Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

24 Cards in this Set

  • Front
  • Back
Cont. Negligence Law
Law the prevents a person from recovering damages if that person contributes in any way to his or her own injury.
Comparitive Negligence Law
Law requiring both parties to a loss to share the financial burden of the injury accoring to their respective degreess of fault. In a number of states if Driver A is 50% or more negligent he or she can collect nothing from driver B.
Tort Reform
Proposed or actual legislation intended to reduce legal costs or settlement awards resulting from negligence suits.
Financial Responsibility Law
Law that requires motorists under certain circumstances to provide proof that they have the ability to pay to up to certain minimum amounts for the damage or injury they might cause as a result of operating a veh.
Compulsory Auto Insurance Law
Law that requires the owners or operators of autos to carry auto liability ins. at least equal to certain miniumum limits before the veh. can be lisc. or regist. in the state.
Un-Satisfied Judgement Funds
Funds set up in some states to compensate auto accident victims who have obtained a court judgement that is un-collectible because the negligent party cannot pay.
UIM -Un-insured Motorists Covg.
Covg. that re-imburses an insd. auto victim who sustains BI caused by an un-insured motorist or a hit and run driver or one who's own provider is insolvent.
Under-Insured Motorists Covg.
Covg. that applies when a negligent driver has liability insurance at the time of the accident but their limits are lower than those of the injured persons own covg.
No-Fault Auto Insurance
Insurance that covers the auto. accident victim on a first-party basis, allowing them to collect from their own insurers regardless of who was at fault.
Monetary Threshold
The level of monetary damages in a no-fault system at which one inj. party can seek compensation from the at-fault party.
Verbal Threshold
The level of severity of inj. in a no fault system, including death and certain specified injuries such as disfigurement and dismemeberment, at which the inj. party can seek compensation from the at-fault party.
Personal Injury Protection (PIP endorsement)
Endorsement to an auto insurance policy describing the no-fault benefits that are provided.
Pure No-Fault System
System that would prevent an inj. person from seeking compensation for damages from the at fault party regardless of the injuries severity, the injured person would collect no fault benefits, directly from his or her own insurer.
Ad-On Plan
Endorsement that provides certain benefits to the inj. auto. victims regardless of fault, the inj. person retains the rt. to seek compensation from the negligent party who caused the accident.
Modified No-Fault Plan
Laws that prevent an injured person from seeking compensation for damages from a negligent driver unelss damages exceed the monetary or verbal threshold. If the claim is below the threshold, the inj. person collects benefits from his or her own insurer.
Choice No-Fault Plan
Plan that gives an insd. the option at the time an auto ins. policy is purchased or renewed of choosing whether to be covered on a no fault basis.
Residual Market (shared market)
Term referring to providers who make insurance available to those who can not obtain covg. in the standard market.
Automobile Insurance Plan
Plan for insuring high-risk drivers in which all auto insurers doing biz in the state are assigned their proportionate share of such drivers based on the total vol. of auto insurance written in the state. Ex- if 1 provider writes 10% ins. in the state, it would be assigned 10% of the states high risk drivers.
Joint Underwriting Association
Organization created in a few states that designates servicing insurers to handle high-risk auto insurance biz, all auto insurers in the state are assessed a proportionate share of the losses and expenses based on their percentage of the voluntary auto ins. permiums written in the state.
The process by which insurers decide which potential cusotmers to insure and the covg. that insureds will be offered. Underwriting acitivities include selecting insureds, pricing covg., determing policy terms and conditions, and monitoring underwiting decisions.
Refers to a decision by the insurer or the insd. to terminate covg. during the policy period (before the expiration date of the policy.)
A Material Misrepresentation
Is a false statement by an insured of an important material fact on which the insurer relies to make an underwriting decision.
Refers to an insurer's decisions to terminate covg. on the expiration date of the policly, in other words the insurer refuses to renew the policy when it expires.
Unfair Discrimination
Invovles applying different standards or methods of treatment to insureds that have the same basic characteristics or loss potential.