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233 Cards in this Set
- Front
- Back
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Acceptance
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demonstrated bythe insurer issuing or the producer delivering the policy
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Adhesion
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Drafted by theinsurer and accepted by an applicant. Applicant must act according to thelanguage of agreement. A court in favor of the person who did not draft thelanguage may decide gray area.
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Aleatory
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Policy ownerobtaining a lot of coverage in return for a small fee. One party may recovermore in value than he or she has parted with.
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Competent Parties
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Must possess legal capacity to enterinto a contract. Cannot be a minor, legally insane, under the influence,forced, enemy aliens.
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Conditional
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Policyis described as a conditional contract since its functions is conditional uponthe performance of the parties arriving at an agreement
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Conditions
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Responsibilitiesof each of the parties to the contract
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Consideration
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exchange of values, thepremium paid
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Contract Law
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Fourelements must be present: agreement, consideration, competent parties, andlegal purpose
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Declarations
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Personalizesthe policy and provides an assortment of information regarding the property orexposures being insured
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Estoppel
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A falsestatment made by one pary which is relied on by another party.
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Exclusions
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Propertyand the causes of loss that are not covered
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Fair Credit Reporting Act
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Federal law thatpermits an insurer to conduct consumer or other investigative reports on applicantsfor insurance. Applicant can receive a copy of the information.
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Insuring Agreement
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Summary ofagreement between the named insured and insurer. Identifies the parties to thecontract
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Legal Purpose
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publicinterest in mind, contract to rob a bank is not valid.
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Offer
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Proposalby one party
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Personal
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agreementis with the company and a person
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Representation
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Unilateral
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Waiver
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issues policy based upon an incomplete application. Right to deny coverage
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Warranties
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CHAPTER 2
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Abandonment
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ACCIDENT
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Additional Coverages
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Incurredloss amounts that are paid “in addition” to other coverage limits provided bythe policy (i.e. debris removal, fire department service charges, credit cardtheft protection) (pg. 2-6).
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Appraisal
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In property insurance, if an insured cannot come to an agreement with regard tothe extent of the loss, an appraisal process must begin. In other words, it isunderstood between the parties that coverage exists but they do not agree on theamount of loss (pg. 2-7).
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Arbitration
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Procedureused when an insurer and insured disagree over whether a loss is actuallycovered under the policy. Arbitration is generally used when a decision isreached by the court (pg. 2-7).
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Assignment
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Aprovision appearing in property and liability contracts. It requires thatbefore an insured can assign a property insurance policy to another, he or shemust provide written notice to the insurer (pg. 2-8).
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Binders
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Abinder is an interim contract generally issued for a specific period while theactual policy is being produced by the insurer. It is a temporary contract forinsurance and is usually not good for more than 30 (and sometimes 60 days) (pg.2-8).
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Cancellation
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Whena policy is canceled by an insurer, the insurer must meet certain obligationssuch as providing sufficient written notice and a reason for cancellation (pg.2-7).
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CoInsurance
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Definition of Insurance
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The transfer of risk from an applicatn to an insurer |
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Direct Loss
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Direct physical loss to tangible or intangible property caused by a peril. |
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Extensions of Coverage
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Coverageextensions are found in property and liability policies which broaden coverage for specific types ofloss exposures. Coverage extensions are sometimes referred to as provisionswhich provide coverage for something not generally covered by the policy (pg.2-6).
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Hazard
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Heightens or increases the possibility of a loss arising |
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Indemnity
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Acontract of indemnity makes the insuredfinancially or economically “whole” again. It restores or reimburses aninsured to the extent of his or her loss (pg. 2-5).
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Indirect Loss
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Consequential loss resulting from a direct loss to property (ALE, rental value, loss of rent, loss of income and loss of use) |
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Insurable Interest
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Supports the principle of idemnity. In property and liability insurance must be present when loss occurs or at the time of loss. Doctrine was developed to prevent a person from utilizing an insurance contract in order to profit |
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Limits of Liability
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Property and liability policies provided coverage "up to a specified limit" stated in the policy |
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Nonrenewal
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when an insurer decides not to renew a policy for whatever reason, it must providewritten notice to the insured within a certain time period of the nonrenewaldate (pg. 2-7).
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Occurrence
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Anunexpected and recurrent, repeated or perpetual exposure to some sort ofcircumstance that later over a period of time causes illness or impairment to aperson (pg. 2-7).
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Peril
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Thecause of loss or the reason for the loss (pg. 2-3).
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Proximate Cause
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Theefficient cause of loss. It is not necessarily the principle cause nearest thedamage but it is responsible for the loss or destruction through a dominoeffect (pg. 2-4).
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Replacement Cost
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It is the amount needed today to replace damaged or destroyed property coveredunder the policy. Replacement cost involves the full cost to repair or replacedamaged property (pg. 2-5).
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Right of Salvage
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Risk
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Theuncertainty concerning possible loss or financial loss (pg. 2-2).
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Subrogation
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insurer right of action against an at-fault party. The insurer subrogates againstanother party or parties. The provision states that the insurer requires fromthe insured, an assignment of all the rights or recovery against any partyresponsible for the loss to the extent of the amount of the payment made to theinsured by the insurer (pg. 2-9).
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Unoccupancy
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Unoccupiedmeans that no one is present but the building is furnished in some capacity. Inother words, there may be an intent to return on the part of the insured (pg.2-7).
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Vacancy
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Building, residence or insured premises is empty or unfunrished. It is a premises that has neight contents nor occupants. No intent to return to the property |
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Chapter 3
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Aggregate Limits |
Provides a maximum limit of liability for the total amount of lossess occuring during the policy period. If aggregate limit of 5 million, the policy will not pay for more than 5 million per policy period no matter how many claims are filed. |
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All Risk |
Protects an insured against any possible type of loss except those perils specifcally excluded |
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Assumption of Risk |
Insured is freed of any liability if the injured third party assumed the risk of injury voluntarily |
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Comparative Negligence
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Court determines and apportions the negligence of each party and awards damages proportionatley |
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Contributory Negligence
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Common law defense that prevents an injured thired party from recovering damages from an insured if the injured party was in any way responsible for the loss |
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Definitions, within condition section of policy
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Numerous definitions such as named insured, covered premisies, policy territory, and policy period |
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Endorsements
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Modify or alter existing coverage or effect a change |
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Liability
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Protects an insured against injury or damage claims made by another party. Covers insured for his or her legal liability or responsiblity for bodily injury or property damages to others |
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Limits of Liability
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Provides coverage up to their stated limit (single limit, split, dual limit or aggregate limit) |
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Mono-Line
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Protect insured property only. Provides noliability insurance protection.
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Multiple Line
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Protects insureds property and casualty and liability protection also provided |
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Named Peril
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Covering named peril will specifically list theperils insured against
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Negligence
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Failure of an individual or prudent person to demonstrate care required by reasonable person. Individual who has been careless or reckless has failed to do somethign he should have done or done somethign he should not have done |
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Package Policy
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Personal Property
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All types of property other than land: furnishings, clothing and appliances |
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Property
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Four basic property sections (DICE): declaration, insuring agreement, conditions and exclusions |
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Real Property
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Dwelling, buildings, and structures, but not the land |
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Single Limits
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One amount that will be paid per occurrence.
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Split Limits
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Subdividedinto a coverage limit for bodily injury per person and per occurrence.
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Statute of Limitations
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If individual fails to commence legal action within a particular states statute oflimitation, an unqualified defense to the legal action will result.
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Strict Liability
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Imposed without regard to fault, or in other words regarding whether anyone is at fault. Injured party will be awarded damages even though the other party did nothing wrong legally wrong to cause the injury. |
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Third Party
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Person suffering an injury that has a right of legal action against the insured. |
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Valued Basis
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Chapter 4
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Adjusting
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Settling of an insurance claim
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Appraisal
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Arbitration
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Parties submit their differences to an uninterest, disinterested or neutral third pary
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Claim Adjuster
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Involved in the investigation, adjustment, negotiation and trial preparation of claims
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Claim Investigation
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Gather as much information as possible concerning the circumstances of the loss including photographs, witnesses or recording testimony
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Claim Reporting
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Insurers require that claims be reported to them in order for the loss to be paid but insurance contracts statee that losses be reported to the insurer. Insurer wish to be notified as soon as possible since they need as much time to investigate.
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Comparative Negligence
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Documentation of Evidence
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All documentation needed to succesfully settle a loss
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Fiduciary Capacity
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Adjuster must act in a high degree of trust or fidelity with regard to both the insurer and the insured. Possess sound interpersonal skills as well as the ability to communicate and negotiate
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Gathering Evidence
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Adjuster must promptly gather all facts as soon as possible to determine if legal liability exists. Physical evidence and oral testimony are two primary forms of evidence
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Independent Adjusters
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Employed by an independent adjusting firm
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Interim Reports
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Provides insured with information but also indicates the progress of settlement process
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Mediation
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Neutral mediator is hired for a fee to provide an impartial voice to the negotiations. Conduct meetings with each party individually and with the parties jointly at attempt to reach a settlement
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Physical Evidence
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Tangible and visible, documentary evidence
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Privileged Communication
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Public Adjuster
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Handles claim in behalf of a client, the insured. PA negotiateses lossess and better settlement offers with an insurer on behalf of an insured
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Resolution
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Settlement Power
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Adjuster is entrusted with the duty and responsibility to determine or ascertain the amount of a loss
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Staff Adjusters
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Employee of an insurer and settles claims on behalf of his or her employer
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Verifying Coverage
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Three important elements that must be determined: if coverage exists, legal liability, and damages suffered by others
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Waiver
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Voluntary relinquishment (abandonment) of a known right
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CHAPTER 5
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Damage To Property of Others
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Up to $1,000 if the insured is responsible for the damage to the property of others. This coverage pays for smaller property damage claims that would not necessitiate legal action (payment from coverage E). Must submit within 60 days after the loss
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HO-2
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Broad form peril policy protecting an insured against named peril (fire, lightning, vandalism, etc.) plus loss by theft. If insured covered his home for $100,000 coverage B would automatically provide $10,000 of coverage. Covers real property
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HO-3
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Provides broader scope of coverage than the HO-2 since it provides all risk or open peril insurance protection (coverage A & B). Covers all types of losses except those specifically excluded.
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HO-4
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Coverage for renters unscheduled personal property (coverage C) and loss of use. Broad form peril policy. If $10,000 of coverage on personal property, the policy will provided $3,000 of coverage for loss of use under coverage D. Primary covers personal property.
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HO-5
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Exact duplicate of the HO-3 policy except that it provides open peril coverage for personal property (coverage C). Provides the broadest scope of coverage compared to any homeowner policy as it provides coverage for real and personal property on an open peril basis
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HO-6
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Broad form peril coverage. Designed for the unit owners of condominiums to protect against loss to personal property arising from a covered peril. If insured carries $20,000 of coverage C, 50% of $10,000 of coverage would be provided for coverage D, loss of use coverage (50% of coverage C).
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Homeowners
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Insured's
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Loss of Use
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Loss Settlement
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Medical Payments
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Coverage F states that the insurer will pay the necessary medical expenses within three years of an accident causing BI to others arising from an insured location or as a result of the personal activites of any insured
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Multiple Lines
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Property insurance to cover ones residence and personal property. And personal liability protection to cover the insured's legal responsibility for bodily injury or property damage to others.
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Package Policy
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Personal Liability
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Coverage E protects an insured if legal suit is brought against one as a result of legal responsibility for bodily injury or personal property
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Section I
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Homeowners conditions and provisions?
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Section II
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Provides personal liability protection and medical payments to others
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Coverage A
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Dwelling
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Coverage B
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Other Structures
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Coverage C
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Personal Property
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Coverage D
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Loss of Use
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Coverage E
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Personal Liability
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Coverage F
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Medical Payments to others
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Watercraft Liabilty Chart
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Chapter 6
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Auto Insurance
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Package policy providing property and liability protection
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Bodily Injury
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Harm to others, including sickness or disease and even death
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Alighting
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Getting out of an auto vehicle
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Temporarily Substitue
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Insured does not own because the owned auto is out of normal use because of a breakdown or repair
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Nonowned Auto
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Borrowed or rented by the insured
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Part A
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Liability coverage
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Part B
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Medical payments coverage
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Part C
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Uninsured motorist coverage
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Part D
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Coverage for damage to the insured auto
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Pre-Judgement Interest
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Compensate for the loss of use
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Collision
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The upset of the covered auto or damage because of its impact with another auto or object. Paid regardless of fault
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Comprehensive
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Covers any direct or accidental damage such as fire, theft, vandalism, food, earthquake, hail, water, riot, falling objects, collision with animal.
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Covered Auto
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Listed on the declaration page, insured
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Definitions
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Liability Coverage
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Medical Payments
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Part B, insured will pay expenses incurred within 3 years
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Non-Owned Auto
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Borrowed or rented auto
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Occupying
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Being in, upon, getting in, on, our of or of a motor vehicle
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Owned Auto
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Auto that is listed on the declaration page
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Personal Auto Policy
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Policy provides coverage for an insured (and family) while operating an owned or non-owned vehicle
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Physical Damage
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Provides property insurance protection for the covered auto. Collision coverage and other than collision coverage
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Property Damage
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Supplementary Payments
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Pay for certain additional expenses incurred as a result of the operation, maintencance or use of the covered auto. Up to $200 a day for loss of earnings.
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Underinsured Motorist
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Covers bodily injury sustained by an insured cuased by an at fault operator who possesses insurance but the limits of liability carried are not sufficient to cover the damages awarded to an injured insured. Insured who is injured will collect rewards from own policy
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Uninsured Motorist
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Pay compensatory damages that an insured is entitled to collect (from own policy) if one suffers bodily injury as a result of being struck by another driver who does not carry any auto liability insurance
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Chapter 7
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Cancellation
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First named insured may cancel the policy at any time by providing written notice to the insurer. If non payment of premiums, the insurer can cancel if they provided 10 day written notice. For any other reason insurer must provide 30 days written notice
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Commercial Package Policy
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Commercial insurance coverage, provides a broader scope
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Common Condidtions
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6 common condiditons in which all coverage parts are subject to |
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Common Declarations
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Name/address, policy period, policy #, name of the insurer, description of the insured business, list of each coverage part and its premium, total policy premium, countersignature of agent, any other forms added
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Coverage Parts
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Commercial, property, liability, inland marine, crime, auto, boiler and machinery and farms
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First Named Insured
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Named insured stated in declaration page
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Modernization and standardization
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The purpose of the new CPP forms
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Monoline Policy
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One coverage type is chosen
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Package Policy
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When more than one coverage type is chosen |
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Policy Changes
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First named insured is authorized to make any policy changes with the insurers consent
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Premiums
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First named insured is responsible for all premium payments
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Transfer of Rights and Duties
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Policy may not be assigned to another without the written consent of the insurer, except if the named insured dies, in which case ones interest in the policy is transferred to a legal representative, written consent for transfer of rights and duties is not required if insured dies
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Chapter 8 Commercial Liability Coverages
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Part E
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Duties after an accident or loss
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Part F
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General Provisions
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Advertising Injury
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Injury arising out of oral or written defamation during the course of advertising ones good, services, or products. Also covers copyright infringement
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Business Owners Policy
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Claims Made
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Covers the liability of a business entity as long as the injury or damage happens after a retroactive date. Claim must be made during the policy period term
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Commercial Auto
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May be added to the CPP to protect an insured for BI or PD to others arising out of the operation, maintenance or use of an auto used for business or commerical purposes
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Commercial Crime
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Theft, burglary, mysterious dissappearance |
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Commercial Liability
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Contractual Liability
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Coverage A
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Protection for an insured who is legally responsible for injury or damage to others as a result of the ownership of premises or business activities on or off the premises
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Coverage B
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Protecting a business owner against personal injury and advertising injury losses
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Coverage C
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Will pay for the reasonable medical expenses of others incurred within one year of the date of the accident
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Crime Coverage Forms
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Covers losses sustained during the policy period and discovered within one year of the policy expiration. If coverage is renewed or replaced this extended period terminates
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Burglary
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Illegal taking of property by one party from another. Must leave visible signs of a focible entry or exit
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Robbery
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Illegal taking of someones property. Person to person encounter between the robber and his victim
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Theft
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Stealing or property without the owners consent
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Custodian
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One who has custody of the property of another. Named insured, partner or employee is considered a custodian under the definition listed in the policy
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Damage to premises rented to you
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Messenger
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Possess custody of insured property while outside the covered area. Named insured, partner, or employee of the business can be considered a messenger.
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Larceny
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Theft of a personal property
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Medical Payments
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Coverage C
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Mysterious Disappearance
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Lost or has disappeared but ownwer nor insurer is able to determine how it happened. Covered by policies protecting against theft
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Occurrence
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This form protects a commercial business for its responsibilities for bodily injury or property damage to others as long as it occurs during the policy period. Claim may be reported to the insurer at any time in the future (indefinitely)
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Personal Injury
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Personal injury is not the same as bodily injury. Business owner makes false and defamatory statements about a competitor it can be sued for slander. Personal injury include: wrongful detention or eviction, false arrest, slander, libel, malicious prosecution and abuse of process
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Premises and Operations
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Products and completed operation
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Any goods or products, other than real property, manufactured, sold, handled, distributed, disposed, of by an insured, anyone trading under the insured's name or a person or organization whose business or assets the insured has acquired
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Supplementary Payments
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Incurred loss amounts that are paid in additon to other coverage limits provided by the policy
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Chapter 9 Works Comp
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Compulsory (Mandatory) Laws
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Elective Laws
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Eligible Employments
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Almost all types of public and private emplyement are eligible. Not included: part time workers, domestic or household employees and farm or agricultural employees and independent contractors
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Income Benefits
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Once a worker is disabled for a lengh of time equal to the retroactive period, income benefits will be paid from the initial day of disability. The average weekly salary shall be ascertained by diving the total wages received by the injured employee by the number of calender weeks the employee was actually employed by the employer |
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Medical Payments
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Insurer will cover unlimited reasonable medical expenses related to the occupational injury. Injured must submit to a medical examination at any time while receiving compensation
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Part I / Workers Compensation
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Consists of statutory benefits available to injured workers
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Part II / Employers Liability
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Employees liability covered which responds to third party legal suits against the employer. Protects an employer against legal suits filed by an employee who may not be subject to the workers compensation law
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Part III / Other States
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Provides workers compensation coverage in additional states to which an employee may travel as part of his employement duties. States must be listed on declaration page
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Partial Permanent Disability
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Some form of permanent impairment exists, which makes a worker unable to perform at his or her full capacity
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Partial Temporary Disability
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Paid to an injured employee if they return to work and due to their disability is unable to earn the equivalent amount they were earning prior to their disability
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Premiums
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Determined by the insurer and based upon; type of work, payroll of all workers, claim experience of the employer which utilizes a past experience modicication factor. More hazardous or riskier the occupation, the greater the rate. The less hazardous the occupation, the lower the rate. (mulitply manual rate for each job classification by each $100 of payroll)
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Rehabilitation Benefits
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Aids the injured worker to recuperate more quickly but helps the employer, since her injured employee will return to work faster
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Survivor/Death Benefits
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Two types of benefits are burial expense and survivor benefit. Reasonable burial expense will be paid by the policy (maximum amount is based upon state). Survivor benefit is paid on a weekly basis according to the state maximum on amounts and lenght of receipt
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Total Permanent Disability
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A worker who is injured and is unable to perform all of her regular duties permanently
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Total Temporary Disability
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A worker who is injured and is unable to perform all of her regular duties for a short duration of time
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Bar to Recovery
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drunk on job? what lol
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Occupational Disease
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Includes any disease peculiar to the occupation in which the employee was engaged and due to causes in excess or the ordinary hazard of employement. EX: repeated exposure to asbestos which later results in cancer
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Chapter 10 Professional Liability
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Consent to Settle Loss
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Requires an insurer to seek an insured's approval prior to settling a claim for a specific amount. However, if the insured does not approve the recommended figure, the consent to settlement clause states that the insurer will not be liable for any additional money required to settle the claim
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Directors and Officers Liability (D&O)
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Protect the corporate officer form legal suits by stockholders or others arising out of mismanagment
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Errors and Omissions Liability
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Liability arising out of the performance of one's professional duties to neglignece
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Liquor Liability
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AKA Dram shop liability. Needed by anyone invovled in the manufacturing, distributing or sales of alcoholic beverages. Anyone requiring a liquor license is required to carry liquor liability coverage
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Malpractice Liability
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Available to physicians, surgeons, dentist and hospitals for protection in case an injured third party takes legal action as a result of the insured's negligence
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Professional Liability
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Protection for individuals who are invovled in the "professions" such as physicians, attornyes, certified public accountants
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Chapter 11 Umbrella Excess Liability
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Broader Protection
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Intended to provide more coverage that is not provided by the primary policy (umbrella liability)
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Catastrophic Protection
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Anyone at any particular time is subject to liability claims of catastrophic portions. Wealthy individuals are usually targets of larger law suits.
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Commercial Umbrella
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Purchased for commercial protection (broader)
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Deductible |
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Excess Liability
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Provides higher coverage limit only. Does not provide broader coverage
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Personal Umbrella
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Provides protection for personal lines exposurers
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Umbrella Liability |
Provides additional liability coverage feature of higher limits but it also provides broader protection not provided by the primary or underlying policy
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Chapter 12 CT Insurance Law
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Admitted Insurer
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Authorized to conduct business in this state. Issued certificate of authority which allows it to sell insurance
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Certificate of Authority
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Name of the insurer license to transact insurance business in this state. Expires on May 1st of each year
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Non Admitted Insurer
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Has not been issued a certificate of authority and thus cannot conduct insurance business in this state
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Surplus Line Insurer
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Legally place business with an unauthorized insurer when speciality coverage cannot be provided by an authorized insurer
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Stock, Mutual and Reciprocals
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Stock company is owned by its stockholders and do not pay dividends to policyholders. Mutual company is owned by its policyholders and "mutually" share profits. Reciprocal is a type of cooperative insurer. Manged by an attorney-in-fact.
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Domestic Insuruers
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Incorporated or chartered in the state of CT. Principal or home office in this state
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Foreign Insurers
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Authorized to conduct business in CT but its charter and principal office is located in another state
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Alien Insurers
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Chartered in another country but is authorized to conduct insurance in CT
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Unfair Trade Practices
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Various forms of slaes practices that are illegal according to CT law (misreresentation, defamation, complaint handling procedures, fraud)
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Misrepresentation
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Misrepresents the terms, befits, conditions, or coverage's provided by a policy in order to mislead an insured
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Defamation
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Makes, publishes disseminates or circulates any oral or written statement which are false or maliciously critical or derogatory to the financial condition of any person or insurer and which are designed to injure that person or insure
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Compliant Handling Procedures
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Failure of any person to maintain complete records or all the complaints which it has received since the date of its last examination is an unfair practice (number of complaints, classificaiton by line of insurance, nature of each complaint, disposition)
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Fraud
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Any authorized employee of the department of public safety, department of motor vehicles, or a local police department may request any insurance company to release to such employee information relative to any investigation relating to fraud of potential fraud to such authorized person
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Cancellations (property)
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Insurer must provided 30 days written notice when canceling a homewowners or fire insurance policy. Reason for cancellation must aslo be included in the notice. If no payment of premium by the insured, insurer must provide 10 day written notice (to the mortgage as well)
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