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32 Cards in this Set
- Front
- Back
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What are the Basic Aspects of an Insurance Contract? (6)
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1. Declarations
2. Definitions 3. Insuring Agreement 4. Exclusions 5. Conditions 6. Miscellaneous Provisions |
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What is the purpose of the Definition Section of the contract?
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To clearly define the key words or phrases so that coverage can be clearly determined.
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What is an Insuring Agreement?
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Summarizes the major promises of the insurer.
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What are the 2 types of Insuring Agreements?
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1. Named Perils Coverage
2. "All-Risks" Coverage (Open Perils) |
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What is the purpose of a Deductible? (3)
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1. Eliminate small claims
2. Reduce premiums 3. Reduce moral hazard |
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What is a Straight Deductible?
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The insured must pay a certain amount before insurer is required to make a payment.
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What is an Aggregate Deductible?
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All losses that occur within a time period are accumulated to satisfy deductible amount.
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What is an Endorsement?
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Provision that modifies, extends, or deletes provisions in property insurance.
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What is a Rider?
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Provision that adds, waives, or amends provisions in life/health insurance.
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What is the coinsurance clause?
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Encourages the insured to insure the property to a stated percentage of its insurable value.
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What is the Percentage Participation Clause?
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Requires you to pay a certain percentage of expenses in excess of deductible. (80/20 coinsurance clause)
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All Risk Policy
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Burden of proof is on insurer.
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Named Peril Contract
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Burden of proof is on the insured.
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HO-2
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Broad Form (Named peril, or any specified perils)
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HO-3
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Special Form (All risk)
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HO-4
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Contents Broad Form (Renters Policy)
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HO-5
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Comprehensive Form (More coverage than HO-3)
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HO-6
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Unit-Owners Form (Condo Owners)
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HO-8
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Modified Coverage Form
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Who is insured under Home-Owners policies? (4)
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1. Named insured and spouse
2. Family members in home 3. Anyone under 21 in the care of insured. 4. Full times students away from home under 24 |
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Who is covered under Personal Auto Policies? (3)
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1. Named insured and resident family
2. Anyone with reasonable belief of permission 3. Any person or organization legally responsible for auto on behalf or insured |
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What does Part D of a PAP cover? (3)
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1. Collision (Hit a car, tree, building, parking lot)
2. Non-Collision (Fire, flood, animal, theft, falling objects) 3. Transportation Expenses |
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What are Financial Responsibility Laws?
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Does not require proof of financial responsibility until after first accident or conviction.
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What are Compulsory Insurance Laws?
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Requires motorist to carry minimum amount of insurance before vehicle can be registered.
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Where does a PAP cover you? (4)
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1. United States
2. Canada 3. Puerto Rico 4. Other U.S. Territories |
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What is a Pure No-Fault plan?
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Accident victims cannot sue and no payments would be made for pain and suffering.
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What is a Modified No-Fault plan?
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Accident victims have right to sue negligent driver only if claim exceeds dollar or verbal threshold.
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What is an Add-On plan?
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Accident victim receives payment with no regard to fault and can also sue negligent driver.
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What is an Automobile Insurance Plan?
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All auto insurers in the state are assigned a proportionate share of high-risk drivers based on total volume.
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What is the Joint Underwriting Association (JUA)?
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Organization of auto insurers in which high-risk business is placed in common pool and each company pays its pro rata share of losses and expenses.
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What are Specialty Automobile Insurers?
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Insurers that specialize in insuring motorists with poor driving records.
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Factors Affecting Automobile Insurance Rates? (8)
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1. Territory (City vs. Rural)
2. Age, gender, and marital status 3. Use of the auto 4. Education 5. Good student discount 6. Number and types of cars (year, make, model) 7. Individual driving record 8. Insurance score (credit based score) |
