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122 Cards in this Set

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What do the financial services industry consists of?
Commercial Banks, Savings and Loan Institutions, Credit Unions, Life and health Insurers, Property and casualty insurers, Mutual funds, Securities brokers and dealers, Private and state pension funds, and government-related financial institutions
How many are in the life and health insurance market?
1000 +
What do the life and health insurers sell?
Life and health insurance products, annuities, mutual funds, pension plans
How many are in the property and casualty market?
3000+
What do the property and casualty insurers sell?
Property and casualty insurance and related lines, including marine coverages and surety and fidelity bonds
What is a corporation owned by stockholders?
Stock Insurer
What is a corporation owned by policy owners?
Mutual Insurer
What is not an insurer, but a society of members who underwrite insurance in syndicates?
Lloyd's of London
What are the members of the Lloyd's of London?
corporations, individual members, and Scottish limited partnerships
What are generally organized as nonprofit, community oriented plans?
Blue Cross and Blue Shield Plans
What plans provide coverage for hospital services?
Blue Cross
What plans provide coverage for physicians' and surgeons' fees?
Blue Shield
What sponsors HMOs and PPOs?
Blue Cross and Blue Shield Plans
What provides comprehensive health care services to its members?
Health Maintenance Organization
What plan states that choice of health care provider may be restricted?
HMOs
Who is someone who legally represents the principal and has the authority to act on the principal's behalf?
Agent
Who has the the power to bind the insurer?
property and casualty agent
Who does not have the power to bind the insurer?
life insurance agent
Who is someone who legally represents the insured?
Broker
Who does not have to authority to bind the insurer at all?
Broker
What is a violation of a person's legal rights, or a failure to perform a legal duty owed to a certain person or to society as a whole?
Legal Wrong
What do legal wrongs include?
Crime, Breach of Contract, and Tort
What is a legal wrong for which the court allows a remedy in a form of money damages?
Tort
What three categories do torts fall into?
Intentional, Strict Liability, and Negligence
What is the failure to exercise the standard of care required by law to protect others from an unreasonable risk of harm?
Negligence
What are the elements of negligence?
Existence of a legal duty to use reasonable care, Failure to perform that duty, Damage or injury to the claimant, and Proximate cause relationship between the negligent act and the infliction of damages
What compensate the victim for losses actually incurred?
Compensatory Damages
What are included within compensatory damages?
Special Damages and General Damages
What are designed to punish people and organizations so that others are deterred from committing the same wrongful act?
Punitive damages
Under what is the injured person cannot collect damages if his or her care falls below the standard of care required for his or her protection?
Contributory Negligence Law
Under what the financial burden of the injury is shared by both parties according to their respective degress?
Contributory Negligence Law
Under what, you can collect damages even if you are negligent, but your reward is reduced in proportion to your fault?
Pure Law
Under what, you can collect damages only if your negligence is less than the negligence of the other party?
49 Percent
Under what, you can recover reduced damages only if your negligence is not greater than the negligence of the other party?
50 Percent
What states that a plaintiff who is endangered by his or her own negligence can still recover damages from the defendant if the defendant has a last clear chance to avoid the accident but fails to do so?
Last Clear Chance Rule
Under the what, a person who understands and recognizes the danger inherent in a particular activity cannot recover damages in the event of an injury?
Assumption of Risk Doctrine
Under what, a motorist's negligence is imputer to the vehicle's owner?
Vicarious Liability Law
Under what, a business that sells liquor can be held liable for damages that may result from the sale of liquor?
Dram Shop Sale
What means "the thing speaks for itself"?
Res Ipsa Loquitur
What three requirements must be met for res ipsa loquitur to apply?
The event is one that normally does not occur in the absence of negligence, the defendant has exclusive control over the instrumentality causing the accident, and the injured party has not contributed to the accident in any way
Who is a person who is invited onto the premises for the benefit of the occupant?
Invitee
Who is a person who enters the premises with the occupant's expressed or implied permission?
Licensee
What is a person who enters or remains on the owner's property without the owner's consent?
Trespasser
What is a hazardous condition tha can attract and injure children?
Attractive Nuisance
Under what doctrine, an employer can be held liable for the negligent acts of employees while they are acting on the employer's behalf?
Respondent Superior
What are defects in the present tort liability system?
Rising tort liablity costs, Inefficiency in compensating injured victims, Uncertainty of legal outcomes, higher jury awards, and long delays in settling lawsuits
Under what rule, several people may be responsible for the injury, but a defendant who is only slightly responsible may be required to pay the full amount of damages?
Joint and Several Liability Rule
What law required motorists to furnish proof of financial responsibility up to certain minimum dollar limits?
Financial Responsibility
When is proof of financial responsibility required?
After an accident involving bodily injury or property damage over a certain amount, upon failure to pay a final judgment resulting from an auto accident, following a conviction for certain offenses; such as DUIs
What requires motorists to carry at least a minimum amount of liability insurance before the vehicle can be licensed or registered?
Compulsory Insurance Law
What is the argue against compulsory insurance law?
Some argue that the law provides greater protection against uninsured drivers because motorists must provide evidence of financial responsibility before an accident occurs
What are the minimum requirements for compulsory insurance laws?
Split limit or Combined Single Limit
What is another method for compensating injured accident victims?
No-fault Auto Insurance
What is after an auto accident involving bodily injury; each party collects for his or her own insurer but can also collect/sue the other party for damages?
No-Fault Auto Insurance
Under what, accident victims cannot sue at all, regardless of the amount of the claim?
Pure No-Fault Plan
Under what, victims have a limited right to sue?
Modified No-Fault Plan
In some states, an injured driver may sue if the bodily injury claim exceeds a certain what?
monetary threshold
In some states, an injured driver may sue if the bodily injury claim exceeds a what? (in the injury involves death, dismemberment, disfigurement, or permanent loss of a bodily member or function)
Verbal Threshold
What are the factors that insurers use to establish auto insurance premiums?
Territory, Age, Gender, and marital status, use of the auto, driver education, number and type of cars, good student discount, individual driving record, an insurance score
What was drafted by the ISO, and it replaced the 1998 form?
2005 Personal Auto Policy (PAP)
What are the eligible vehicles included in auto insurance?
Four-wheeled motor vehicle owned or leased by the insured for at least six consecutive months and a pick-up or van with a gross vehicle weight rating of 10,000 lbs. or less
What is a nonowned auto or trailer used temporarily because of mechanical breakdown, repair, servicing loss, or destruction of a covered vehicle?
temporary substitute vehicle
What is the most important coverage part of the PAP for the auto insurance?
Part A Liability Coverage
What protects a covered person against a suit or claim arising out of the ownership or operation of a covered vehicle?
Liability Coverage
How is liability coverage normally written, where the amounts of insurance for bodily injury liability and property damage liability are stated separately?
Split Limits
In addition to the policy limits and legal defense for liability coverage, certain what can be paid which include: the cost of a bail bond, interest accruing after a judgment, loss of earnings ($200 per day), and other reasonable expenses.
Supplementary Payments
What are the exclusions for liability coverage for auto insurance?
Intentional injury or damage, property owned or transported, property rented, used, or in the insured's care, bodily injury to an employee, use as a public livery or conveyance, vehicles used in the auto business, vehicles with fewer than four wheels, undeclared vehicles owned or furnished for the insured's regular use
What covers all reasonable medical and funeral expenses incurred by an insured in an auto accident?
Medical Payments Coverage
What are exclusions to the medical payments coverage include injuries sustained?
While occupying a vehicle with fewer than four wheels, while operating the vehicle as a public livery or conveyance, when the vehicle is used as a residence, when the vehicle is used without a reasonable belief of permission, and when the vehicle is competing in a race
What pays for the bodily injury caused by an uninsured motorist, by a hit-and-run driver, or by a negligent driver whose insurance company is insolvent?
Uninsured motorists coverage
What are coverages that do not apply to the uninsured motorists coverage?
An insured is injured in, or by, a vehicle owned by the named insured, but not insured under the policy, there is primary coverage under another policy, the vehicle is used as a public livery or conveyance (not carpool), and when workers compensation benefits are applicable
Under what, the insurer agrees to pay for any direct and accidental loss to a covered auto or any nonowned auto?
Coverage for Damage to your Auto (part D)
What are the two optional coverages available for coverage for damage to your auto?
Collision coverage and Other-than-collision coverage
What is defined as the upset of your covered auto or nonowned auto or its impact with another vehicle or object?
Collision
What is the loss due to the following perils: missiles or falling objects, fire, malicious mischief or vandalism, theft, hail, water, flood, riot or civil commotion, contact with a bird or animal, glass breakage and windstorm?
Other-than-collision coverage
What is a private passenger auto, pickup, van, or trailer not owned by or furnished or made available for regular use of the named insured or family member, while it is in the custody of or being operated by the named insured or family member which is covered under part D Coverages?
Nonowned Auto
What Auto Part pays for temporary transportation expenses?
Part D: Coverage for Damage to Your Auto
What are exclusions for Part D auto coverage?
Use as a public livery or conveyance, damage from wear and tear, freezing and mechanical or electrical breakdown, radioactive contamination or war, certain electronic equipment- permanently installed equipment is covered, tapes, records and disks, government destruction or confiscation, trailer, camperbody, or motorhome, and racing vehicle
In Part E, what are duties after an accident or loss?
Promptly notify the insurance company or agent, cooperate with the insurer in the investigation and settlement of a claim, send the insurer copies of any legal notices received in connection with an accident, take a physical exam if required
What is the named insured can cancel at any time by returning the policy to the insurer or providing written notice?
Cancellation
If a policy has been in force for more than 60 days, the insurer can cancel only if?
the premium has not been paid, the driver's license of any insured has been suspended or the policy was obtained through material misrepresentation
What if an insurer decides to discontinue coverage, the insured must be given notice at least 20 days before the end of the policy period?
Nonrenewal
What is a policy is automatically terminated if the insured decline's the insurer's offer to renew?
Automatic Termination
What can a homeowner policy cover?
the dwelling, other structures, personal property, additional living expenses, personal liability claims and medical payments to others
What covers the dwelling, other structures, and personal property on a named perils basis?
HO-2 (Broad Form)
What covers the dwelling and other structures on a risk-of-direct-physical loss basis, all direct physical losses are covered except those losses specifically excluded, and personal property is covered on a named perils basis?
HO-3 (Special Form)
What covers a tenant's personal property on a named perils basis and does not include coverage for dwelling and other structures?
HO-4 (Contents Broad Form)
What provides open perils coverage ("all risks coverage") on the dwelling, other structures and personal property and all direct physical losses are covered except those losses specifically excluded?
HO-5 (Comprehensive Form)
What covers personal property on a named perils basis and a minimum of $5000 of insurance is also provided on the condominium unit that covers improvements and additions?
HO-6 (Unit Owners Form)
What is designed for older homes, cost to repair basis - dwelling and other structures are based on the amount required to repair or replace using common construction materials and methods, replacement must be on the same location and market value<replacement cost results in moral hazard concerns for the insurer?
HO-8 (Modified Coverage Form)
What are the two sections that the HO-3 policy is made up of?
Section 1: Property Coverages
Section 2: Liability Coverages
What are coverages under section 1 for HO-3 Policy?
Dwelling, other structures, personal property, loss of use and additional coverages
What are coverages under section 2 for HO-3 Policy?
Personal liability and Medical Payments to Others
What persons are considered insureds under the HO-3 Policy?
Named Insured and Spouse, Resident relatives, Other Persons under age 21, and Full-time student away from home
What are 2 reasons why care who is under HO-3 Policy?
personal property and liability
What covers the dwelling on the residence premises and any structure attached to the dwelling?
Coverage A for HO-3 Policy
What insures other structures on the residence premises including a detached garage, tool shed, pool house, etc..?
Coverage B for HO-3 Policy
What insures personal property owned or used by an insured (computer)?
Coverage C from HO-3 Policy
What types of property does Coverage C of HO-3 Policy exclude?
Animals, birds and fish, motor vehicles, aircraft and parts, property of roomers, boarders and other tenants, property in a regularly rented apt., business records, and water or steam
What provides protection when the residence premises cannot be used because of a covered loss?
Coverage D from HO-3 Policy
What is the increase in living expenses actually incurred by the insured to maintain the family's normal standard of living?
Additional Living Expenses
What are additional coverages in section 1 of HO-3 Policy?
Reasonable repairs to protect the property from further damage, trees, shrubs and plants, for a limited set of perils, fire dept. service charge, and unauthorized use of credit card, electronic funds transfer card or access device; forgery and counterfeit money
What are some exclusions under Section 1?
Any loss due to an ordinance or law, except as described in the Additional Coverages, Property damage from earth movement, Property Damage from certain water losses, Losses due to neglect, Property damage due to war or nuclear hazard, and any intentional loss
Losses to personal property are paid on the basis of what?
Actual Cash Value
What is the amount necessary to repair or replace the dwelling with material of like kind and quantity at current prices?
Replacement Cost
What insurance protects the named insured and family members against legal liability arising out of their personal acts?
Personal Liability
What is when the insurer pays amount for which the insured is found legally liable, up to the policy limits?
Personal Liability
What protects the insured when a claim or suit for damages is brought because of bodily injury or property damage allegedly caused by an insured's negligence?
Coverage E
What is defined as an accident which results in bodily injury or property damage during the policy period?
An Occurrence
What is a mini-accident policy?
Coverage F
What are some exclusions applied to both Coverage E and F?
Expected or intentional injury, business activities, with some exceptions, professional services, liability arising out of the use of: motor vehicle, an aircraft, a levercraft, and certain watercraft, uninsured locations, war or other hostile military acts, communicable diseases, sexual molestation, corporal punishment, or physical or mental abuse, and controlled substances
What are several exclusions apply only to coverage E?
Property owned by the insured, property in the care of the insured, with some exceptions, workers compensation, bodily injury to an insured
What are several exclusions that apply only to Coverage F?
Injury to a resident employee of an insured location, Workers compensation and persons regularly residing on the insured location
What are covered in addition to the policy limits for liability damages (court costs, attorney fees)?
Claim's Expenses
What are incurred for bodily injury covered under the policy that the insurer pays?
First-aid Expenses
What pays up to $1000 per occurrence for property damage caused by an insured?
Damage to Property of Others
What provides for an annual pro rata increase in the limits of insurance in the Section 1 coverages?
Inflation- guard endorsement
What covers earthquakes, landslides, volcanic eruption, and earth movement?
Earthquake Coverage Endorsement
What is added to the policy, claims are paid on the basis of replacement cost with no deduction for depreciation?
Personal Property Replacement Cost Loss Settlement Endorsement
What covers both business property and legal liability arising out of a home-based business?
Home Business Insurance Coverage Endorsement
What are major rating and underwriting factors?
Type of Construction, Location of Home, Fire Protection Class, Construction Costs, Type of Policy, Deductible- amount, Insurance Score
What report shows up to five years of information on property claims, including the date of loss, type of loss, and amounts paid?
Comprehensive Loss Underwriting Exchange (CLUE)