Oklahoma P&C - Final Crack-Down Quizlet Condensed

Practice flashcards covering essential Property & Casualty insurance concepts, rules, formulas, and memory tips condensed from PSI review questions.

What is apparent authority?

Authority a customer reasonably believes the agent has because of the insurer's actions. Memory: Apparent = it APPEARS the agent can do it.

What defines an aleatory contract?

The values exchanged may be unequal depending on whether a loss occurs. Memory: Small premium could lead to a large claim payment.

What characterizes a contract of adhesion?

The insurer writes the contract and the insured accepts it as written. Ambiguities are generally interpreted against the drafter. Memory: Adhesion = take it or leave it.

What is required to have an insurable interest?

You must stand to suffer a financial loss if the property is damaged. Memory: If you lose money when it is damaged, you have an interest.

What is completed operations coverage under a Commercial General Liability (CGL) policy?

CGL exposure for bodily injury or property damage caused by work after the work has been completed.

How does the CGL own-work rule treat resulting damage versus repair of defective work?

CGL may cover resulting injury or damage, but generally does NOT pay to repair or replace the insured's own defective work. Memory: Damage CAUSED by your work can be covered; fixing YOUR work is not.

What is contractual liability / insured contract coverage in a CGL policy?

CGL can cover certain liability the insured assumes from another party in a qualifying contract.

What is excluded under the care, custody, or control (CCC) exclusion in a CGL policy?

CGL generally excludes damage to property that is in the insured's care, custody, or control. Memory: If you are holding or servicing it, think CCC.

Who is excluded and who may be covered under CGL Medical Payments?

Can pay certain medical expenses without proving negligence. Employees are excluded; a qualifying volunteer worker may be covered. Memory: Med Pay is for others, not employee work injuries.

What does Garagekeepers insurance cover?

Covers customers' autos while in the care, custody, or control of a garage-type business. Memory: Garage is KEEPING someone else's car.

When is Fire Legal Liability coverage most useful?

Most useful to a commercial tenant for fire damage to premises rented to the tenant. Memory: Tenant + rented building + fire.

How is claims-made coverage triggered?

Coverage is triggered by a claim made during the policy period, subject to the retroactive date and policy terms. Memory: Focus on WHEN the claim is made.

What does an Extended Reporting Period (ERP) allow, and what does it NOT cover?

Allows certain claims to be reported after a claims-made policy ends. It does not cover new incidents after expiration. Memory: Extends reporting, not the occurrence period.

How does a paid claim affect the CGL per-occurrence limit and aggregate limit?

A paid claim reduces the aggregate limit, but the stated per-occurrence limit remains available for a later occurrence, subject to the remaining aggregate.

What is open perils coverage, also known as Special coverage?

Covers risks of direct physical loss unless excluded. Memory: Open = Special.

What function does the Causes of Loss form serve?

Specifies which perils or causes of loss are covered. Memory: It answers, 'What can cause the damage?'

When does debris removal coverage generally apply?

Debris removal coverage generally applies when the debris results from a covered cause of loss. Memory: No covered loss, no debris-removal coverage.

How is collapse typically treated in a property insurance policy?

Typically treated as an Additional Coverage when the policy's stated conditions are met. Memory: Collapse = Additional Coverage, not a Basic peril.

What is functional replacement cost valuation?

Uses less costly modern materials that perform the same function, often for older or ornate property. Memory: Old/unique property, modern functional substitute.

What is the formula for calculating coinsurance loss payment?

$\text{Amount carried} \div \text{amount required} \times \text{loss} = \text{payment}$ (before deductible/limits). Memory: DID carry ÷ SHOULD carry × LOSS.

How does the appraisal clause operate to determine a loss amount?

The insured and insurer each choose an appraiser; if they disagree, an umpire is involved. Agreement by any two determines the amount of loss.

How is commercial property flood coverage provided?

Flood generally requires separate flood coverage rather than the standard commercial property endorsement options. Memory: Flood = separate.

What does the liberalization clause do when an insurer broadens a policy form?

Automatically gives the insured certain broader coverage when the insurer broadens the form without extra premium. Memory: Liberalize = make coverage better.

Under a Businessowners Policy (BOP), how is permanently installed carpeting classified?

Permanently installed carpeting is building property. Memory: If it is permanently attached, think building.

Why is a manufacturing business generally ineligible for a Businessowners Policy (BOP)?

A manufacturing business is generally not a typical eligible BOP risk because of its size or complexity. Memory: BOP = smaller, lower-risk businesses.

On what valuation basis is Damage to Your Auto generally settled?

Damage to Your Auto is generally settled on an Actual Cash Value basis. Memory: Auto physical damage = ACV.

When does Transportation Expense coverage begin after a covered non-theft auto accident?

For a covered non-theft loss that makes the auto unusable, transportation expense begins after the required $24\text{-hour}$ waiting period. Memory: Accident = 24 hours.

How is mobile equipment treated under the commercial auto definition?

Generally not treated as an auto under the commercial auto definition. Memory: Bulldozer/forklift-type equipment = mobile equipment.

What is the purpose of Workers Comp vocational rehabilitation?

Vocational rehabilitation helps an injured employee return to suitable work. Memory: Vocational = job/work.

Which policy is primary if an employee is injured while driving a company vehicle for work?

Workers Compensation is primary for the employee's work-related injury; commercial auto may apply only as excess or for other auto liability exposures. Memory: Employee + on the job = Workers Comp first.