PA property and casualty insurance exam

Property

you can possess/ physically touch

BI

bodily injury

PD

Property damage

Liability/casualty

what you pay the other guy

personal lines insurance

cover needs of individual or family (auto,boat,camper,rv)

commercial lines insurance

needs of a business

direct loss

example - house burns down

indirect loss

example - additional money you will have to spend to live somewhere else while house is being rebuilt. Out of pocket expenses.

indemnify

to make whole again - no better no worse

predetermined loss limit

based upon the rule of the 4Ls - you get the lower of the loss or the limit up to the level of your insurable loss.

inherent vice

loss results from an inherent property not fortuitous, not covered

CPC

catastrophic, predictable, covered elsewhere

endorsement

written modification to your policy designed to accommodate your specific needs - sometimes called a rider

mutual company

earning called surplus, not taxable, dividend

reinsurance treaty

% risk transferred and fees involved for entire class

surplus lines producer

agent authorized to sell contracts from nonadmitted company if desired policy is unavailable from admitted company

consideration

acceptance and offer

aleatory

not necessarily equal due to uncertain timing of event which is the subject of contract

unilateral

one promiser

negative data that they can use against you

up to seven years

Up to how many years can they use bankruptcy against you?

10 years

Largest of these ratings bureaus

Insurance services office

premium calculation

multiply the units of exposure. example - rate is 2.25$ per sq ft, annual premium is 10,000 sq ft = 2.25 x 10,000 = 22,500 sq ft

merit rates

customized class rates based upon physical characteristics or modifications to exposure or loss experience

schedule rating

lower rating for a building just updated

experience rating

add/subtract from class rates based upon actual loss of exposure

expense ratio

expenses to premium

estoppel

you can be estopped from exercising what you have continuously waived

DICE

declarations, insuring clause, conditions, exclusions

abandonment

an attempt by an insured to receive full value for a partially damaged item by offering the damaged property to the insurance company. The company is under no obligation to pay for abandoned property.

salvage

company gains ownership of item, have the right to recoup some of their outlay...salvage

FLEW RVVVSSS

fire, lightning, explosion, windstorm/hail, riot, vandalism(will cover burglar damage), volcanic action, smoke, sprinkler leakage, sinkhole collapse

liability coverage

NEVER pay you - always the other guy

criminal law

wrongs against society, think law and order

tort law

wrongs between two individuals, think judge judy. single tort = negligence

negligence

failure to do or not to do what the reasonable person would do or not to do in same circumstances

accident

unforeseen and unintended happening at a known place and time

occurence

includes all accidents also includes events that happen over a period of time

compensating damage

intended to compensate the other guy and return him to his preinjury status

special or non economic damages

difficult to quantify, humiliation, embarrassment, pain and suffering, mental anguish

punitive damages

punish the offender and dissuade others from repeating the same offense, often exclude punitive damage

supplementary payments

not an optional add on, it is integral part of any liability policy.

dwelling policies

fully integrated, autonomous, contracts which offer the policyowner 3 levels of peril power. basic - broad - special perils

DP 1

basic perils on both dwelling and personal property (contents)

DP 2

upgrades these coverages to the broad form perils

DP 3

extends coverage on the dwelling to special (all risk) leaves the contents coverage at broad form level

DP 4

known as TENANT form, which offers no building coverage - provides basic perils coverage for personal property and allows the insured to increase the peril power by endorsement

Coverage A

insures dwelling and all permanent attachments to the dwelling. If garage is part of same structure then garage falls under coverage A

Coverage B

protects other structures on the insured premises - detached garages, storage sheds, backyard playground, swimming pools, fences.

Coverage C

covers personal property, furniture, clothing, toys, household goods. Money amount of "C" is selected by policy owner as some landlords rent properties fully furnished. The off premises value of C is equal to 10% of the on premises coverage.

Coverage D

indirect or consequential loss coverage designed to protect the landlords cash flow.

Coverage E

only available to policy owners who actually inhabit the dwelling

theft coverage

can be provided by either of 2 endorsements

Coverage E

personal liability

Coverage F

medical payments to others

Homeowners broad form perils

the basic perils plus plumbing, falling objects, weight of snow, ice and sleet

HO -2

building and content automatic coverage D limit is 30% of coverage A but can be increased

HO - 3

special form homeowners, unequal in coverage

HO - 5

special perils coverage, this is called comprehensive form homeowners -

HO - 4

tenants form no coverage A - coverage C becomes lead coverage. Coverage D is 30% of coverage C

HO - 6

$1000 for betterments and improvements 50% of coverage C

Permitted incidental occupancies

provides premises liability and medical payments coverage for an in home business that you own

Earthquake

treats all tremors or eruptions in a 72 hour period as a single occurence

part a liability

pays to other guy, bodily injury/property damage, defend you in any suits filed to which this coverage applies will be an important part of the coverage

part b med pay

in auto, med pay is different, medpay pays for you and your family and anyone else in your car. it is a no fault coverage, limits are per person and benefits can only be used to fix the body

part c un and underinsured motorists

the other guy is at fault and he cant pay or wont pay and has no insurance or not enough to cover damage... will cover your body for sure and it can even cover your car

part d damage to your auto

protect your car, two separate coverages, collision and other than collision. Collision = named perils, replace/repair your car

single limit

100,000 per occurence

split limit

when you see 20/40/10 think of thousands - next thing you should think of is body max,all bodies, property max

Yacht policy

ocean marine multi line contract known as a yacht policy - coverage can be written on a full marine(all risk) basis or a limited hull(named peril) basis

FLARE perils

fire, lightning, aircraft, riot, explosion

vacancy

after 60 days, may cancel the coverage

coinsurance

divide what you did buy by what you should of bought and multiply that times the loss. this amount minus your deductible is the amount to be paid

Inflation guard

coverage limits keep pace with inflation

peak season

coverage limits can fluctuate for businesses that are seasonal

Full value reporting form

grown up version, strict compliance with reporting requirements of endorsements - reports must be made within 30 days of the end of reporting period

LEASE

lease, easement, agreement to indemnify a municipality, sidetrack agreement, elevator maintenance agreement

surety bonds

they are sure that you do something - to assure your actions to a third party

robbery

from a person by violence or threat of violence

securities

are not money

Business auto coverage form

business owns a delivery van, pick up and trailer

truckers coverage form

contract or common carrier hauling; property to others

motor carrier coverage form

business hauls its own goods & property of others

blanket bond

covers all employees

custodian

inside

messenger

outside

Limited Tort

allows named insured and other household members to seek recovery for all medical and out of pocket expenses. Not for pain and suffering or nonmonetary damages unless the injuries are defined as serious injury in policy

Full tort

allows recovery for medical and out of pocket expenses along with right to seek financial compensation for pain and suffering and other damages

PA workers compensation does not apply to?

household employees

Workers compensation benefits include all except?

punitive damages

What is the renewal fee for a lapsed license?

$165.00

For knowingly violating the PA insurance code, a producer can be assessed a fine of?

5000 per person and 50,000 aggregate

Absolute Liability

a tort law concept in which an individual can be found legally responsible without being negligent

accident

an unexpected and unintended chance happening/occurring at a known time and place

adverse selection

likelihood of worst possible risks seeing the best possible coverage. Example - a person who seeks to buy insurance for his home following a tv broadcast that a wildfire is three miles away and blowing his direction

Appraisal

A process in which the insured and the company seek to place a value on damaged property by hiring three appraisers. When two of three agree on the value of the damage, it is binding on both parties.

uninsured motorist

an at fault motorist who causes an accident and who does not carry the required amount of liability insurance to satisfy the laws of the state in which the accident occurred - illegal

second injury fund

found in the workers compensation program, the second injury fund is a pool of money supplied by all workers compensation insurers that is designed to encourage employers to hire handicapped persons without the fear that they will suffer a second, more expensive injury

scheduled personal property

an inland marine endorsement to a homeowners policy which provides coverage for items excluded or limited under the basic policy

short rate refund

you are assessed a small penalty if you cancel mid term.