Exam (elaborations)
Indiana Property and Casualty Insurance Exam (1).
Indiana Property and Casualty Insurance Exam (1).
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Indiana Property and Casualty Insurance Examis an association of all of the state insurance commissioners active in insurance regulatory
problems and in forming and recommending model legislation and requirements. The NAIC
does not directly MAKE laws, as laws are made at the state level. They do work on suggesting
standards for states to adopt with the goal of a standardizing the insurance industry throughout
the United States of America. - ANS-National Association of Insurance Commissioners (NAIC)
is established by each state to support insurers and protect consumers in the case of insurer
insolvency, guaranty associations are funded by insurers through assessments. All authorized
insurers are legally required to participate in the State Guaranty Association for any state they
are authorized to do business in regardless of where their corporate office is. - ANS-State
Guaranty Association
something of value exchanged for something else of value - ANS-Consideration
is the portion of the insurance policy in which the insurer promises to make payment to or on
behalf of the insured. It states the scope and limits of coverage. The insuring agreement is
usually contained in a coverage form from which a policy is constructed. In other words, it is the
insurance company saying, "We ensure to INSURE you under these conditions for this amount.
- ANS-The Insuring Agreement (Insuring Clause, Insurance Provision)
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the
event of a loss. - ANS-Notice of Claim
is the act of putting a lapsed policy back in force by producing satisfactory evidence of
insurability and paying any past-due premiums required. Most states have reinstatement laws
requiring an insurer to allow for a policy to be reinstated upon request of the policy owner within
a specified period of time. - ANS-Reinstatement
a sworn statement that must usually be furnished by the insured to an insurer before any loss
under a policy can be paid - ANS-Proof of loss
Insurance is also sold through a special branch of the industry known as home service or "debit"
insurers.
These companies specialize in a particular type of insurance called industrial insurance, which
is characterized by relatively
small face amounts (usually $1,000 to $2,000) with premiums paid weekly. - ANS-Industrial
Insurer
a risk that presents the chance of loss but no opportunity for gain - ANS-Pure Risk
,a situation in which either profit or loss is possible - ANS-Speculative Risk
A principle stating that the larger the number of similar exposure units considered, the more
closely the losses reported will equal the underlying probability of loss. - ANS-Law of Large
Numbers
is the effect of personal reputation, character, associates, personal living habits, financial
responsibility, and environment, as distinguished from physical health, upon an individual's
general insurability. - ANS-Moral Hazard
is hazard arising from indifference to loss because of the existence of insurance. - ANS-Morale
Hazard
is selection "against the company." Tendency of less favorable insurance risks to seek or
continue insurance to a greater extent than others. Also, tendency of policy owners to take
advantage of favorable options in insurance contracts. - ANS-Adverse Selection
exists when a person subjects another party to a dangerous or hazardous condition present on
their property, including the idea of harboring a wild animal on the premises. When a victim is
hurt in an absolute liability situation, they do not have to establish negligence to collect money
damages. - ANS-Absolute Liability
replacement cost minus depreciation - ANS-Actual Cash Value
Additional insured is a third party who is usually added to a commercial policy because they
also have loss potential. - ANS-Additional insured
The aggregate limit is the limit the policy will pay for all covered loss in a policy period
regardless of the total number of claims brought by any number of claimants. The aggregate
limit resets to the original amount on the anniversary of the policy. - ANS-Aggregate Limit
The appraisal clause of a property contract is a condition in the property policy that addresses a
situation in which the insured and the insurer cannot agree on the value (amount) of the loss. -
ANS-Appraisal
settling a dispute by agreeing to accept the decision of an impartial outsider - ANS-Arbitration
a shipping contract that contains all shipping information between the consignor (person
sending the goods) of the goods, carrier and consignee. - ANS-Bill of Laden
A binder is temporary coverage which allows that coverage to be put in force by agents who
have a binding authority from an insurance company. A binder is the acknowledgment that
immediate coverage is in effect pending the future issuance of a policy. - ANS-Binders
, Blanket limit policies cover multiple locations simultaneously under a single policy with one limit
that applies to all locations and all business personal property at all the insured locations -
ANS-Blanket limit
the face amount, or limit, of a surety bond. - ANS-Bond Penalty
offer coverage on all of the thirteen perils included in the SFP while creating and adding a new
set of nine perils - ANS-Broad form perils
policies will pay for direct physical loss of or damage to covered property at the premises
described in the Declarations caused by or resulting from any Covered Cause of Loss while a
building is under construction or being renovated. - ANS-Builders Risk (BR)
covers personal property (items not land or affixed to land) and includes the contents of the
insured building. - ANS-Business Personal Property
is a situation which draws the attention and possible injury of a child. - ANS-Children (Attractive
Nuisance Doctrine)
additional Living Expenses and Fair Rental Value are covered for up to two weeks if the
prohibited use of the insured residence was the result of direct damage to neighboring premises
by a covered peril. - ANS-Civil Authority Prohibits Use
a new coverage trigger and policy form of coverage in the 1980's. - ANS-Claims Made Form
The Coinsurance or Insurance To Value clause is found in a replacement cost policy and it
requires the insured to have in force a minimum specified amount of the replacement cost value
(expressed as a percentage, usually an 80% minimum) of the insured property in order for
partial loss claims to be paid in full. The clause does not apply to total loss claims, only to partial
loss situations. - ANS-Coinsurance/Insurance To Value
Combined Single Limit is a total policy limit which is expressed in the declarations as a single
dollar amount that will be paid for both bodily injury (including death) and property damage,
regardless of the number of victims, in a single accident. - ANS-Combined Single Limit
the bond limit is the maximum amount that will be paid for a single loss regardless of the
number or employees involved. - ANS-Commercial Blanket Bond
this form is utilized to write protection to cover direct physical loss in three areas of a firm's real
and personal property as well of that of bailment property and is often an integral part of a CCP
contract. - ANS-Commercial Building and Business Personal Property Form
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