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INS 22
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94
Insurance
06/20/2012

Additional Insurance Flashcards

 


 

Cards

Term
Loss Exposure
Definition
Any condition or situation that presents a possibility of loss, wheter or not an actual loss occurs. pg 1.3
Term
Loss Exposure Equation
Definition

Remove any of these three elements and a loss exposure is no longer present.

 

Loss exposure=asset exposed*cause of loss*financial consequence of loss

Term
Cause of a loss (peril)
Definition
the actual means by which property is damaged or destroyed. Fire, wind, hail are examples. pg 1.4
Term
Property loss exposure
Definition
A condition that presents the possibility that a person or an organization will sustain a loss resulting from damage (including destruction, taking, or loss of use) to property in which that person or organization has a financial interest
Term
Real property (realty)
Definition

Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land.

 land.building. other structures attached to the land (swimming pools..storage shed.flagpole) trees.crops. foundations. underground pipes.

Term
Personal Property
Definition

All tangible or intangible property that is not real property. Example: sofa, computer

pg 1.5

Term
Liability loss exposure
Definition
Any condition or situation that presents the possibility of a claim alleging legal responsiblity of a person or business for injury or damage suffered by another party
Term
Damages
Definition
Money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible
Term
Negligence
Definition
The failure to exercise the degree of care that a reasonable person in a similiar situation would exercise to avoid harming others. pg 1.10
Term
Sources of Tort Liability
Definition

1. Negligence

2. Intentional Torts

3. Absolute liability

pg. 1.10

Term
4 elements of Negligence
Definition

1.  A duty to act

2. A breach of duty

3. An injury or damages occurs

4. The breach of duty is the direct cause of the injury or damage in an unbroken chain of events.

pg 1.10 

Term
Personal financial planing loss exposures
Definition
Life, health, and retirement related loss exposures. pg 1.12
Term

Temporary total disability

(TTD)

Definition
A disability caused by a work-related injury or disease that temporarily renders an injured worker unable to preform any job duties for a period of time; the worker eventually makes a full recovery and can resume all job activities
Term

Temporary partial disability

(TPD)

Definition
A disability caused by a work-related injury or disease that temporarily limits the extent to which a worker can perform job duties; the worker is eventually able to return full duties and hours
Term

Permanent partial disability

(PPD)

Definition
A disability caused by a work related injury or disease that impairs the injured employee's earning capacity for life: but the employee is able to work at reduced efficiency. pg 1.15
Term

Permanent total disability

(PTD)

Definition
A disability caused by a work-related injury or disease that renders an injured employee unable to ever return to gainful employment. pg 1.15
Term
Risk management process
Definition
The method of making, implementing, and monitoring decisions that minimize the adverse effects of risk on an organization. pg 1.17
Term
Risk control
Definition
A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable
Term
Risk financing
Definition
A conscious act or decision not to act that generates the funds to pay for losses and risk control measures or to offset variability in cash flows. pg 1.18
Term
List 6 Risk control techniques
Definition

1. Avoidance

2. Loss prevention

3. Loss reduction

4. Separation

5. Duplication

6. Diversification

pg 1.21

Term
List 2 Risk financing techniques
Definition

1. Transfer

2. Retention

pg 1.22

Term
Avoidance
Definition
A risk control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated. pg 1.22
Term
Loss prevention
Definition
A risk control technique that reduces the frequency of a particular loss. pg 1.22
Term
Loss reduction
Definition
A risk control technique that reduces the severity of a particular loss. pg 1.23
Term
Separation
Definition
A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss. pg 1.23
Term
Duplication
Definition
A risk control technique that uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve. pg 1.23
Term
Diversification
Definition
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions. pg 1.23
Term
Retention
Definition
A risk financing technique by which losses are retained by generating funds within the organization to pay for the losses. pg 1.24
Term
Insurance
Definition
A risk management technique that transfers the potential financial consequences of certain specified loss exposures from the insured to the insurer. pg 1.25
Term
Transfer
Definition
In the context of risk management, a risk financing technique by which the financial responsibility for losses and variability in cash flows is shifted to another party. pg 1.25
Term
Definition
Term
Workers compensation
Definition
A system that pays lost wages, medical and vocational rehabilitation expenses, and death benefits to injured workers or their dependants for employment-related injuries and diseases. pg 1.30
Term
Policy provisions
Definition
Any phrase or clause in an insurance policy that describes the pollicy's coverages, exclusions, limits, conditions, or other features. pg 1.32
Term
Declarations page
Definition
An insurance policy information page or pages providing specific details about the insured and the subject of insurance. pg 1.32
Term
Endorsement
Definition
A document that amends an insurance policy. pg 1.33
Term
Definitions
Definition
A preliminary section of a homeowners policy identifying the insured, the insurance company, and the commonly used terms found throughout the policy. pg 1.33
Term
Insuring agreement
Definition
A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service. pg 1.35
Term
Policy condition
Definition
Any provision that qualifies an otherwise enforceable promise made in a policy. pg 1.37
Term
Exclusion
Definition
A policy provision that eliminates coverage for specified exposures. pg 1.37
Term

Dice: Decision Tree

What are the 4 steps

Definition

1. Review of the declarations page to determine whether it covers the person or the property at the time of the loss

2. Review of the insuring agreement to determine whether it covers the loss

3. Review of policy conditions to determine compliance

4. Review of policy exclusions to determine whether they prelude coverage of the loss.

pg 1.40

Term
What are the 6 risk management steps?
Definition

1. Identifying loss exposures

2. Analyzing loss exposures

3. Examining the feasibility of risk management techniques

4. Selecting the appropriate risk management techniques

5. Implementing the selected risk management technique

6. Monitoring results and revising the risk management program

Term
Under Tort liability law, who has to prove that another party was at fault before they can collect damages from that party?
Definition
the injured auto accident victims
Term
Financial responsibility laws
Definition
Laws enacted to ensure that motorists have the financial ability to pay for any property damage or bodily injury they might cause as a result of driving or owning an auto. pg 2.4
Term
Compulsory auto insurance law
Definition
Law that requires the owners or operators of automobiles to carry automobile liability insurance at least equal to certain minimum limits before the vehicle can be licensed or registered. pg 2.5
Term
First party
Definition
The insured in an insurance contract. pg 2.6
Term
Unsatisfied judgement fund
Definition

A fund designed to provide a source of recovery for victims of motor vehicle accidents when an at-fault motorist is unable to pay any judgement.

pg 2.6 

Term

Uninsured motorists coverage

(UM)

Definition

Coverage that provides a source of recovery for occupants of a covered auto or for a qualifying pedestrians who are injured in an accident caused by an at-fault motorist who does not have the state minimum liability insurance or by a hit-and-run driver.

pg 2.6

Term

Underinsured motorists coverage

(UIM)

Definition

Coverage that applies when a negligent driver has liability insurance at the time of the accident but has lower than those of the injured person's coverage.

pg 2.7

Term
No-fault automobile insurance
Definition

Insurance that covers automobile accident victims on a first-party basis, allowing them to collect damages from their own insurers regardless of who was at fault.

pg 2.8

Term
No-fault laws
Definition

State statutes that require motorists to purchase (or require insurers to make available) insurance that provides minimum first-party benefits to injured persons regardless of fault.

pg 2.9

Term

Monetary threshold

(dollar threshold)

Definition

In a no-fault system, a dollar limit in total medical expenses an injured victim must exceed before he or she is permitted to sue the other party.

pg 2.10

Term
Verbal threshold
Definition

In a no-fault system, the designated criteria that are verbally "set forth in the statute that limit the right to sue"

pg 2.10

Term
Add-on plan
Definition

In a no-fault system, a plan that provides certain personal injury protection (PIP)-type benefits such as medical payments and disability coverages to injured victims, without regard to fault.

pg 2.11

Term
Choice no-fault plan
Definition

In a no-fault system, a plan that gives the insured the option, at the time an auto insurance policy is purchased or renewed, of choosing whether to be covered on a no-fault basis.

pg 2.11

Term

Personal injury protection coverage

(PIP)

Definition

Coverage that pays benefits, regardless of fault, for medical expense, income loss, and other benefits, resulting from bodily injury to occupants of a covered auto.

pg 2.12

Term
Subrogation
Definition

The process by which an insurer can, after it has paid is a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.

pg 2.13

Term
Residual market
Definition

The term referring collectively to insurers and other organizations that make insurance available through a shared risk mechanism to those who cannot obtain coverage in the admitted market.

pg 2.13

Term

Safe driver insurance plan

(SDIP)

Definition

Plan that allows for lower basic premiums for accident-free driving records and a surcharge for accidents.

pg 2.14

Term
Automobile insurance plan
Definition

Plan for insuring high-risk drivers in which all auto insurers doing business in the state are assigned their proportionate share of such drivers based on the total volume of auto insurance written in the state.

pg 2.14

Term

Joint underwriting association

(JUA)

Definition

Organization that designates servicing insurers to handle high-risk auto insurance business, all auto insurers in the state are assessed a proportionate share of the losses and expenses based on their percentage of the voluntary auto insurance premiums written in the state.

pg 2.15

Term
Reinsurance facility
Definition

A state-wide reinsurance pool to which insurers can assign premiums and losses for high-risk drivers, original insurers service the policies, but all insurers in the pool share the losses and the expenses of the facility in proportion to the total auto insurance they write in that state.

pg 2.15

Term
List 5 primary rating factors of auto insurance?
Definition

1. Territory

2. Use of auto

3. Age

4. Gender

5. Marital Status

pg 2.17

Term
Part A in auto insurance is?
Definition

Liability coverage

pg 3.3

Term
Part B in auto insurance is?
Definition

Medical payments coverage

pg 3.3

Term
Part C in auto insurance is?
Definition

Uninsured motorists coverge

pg 3.3

Term
Part D of auto insurance?
Definition

Damage to Your auto coverage.

pg 3.3

Term
Part E of auto insurance?
Definition

Insured duties following an accident or loss.

pg 3.3

Term
Part F of auto insurance is?
Definition

General provisions

pg 3.3

Term
Definition
Term
Named Insured
Definition

A person, corporation, partnership, or other entity identified as an insured party in an insurance policy's declarations page.

pg 3.7

Term
Policy period
Definition

The time frame, beginning with the inception date, during which insurance coverage applies.

pg 3.7

Term

Vehicle identification number

(VIN)

Definition

A unique number that is assigned to each vehicle and that identifies certain vehicle characteristics.

pg 3.7

Term
Collision coverage
Definition

Coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn.

pg 3.14

Term

Other than collision coverage

(OTC)

Definition

Coverage for physical damage to a covered auto resulting from any cause of loss except collision or a cause of loss specifically excluded.

pg 3.14

Term
Compensatory damages
Definition

A payment awarded by a court to reimburse a victim for actual harm.

pg 3.15

Term
Split-limits basis
Definition

Seperate coverge limits that allow one limit for bodily injury to each person: a second usually higher to limit for bodily injury to all persons in each accident; and a third limit for all property damages in each accident.

pg 3.15

Term
Single-limit basis
Definition

One coverage limit that applies to all damages arising from bodily injury or property damage or both, resulting from a single accident.

pg 3.15

Term
Prejudgement interest
Definition

Interest that may accrue on damages before a judgement has been rendered.

pg 3.15

Term
Supplementary payments
Definition

Various expenses the insurer agrees to pay under a liability insurance policy (in addition to the liability limits) for items such as premiums on bail bonds and appeal bonds, loss of insured's earnings because of attendance at trials, and other reasonable expenses incurred by the insured at the insurer's request.

pg 3.17

Term
Attachment
Definition

The act of seizing property to secure judgement.

pg 3.17

Term
Postjudgement interest
Definition

Interest that may accrue on damages after a judgement has been entered in a court and before the money is paid.

pg 3.17

Term
Public or livery conveyance
Definition

In case law, a method of transportation that is indiscriminately offered to the general public, such as a taxi or public bus.

pg 3.18

Term
Uninsured motor vehicles
Definition

A land motor vehicle or trailer that is not insured for bodily injury liability, is insured for less then the financial responsibility limits, is a hit and run vehicle, or whose insurer denies coverage or becomes insolvent.

pg 3.43

Term
Arbitration
Definition

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding.

pg 3.47

Term
Physical damage coverages
Definition

There are four kinds:

1. comprehensive- pays for loss to covered auto or its equipment from any cause not excluded, except collision or overturn.

2. specified causes of loss- provides named peril coverage

3. collision- covers loss to a covered auto or its equipment by collision with another object or by overturn.

4. towing- provides coverage for towing and labor performed at the place of disablement.

pg 4.3

Term
Deductible
Definition

A portion of a covered loss that is not paid by the insurer.

pg 4.3 

Term
Transportation expenses
Definition

Coverage extension for substitute transportation costs incurred when a private passenger type auto has been stolen.

pg 4.6

Term
Appraisal
Definition

A method of resolving disputes between insurers and insureds over the amount owed on a covered loss.

pg 4.11

Term
Proof of loss
Definition

A statement of facts about a loss for which the insured is making a claim.

pg 4.20

Term
Liberalization clause
Definition

A policy condition providing that is a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing policies of the same type.

pg 4.21

Term
Policy termination
Definition

The ending of the contractual relationship between the insured and insurer by cancellation, expiration, or non renewal.

pg 4.23

Term
Cancellation
Definition

Termination of a policy, by either the insurer or the insured, during the policy term.

pg 4.23

Term
What are the names of the 6 ISO Homeowners policy forms?
Definition

1. HO-2 Broad Form

2. HO-3 Special Form

3. HO-4 Contents Broad Form

4. HO-5 Comprehensive Form

5. HO-6 Unit-Owners Form

6. HO-8 Modified Coverage Form

pg 5.3 

Term
Definition