REVIEW OF PERSONAL AND COMMECIAL LINES

Express Authority

Authority that is written into the agency contract

State Level

The Business of Insurance is regulated on the ____.

Legal Purpose

The Contract must be entered into for a ___ in good faith

Pro Rata

A policy that pays a proportion of the loss based on the ratio of insurance it writes compared to the total of all applicable limits pay on this basis.

Flat Cancellation

No coverage is provided any paid premium is returned

Concurrent Causation

Involves multiple perils that are all the proximate cause

Burglary

Property is stolen from a premise with signs of forced entry and/or exit

Robbery

When property is stolen by someone who harmed/threatened

Actual Cash Value

Cost at time of Loss to repair or replace damaged property minus depreciation

Coinsurance Clause

When an insurer requires that the insured maintains insurance to a set value of Replacement Cost.

Specific Limit

Insured a single item of property for a single limit of insurance

Blanket Limit

insured multiple properties or types of property at multiple locations for a single limit

Scheduled Limits

Insures multiple items on the same policy but for separate limits

Damages

When a third party is owed compensation

Compensatory Damages

Awarded to the injured third-party for actual sustained losses

Special Damages

Damages for Specific and Calculable loss amounts

General Damages

Damages for noneconomic losses that are difficult to calculate

Punitive Damages

Ordered by the court to punish the wrongdoer

Tort

A wrongful act that violates a duty or rights of another

Negligence

A breach in the level of care a reasonable person who exhibit under similar circumstances

Contributory Negligence

A common law defense that prevents the claimant from recovering damages for negligence because the claimant was also negligent to any extent

Comparative Negligence

A statutory defense that allows a partially negligent claimant to still recover damages, thought they are reduced by how much the claimant was negligent

Strict and Absolute Liability

The liability automatically assigned without needing to establish negligence to the owner of a dangerous animal, firearms, explosives, highly flammable chemicals and other significant hazards.

Four Dwelling Units

Eligible Dwelling may have up to ___.

Five Roomers

Dwellings are limited to have no more than ____ or boarder in order to maintain eligibility

10% of the Coverage A - Dwelling

The limit for other structures coverage is typically ____ on dwelling form.

Modified Form

HO-8, for older buildings

Contents Broad Form

HO-4, made for tenants

10% of Coverage A - Homeowners

The Limit of Insurance for Other Structures is equal to ___.

Covered Perils for Basic Form of Commercial Package Policy

• Explosion

• Sinkhole Collapse

• Volcanic Action

• Sprinkler Leakage

• Aircraft or Vehicle

Average Losses

Partial Losses to Cargo

General Average

Losses are sustained from voluntary sacrifice of cargo and other expenses that benefit everyone

Particular Average

Are accidental partial losses that benefit one party’s interest

Loss Sustained Form

Similar to Occurrence Form in General Liability, covers losses that take place during the policy as long as the losses were discovered during the policy period

Fidelity Bonds

Protect Employers from direct loss due to dishonest or fraudulent acts by employee, such as employee theft

Surety Bonds

Guarantee that a specific obligation or performance is fulfilled

No coverage is provided

W has a Basic Form Dwelling policy with Extended Coverage that insures a rental property for $80,000. Vandals attack a tree on the property, causing it to fall and severely damage the dwelling. The tree is worth $500, and the dwelling sustained $25,000 of damage. How does W's policy provide coverage?

Special damages

are awarded to an injured party for actual and known expenses such as medical bills, loss of earnings, and the cost of repairing or replacing damaged property.

3 years

Under a Personal Auto policy, how long does an injured party have following an accident to incur necessary medical expenses?

$250

The standard deductible applicable to Farm Property losses is:

Injuries to employees

Excluded on the Business Auto Coverage Form Liability Coverage

Waive their rights of recovery prior to a loss

Under the Subrogation condition of a Special Form Homeowners policy, the insured may:

Personal Umbrella Liability policies

protect the insured from damages the insured is legally obligated to pay due to bodily injury, property damage, and personal injury to others, including claims associated with the insured’s auto liability. Also includes personal injury liability coverage

Direct loss

When firefighters extinguish a house fire with water, the water damage is considered a(n):

Residence employees,

When they are not eligible for Worker’s Compensation coverage, are eligible to receive medical payments provided by Coverage F of the insured’s policy.

A third party

Liability insurance is a two-party contract with payments made to

Motor Carrier Act

The deregulation of the trucking industry was accomplished through this 1980 regulation

How does the standard fire policy value losses?

On an actual cash value basis

Coverage A of a Commercial General Liability policy will exclude coverage for

exclude coverage for bodily injury to employees in the course of employment and bodily injury to employee’s relatives as a consequence of the employee’s work.

Can you get medical care coverage if J was driving their own car from the post office after retrieving their employer's mail

Business use of private passenger autos is not excluded under medical payments coverage.

What is true regarding an unendorsed HO-4?

It provides named perils coverage on an actual cash value basis

Traffic infraction

It is considered a ____ to fail to provide proof of insurance.

Livestock death by collision

The Livestock Coverage Form insures against the same perils included in the Covered Causes of Loss - Basic option available under the Farm Property coverage forms. Livestock are covered if their death is caused by ____.

Proof of mailing

considered sufficient proof of notice is considered _____ that the insurer provided a termination notice

Pair and Sets clause

in the event of a loss to a pair or set, the insurer will pay the difference between the actual cash value of the property before and after the loss. The claim payment will reflect both the lost value of the part and the lost value of the whole

15 working days

Insurers must accept or deny a claim within_____after receiving proof of loss, unless it cannot be reasonably determined within that time.

12 months

The maximum suspension of a license the commissioner can issue

$1,000 per offense

If a licensee commits an act that is grounds for license suspension, revocation, probation, or nonrenewal, the Commissioner of Insurance may levy a penalty of up to ____ per offense after a hearing.

Assessments against member insurers

Where does the Washington Property and Casualty Insurance Guaranty Association get its funding to pay claims?

5 years

How long must records be retained by producers and insurers for the Commissioner to be able to inspect?

fair discrimination

insurers may use _____, which is offering different policies to individuals having an unequal expectation of life.

Exclusively approving catastrophic risks to drive down company profits

Not a violation of federal fraud statements legislation

Vicarious Liability

Liability assumed through someone Elses actions whom you are in charge of. Employer to Employee

first 90 days.

In the event the insured consolidates or merges with another entity, coverage is provided for the ____

3 Years

Under the BOP, the insurer may examine and audit books and records at any time during the policy period and up to how many years following policy termination?

$15,000

An insured has an HO-3 policy with the Identity Fraud Expense Coverage Endorsement. If the insured is a victim of identity fraud and incurs notary expenses and attorney fees related to the fraud, the endorsement will provide how much coverage for these expenses?

Collision damage to another vessel when the insured is liable

The Collision or Running Down Clause in Ocean Marine insurance covers:

Provide 45 days’ advance written notice

An insurer issued an insurance policy in Washington that allows the insurer to change rates or policy terms in the middle of the policy period. If the insurer makes a midterm change, the insurer must:

It has been 90 days since the spouse moved to a different residence away from the named insured

The named insured's spouse will not be considered an insured on the named insured's Personal Auto policy if:

Only compensatory damages arising directly from a covered loss

The Commercial Crime coverage part will pay for:

vacant for more than 60 consecutive days before loss

Loss from vandalism and malicious mischief is excluded if the dwelling has been _____

Unilateral contract

one party makes a promise of performance, without receiving a promise of performance in return.

Coverage J

Medical payments coverage is provided by the Farm Liability Coverage Form under which coverage part?

Under a Commercial General Liability policy, which of the following is considered an insured's product?

Goods and merchandise are considered an insured’s product after they leave the insured’s premises and control, such as after a sale.

Property Off Premises

a Coverage Extension that applies to the insured’s property that is located away from the insured premises under a Building and Personal Property Coverage form. IT IS NOT an option coverage

Act of theft

M, a producer in Washington, diverted premium funds instead of accounting for them and paying them to the entitled person. This is considered a(n):

Property damage to impaired property

meaning property that is less useful because it uses the insured’s defective product or work, is not covered by the CGL.

Two

Eligible dwellings for Homeowners insurance may have up to how many roomers or boarders per family?

A claim payable after the insured’s faulty completed operations damages a customer’s home

will reduce the products-completed operations aggregate limit and will not affect the general aggregate limit.

The Special Form only

Which Causes of Loss form available for the property coverage forms on a Commercial Package policy will cover loss of merchandise due to a burglary?

The insured to maintain insurance equal to 80% of the building's replacement cost

Property policies with an 80% coinsurance requirement usually require:

NOT Included in the definition of Your Covered Auto

Autos furnished for the insured’s regular use, such as a company car, are excluded by unendorsed Personal Auto policies

1 year

How long is the term for any policy issued under the Joint Reinsurance Association? 

35 days

Auto insurers in Washington must reopen the claim file if the claimant locates, but does not purchase, a comparable motor vehicle within how many days after the final claim payment was sent?

180-day minimum

If the independent producer moves office spaces, requires ____ notification by insurer before termination

proof of financial responsibility

A bond, insurance policy or if an accident has damages less than 500.

2 business days

If the risk is deemed acceptable under the FAIR Plan, how long after receiving the premium must the policy or binder be delivered to the applicant? 

180 days

Before terminating an independent producer's contract, an insurer must give the producer at least how much notice? 

45 days

Refunds must be returned on a pro rata basis within how many days after the cancellation notice date? 

$200

Insureds in Washington who accept a prohibited rebate of premium will be liable for a fine of up to:

One year of the accident

Medical payments coverage under the Commercial General Liability coverage part includes reasonable medical expenses incurred and reported within:

The weight of ice, snow, or sleet

is not a covered peril on the DP-1, even with Extended Coverages, and the Collapse Other Coverage is only available on the DP-2 and DP-3.

Loss resulting from a windstorm

Homeowners policies cover losses to trees, shrubs, and plants, except:

Identity fraud or identity theft coverage

is not one of the Insuring Agreements provided on the Commercial Crime coverage forms.

Liberalization

Which is NOT a Common Policy Condition under a Commercial Package policy?

Tenant's improvements and betterments

Which of the following is covered as business personal property under the BOP?

$1,000 of coverage

An insured is part of a homeowners association. After a property loss to a common area owned by all of the association's members, the insured is assessed $1,500 for the damages. The insured's Special Form Homeowners policy will provide:

6 months

When a consumer reporting agency receives a request to issue correct information in a consumer report, the agency must reinvestigate within what time period?

Indirect loss when the seller was unable to obtain a refund of import duties after some cargo was lost in a fire

Freight insurance on an Ocean Marine policy provides coverage for:

$200

S has a sailboat covered under a Boatowners Policy with a deductible of $300. The hull suffers collision damage totaling $500, and later, the motor suffers a $300 fire loss. S submits two claims to the insurer. How much would the insurer cover for the losses?