Adj 19-11: Insurance Basics

Front 1

What are the 4 elements of any legal contract?

Back 1

Agreement: O&A
Consideration($)
Competentent Parties
Legal Purpose

Front 2

Describe the contract of adhesion.

Back 2

Take it or leave it concept

Front 3

An aleatory contract is when ________amts are exchanged....i.e_____.

Back 3

unequal amounts; low premium, high value

Front 4

B/c its btw the insurance company and the individual its a _____contract.

Back 4

Personal

Front 5

What makes it a unilateral contract?

Back 5

Only one party is legally bound

Front 6

There are certain conditions that have to be met...i.e. its a ________contract.

Back 6

Conditional

Front 7

B/c there are ambiguities ruling in favor of ______in the contract an insured can what?

Back 7

reasonably expect the coverage

Front 8

Indemnity means insurer will _______.

Back 8

Restore but not reward.

Front 9

Utmost good faith means________.

Back 9

Tell the truth.

Front 10

Explain the difference btw representation vs. misrepresentation.

Back 10

Representation: You tell the truth to the best of your knowledge.
Misrepresentation: You intentionally lie and could void the contract.

Front 11

Whats a warranty? Give 2 examples.

Back 11

ab ABSOLUTELY true statement.

Front 12

Concealment means_________

Back 12

Intentionally withholding info.

Front 13

If you intentionally misrepresent or conceal you're committing______

Back 13

Fraud!

Front 14

If you relinquish your rights you are in the act of a ________ and the legal process to prevent you from re-asserting those rights is called ______.

Back 14

waiver;estoppel

Front 15

A binder is_________.

Back 15

immediate, but temp. coverage

Front 16

Generally,insurable interest must be demonstrated when? and it must ALWAYS exist when?

Back 16

when a policy is issued/at the time of loss.

Front 17

What are the 3 elements of insurable risk?

Back 17

blood, $, business

Front 18

whats the definition for insurance?
what is risk?what are the 2 types.

Back 18

the transfer of a possibility of a loss/risk to the insurance company.
the uncertainty or chance of a loss occuring.pure/speculative

Front 19

whats a loss?
whats a hazard? what are the 3 types?

Back 19

the reduction,decrease, or disappearance of a persona/property insured in a policy.
what creates the probabilty of a loss from a peril. PHYSICAL/MORAL/MORALE(carelessness)

Front 20

What is negligence? Is generally going to be an issue for ______claims.

Back 20

failure to care when a reasonable person would have.
casualty/liability claims

Front 21

Who has the burden of proof for negligence.

Back 21

injured party

Front 22

What are the 4 L.A.S.P elements of negligence?

Back 22

Legal duty(to act or not act), standard of care(violated/breached that legal duty), proximate cause(unbroken chain of events), actual damages(injured party seeking recovery)

Front 23

What are some defenses against negligence?

Back 23

*They assumed the risk
*Contributory negligence(last clear chance rule)
*Comparative negligence
*intervening cause

Front 24

How long does the statute of limitations last?

Back 24

3 years.

Front 25

What is a tort?
Whats a tortfeasor?
What types of injuries do torts result in?
_________has two classes of ____damages which include what?
There also can be ______damages.

Back 25

civil wrong.
the person who does the civil wrong.
PD & BI.
BI/compensatory/special;general/punitive

Front 26

What type of liability does the injured party NOT have to prove negligence?
Give an example.

Back 26

Absolute liability. Hotel swimming pool deaths.

Front 27

Whats strict liability?

Back 27

An implied warranty that the product is safe.

Front 28

Whats examples of vicarious liability?

Back 28

Parents being responsible for kids. Employers being responsible for employees.

Front 29

Whats a peril?

Back 29

Specific cause of loss

Front 30

What are the 2 types of perils?

Back 30

Named(in the policy); Open(not listed/not excluded in the policy)

Front 31

What are the two types of property losses?

Back 31

direct/indirect

Front 32

Water damage caused by the Fire Dept. putting out a fire is a ______loss.

Back 32

direct

Front 33

If you're house catches on fire what may be an indirect loss of that?

Back 33

extra living expenses you have while the house is being repaired.

Front 34

whats blanket insurance?whats an example?will there be mulitiple amts. of insurance written?

Back 34

ONE policy for MANY properties at one or more locations.
$10 million policy covering 5 of your warehouses.
No although the amts may be grouped

Front 35

Whats specific insurance?

Back 35

Policy covers a specific kind of property for a specific amt. of insurance

Front 36

whats the best type of fire material you can get for fires? whats the worst/most common type?

Back 36

Fire-resistive/frame. its vice-versa for earthquakes.

Front 37

what is loss valuation?

Back 37

the factor in determining the premium charged and the amt.of insurance required.

Front 38

What's ACV? And how is it determined?

Back 38

Actual Cash Value. Replacement cost-depreciation.

Front 39

Whats replacement cost? And how is it contrary to indemnity?

Back 39

The cost to replace the property w/ like kind and quality @ today's price. NO DEDUCT FOR DEPRECIATION.
You may get excess of your ACV.

Front 40

What are the 6 loss valuations? Who determines them?

Back 40

ACV
RC
F(RC)
Market Value
Agreed Value
Stated Amount
....Insured

Front 41

Whats an example of functional replacement cost?

Back 41

Using dry wall to fix a house that previously had plaster walls.

Front 42

Whats market value?

Back 42

Loss valuation that's based upon the amt. a willing buyer would pay a seller

Front 43

Whats stated amt.?
Is it subject to coinsurance in the event of loss?
Will the insurer pay more than the stated amt?
What are some examples?

Back 43

Insurance scheduled in your property policy.
NO.
NO.
jewelry/collectibles/fine art

Front 44

Whats agreed value?
Agreed value is primarily for__________.
Whats suspended in this type of policy?

Back 44

Insurer and Insured AGREE on amt. of insurance that is of fair value.
Real property.
Any coinsurance/contribution clauses.

Front 45

What is the policy structure?

Back 45

D.(2).I.A.C.E.E.

Front 46

Which part of the policy structure has the basic underwriting info?
What does the definition section do?
What section are the promises made? What else is in the ^ above section?
Whats an example of addt'l coverage?
whats an example of supplemental coverage? where are they usually found?

Back 46

Declaration
Clarify terms in the policy.
Insuring agreement(coverage/perils)
Removal of debris in your homeowner policy
claim-related expenses/reasonable damage property protection expenses/defense expenses;liabililty policies

Front 47

Where are the general rules in a policy structure?
What are the 3 types?

Back 47

Conditions
Inspections/changes to the policy/return of premium

Front 48

Changes to the policy must be made by who? and how?

Back 48

Insurer/writing

Front 49

Give an example describing the liberalization clause?

Back 49

If there is new, free coverage the insured gets it IMMEDIATELY and doesn't have to wait on policy renewal

Front 50

when is return of premium used?

Back 50

when you're calculating the return premium when the policy is cancelled before the expiration date.

Front 51

The exclusions section of a policy tells what?

Back 51

what perils/persons aren't insured. also some of the broad terms in the insuring agreement.

Front 52

What does the endorsement section do?

Back 52

adds/deletes/corrects

Front 53

There are common policy provisions...what are the first ten?
Name the last four!

Back 53

Insureds(named/first named/addt'l)
Policy Period
Policy Territory
Cancellation & Nonrenewal
Deducts
Other Insurance(Concurrent/nonconcurrency/P&E/Pro Rata/Contribution by equal shares)
Limits of liability
Policy Limits
Restoration/nonreduction of limits
coinsurance
Vacancy/Unoccupied
Named Insured Provisions
Insurer Provisions
Third-Party Provisions

Front 54

*INSURED
Insured means what?
Named insured appears where?
First named insured?-What can they do?
Who are addt'l insureds? How are they usually added?

Back 54

Anyone on the policy
On the declaration.
Is FIRST-they have control/can make changes/can cancel/pays the premium
Addtl'-not named, but they're covered Added by endorsement

Front 55

Policy Period begins...?

Back 55

12:01 am!

Front 56

Policy territory is where?Special cvg. for what area can be covered?

Back 56

US(its possessions &territories),Canada, Puerto Rico
Mexico

Front 57

If the _____ or the _______ cancells the policy they're doing what?
When is it non-renewed?

Back 57

terminating policy before it expires
when they terminate at its expiration date

Front 58

whats deductible?

Back 58

the amt. paid out before the insurance company will pay anything!

Front 59

whats other insurance mean?
If you have two fire policies you may have?(how's this covered)
If you have fire and hurricane policy you may have?

Back 59

tells how the policy will responds if other valid insurance written on the same risk
CONCURRENT
NONCURRENCY

Front 60

The policy that pays first is the?
When does your excess policy kick in?

Back 60

PRIMARY
After the primary pays or amt. has paid its limit

Front 61

How do you calculate pro rata.
The insurer's liability for payment is the _______.
This is based on what 5 things?

Back 61

(see note card)
limits of liability
per occurence/per person/aggregate/split/combined single

Front 62

After the repairs are made, the policy limits are _______to the original limit. If its a liability policy with an aggregate when is it restored?

Back 62

Restored
On the anniv. of the policy

Front 63

Whats the purpose of coinsurance?
The Guaranty Assoc.will pay _____claims in full. For anything else it pays______w/ a ______deductible.

Back 63

To maintain the insurance to value.

Front 64

Who can cancel the policy? How? How will the refund be calculated?
What are the 3 reasons why insurers can cancel?How do they work?

Back 64

The first named insured
Written notice mailed/delivered
Cancellation/non-renewal reasons/renewal reasons.

Front 65

Who can do nonrenewal?
How?
Under what conditions?

Back 65

The insurer
written notice
Nov1-June1(60 days for notice)
Jun1-Nov1(90 days for notice)