. Property Not Covered - Although most classes of property may be insured on the Building and Personal Property Coverage Form, certain classes of property are not covered. They are either uninsurable or must be insured separately. Types of property not covered on the Building and Personal Property Coverage Form include: ■ Accounts, bills, currency, food stamps, or other evidences of debt, money, notes, and securities are not covered. ■ Animals, unless they are owned by others and boarded by the named insured OR owned by the insured when they are "stock" and inside buildings. ■ Autos held for sale, including cars, trucks, motorcycles, motor homes, etc. ■ Bridges, roadways, sidewalks, patios, and other paved surfaces. ■ Contraband, stolen property, or property used in the course of illegal transportation or trade. ■ The cost of excavations, grading, backfilling, or filling. ■ The foundations of buildings, structures, machinery, or boilers if the foundations are below the lowest basement floor or the surface of the ground if there is no basement. ■ Land, including land on which covered buildings and structures are located, water, growing crops, and lawns. ■ Personal property while it is being transported in the air or on water. ■ Bulkheads, pilings, piers, wharves, or docks. ■ Property insured by this policy under another coverage part, or property specifically insured on another policy. ■ Retaining walls that are not part of a building and underground pipes, flues, and drains. ■ Electronic data, including information, facts, and computer programs and the cost to replace or restore such information. ■ Vehicles and self-propelled machines, including aircraft and watercraft, if they're licensed for use on public roads OR are operated principally away from the described premises. ■ Property manufactured, processed, or warehoused by the insured. ■ Rowboats and canoes out of water at the described location. ■ Motorized vehicles that are not autos and are held for sale by the insured. ■ When outside of buildings: grain, hay, straw, other crops; fences, radio and TV antennas and their wiring, masts or towers; trees, shrubs, or plants that are not "stock." c. Covered Causes of Loss - The Building and Personal Property Coverage Form requires the insured to select one or more of the cause of loss forms to be attached. These forms vary and allow the insured to select the appropriate form for a particular class or type of property. For example, the insured may want building items to be insured under a special causes of loss form and business personal property to be insured under a broad causes of loss form. d. Additional Coverages - The coverages extend the insurance provided and are automatically included at no extra cost to the insured
Causes of Loss - Broad Form
a. Falling Objects - Damage caused by falling objects, but not to the object itself. Coverage for the interior of the building and its contents is only if the exterior of the building is first damaged by the falling object. b. Weight of Ice, Snow, or Sleet - Does not include coverage for personal property outside of buildings or structures. c. Water Damage Caused by Accidental Discharge - Coverage for water damage is provided when accidental discharge or leakage of water or steam occurs as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning, or other system or appliance that is located on the described premises and contains water or steam. Coverage is NOT provided for discharge or leakage from an automatic sprinkler leakage system, a sump or related equipment, roof drains, gutters, downspouts, etc. Neither is coverage provided if continuous or repeated seepage or leakage of water takes place over a period of 14 or more days. Plumbing is not covered. The Causes of Loss - Broad Form contains the same exclusions, additional coverages, and limitation found in the basic form; however, it also includes the Additional Coverage - Collapse
Court Bonds - Required by the court to enforce certain behavior; there are two types of court bonds
a. Judicial Bonds guarantee that certain parties fulfill their statutory obligations in connection with court proceedings. b. Fiduciary Bonds guarantee the honest and faithful performance of executors, trustees, and other fiduciaries. This type of bond is often required by statute in order to protect the interests of those for whom the fiduciary acts.
Insurable risks must include:
a. Large number of homogeneous units or groups with the same perils. 1) Law of Large Numbers - As the number of units in a group increases, the more likely it is to predict a particular outcome. 2) Auto insurance losses are the easiest type of insurance loss to predict precisely because the number of units insured is so great. b. The chance of loss must be calculable. A statistical expectation of loss is used by insurers to calculate premiums. c. The loss must be measurable (definite and verifiable in terms of amount, cause, place and time). d. The premiums must be affordable. e. From the perspective of the insured, the loss must be accidental in nature. f. Catastrophic perils are not covered; examples include war, nuclear hazard and illegal operations.
Mass Marketing
a. Mass marketing is used to target a specific type of insurance to a large group of individuals, such as the American Association of Retired People (AARP). b. Insurer reduces marketing and underwriting expenses
Livestock Coverage Form
a. The Livestock Coverage Form provides insurance for livestock of a class shown on the Declarations against loss by death or destruction. Limits can be shown on the Declarations with a limit per animal within a class OR with a limit per class with a sublimit for individual animals. b. Livestock is defined as cattle, sheep, swine, goats, horses, mules, and donkeys; POULTRY is NOT livestock. c. NO coverage is provided for livestock that is: 1) In the custody of a common or contract carrier. 2) In public stockyards, sales barns or yards, etc. 3) In packing plants or slaughterhouses.
management
a. The determination of what types of protection are required to meet an insured's needs. b. A survey of the insured's operations, health, assets and exposures that could give rise to losses. c. Assessment of potential loss frequency and severity. d. Physical inspections, applications or medical exams used for underwriting help to manage a risk.
(homeowners)Grave Markers
a. The policy will pay up to $5,000 for grave markers, on or away from the residence premises, for loss caused by a peril insured under Coverage C. b. This coverage does not increase the limits of insurance that apply to the damaged, covered property
The Common Policy Declarations Page shows
a. Who: The Named Insured, which is the individual or business entity for whom insurance is provided. b. What: A description of the business being insured. c. When: The policy period, which includes the effective and expiration dates. Commercial package policies are written for terms of one year. d. Where: The mailing address of the named insured. e. How Much: On the common declarations, this includes the total premium charged for each coverage part as well as the total policy premium. If a premium does not appear next to a coverage part on the common declarations, no coverage is provided.
people who do not qualify for workers comp are
agricultural workers domestic employes casual laborers contractors sole
The Federal Employees Compensation Act applies to
all us employees
Crop-hail insurance is rated on what basis
an acreage basis and the insured can choose a wide variety of coverage options.
Boatowners Policy losses are settled on what basis
an actual cash value (ACV) basis
Every person with an even-numbered birth year must meet continuing education requirements in
an even-numbered compliance year
Workers' Compensation insurance is the exclusive remedy for workplace injuries. This means
an injured worker cannot obtain other insurance for workplace injuries or their related medical expenses and lost wages. Injured workers are not permitted to sue an employer for injuries if covered by Workers' Compensation insurance.
DIC coverage is generally written on what basis
an open perils basis,
There are BOP coverage limitations
and restrictions on coverage for inventory shortage, loss or damage by theft of certain property, equipment breakdown, transferred property, interior building damage, and animals and fragile articles.
Duties of an Injured Person - Coverage F - Medical Payments to Others
applies to third party claimants The injured person, or someone acting on his or her behalf, must: a. Give the insurer written proof of the claim as soon as practical - and under oath, if required. b. Authorize the insurer to obtain copies of medical records and reports. c. Submit to a physical exam by a doctor of the insurer's choice when and as often as the insurer reasonably requires.
Defense Base Act
applies to workers on military bases outside the United States.
The BOP liability coverage extensions
are Supplementary Payments and Medical Expense
Insurance Agencies
are independent organizations that recruit, contract with, and support sales agents and producers.
Insurance Agents or Producers
are licensed individuals representing an insurance company when transacting insurance. represents insurance company
Transit Coverage Forms
are used when the insured purchases inland marine insurance for shipments of goods via common or contract carriers.
Express warranties
are written into the policy contract, such as the exclusion of coverage for war, strike, riot, and civil commotion.
Implied warranties
aren't always written into the contract but are generally understood by all parties and binding upon them.
employer has three common law defenses to avoid paying claims:
assumption of risk fellow servant rule Contributory Negligence
The Plan may provide for separate surcharges for major, intermediate, and minor accidents. A major accident is an at-fault accident resulting in either bodily injury or death, or only property damage of
at least $3,000. An intermediate accident is an at-fault accident resulting in only property damage of more than $1,800, but less than $3,000. A minor accident is an at-fault accident resulting in only property damage of $1,800 or less. The Plan may also exempt certain minor accidents from the recoupment (recovery of expenses) surcharge.
20 days advance written notice is required for what
at least 20 days advance written notice for all other reasons.
A limited representative is
authorized by the Commissioner to solicit or negotiate contracts of insurance that are restricted in the scope of coverage they afford.
The annual limit of insurance for Buildings will
automatically increase by 8% unless a different percentage is shown in the Declarations.
Elective
benefits are not mandated by state employers have the choice to accept or reject state Workers' Compensation laws. If a job chooses to reject the Workers' Comp laws and an employee is injured, the employee may then file a claim or lawsuit against the employer for injuries; and the employer is denied the use of common law
Surety Bonds (Performance Bonds) contract bond
bid bond performance bond
Covered property under Section I of the BOP
buildings and structures at the premises It also includes completed additions and fixtures, uninsured construction materials located in or on the buildings within 100 feet of the described premises, and permanently installed machinery and equipment also includes the property owned by the insured and furnished as landlord or that is used to maintain or service the premises, outdoor furniture, business property located in or on the buildings or within 100 feet of the described premises, and leased property for which the insured has a legal responsibility to insure
The National Association of Insurance Commissioners (NAIC
consists of all State and territorial insurance commissioners or regulators. a. The NAIC provides resources, research, legislative and regulatory recommendations and interpretations for state insurance regulators. b. The association promotes uniformity among states. Members may accept or reject recommendations. c. The NAIC has no legal authority to enact or enforce insurance laws.
Valued Contract
contract that pays a stated amount in the event of a loss. (Most insurance policies are NOT valued contracts unless they are endorsed
Newly Acquired Auto coverages begin when ? if newly acquired auto is an additional vehicle the insured must report in how many days
coverage begins on the date the named insured becomes the owner. If newly acquired auto is an additional vehicle, insured must report to insurer within 14 days.
Crop Hail Insurance when does coverage begin
coverage begins at 12:01 a.m. following the date the application is signed, provided the crop is clearly visible above the ground.
commercial articles froms
covers fine arts
accounts receivable coverage from
covers when a insurance company loses their business records kind of like receipts
Insurance may also be purchased from a FAIR plan when a dwelling is
currently uninsured, and no carrier in the standard marketplace will write coverage
bop additional coverages Debris Removal
debris removal 10,000
the McCarran-Ferguson Act of 1945
determined that the federal government can not regulateinsurance in areas over which states have the authority to do so. Congress created
DIC does not contain what 2 types of rating forms
does not contain a Coinsurance or Pro Rata Clause, and the form may be written for an amount of insurance different from the limit of insurance provided by the policy it
motor truck cargo coverage - bill of lading form straight
doesn't contain a value limitation for the cargo being shipped, meaning the carrier is legally responsible for the full value of transported goods while it is in the carrier's care
bop additional coverages Civil Authority
due to a covered loss that occurs within 1 mile of the insured's property. The coverage begins 72 hours after the action occurs and ends 4 consecutive weeks after the coverage begins
pure claims-made form requires claims to be made ______ ?
during the policy period
Farm Property Coverage Form coverage a
dwelling
The DIC form is often written to provide coverage in the event of what ?
earthquake, flood, collapse, and subsidence.
what are the names of NFIP 2 programs
emergency program regular program
Permitted Incidental Occupancies Endorsement
enables homeowner to do business activities on premises 2. The endorsement also allows the Coverage C (Personal Property) special limit of $2,500 to apply to the described business
bop Protective Safeguards Endorsement (BP 04 03 1. This endorsement specifies that the insured is required
ex.sprinkler systems, automatic fire alarms, security services). 2. The policy will not pay for loss or damage caused by fire if the insured had prior knowledge that the safeguards were suspended or impaired and failed to notify the insurer, or failed to maintain any protective device in working order. 3. The insured must notify the insurer if the automatic sprinkler system is off more than 48
Surplus Lines Insurance
finds coverage when insurance cannot be obtained from admitted insurers. a. May not be utilized solely to receive lower cost coverage than would be available from an admitted carrier. b. Each State regulates the procurement of Surplus Lines insurance in its State. c. Non-admitted business must be transacted through a Surplus Lines Brokers or Producers.
No deductible applies to BOP Additional Coverages for
for Fire Department Service Charge, Business Income, Extra Expense, and Fire Extinguisher Recharge Systems.
Fidelity Bonds (Honesty Bonds) Blanket Bond
for an employer that desires to cover all existing employees of a firm without exception, as well as any new employees
equipment Breakdown Coverage( Boiler & Machinery Coverage)
for loss due to the equipment breakdown of most types of equipment, such as boilers, machinery, standard property insurance policies. Coverage may be added by endorsement to a policy or written as a monoline policy.
The BOP includes property valuation
for most types of covered property unless the Declarations page shows that loss settlement is to be made on an actual cash value basis
Syndicates,
groups of underwriters each of which specializes in insuring a particular type of risk.
Surety Bonds (Performance Bonds) License and Permit Bond Tax bonds
guarantee a business complies with laws pertaining to payment of taxes.
Surety Bonds (Performance Bonds court bonds Judicial Bonds
guarantee that certain parties fulfill their statutory obligations in connection with court proceedings
Any person who refuses to provide records required by the Commissioner or who makes any false statements about records is
guilty of a Class 1 misdemeanor and subject to license suspension or revocation.
Limits of Insurance bop automatically provides a limit increase of 25% for seasonal fluctuations in value. the increase only applies when ?
if is shown in the dec page and dec page is at least 100% of the insured's average monthly values during the 12 months immediately preceding the loss
Negligence
in a broad sense, is the failure to use ordinary care. Specifically, it is a wrongful act that is neither criminal nor a breach of contract that violates a duty or the rights of another - and for which the injured party may demand compensation. It is the failure to use the same degree of care a reasonable and prudent person would use when given the same knowledge and set of circumstances
NFIP Under FEMA in order to obtain, renew, or change a federal loan, a property owner must purchase flood insurance if the property is located where ?
in a special flood hazard area (SFHA).
BOP Additional Coverages
include Debris Removal, Preservation of Property, Collapse, Money Orders and Counterfeit Paper Currency, Forgery or Alteration, Increased Cost of Construction, Business Income from Dependent Properties, and Glass Expenses
The BOP Optional Coverages
include Outdoor Signs, Money and Securities, Employee Dishonesty, and Mechanical Breakdown
The types of businesses eligible for a BOP
include apartment buildings, office buildings, service or processing shops, wholesalers, contractors, certain restaurants, convenience/gasoline stores, self-storage facilities, and commercial condominium unit-owners
Property Not Covered under Section I of the BOP
includes -vehicles -subject to registration, -land, outdoor fences, antennas, satellite dishes, towers, unattached signs, -trees, shrubs, or plants - watercraft and its equipment while afloat, -money or securities, accounts, bills, food stamps, other evidence of debt, accounts receivable, valuable papers and records, electronic data except as provided under additional coverages, and animals, unless held for sale or being boarded for others by the insured
workers comp employers are not required to provide workers comp to
independent workers
Fidelity Bonds (Honesty Bonds) what are the 4 times
individual bond name schedule bond position schedule bond blanket bond
Crop, Hail, and Windstorm Insurance
insurance is a specialized policy that protects the insured against reduced yield because of a covered loss to crops before they are harvested.
Lay Up Warranty
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.
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. d. Surplus and Excess lines insurance can be placed through non-admitted carriers.
. The Federal Employers Liability Act (FELA) applies to
interstate railroad workers.
Liability and Medical Expenses Limits of Insurance bop The aggregate limits do not apply to losses that
involve Damages to Premises Rented to You.
Strict and Absolute Liability
is a legal principle that imposes legal liability based on conditions, activities, or products that exhibit very high hazards; the degree of care exercised by the insured isn't considered when making a determination of liability.
A Position Schedule Bond
is available to employers that desire to bond a specific position, regardless of who fills the position, or how often the person filling the position is replaced
Fidelity Bonds (Honesty Bonds) Position Schedule Bond
is available to employers that desire to bond a specific position, regardless of who fills the position, or how often the person filling the position is replaced.
Controlled lines of coverage, or filed lines
is controlled Accounts receivable ■ Commercial articles floater ■ Jewelers block coverage ■ Sign coverage ■ Valuable papers ■ Records coverage, and equipment dealers coverage
A Blanket Bond
is for an employer that desires to cover all existing employees of a firm without exception, as well as any new employees
A Blanket Bond
is for an employer that desires to cover all existing employees of a firm without exception, as well as any new employees.
Protection and Indemnity Insurance (P & I Insurance)
is liability insurance purchased by ship owners for all types of maritime liability pertaining to the use of a vessel. 1) Cargo lost or damaged through the insured's negligence. 2) Damage to other property, including fixed objects, such as wharves, docks, and other vessels, when not caused by collision. 3) Damage to property on board the insured vessel when caused by collision. 4) Injuries to seamen resulting from the vessel's lack of seaworthiness
Absolute liability
is most often associated with dangerous animal ownership, abnormally dangerous activities, and employers liability for injuries sustained by their employees. Dangerous animals include lions, bears, and certain dog breeds such as pit bulls and rottweilers. Absolute liability applies to the storage of explosives, highly flammable material and weapons or firearms.
Uncontrolled lines of coverage, or unfiled lines,
is not controlled ■ Builders risk coverage ■ Contractors equipment floaters ■ Electronic data processing (EDP) coverage ■ Installation floaters ■ Transportation floaters
The judicial branch
is responsible for interpreting and determining the constitutionality of the statutes.
incorporated
is the legal process by which a business entity is formed. A corporation is a separate legal entity from its owners.
An Individual Bond
is used when an employer wishes to bond a single employee
Fidelity Bonds (Honesty Bonds) An Individual Bond
is used when an employer wishes to bond a single employee
Fidelity Bonds (Honesty Bonds) A Name Schedule Bond
is used when an employer wishes to bond several employees who are all named in the bond
A Name Schedule Bond
is used when an employer wishes to bond several employees who are all named in the bond.
motor truck cargo coverage
it covers the interest of the trucker a. Bill of lading form, which is written on an open perils basis. b. Named perils form, which varies by insurer.
After a hearing, the Commissioner may, in add to or instead of suspending or revoking a license. The penalty cannot be
less than $100 or more than $1,000 and will be in addition to payment of any other penalty for a violation of the criminal laws of this state.
Employment Practices Liability Insurance (EPLI)
liability coverage against claims made by employees, former employees, and potential employees alleging their legal rights were violated. EPLI provides coverage against various types of claims 2. Discrimination 3. Wrongful termination 4. Breach of employment contract
2. 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)
The BOP insurance-to-value provision
means that in the event of a partial loss, if property is insured for less than 80% of its replacement value, a penalty will be applied to the loss payment.
Named Perils Endorsement (BP 10 09) 1. This endorsement provides
named perils coverage in lieu of the open perils coverage that is provided automatically by the Businessowners Coverage Form.
The Internet Liability and Network Protection Policy Insuring Agreement B
network security
Business Pursuits Endorsement
off premises 1. The endorsement extends liability coverage for the insured's involvement in a business that the insured does not own, have financial control over, or have a partnership interest in. 2. The pursuit must be named in the endorsement, and is commonly added for those in the teaching, sales, and clerical professions
Permitted Incidental Occupancies Endorsement
on premises allow the necessary and incidental use of the premises for the business 2. The premises must be occupied principally as the insured's residence; the business must be conducted by an insured; and there can be no other business conducted on the premises. The endorsement is commonly used for a studio, office, or private school type of occupancy. 3. The endorsement does not cover bodily injury to any employee of the insured, except residence employees in the course of their employment
jewelers block coverage from
open peril jewels watches stones and etc.. does Not cover show windows or money
bop additional coverages Preservation of Property
open perils basis, for up to 30 days, property while being moved or temporarily stored at another location to save and protect it from damage by a covered peril.
Boatowners Policy provides coverage for hull on what basis
open perils coverage for the hull, motor, trailer, equipment, and accessories manufactured for marine use..
Freight Insurance - Freight insurance
or freight revenue insurance, provides coverage when the prepayment of freight is lost due to a partial loss to cargo or a voyage that isn't completed.
The BOP exclusions applicable to business liability coverage are
or intentional injury, contractual liability, liquor liability, Workers' Compensation and employer's liability, pollution, aircraft, auto, or watercraft, transportation of mobile equipment, and war.
Non-resident relatives
or more persons related by blood, marriage, or adoption who reside in separate households. This includes a ward or foster child.
Farm Property Coverage Form coverage b
other structures
bop optional coverages
outdoor signs open peril money and securities employee dishonesty equipment
Farm Liability Insurance
package policy. The Farm Liability Coverage Form contains three major coverages: H, I and J. 1. Coverage H (Bodily Injury and Property Damage Liability) a. Coverage H pays sums the insured becomes legally obligated to pay for losses arising from bodily injury or property damage. Fire damage liability is included. b. Coverage includes products liability from the sale of farm products. 2. Coverage I (Personal and Advertising Injury Liability) Coverage I provides for payment of sums the insured becomes legally obligated to pay for losses arising from personal or advertising injury, to which the insurance applies. An offense must be related to the farming business. For example, the insured unknowingly libels a neighbor's farm products. 3. Coverage J (Medical Payments) a. Coverage J provides third-party payments for reasonable medical expenses arising out of an accident, if the expenses are incurred and reported within 3 years of the accident date. b. The Medical Payments limit applies per person, and payment is made regardless of fault
Physical Hazard
physical condition that increases the probability of loss; use, condition, or occupancy of property. Example: Flammable material stored near a furnace
Unoccupancy
property that contains personal property but has no occupants
Professional Liability Insurance
protects professionals from losses that arise out of their professional conduct Professional liability insurance does NOT provide coverage for bodily injury or property damage
Congress created federal agencies to
provide regulatory oversight impacting insurance practices.
Fair Access to Insurance Requirements (FAIR
provides basic property insurance to property owners who are unable to secure coverage in the standard property marketplace. Farm property isn't eligible for coverage, though certain types of incidental business use may be allowed.
valuable papers and records floater
provides coverage for important papers like maps blueprints ,deeds books
Aircraft hull All risk
provides coverage when on the ground, during taxi, and in flight.
Aircraft hull Ground including taxi
provides coverage when the hull is on the ground and not in motion PLUS losses that occur during taxi; for example, a collision with another plane when taxiing on a runway.
Aircraft hull Ground only
provides coverage when the hull is on the ground and not in motion; covered losses would include fire, theft, vandalism
Business pursuits
provides liability coverage for a business conducted away from the residence premises
The Insurance Contract
purchased to indemnify the insured against a loss, damage or liability arising from an unexpected event. b. The exchange of a relatively small and definite expense for the risk of loss that, if it occurs, may be large or small. c. A contract designed to transfer risk from the insured to the insurer
BOP (business owners policy) VALUATION METHOD IS
replacment cost
Producers.
represents the insurer
Duties After Occurrence
responsible for performing the following duties. The insurance company has no duty to provide coverage if the named insured's failure to comply with the following duties a. Give the following information in written notice to the insurer or its agent as soon as is practical: 1) The policy number. 2) The identity of the named insured. 3) Reasonably available information about the time, place, and circumstances of the occurrence. 4) Names and addresses of any claimants and witnesses. b. Cooperate with the insurer in the investigation, settlement, or defense of any claims. c. Promptly forward any notice, demand, summons, or other process to the insurer. d. At the insurer's request, aid the insurer in making a settlement, pursuing subrogation attempts, taking the case to court, and procuring evidence. e. With respect to Damage to Property of Others, submit to the insurer, within 60 days after a loss, a sworn statement of loss and show the damaged property. f. No insured shall, except at his/her own expense, voluntarily make payment, assume obligation, or incur expense other than for first aid at the time of bodily injury
Ineligible BOP
risks include automobile repair and service stations; automobile, mobile home, and motorcycle dealers; parking lots or garages; most restaurants, bars, and grills; places of amusement; and manufacturers.
The Jones Act or Merchant Marine Act of 1920 applies to
sailers
Scheduled Benefits
schedule of benefits applies to specific permanent partial injuries, such as a dollar amount for the loss of an eye, or a hand. These benefits are usually paid in addition to other benefits.
arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider Process where a disputed claim is decided by a neutral third party. The disputing parties choose the impartial third party
Camera Floater blanket coverage is provided on what? items
shades, filters, etc.
the motor carrier coverage form
someone who transports their own goods and someone else
Water Back Up and Sump Discharge or Overflow endorsement
special deductible of $250 allows the insured to buy back some coverage that is excluded under the Water Damage exclusion. It provides up to $5,000 of coverage for direct physical loss to property insured under Section I (Coverages A, B, and C) caused by water or waterborne material that: a. Backs up through sewers or drains; or b. Overflows from a sump, sump pump, or related equipment. 2. Coverage is provided even if the sump overflow is caused by equipment breakdown.
reciprocal insurer members are know as
subscriber.
Surety Bonds (Performance Bonds) License and Permit Bond Broker's bonds
such as insurance, mortgage, or title agency bonds guarantee that the broker performs according to law.
The Commissioner will award 24 biennial continuing professional educational credit hours based on government service relative to insurance or finance,
such as service as a legislator on a committee in the General Assembly that hears insurance and finance matters.
Injured workers are not permitted to____ WHILE COVERED under workers comp
sue an employer for injuries if covered by Workers' Compensation insurance
NFIP Eligibility, Coverage for residential buildings and non-residential buildings are under what form under
the General Property Form.
The Federal Insurance Office was established by
the Dodd- Frank Wall Street Reform and Consumer Protection Act.
NFIP Coverage is provided for buildings owned by a residential condominium association under what form
the Residential Condominium Building Association Form (RCBAP).
Terrorism Risk Insurance Act and its Extensions of 2005 and 2007 the second TRIA extension is called what ?
the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA) and is scheduled to expire on December 31, 2020.
Personal Injury Endorsement
the following offenses: a. False arrest, detention, or imprisonment. b. Malicious prosecution. c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies, committed by or on behalf of its owner, landlord, or lessor. d. Oral or written publication of material that violates a person's right of privacy, slanders or libels a person or organization, or disparages a person's or organization's goods, products, or services. 2. Insurance provided by the endorsement does not apply to "personal injury" that is: a. Caused by or at the direction of an insured with the knowledge the act would violate another's rights and inflict personal injury. b. Arising out of oral or written publication of material with the knowledge of its invalidity c. Arising out of oral or written publication of material that took place before the inception date of the policy. d. Arising out of a criminal act committed by, or at the direction of, an insured. e. Arising out of contractual liability assumed by an insured other than an indemnity agreement that relates directly to the ownership, maintenance, or use of the premises. f. An offense related directly or indirectly to the employment of an injured party by an insured. g. Arising out of or in connection with a business conducted from an insured location or engaged in by an insured. h. Arising out of civic or public activities performed by an insured for pay. i. Sustained by the named insured or an insured. j. Actual, alleged, or threatened discharge, dispersal, seepage, migration, etc., of pollution.
Instrumentalities of Transportation
things that are not easily covered
jettison
throwing things over board
Any order or decision of the Commissioner is subject
to judicial review.
The U.S. Longshoremen and Harbor Workers' Compensation Act applies to
to workers who load, unload, build, or repair ships (but not to the crew of the ship)
Unfair methods of competition and unfair or deceptive acts or practices are commonly known as
unfair trade practices. All persons engaged in the business of insurance are prohibited from committing these acts.
camera floater is to what % of the designated on the schedule
up to 25% of the limit designated on the schedule.
Stated Value
valuation method that states the value of a particular property on the declarations page, but provides for the insurer to pay the lesser of the stated value or ACV of the property following a loss
The businessowners policy (BOP
was designed for small to medium sized businesses that don't engage in high-risk or highly specialized operations with sales usually under $6 million and that occupy less than 35,000 square feet of space.
Medical Malpractice Insurance
whose negligent acts or omissions may injure or harm patients. Other professions covered by malpractice insurance include social workers and beauticians. This is the only type of professional liability that may include coverage for bodily injury.
Coverage is usually written in increments of $1 million,
with a single limit per occurrence covering claims for both Bodily Injury/Property Damage, and Personal Injury in excess of the insured's underlying policy limits. 3. Insurance companies issuing umbrella coverage require their insureds to have underlying primary insurance in place. "Primary" insurance pays before the umbrella pays and "underlying" insurance provides coverage for the same risks that are insured under an umbrella policy. For example, every umbrella policyholder must also have personal auto and personal liability insurance in place. If the insured owns recreational vehicles, watercraft, or rental property, those exposures must also be insured on underlying primary policies. 4. The umbrella acts as excess coverage over the limits of these underlying primary policies 5. If the coverage in an umbrella is broader than the underlying policy—meaning the primary policy doesn't insure a loss—the umbrella will "drop down" and cover the entire loss. When an umbrella policy drops down and acts as a primary policy, the insured pays a self-insured retention, which is a method of loss cost-sharing. The only time the insured must pay a self-insure
An individual who holds a property, casualty, or personal lines insurance license may apply for an adjuster license without having to take the adjuster exam
within 60 days
The Facility defines a "clean risk" as any owner of a private passenger motor vehicle if the owner, principal operator, and each licensed operator in the owner's household have:
§ 2 years' driving experience as licensed drivers § Not been assigned any Safe Driver Incentive Plan points during the 3-year period immediately preceding either the date of the insurance application or the renewal date of the motor vehicle insurance policy
the Association may issue insurance on that property and offer: A policy from the Association must be offered for a ____year term, a __year term
§ Additional extended coverage § Optional perils endorsements § Business income and extra expense coverage § Crime insurance § Separate policies for windstorm and hail insurance A policy from the Association must be offered for a 3-year term, a 1-year term
The Bureau shall file a Safe Driver Incentive Plan ("Plan") that adequately and factually distinguishes between various classes of drivers that have safe driving records and various classes of drivers that have a record of:
§ At-fault accidents § Convictions of major moving traffic violations § Convictions of minor moving traffic violations; or § A combination of these
The Post-Assessment Insurance Guaranty Association provides a mechanism for the payment of covered claims under certain insurance policies to:
§ Avoid excessive delay in payment § Avoid financial loss to claimants or policyholders because of the insolvency of an insurer § Assist in the detection and prevention of insurer insolvencies § Provide an association to assess the cost of this protection among insurers
FIRE Upon request, the following initial information must be added to a property policy and provided after any changes in the policy:
§ Basis rate § Deficiency charge (debits) § Credits for improvements to the property § Final rate at which policy was written
Premium surcharges, increases, or point assessments will not be made when:
§ End of the policy to the Reinsurance Facility § Operating a firefighting, rescue squad, or law enforcement vehicle in response to an emergency § Conviction for a violation of speeding 10 miles per hour or less over the speed limit unless there is a driving record consisting of moving traffic violation(s) during the 3 years prior to the application or renewal. This does not include the offense of speeding in a school zone in excess of the posted school zone speed limit.
UNDERWRITING ASSOCIATION A licensed agent is an agent of a company which is a member of the Association but is not an agent of the Association. On behalf of its members, the Association may issue basic property insurance, including:
§ Farm risks § Additional extended coverage § Optional perils endorsements § Crime insurance policies The Association may also reinsure member policies. The Commissioner must review the Association's plans at least once every calendar year.
A member of a professional insurance association may receive up to 4 ICECs during the biennial compliance period based solely on membership in that association. The association must:
§ Have been in existence for at least 5 years § Be approved as a continuing education provider § Have been formed for purposes other than providing continuing education
Powers and Duties of the North Carolina Insurance Underwriting Association
§ Issue insurance § Reinsure members and assess its members for providing reinsurance § Cede reinsurance to its members and purchase reinsurance on behalf of its members § Pledge the proceeds of assessments and other available Association funds as a source of revenue to secure financing arrangements necessary to fund deficits of the Association. This may include borrowing from member companies § Publish all homeowners' rate filings with the Department of Insurance in the North Carolina RegisteR
If a policy ceded to the Facility has a higher premium payment than the one the insurer charged before ceding the policy, the policyholder must be informed, in writing, that the:
§ Policy has been ceded § Coverages are written at the Facility rate, and the rate differential must be specified § Reason(s) for ceding the policy to the Facility § Insured has the right to search for another insurer who may not choose to cede the policy to the Facility
Post-Assessment Insurance Guaranty Association (Guaranty Fund The Association is not obligated to pay a claimant's covered claim, except a Workers' Compensation claim, if the insured had:
§ Primary coverage at the time of loss § With a solvent insurer § Of at least $300,000 § Applicable to the claimant's loss § Coverage written subject to a self-insured retention of at least $300,000
Premium surcharges, increases, or point assessments will not be made when:
§ The insured is involved and is at fault in a "minor accident" § The insured is not convicted of a moving traffic violation in connection with the accident § Anyone covered under the policy has not had a conviction for a moving violation or at-fault accident during the immediate three years prior to application or renewal § The insured has been covered by liability insurance with the same company or group continuously for at least 6 months immediately preceding the acciDENT
Premium surcharges, increases, or point assessments will not be made when:
§ The insured is not convicted of a moving traffic violation in connection with the accident § Anyone covered under the policy has not had a conviction for a moving violation or at-fault accident during the immediate three years prior to application or renewal § The insured has been covered by liability insurance with the same company or group continuously for at least 6 months immediately preceding the accident
Basic farm
■ Fire or Lightning ■ Windstorm or Hail ■ Explosion ■ Riot or Civil Commotion ■ Aircraft ■ Vehicles ■ Smoke ■ Vandalism ■ Theft ■ Sinkhole Collapse ■ Volcanic Action ■ Collision (Coverages E & F only) ■ Earthquake Loss to Livestock ■ Flood Loss to Livestock
broad farm
■ Fire or Lightning ■ Windstorm or Hail ■ Explosion ■ Riot or Civil Commotion ■ Aircraft ■ Vehicles ■ Smoke ■ Vandalism ■ Theft ■ Sinkhole Collapse ■ Volcanic Action ■ Collision (Coverages E & F only) ■ Earthquake Loss to Livestock ■ Flood Loss to Livestock Includes the Basic Causes of Loss, plus the following: ■ Electrocution of Covered Livestock ■ Attacks on Covered Livestock by Dogs or Wild Animals ■ Accidental Shooting of Covered Livestock ■ Drowning of Covered Livestock From External Causes ■ Loading/Unloading Accidents ■ Breakage of Glass or Safety Glazing Material ■ Falling Objects ■ Weight of Ice, Snow, or Sleet ■ Sudden and Accidental Damage to Heating or Air Conditioning Systems ■ Accidental Discharge or Leakage of Water or Steam From a System or Appliance Containing Water ■ Freezing of Plumbing, Heating, Air Conditioning, Fire Protective Systems, or Appliances ■ Sudden and Accidental Damage From Artificially Generated Electricity
yacht offers these coverages
■ Protection and indemnity coverage for the insured's legal liability for bodily injury and damage to property of others. ■ Personal property ■ Coverage for fuel spills, commercial towing, and dinghies.
