Term
| What are the 6 homeowner coverage forms to be aware of for the test? |
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Definition
1) HO - 2: Broad
2) HO - 3: Special
3) HO - 4: Tenant Broad
4) HO - 5: Comprehensive
5) HO - 6: Condominium
6) HO - 8: Modified |
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Term
| What are the 3 things that must be present to qualify for homeowner's insurance? |
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Definition
1) Can't be a dwelling of more than 4 families
2) Must be owner of the property
3) Cannot have high exposure to loss |
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Term
| What is the homeowner coverage that is Named Perils coverage on Both dwelling and contents and s offered on a replacement cost basis (buildings) and ACV on contents? |
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Definition
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Term
| What is the form of homeowner coverage that is Open Perils on Dwelling BUT Named Perils on Contents and is offered on a replacement cost basis (buildings) and ACV on contents? |
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Definition
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Term
| What is the form of homeowner coverage that is Named Perils to protect contents of Renters who are occupying a building as a non-owner; ACV Basis? |
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Definition
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Term
| What is the form of homeowner coverage that is open perils on both dwelling and contents and is offered on a replacement cost basis (buildings) and ACV on contents? |
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Definition
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Term
| What is the form of homeowner coverage that is Named Perils to protect contents of condominium and co-op owners; ACV basis? |
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Definition
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Term
| What form of homeowner's coverage that is Named Perils coverage on both dwelling and contents used when the replacement cost of a home is far greater than the market value? |
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Definition
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Term
| What types of homes usually get HO-8 modified homeowner's coverage? |
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Definition
| Historic homes - not used often |
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Term
| Which homeowner coverage is the most expensive? |
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Definition
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Term
| What are the 2 sections of a Homeowners contract? |
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Definition
1) Section I which deals with damage to dwelling and to contents
2) Section II provides comprehensive personal liability |
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Term
| Why is homeowners coverage considered a multi-line coverage? |
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Definition
| Because both property and liability coverages are offered in this single policy |
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Term
| Most Homeowner policies are written on what basis? |
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Definition
| Owner-occupied single family home basis |
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Term
| Under the HO-2 Broad Form of homeowners coverage, which is a named perils policy, it provides for direct physical loss caused by what 2 perils? |
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Definition
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Term
| Under the HO-2 Broad Form Homeowners coverage, which is a named perils policy, it provides the option for extended coverage for what 10 additional perils? |
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Definition
REV C SHAW
1) Windstorm
2) Civil Commotion
3) Smoke
4) Hail
5) Aircraft
6) Vehicles
7) Volcanic Eruption
8) Explosion
9) Riot
10) Vandalism and Malicious Mischief (VMM) |
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Term
| Under the HO-2 Broad Form Homeowners coverage, which is a named perils policy, it provides the option for broad form perils which are what 9 additional perils? |
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Definition
1) Burglar Damage
2) Ice and Snow (weight)
3) Glass Breakage
4) Accidental Discharge
5) Falling Objects
6) Freezing Pipes
7) Electrical Damage
8) Collapse (Abrupt)
9) Tearing Apart |
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Term
| Under the HO-2 Broad Form Homeowners coverage, which is a named perils policy, what is an additional peril that can be covered that is not included in the policy or under the extended coverage or broad form perils coverage? |
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Definition
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Term
| What are the 2 types of fire? |
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Definition
1) Hostile - one which escapes from its intended confines
2) Friendly - one which burns within its intended confines |
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Term
| What type of fire is covered under homeowners insurance? |
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Definition
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Term
| What peril means combustion which produces a spark, flame or glow and is not merely smoke but a candescence? |
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Definition
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Term
| What peril is the natural discharge of electricity in the atmosphere? |
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Definition
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Term
| What peril means the direct action of wind and includes tornadoes, hurricanes, high winds and cycles? |
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Definition
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Term
| What peril is an uprising or disturbance by a large number of people who then damage the insured property? |
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Definition
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Term
| What peril is an sudden or accidental damaged caused by smoke from any source except from agricultural smudging and industrial operations? |
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Definition
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Term
| What peril includes any damaged caused by the direct action of hail to the insured property? |
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Definition
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Term
| What covered peril includes damage to the insured property caused by contact with aircraft including self-propelled missiles, helicopters, dirigibles, balloons, airplanes and spacecraft? |
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Definition
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Term
| What peril refers to all physical damage to the covered property caused by vehicles as well as objects thrown by vehicles that cause damage? |
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Definition
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Term
| What peril refers to the damage done by lava flow and airborne particles? |
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Definition
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Term
| Any volcanic eruptions that occur within what time period is considered to be a single eruption? |
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Definition
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Term
| Does the explosion peril include direct damage caused by both on premises and off premises? |
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Definition
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Term
| What 10 perils are referred to as extended coverage perils? |
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Definition
1) Windstorm
2) Civil Commotion
3) Smoke
4) Hail
5) Aircraft
6) Vehicles
7) Volcanic Eruption
8) Explosion
9) Riot
10) Vandalism and Malicious Mischief |
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Term
| What peril refers to direct damage caused by a group of people (usually defined as three or more) acting in a violent manner against individuals and property? |
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Definition
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Term
| What peril covers loss caused by willful and malicious actions? |
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Definition
| Vandalism and Malicious Mischief |
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Term
Vandalism and Malicious Mischief coverage will not apply if a residence dwelling is vacant for a minimum of how many days or more?
Is a dwelling under construction considered vacant? |
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Definition
|
|
Term
| what 9 perils are referred to as Broad Form perils? |
|
Definition
1) Burglar Damage
2) Ice and Snow
3) Glass Breakage
4) Accidental Discharge
5) Falling Objects
6) Freezing of Pipes
7) Electrical Damage
8) Abrupt Collapse
9) Tearing Apart |
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Term
| What damage is covered in under the burglary peril? |
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Definition
| Damage caused by burglars but NOT the value of any property which is stolen |
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Term
| Ice and Snow peril coverage does not cover damage done to what 11 things? |
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Definition
1) Awnings
2) Patios
3) Pavements
4) Fences
5) Swimming pools
6) Foundations
7) Retaining walls
8) Bulkheads
9) Wharves
10) Docks
11) Piers |
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Term
| Insurance with the ice and snow (weight) peril will cover damage due to the weight of ice, snow and sleet, if damage is done to what 2 things? |
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Definition
1) The insured building
2) Contents within the insured building |
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Term
| All glass in a building, including windows in storm doors, is covered under the Glass Breakage peril except in what case? |
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Definition
| When the premises have been vacant for 60 consecutive days or more |
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Term
| Under the Accidental Discharge peril, what that comes from plumbing, heating, air conditioning or fire protective sprinkler systems is covered? |
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Definition
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Term
| Is the tearing or replacing of any part of a building to repair an appliance or system from which steam or water has escaped and caused damage be covered by the Accidental Discharge peril? |
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Definition
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Term
| Are sump or sump pumps covered under the Accidental Discharge peril? |
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Definition
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Term
Are the following losses covered under the Accidental Discharge peril:
- Seepage or leakage over a period of time
- Vacancy of 60 or more days
- Damage to the system from which the water or steam escaped
- Caused by freezing not covered by the freezing peril
- Accidental Discharge or water overflow occurring from off the described location? |
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Definition
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Term
| Damage to the exterior and contents caused by any falling object is covered if what? |
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Definition
| If the falling object first damages the roof or an exterior wall |
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Term
Are the following covered under the falling objects peril if they are damaged as a result of falling objects:
- Awnings
- Fences
- Outdoor equipment
- Masts
- Towers
- Antennas |
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Definition
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Term
| Is the freezing of pipes of plumbing, heating, air conditioning, fire protective sprinkler systems or of a household appliance covered by the freezing of pipes peril? |
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Definition
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Term
| The freezing of pipes will not cover loss at a location while it is vacant, unoccupied or under construction unless what? |
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Definition
| The insured takes reasonable steps to maintain building heat or shut off the water supply and drain the system or appliance of water |
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Term
| Electrical damage from artificially generate electrical current to insured property is covered only in what circumstance? |
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Definition
| When sudden and accidental |
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Term
| What is excluded under the electrical damage peril? |
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Definition
| Electronic component damage |
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Term
| Abrupt collapse to a building or any part of a building is covered on a direct loss basis if caused by one of what 5 things? |
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Definition
1) Perils insured against under the policy
2) Hidden decay
3) Hidden animal infestation or insect damage
4) Weight of contents (equipment, people and animals)
5) Weight of rain collected on a roof
6) Uses of defective methods or materials if the collapse occurs during construction |
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Term
| Are bulging, building expansion, settling, cracking, shrinking, or an abrupt collapse of a building, or any part of a building that is merely in danger of falling down, covered under the Abrupt Collapse peril? |
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Definition
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Term
| What means that the building, or any part of it, falls down or caves in and can no longer be lived in? |
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Definition
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Term
| Are sudden and accidental tearing apart, cracking or burning or bulging of a steam or hot water system, air conditioning system, fire protective sprinkler systems or of a household appliance for heating water covered under the Tearing Apart peril? |
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Definition
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Term
| What is not covered under the Tearing Apart peril? |
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Definition
| Gradual, preventable or foreseeable loss |
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Term
| Attempted theft and the loss to property from a known place is covered under the theft peril when what? |
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Definition
| It is likely that the property was stolen |
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Term
| The theft peril does not cover loss caused by theft under what 6 circumstances? |
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Definition
1) When committed by an insured
2) From a dwelling under construction
3) From any part of the residence that has been rented to another party other than an insured
4) Of watercraft and its furnishings while away from the insured premises
5) Of trailers and campers away from the insured premises
6) Of property from a residence owner by or rented to or occupied by an insured unless that insured is temporarily living there at the time the theft occurs |
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Term
| What are the 9 perils exclusions that apply to all HO coverage forms? |
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Definition
1) Ordinance or law
2) War
3) Nuclear hazards
4) Water damage
5) Earth movement
6) Power failure
7) Intentional loss
8) Neglect
9) Government action |
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Term
| If a peril is not excluded from an insurance policy, is it covered? |
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Definition
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Term
| What is excluded under the water damage peril exclusion? |
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Definition
| Water damage from floods, tidal wave and tsunami, tides and tidal waves, sewer or drain backup, and water which comes through from below the surface of the ground such as seepage or leaks through walls to basements walls or windows and leaks through a swimming pool |
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Term
| Are earthquakes covered under any peril? |
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Definition
| No - it is excluded under the Earth movement |
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Term
| Are direct losses caused by fire, explosion or theft, even as a result of a earthquake, covered? |
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Definition
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Term
| What are the 2 basic reasons why an insurer excludes a peril from coverage? |
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Definition
1) When the peril is either covered under a separate policy or is available as an endorsed coverage
2) When the peril, if it were to happen and be covered, would probably make the insurer go broke |
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Term
The following perils are excluded from coverage in what 2 policies:
- Freezing pipes/systems in vacant dwellings
- Theft from a dwelling under construction
- Damage to foundations or pavements from ice and water weight
- Vandalism to vacant dwellings
- Latent defects, corrosion, industrial smoke, pollution
- Settling, wear and tear of the building
Domestic pets owned by insured
- Latent defects, corrosion, industrial smoke, pollution
Mold, fungus or wet rot unless hidden and caused by water overflow or escape from within
- Nesting, infestation and discharge or release of waste products by any animal
- Weather conditions that aggravate excluded loss
- Birds, rodents or insects
- Government and association actions
- Defective construction, design, and maintenance? |
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Definition
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Term
| What is the difference between HO-3 and HO-5? |
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Definition
HO-3 = open only on dwelling
HO-5 = open on everything |
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Term
| HO-4 and HO-6 are similar because the focus of coverage is not on the dwelling or buildings but on what? |
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Definition
| The contents of the insured as well as loss of use and coverage for personal liability |
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Term
| What Homeowners Coverage is Named Perils coverage on BOTH dwelling and contents used when the REPLACEMENT cost of a home is far greater than the MARKET VALUE? |
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Definition
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Term
| HO-8 Modified does not offer all the perils of HO-2 Broad Form but instead provides a more limited menu of what 10 perils? |
|
Definition
1) Fire or Lightening
2) Windstorm or Hail
3) Explosion
4) Riot or Civil Commotion
5) Aircraft
6) Vehicle
7) Smoke
8) Vandalism or Malicious Mischief
9) Theft
10) Volcanic Eruption |
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Term
| HO-8 Coverage is NOT replacement coverage but instead pays the lesser of what 2 options? |
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Definition
1) Up to the policy limit OR
2) The actual amount spent to repair or replace loss to the structure using common construction materials or their equivalents |
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Term
| What is the term for the actual amount spent to repair or replace loss to the structure using common construction materials or their equivalents? |
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Definition
| Functional replacement cost |
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Term
| A Homeowner's policy is a multi-line contract meaning it combines what 2 types of coverage in a single policy? |
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Definition
| Property and liability (casualty) |
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Term
| There are 2 sections that are automatically included in a homeowner's policy - what are those 2 general sections and which section has a deductible? |
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Definition
1) Property (deductible selected by insured starting at $1,000)
2) Liability (No deductible) |
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Term
| What are the 4 options of coverage under the Property section of a Homeowners Policy? |
|
Definition
1) Coverage A: Dwelling (Replacement Cost basis in HO-2, HO-3, HO5 but not HO-8)
2) Coverage B: Other Structures (detached from the dwelling)
3) Coverage C: Personal Property (also referred to as contents)
4) Coverage D: Loss of Use |
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Term
| What are the 2 options of coverage under the Liability section of a Homeowners Policy? |
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Definition
1) Coverage E: Comprehensive Personal Liability
2) Coverage F: Medical Payments to Others |
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|
Term
| Under Coverage A, the Dwelling coverage, of a Homeowners policy, under what Homeowner's policies apply the Replacement Cost basis? |
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Definition
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|
Term
| What is covered under Coverage A Dwelling coverage in a Homeowner's Policy? |
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Definition
| Applies to the dwelling (NOT the land itself) and any structures that are ATTACHED to the dwelling as well as materials and supplies in the dwelling intended to be used for construction, alteration and repair of the dwelling |
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Term
| Is there any Coverage A (Dwelling) in HO-4? |
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Definition
| No because the renter does not own the building and therefore has no insurable interest |
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Term
| Is Coverage A (Dwelling coverage) available for HO-6 policies? |
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Definition
| There is some limited coverage available for things such as alterations and real property exclusive to the insured |
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Term
| What does Coverage B in a Homeowners Policy for Other Structures cover? |
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Definition
| Covers structures detached from the dwelling like a tool shed and garages not attached to the dwelling |
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Term
| What type of coverage applies to a garage that is attached to a house? |
|
Definition
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|
Term
| Does Coverage B cover structures outside of a dwelling that are used for business purposes? |
|
Definition
| No but it does apply if the garage is used as a private garage and is leased to a non-tenant of the dwelling |
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Term
| What does Coverage B, Other Structures, pay out? |
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Definition
| Pays up to 10% of the amount paid under Coverage A and pays IN ADDITION TO the amount paid under Coverage A |
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Term
| What does Coverage C for Personal Property cover? |
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Definition
| It protects personal property which is owned or used by the insured anywhere in the world |
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Term
| What is the coverage amounts under Coverage C and under which type of policies (2 different types of coverage amounts)? |
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Definition
1) Coverage amount is 50% of the Coverage A limit for forms HO-2, HO-3, HO-5, and HO-8
2) Actual Cash Value of the contents of the insured for forms HO-4 and HO-6 forms |
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Term
| Can an insured request that the personal property of others located on the insured premises as well as that of guests and residence employees be covered? |
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Definition
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|
Term
| What are the 9 things that are excluded from the Coverage C Personal Property Coverage?1 |
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Definition
1) Animals, birds, fish
2) Aircraft and parts
3) Automobile or motorized vehicles unless the vehicles are used to assist the handicapped
4) Any recording or sound reproducing devices while in a motor vehicle, including tapes, records and discs
5) The property of boarder's and roomer's when the individuals are not related to the insured, and any property in an apartment which is regularly rented if it is away from the insured premises
6) Hovercraft and parts
7) Business data
8) Credit card or fund transfer cards other than those coverages provided under Additional Coverages
9) Property scheduled elsewhere |
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Term
| What are the 12 personal property categories that have payout limits and what are those limit amounts? |
|
Definition
1) Money: $200
2) Valuable papers: $1,500
3) Trailers, other than watercraft: $1,500
4) Watercraft and furnishings: $1,500
5) Theft of firearms: $2,500
6) Theft of pewter ware, silverware, gold ware, etc.: $2,500
7) Theft of jewelry, furs, precious stones: $1,500
8) Loss of portable electronic capable of being powered by a motor vehicle: $1,500
9) Antennas, tapes, wires, records, disks or other media in or upon a motor vehicle: $250
10) Property on premises used for business purposes: $2,500
11) Property away from premises used primarily for business EXCEPT those listed in #9 and #10: $1,500
12) Personal property located in self-storage facilities: 10% of the Coverage C limit or $1,000, whichever is higher |
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Term
| What type of coverage within Homeowner's insurance applies when a covered peril renders the insured dwelling uninhabitable, or not fit in which to live? |
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Definition
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|
Term
| What are three expenses covered under Coverage D? |
|
Definition
1) Additional Living Expenses
2) Fair Rental Value
3) Civil Authority Prohibits Use |
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Term
| Is loss caused by a lease cancellation covered by Coverage D? |
|
Definition
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Term
| What 4 homeowners policies use Coverage A as the basis for how much is covered under Coverage D? What percentage of coverage is paid out for Coverage D losses? |
|
Definition
HO-2 - 30%
HO-3 - 30%
HO-5 - 30%
HO-8 - 10% |
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|
Term
| What 2 homeowners policies use Coverage C as the basis for how much is covered under Coverage D? What percentage of coverage is paid out for Coverage D losses? |
|
Definition
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Term
| What is comprehensive coverage against many types of liability and only those types of liability that are specifically excluded would not be covered? |
|
Definition
| Section II - Comprehensive Personal Liability (Coverage E & F) |
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Term
| Does a Comprehensive Personal Liability policy include business or automobile coverage for the individual or family unit? |
|
Definition
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Term
| What policy protects the individual for liability that results from the personal activities of both the insured and family members, either on or away from their living quarters? |
|
Definition
| Comprehensive Personal Liability policy |
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Term
| What policy includes coverage for injury to domestic employees in a state where such workers are excluded from coverage under worker compensation laws? |
|
Definition
| Comprehensive Personal Liability policy |
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Term
| What coverage is automatically included in a homeowner policy as Section II? Does it have a deductible? |
|
Definition
Comprehensive Personal Liability policy
No deductible for Generally Liability coverage |
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Term
| What do Coverage E and Coverage F, which are part of Section II, pay for? |
|
Definition
Coverage E = makes the insurance company liable to pay up to the limited liability set in the policy for all bodily injury or property damage that is covered according to the insuring agreement and not excluded
Coverage F - pay for all medically necessary expenses for parties hurt while on the premises of the insured or by the off-premises activities of an insured, but it will not pay any medical expenses for either the insured or the insured's family
Coverage F = medical payments to others |
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Term
| Under Coverage E, since the insurer is paying for the attorney, is the insured the actual client? How does that affect liability? |
|
Definition
No the insured is not the actual client
As a result, the insured can be left holding a sizable liability bag if the amount of coverage does not pay the entire settlement amount |
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Term
| Under Coverage F, could medical payments apply to situations where the insured is not legally liable, but feels morally responsible? |
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Definition
| Yes - but it is not an admission of guilt or liability |
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Term
| Under Coverage F, necessary medical expenses will be paid which are incurred or which are medically detected within what amount of time? |
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Definition
| Within 3 years from the date of an accident that causes bodily injury |
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Term
| Medical expenses that are covered under Coverage F mean reasonable charges for what 9 services? |
|
Definition
1) Surgical
2) Medical
3) X-ray
4) Dental
5) Ambulance
6) Hospital
7) Professional nursing
8) Prosthetic devices
9) Funderal services |
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|
Term
| What are the 2 other groups that coverage F applies to? |
|
Definition
1) A person on the insured location or on the location with the permission of the insured OR
2) to a person off the insured location if the bodily injury:
a) arises out of a condition on the "insured location" or immediately adjoining property;
b) is caused by activities of an insured
c) is caused by a residence employee in the course of the residence employee's employment by the insured
d) is caused by an animal owned by or in the care of the insured |
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Term
| What are the 4 items that are excluded from Section II because they are designed to be covered under other existing policy coverages? |
|
Definition
1) Motor Vehicles
2) Watercraft
3) Aircraft
4) Hovercraft |
|
|
Term
| What are 5 exclusions that apply to Coverage E only? |
|
Definition
1) Contractual liability
2) Bodily injury or property damage to an insured
3) Damage to property rented to or occupied by, or used under the care, custody and control of an insured
4) Bodily injury to individuals covered under Workers Compensation
5) Bodily injury or property damage covered under a nuclear energy liability policy |
|
|
Term
| What are the 4 liability exclusions of bodily injury that apply to Coverage F only? |
|
Definition
Bodily injury to:
1) A resident employee not sustained during the course of employment or in premises
2) Any person regularly residing on the insured premises
3) To individuals eligible to receive Workers Compensation or disability benefits
4) Any person from any nuclear reaction |
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|
Term
| What are 8 bodily injury and property damage liability exclusions that apply to both Coverage E and Coverage F? |
|
Definition
1) Intentional Acts
2) Business Activities
3) Professional Liability
4) War
5) Communicable Diseases
6) Sexual Molestation
7) Illegal Substances
8) Nuclear Weapon |
|
|
Term
| What is the exception to the bodily injury and property damage liability exclusion of intentional acts? |
|
Definition
| There is an exception that includes coverage for bodily injury and property damage resulting from the use of reasonable force to protect persons or property |
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|
Term
| What are 11 additional coverages provided under Section I of the homeowners policy at no additional premium cost and what coverage is included? |
|
Definition
1) Debris Removal - limit on fallen trees is $1,000 total ($500 per tree)
2) Reasonable Repairs
3) Landscape up to 5% of dwelling coverage with a maximum of $500 for each tree, shrub or plan (up to $250 in HO-8)
4) Fire Department Service Charge up to $500 paid
5) Property Removed to protect it from further damage for up to 30 days
6) Credit Card Forgery up to $500 without deductible
7) Loss Assessment up to $1,000
8) Landlord's Furnishings up to $2,500
9) Building Additions
10) Ordinance or Law
11) Grave Markers up to $5,000 |
|
|
Term
| What are the 4 additional coverages of the Homeowner Policy Section II? |
|
Definition
1) Claims expenses
2) First aid expenses (not for expenses to any insured but expenses incurred by insured for providing first aid)
3) Damage to the Property of Others - up to $1,000 per occurrence for the replacement cost (some exclusions apply)
4) Loss Assessment - $1,000 per occurrence coverage for the insured's share or assessment as a member of a group of property owners |
|
|
Term
| As part of additional coverage of the homeowner policy Section II, a company will pay up to $1,000 per occurrence for the replacement cost of the property of others that is damaged by an insured EXCEPT for what 5 kinds of property damage? |
|
Definition
1) Caused intentionally by an insured 13 years old or older
2) To property that the insured owns
3) To property owned by a tenant
4) To property where the loss is covered under Section I of the Homeowner Policy
5) Where the loss arises out of a) business pursuits, b) a premises owned by the insured that is not listed in the policy declarations c) the use, maintenance or ownership of aircraft, watercraft, hovercraft or other motor vehicles |
|
|
Term
| As part of additional coverages of the homeowner policy section II, an insured covers loss assessments for up to $1,000, regardless of the number of assessments, for loss arising out of 1 of what 2 scenarios? |
|
Definition
1) One accident, including continuous or repeated exposure to the same harmful condition; or
2) A covered act of a director, officer to trustee. An act involving more than one director, officer or trustee is considered to be a single act |
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|
Term
| Can liability arising from unintentional acts that lead to defamation, false imprisonment, unlawful eviction, malicious prosecution and invasion of privacy be added to Section II of a homeowner policy as an optional endorsement? |
|
Definition
|
|
Term
| Regardless of the number of insures, the most an insurer must pay is one of what 2 amounts? |
|
Definition
1) The insured's interest in property at the time of loss, OR
2) The limit of liability |
|
|
Term
| An insured has certain duties after a loss (including notifying the company, police, etc). as well as submitting a signed proof of loss within how many days of the insurer's request? |
|
Definition
|
|
Term
Buildings covered under Coverage A and B are settled on what type of basis?
Personal property loss (contents) is paid on what type of basis? |
|
Definition
Buildings are settled on a Replacement Cost Basis subject to an 80% co-insurance requirement
Personal property loss is pad on an ACTUAL CASH VALUE BASIS |
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Term
| What is the exception to the general rule that buildings under coverage A and B are settled on a replacement cost basis and personal property is paid on an actual cash value basis? |
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Definition
| If cost to repair or replace is both less than 5% of the Coverage A amount and $2,500, then settlement is made with or without actual repair |
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Term
| What are the 2 options that an insurance company has to cover a loss to a pair or set? |
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Definition
1) Either repair or replace the pair or set to its original value before the loss, OR
2) Paying the difference between the ACV of the property before and after the loss |
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Term
| What happens when parties cannot agree to the value of a loss? |
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Definition
| Each party selects an appraiser within 20 days of receiving notice from the other |
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Term
| A loss payment will be made by the insurer within how many days from the receipt of the insured's proof of loss when there is agreement, a final judgment or the filing of an appraisal award? |
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Definition
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Term
| Will a Homeowners policy cover a loss for a good that is in custody of a bailee for repair or service? |
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Definition
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Term
| Is direct loss by fire resulting from a nuclear hazard covered by homeowners policy? |
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Definition
| Yes although any nuclear reaction, radiation or radioactive contamination is excluded from coverage |
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Term
| What happens if a property that was settled for loss is recovered by the insured? |
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Definition
| The insured can either keep it or turn it over to the company; if they decide to keep it then the settlement is adjusted downward otherwise the settlement stands |
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Term
| What are the 5 aspects to defining the insured of a homeowner's policy? |
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Definition
1) The person named in the policy declaration, AND
2) Any resident of a household who is a relative (of any age), AND
3) Any person under the age of 21 and in your care or the care of a resident of your household who is a relative
Also:
4) Includes the named insured's spouse if the spouse is a resident of the household
5) A child of the insured living away at college is an insured up to the age of 24 |
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Term
| What is considered an insured location? |
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Definition
| Any location the insured is staying at |
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Term
| What is the only location that is not insured? |
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Definition
| When the property is owned by the insured and not listed in the declarations of the homeowner policy |
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Term
| What are the 3 forms of the Dwelling Program, what do they cover and what amount of payment is issued under each form? |
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Definition
1) The Basic Form (DP-1) - Named Perils; ACV loss payment
2) The Broad Form (DP-2) - Named Perils; Replacement Cost loss payment
3) The Special Form (DP-3) - Open Perils; Replacement Cost loss payment |
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Term
| What are the 4 requirements for a Dwelling Property Form? |
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Definition
1) One to four residential dwelling units
2) Dwellings which are not owner-occupied
3) Structures with a very low valuation
4) Abnormally high loss exposure |
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Term
| What are the 5 coverages available for the 3 Dwelling Forms? |
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Definition
1) Coverage A - Dwelling
2) Coverage B - Other Structures (detached)
3) Coverage C - Personal Property
4) Coverage D - Fair Rental Value
5) Coverage E - Additional Living Expenses |
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Term
| What is the standard deductible of a Dwelling Policy? |
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Definition
| $250, which can be increased |
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Term
| Is Broad Theft Liability coverage included in a Dwelling Policy? |
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Definition
| No but it can be added by endorsement for additional premium cost |
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Term
| Can Dwelling Form Policies apply to a dwelling with a business on the premises that are incidental (studio, beauty salon, home office, etc) to the residential aspects of occupancy? |
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Definition
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Term
| Basic Form Dwelling Policy insures against loss from what 3 perils ONLY? |
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Definition
1) Fire
2) Lightening
3) Any type of internal explosion (direct loss to insured property due to any explosion occurring within the described property or any structure containing the insured's personal property) |
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Term
| Is there any landscape coverage with the Basic Form of Dwelling Coverage (DP-1)? |
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Definition
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Term
| What are 2 additional types of coverage that can be purchased with the basic form of Dwelling Property insurance? |
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Definition
1) Extended Coverage (EC)
2) Vandalism or Malicious Mischief (VMM) |
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Term
| What are the 9 perils that Extended Coverage, which can be added to basic dwelling coverage, covers (remember REV C SHAW)? |
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Definition
Riot
Explosion
Vehicles and Volcanic Eruption
Civil Commotion
Smoke
Hail
Aircraft
Windstorm |
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Term
| The Broad Form of Dwelling Coverage (DP2) includes all of the Basic Form (DP1) perils plus the Extended Coverage perils PLUS Vandalism and Malicious Mischief plus what other 9 broad form perils? |
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Definition
1) Burglar Damage
2) Accidental Discharge
3) Electrical Damage
4) Ice and Snow (weight)
5) Falling Objects
6) Collapse
7) Glass Breakage
8) Freezing of Pipes
9) Tearing Apart |
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Term
| Which form of Dwelling Coverage is open perils and is the most comprehensive coverage available under the Dwelling Program, covers dwelling and other structures, and includes landscape coverage? |
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Definition
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Term
| Which form of Dwelling Coverage is open perils and is the most comprehensive coverage available under the Dwelling Program, covers dwelling and other structures, and includes landscape coverage? |
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Definition
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Term
| What Dwelling Program Property coverage applies to the Dwelling as indicated on the declarations page including an structures that are attached the dwelling as well as materials and supplies in the dwelling intended to be used for construction, alteration and repair of the dwelling? |
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Definition
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Term
| What dwelling program property coverage covers buildings such as a tool shed and garages that are not attached to the dwelling and will not cover structures for business purposes unless it is in regards to a garage that is used as a private garage and is leased to a non-tenant? |
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Definition
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Term
| Which dwelling property program property coverage provides protection for personal property which is owned by the insured or members of the insured's family residing on the premises with the insured that is usual to the dwelling occupancy? |
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Definition
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Term
| Can an insured request that the personal property of others located on the insured premises, as well as that of guests and residence employees, be covered under Coverage C of Dwelling Program Property Coverage? |
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Definition
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Term
| If someone wants to insure personal property beyond the limits included in their dwelling coverage, what should they do? |
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Definition
| The normal method is for the insured to add a personal floater endorsement and pay specified additional premiums based on the coverage amount desired |
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Term
| Dwelling Program Property Coverages D and E are refereed to as time element coverage - why is that? |
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Definition
| Because they pay for indirect or consequential loss |
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Term
| What dwelling program property coverage covers the fair rental value of any portion of the premises that is rented to others or held for rental? |
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Definition
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Term
| Is loss caused by cancellation of a lease by a tenant covered under Dwelling Property Program Coverage D? |
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Definition
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Term
| How much of additional amount of insurance in the form of Coverage D is provided in DP-2 and DP-3 forms? |
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Definition
| 20% of the dwelling amount |
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Term
| What dwelling program property coverage is provided to the insured and family while the insured property is unfit for use? |
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Definition
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Term
| How long are living expenses provided for under Dwelling Program Property Coverage E? |
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Definition
| It is for the shortest time required for repair or replacement of the insured premises |
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Term
| What are the 9 exclusions from all 3 forms of dwelling coverage? |
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Definition
1) Ordinance or law
2) War
3) Nuclear hazards
4) Water damage from flood, tidal waves, sewer or drain backup
5) Earth movement
6) Power failure and interruption (unless caused by a covered peril)
7) Intentional loss
8) Neglect
9) Government Action |
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Term
| Do dwelling forms cover theft and liability also? |
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Definition
| No - only offer coverage for loss to property - theft and liability coverage would need to be added by endorsement |
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Term
| What are the 2 forms available for protection against loss from the peril of theft? |
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Definition
1) Limited theft - same coverage as broad theft except the loss has to take place on the insured premises
2) Broad theft - offers coverage for loss from theft and vandalism and malicious mischief both on and off premises |
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Term
| How much is landscape damage covered under dwelling coverage? |
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Definition
| Shrubs, tress, plants and lawns are covered up to 5% of the dwelling coverage amount with a maximum of $500 for each tree |
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Term
| How much is paid when the fire department is called to save or protect covered property from any peril covered in a policy if the protection service is from an outside entity? |
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Definition
up to $500
This coverage does not apply when the insured property is located within the limits of the city |
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Term
| What are the 2 choices of coverage for business owners? |
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Definition
1) Business Owner Policy (better policy)
2) Commercial Package Policy |
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Term
| What makes a Commercial Package Policy different than a Business Owner Policy? |
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Definition
It is an a la carte policy and you can pick what you want and need
It can be monoline (one line only) or part of a package policy |
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Term
| The only class of risk not eligible for a Commercial Package Policy is property that is only eligible for what other type of policy? |
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Definition
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Term
| If a commercial entity wants a Commercial Package Policy, they need to select at least 2 or more of what 7 policy coverage parts? |
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Definition
1) Farm coverage
2) Commercial Property coverage
3) Commercial Inland Marine Floaters
4) Equipment Breakdown Coverage
5) Commercial General Liability (a casualty policy concept)
6) Commercial Crime (a casualty policy concept)
7) Commercial Auto (a casualty policy concept) |
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Term
| Each Commercial Package Policy (CPP) consists of what 4 elements? |
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Definition
1) Common Policy Declarations
2) Common Policy Conditions
3) Interline Endorsements (when necessary, to automatically remove duplicated coverage)
4) Two or more parts of coverage (it cannot be a package with only one coverage part) |
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Term
| What are endorsements that could apply, or do apply, to more than one coverage part of a Commercial Package Policy that are meant to minimize the number of endorsements used and to reduce coverage redundancy? |
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Definition
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Term
| Regardless of the coverage parts selected, the Commercial Package Policy has 8 common policy declarations provisions that apply to all selected coverage parts - what are those 8 provisions? |
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Definition
1) Names the insured and lists mailing address
2) Describes the business involved
3) Shows the period of coverage (time and date it begins and ends)
4) All coverage purchased and the premium cost of each
5) Lists all forms which apply to all parts of coverage
6) Countersignature and date of signature
7) Policy number
8) Identifies the insurer and producer |
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Term
| Regardless of the coverage parts selected, the Commercial Package Policy has 6 Common Policy Conditions that applies to all selected coverage parts - what are those 6 conditions? |
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Definition
1) Cancellation
2) Changes
3) Premiums
4) Examination of your books and records
5) Inspections and surveys
6) Transfer of your rights and duties under this policy |
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Term
| Does an insured have to have written consent of a company to assign their Commercial Package Policy? |
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Definition
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Term
| A company may examine and audit insured's books any time during their Commercial Package Policy coverage time and up to how many years after the coverage expires? |
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Definition
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Term
| Who is the only person that can make changes under the Commercial Package Policy? |
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Definition
| Only the first named insured can make changes |
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Term
| How many days notice must an insurance company give a named insured under a Commercial Package Policy if cancellation is for nonpayment of premium? What if it is for another reason? |
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Definition
Non payment of premium - 10 days' notice
Other reasons - 30 days' notice |
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Term
| Commercial Building and Business Personal Property Form of Commercial Property insurance is utilized to write protection to cover direct loss in what 3 areas? |
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Definition
1) Buildings
2) Business Personal Property
3) Personal Property of Others |
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Term
| If personal property is to be covered under the Business Personal Property area under Commercial Building and Business Personal Property Form, where must it be located? |
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Definition
| It has to be in or on the building listed in the Declarations or in the open or in a vehicle which is within 100 feet of the described premises |
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Term
| What are the 13 pieces of property excluded under the Commercial Building and Business Personal Property Form? |
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Definition
1) Accounts, bills, currency, deeds, money, securities
2) Underground pipes
3) Automobiles held for sale
4) Animals, unless owned by others and boarded by the insured
5) Bridges, roadways, paved surfaces
6) Illegally transported contraband used in trade
7) Cost of grading backfilling or filling land, water
8) Land, growing crops or lawns
9) Personal property while airborne or waterborne
10) Retaining walls not part of the building
11) Cost or research to restore or replace valuable records
12) Building foundations, structures, machinery or boilers if their founds are below the lowest basement floor or below the surface of the ground if there is no basement
13) Vehicles or self-propelled vehicle machines |
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Term
| A business owes a duty to keep the property of others safe in what circumstance? |
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Definition
| When that property is in their care, custody and control |
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Term
| What are the 3 basic reasons why an insurance company excludes perils, property types or people from coverage? |
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Definition
1) No company would cover the exclusion because losing money is a certainty OR
2) The exclusion is covered under a different policy form and is not meant to be covered under the policy excluding it, AND
3) The exclusion can be added by endorsement for an additional premium |
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Term
| What are the 6 additional coverages that are found in the Coverage From of the Building and Personal Property Form without additional premium? |
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Definition
1) Debris Removal
2) Preservation of Property - expenses covered as a result of protecting property for up to 30 days
3) Fire Department Service Charge - max $1,000 reimbursement
4) Pollution Cleanup and Removal - limited to $10,000 per policy period
5) Increased Cost of Construction
6) Electronic Data - max of $2,500 covered towards restore or replacement cost |
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Term
| How much coverage is provided through the debris removal additional coverage form of the Building and Personal Property Form of coverage? When must this loss be reported? |
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Definition
- coverage is limited to the actual expense of debris removal or a maximum 25% of the amount paid for direct loss plus the amount of the deductible
- up to $25,000 can be provided for debris removal if the above limit does pay for covered loss
- must be reported within 18 days from the physical loss date |
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Term
The Increased Cost of Construction coverage is added to a Building and Personal Property Form under what conditions?
If it does apply, what is the amount it covers? |
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Definition
Coverage is added ONLY if the basic policy pays loss on a REPLACEMENT COST basis IF
covered property has been damaged or destroyed by a covered peril AND there is increased cost to repair or replace
The policy will pay the lesser amount of $10,000 or 5% of the coverage limit for the damaged building |
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Term
| What are the 6 coverage extensions provided by a Building and Personal Property Form if the Declarations of the policy indicates Replacement Cost Coverage (with an 80% or higher Co-Insurance requirement)? |
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Definition
1) Newly acquired or constructed property
2) Property off premises - maximum of $10,000 coverage
3) Outdoor property - $1,000 maximum - includes debris removal
4) Valuable papers and records - up to $2,500 of coverage for restoration if NO DUPLICATES
5) Personal effects and property of others - up to $2,500
6) Non-owned detached trailers - $5,000 maximum coverage |
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Term
What is the amount of coverage allowed for newly acquired or constructed property under this coverage extension of the Building and Personal Property Form?
What is the maximum amount of business personal property coverage applied? |
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Definition
Newly acquired or constructed property - covered up to a maximum of $250,000 per building for up to 30 days of acquisition or construction
Business personal property coverage - $100,000 maximum applied up to 30 days |
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Term
| Commercial Building and Personal Property policies can be written in one of what 4 cause of loss forms? |
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Definition
1) Basic Form
2) Broad Form
3) Special Form
4) Earthquake Form |
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Term
| The Basic Form of Commercial Building and Personal Property policies covers what 5 basic perils? |
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Definition
1) Fire
2) Lightening
3) Vandalism
4) Sprinkler linkage
5) Sinkhole collapse |
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Term
| The Basic Form of Commercial Building and Personal Property policies covers what 9 extended coverage perils? |
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Definition
1) Explosion
2) Windstorm
3) Hail
4) Smoke
5) Aircraft
6) Vehicles
7) Riot
8) Civil commotion
9) Volcanic action |
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Term
| The Broad Form of Commercial Building and Personal Property policies covers all of the basic perils plus what 4 perils? |
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Definition
1) Falling objects
2) Weight from snow, ice or sleet
3) Water Damage
4) Collapse |
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Term
| The Special Form of Commercial Building and Personal Property policies covers what type of perils? |
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Definition
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Term
Is the Earthquake Form of Commercial Building and Personal Property properties a separate policy?
What type of damage does it cover? |
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Definition
No - it needs to be added to any of the 3 other forms of Commercial Building and Personal Property policies
It protects against damage from earthquake and volcano eruption |
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Term
| Under the sinkhole collapse peril which is a basic peril that is covered under different forms of the Commercial Building and Personal Property policies, is the cost to refill the sinkhole or is sinking or collapse of land caused by mine subsidence covered? |
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Definition
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Term
| What are the 8 common peril exclusions found in all three forms of Commercial property Cause of Loss policies? |
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Definition
1) Ordinance or law
2) War
3) Nuclear hazards
4) Water damage from flood, tidal waves, sewer or drain backup
5) Earth movement
6) Power failure and (utility services) interruption
7) Government Action
8) "Fungus", Wet Rot, Dry Rot and Bacteria |
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Term
| All covered activity occurring within what time period is defined as a single earthquake or volcanic eruption? |
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Definition
| Any 168 hour period (Note personal lines is 72 hours) |
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Term
| What are 2 optional coverages that can be purchased as an addition to the Commercial Property and Business Personal Property Form and are for indirect or consequential loss to a business? |
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Definition
1) Business Income
2) Extra Expense |
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Term
| What is defined as net income which would have been earned plus normal operating expenses including payroll? |
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Definition
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Term
| What are the 3 additional coverages that are included in the Business Income coverage that can be added to a Commercial Property and Business Personal Property Form coverage? |
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Definition
1) Civil Authority
2) Alterations and New Buildings
3) Extended Business Income |
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Term
| Business income loss that is paid through the available optional coverage for Commercial Property and Business Personal Property Form is paid during what period? When does that begin and end? |
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Definition
Period of Restoration
Begins when the direct loss occurs
Ends when the building should be repaired with reasonable speed and similar quality or when the business is resumed in a new location |
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Term
| How long is the waiting period before business income loss is paid through Commercial Property and Business Personal Property Form coverage? |
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Definition
| 72 hour waiting period after the date physical loss has occurred |
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Term
| Extra Expense Coverage - which is a coverage option that can be added to the Commercial Property and Business Personal Property Form is ideal for the business in what situation? |
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Definition
| The business that cannot endure a complete shutdown and may be forced to go out of business if it is not up and running right away |
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Term
| Is there a waiting period required under Extra Expense Coverage which is a coverage that can be added on to the Commercial Property and Business Personal Property Form? |
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Definition
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Term
| Equipment breakdown insurance coverage is for business equipment breakdowns caused by what 4 things and that is ACCIDENTAL? |
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Definition
1) Motors burning out
2) Utility
3) Boiler malfunction
4) Operations error |
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Term
| Equipment Breakdown coverage has the same regular exclusions common to all commercial property coverage forms but it also extends to what 3 things? |
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Definition
1) Fire
2) Lightening
3) Extended Coverage perils |
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Term
| Under Equipment Breakdown coverage, the major exception to the normal exclusion is explosions - it will coverage loss or damage caused by an explosion of "Covered Equipment" that comes from what 7 things? |
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Definition
1) Steam boiler
2) Electric steam generator
3) Steam piping
4) Steam turbine
5) Steam engine
6) Gas turbine
7) Moving or rotating machinery when such explosion is caused by centrifugal force or mechanical breakdown |
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Term
| If an insured elects or is required to repair or replace damaged "Covered Equipment", it will pay, subject to the limit of insurance, up to an additional 25% of the property damage amount if it is repaired or replace in a manner that is 1 of what 3 ways? |
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Definition
1) Improves the environment
2) Increases efficiency
3) Enhances safety |
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Term
| All repairs and replacements must take place within 24 MONTHS following the date of the equipment breakdown, otherwise the insurer will pay on the smaller of what 2 amounts? |
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Definition
1) Cost it would have taken to repair or replace
2) Actual cash value at the time of the breakdown |
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Term
| Breakdown means that one of what 3 direct physical losses occurred that causes damage to Covered Equipment and necessitates its repair or replacement? |
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Definition
1) Failure of pressure or vacuum equipment
2) Mechanical failure including rupture or bursting caused by centrifugal force
3) Electrical failure including arcing; unless such loss or damage is otherwise excluded |
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Term
| Breakdown of equipment does NOT meant or include what 5 things? |
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Definition
Basically anything that could have been prevented:
1) Malfunction including but not limited to adjustment, alignment, calibration, cleaning or modification
2) Defects, erasures, errors, limitations or viruses in computer equipment and programs including the inability to recognize and process any date or time or provide instructions to "Covered Equipment"
3) Leakage at any valve, fitting, shaft seal, gland packing, joint or connection
4) Damage to any vacuum tube, gas tube or brush
5) Damage to any structure or foundation supporting the "Covered Equipment" or any of its parts |
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Term
| What is a stand alone package policy that is designed to meet the property and casualty needs of small to medium sized businesses that qualify for its very reasonably priced premium? |
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Definition
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Term
| Eligible risks that can be covered by a Business Owners Policy are limited to how much square feet of space and how much in gross annual sales? |
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Definition
Limited to 35,000 square feet of space
Limited to gross annual sales not exceeding $6,000,000 |
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Term
| What type of perils are covered in a Business Owners Policy? At what type of cost does the policy cover? |
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Definition
Open Perils
Replacement Cost |
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Term
| What are the type of businesses that tend to not be eligible for a Business Owners Policy? |
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Definition
| Those that tend to include large or more complicated types of risks or where most of the business is conducted off-premises |
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Term
| What are 12 types of businesses that can be eligible for a Business Owners Policy? |
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Definition
1) Residential apartment and condo buildings of any size
2) Commercial Unit-owners condominiums
3) Contractors
4) Mercantile risks
5) Processing and service risks
6) Wholesale risks
7) Office buildings
8) Buildings eligible for certain businesses
9) Motels
10) Restaurants 7,500 square feet max
11) Convenience food stores/gasoline stores/grocery stores/supermarkets
12) Self-storage facilities |
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Term
| What are the 2 coverages available in Section I of a Business Owners Policy? At what cost are losses covered in both sections? |
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Definition
Coverage A - Buildings
Coverage B - Business Personal Property
Covered on a replacement cost basis |
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Term
| Does a Business Owners Policy pay if any excluded perils directly or indirectly cause loss even if there is another (covered) cause or event that contributes at the same time or in any sequence to the loss (concurrent loss)? |
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Definition
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Term
| What are 11 general exclusions to Section I Coverage A & B of a Business Owners Policy? |
|
Definition
1) Autos and vehicles required to be registered and aircraft
2) Money and securities if lost due to property damage but not when theft occurs
3) Illegal contraband while being illegally transported or traded
4) Land, water, lawns and growing crops
5) Radio and television antennas unless listed as covered and outdoor fences
6) Trees, shrubs and plants unless listed as covered
7) Floating watercraft
8) Accounts, bills, food stamps, other evidences of account receivable, except as covered
9) Computers permanently installed, but not computers held as "stock"
10) Electronic data except as provided under Additional Coverages
11) Animals, unless owned by others and boarded by you |
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Term
| What are 18 additional coverages included at no extra cost under a Business Owners Policy? |
|
Definition
1) Debris Removal - 25% limit
2) Preservation of Property
3) Fire Department Service Charge - $2,500 max reimbursement
4) Collapse
5) Water Damage, Other Liquids, Powder or Molten Material Damage
6) Business Income - up to 12 months; payroll up to 60 days
7) Extra Expense
8) Pollution Cleanup and Removal - $10,000 limit
9) Civil Authority
10) Money Order and Counterfeit Paper Currency - up to $1,000
11) Forgery and Alteration - $2,500 max
12) Glass Expenses
13) Fire Extinguishers Systems Recharge Expense - up to $5,000
14) Increase Cost of Construction
15) Business Income loss from a dependent or secondary property - $5,000 limit
16) Electronic Data - $10,000 maximum
17) Interruption of Computer Operations - $10,000 limit
18) Limited Coverage for "Fungi", Wet Rot or Dry Rot - $15,000 limit |
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Term
| What are 7 extensions of coverage within a Business Owners Policy that is not subject to a co-insurance requirement? |
|
Definition
1) Newly acquired or constructed property - $250,000 max per building; $100,000 max per business personal property coverage
2) Personal Effects - $2,500
3) Valuable Papers and Records - $10,000 max
4) Property Off Premises - $10,000 max
5) Outdoor Property - $2,500 max
6) Accounts Receivable - $10,000 limit
7) Business Person Property Temporarily in Portable Storage |
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Term
| What are the 10 basic exclusions in Part I of a Business Owners Policy? |
|
Definition
1) Ordinance or law
2) War
3) Nuclear hazards
4) Water/flood
5) Earth movement
6) Power failure/Utility Interruption
7) Government Action
8) Certain Computer-related losses
9) Fungi, Wet/Dry Rot
10) Virus of Bacteria |
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Term
| What are 5 additional coverages under a Business Owners Policy that do not recover a deductible and will pay from the first dollar of a covered loss? |
|
Definition
1) Fire department service charge
2) Fire extinguisher systems recharge expense
3) Extra expense
4) Business income
5) Civil authority |
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Term
| If a loss occurs under a Business Owners Policy as a result of theft, what is the loss limit unless a higher limit is selected? |
|
Definition
|
|
Term
| What is the limit paid on an attached outdoor sign under a Business Owners Policy? |
|
Definition
|
|
Term
| What are the 4 optional coverages under a Business Owners Policy that can be bought for an extra premium? |
|
Definition
1) Outdoor signs
2) Money and securities
3) Employee dishonesty
4) Equipment breakdown |
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|
Term
How much notice does a company have to give to an insured if they are cancelling a Business Owner Policy for nonpayment of premium?
What if it is for a reason other than non payment?
What if it is because a building is vacant, going to be demolished, property taxes are past due, etc? |
|
Definition
10 days notice for nonpayment
30 days notice for another reason
5 days notice for issues with building |
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|
Term
| What type of policy will pay for direct physical loss of our 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? |
|
Definition
|
|
Term
| Coverage under a Builders Risk policy will end when any one of what 6 conditions first occurs? |
|
Definition
1) The policy expires or is cancelled
2) Property is accepted by the purchaser
3) Builders interest in the property ceases
4) Builder abandons the construction with no intention to complete it
5) 90 days after construction is complete OR
6) 60 days after any building described in the Declarations is Occupied in whole or in part or put to its intended use |
|
|
Term
| What are 4 properties that are excluded under Builders Risk? |
|
Definition
1) Land or water
2) Lawns, trees, shrubs or plants - when outside of buildings
3) Radio or television antennas and their lead-in/wiring, masts or towers - when outside of buildings
4) Signs (other than those attached to buildings) - when outside of buildings |
|
|
Term
| What are 4 types of property covered under Builders Risk? |
|
Definition
1) Foundations
2) Fixtures and machinery
3) Equipment used to service the building
4) Builders building material and supplies used for construction provided such property is intended to be permanently located in or on the building or structure described in the Declarations within 100 feet of its premises
5) If not covered by other insurance also covered are temporary structures built or assembled on site, including cribbing, scaffolding and construction forms |
|
|
Term
| What are 4 additional coverages within a Builders Risk policy? |
|
Definition
1) Debris Removal
2) Preservation of Property
3) Fire Department Service Charge
4) Pollutant Clean Up |
|
|
Term
| What are 2 optional coverage extensions under Builders Risk policies? |
|
Definition
1) Building Materials and Supplies
2) Loss or damage to sod, tress, shrubs and plants outside of buildings on the described premises - limited to $1,000 |
|
|
Term
| What are the 3 types of risk which may be insured under inland marine coverage? |
|
Definition
1) Personal floater risks
2) Commercial property floater risk
3) Bridges, tunnels and other instrumentalities of transportation and communication |
|
|
Term
| What risk under an Inland Marine policy are written on an open perils basis and cover insured property anywhere in the world and settlement is limited to ACV at the time of the loss or the cost to repair or replace the property (whichever is less? |
|
Definition
| Personal articles floater coverages |
|
|
Term
| Personal Articles Floater coverage under an Inland Marine insurance covers Scheduled property anywhere in the world on an open perils basis - what does scheduled property mean? |
|
Definition
| Property that has great value and needs to be individually appraised and specifically listed in the declarations to be covered |
|
|
Term
| What 9 items are covered through a scheduled property endorsement under a Personal Articles Floater in Inland Marine insurance? |
|
Definition
1) Furs
2) Jewelry
3) Fine arts
4) Postage stamps
5) Cameras
6) Silverware
7) Rare coins
8) Golfer's equipment
9) Musical instruments |
|
|
Term
| What are 2 other personal floaters that are available for someone to insure their personal articles that allow property to e insured everywhere in the world except while at the home of the insured? |
|
Definition
1) Personal Property Floater
2) Personal Effects Floater |
|
|
Term
| Forms of commercial property floaters are either controlled or uncontrolled, what is the difference between both of these? |
|
Definition
1) Controlled are those submitted to and approved by a State Department of Insurance
2) Uncontrolled Form is not standardized by a rating bureau but are developed by individual insurance companies to meet the needs of customers |
|
|
Term
| A common carrier is liable for all property loss of the goods they are transporting except loss caused by what 5 things? |
|
Definition
1) Acts of God
2) Acts by public enemy
3) Order of public authority
4) Neglect of the shipper
5) Inherent vice (like perishable items) |
|
|
Term
| What are the 4 types of transportation insurance? |
|
Definition
1) Motor Truck Merchandise Floater
2) Owner's Goods on Owner's Truck
3) Specialized Forms
4) Shipper's Form |
|
|
Term
| All shipping information between the consignor of goods, carrier and consignee (person receiving goods) are contained in the shipping contract which is called what? |
|
Definition
|
|
Term
| Flood policies can be purchased in one of what 2 ways? |
|
Definition
1) The National Flood Insurance Program
OR
2) Through private insurance companies who participate in the federal program called the Write Your Own Program |
|
|
Term
| Is there loss potential to a private carrier participating in the federal program, write your own program, to provide flood policies? |
|
Definition
|
|
Term
| Are homes and buildings in high-risk flood areas with mortgages from federally regulated or insured lenders required to have flood insurance? |
|
Definition
|
|
Term
| What are 3 things that are specifically excluded from building coverage under flood insurance? |
|
Definition
1) Landscape, including lawns, tress, shrubs and plants, outdoor swimming pools, fences and water structures
2) Walks, driveways and any paved surface outside the building are excluded
3) Certain property in basements is excluded by flood policies: finished walls, floors ceilings and other improvements |
|
|
Term
| Residential contents may be insured under a flood policy but the coverage applies to household and personal property which is what? |
|
Definition
Usual and incidental to the occupancy of the dwelling
Must also be inside a fully enclosed or sheltered building on the premises |
|
|
Term
| How long is the waiting period before a flood insurance policy becomes effective once an application and payment of premium has been made? |
|
Definition
|
|
Term
| What policy is only available as an optional endorsement for an extra premium on either the homeowner or dwelling policy since a homeowner policy excludes loss by earth movement? |
|
Definition
|
|
Term
| A mobile home can be defined as a trailer used as 1 of what 3 things? |
|
Definition
1) A permanent building
2) Normally connected to utilities
3) Designed without a permanent foundation |
|
|
Term
| When a mobile homes endorsement is attached to an HO-2 or HO-3 it becomes a Mobile Home Owners Policy and has the same coverages as a homeowners policy except what? |
|
Definition
| That Coverage C, Personal Property, is 40% of the Coverage A amount instead of 50% coverage |
|
|
Term
| What are the 6 coverages that are offered under a Yacht Policy for boats longer than 26 feet? |
|
Definition
1) Vessel (hull of the boat)
2) Liability
3) Medical payments
4) Workers compensation
5) Boat Trailer
6) Land Transportation |
|
|
Term
| A Homeowners Policy has limited boat coverage of only $1,500 so, because of that, what are 2 other forms of watercraft insurance that are available? |
|
Definition
1) Boatowners Policy
2) Yacht Policy |
|
|
Term
| A difference between the mobile home coverage and homeowners policy is the special "Property Removed" Clause - what does that mean? |
|
Definition
| If the mobile home is in danger of damage or loss caused by a covered peril the policy will pay up to $500 (no deductible) to remove personal property to avoid damage |
|
|
Term
| What are the 7 types of coverage under Farm Property Coverage Form? |
|
Definition
1) Coverage A - Dwelling
2) Coverage B - Other Private Structures Appurtenant to Dwelling
3) Coverage C - Household Personal Property
4) Coverage D - Loss of Use
5) Coverage E - Scheduled Farm Personal Property
6) Coverage F - Unscheduled Farm Personal Property
7) Coverage G - Other Farm Structures |
|
|
Term
| Are animals covered under a homeowner's policy? What about a farm policy? |
|
Definition
|
|
Term
| In some areas of the country, windstorm peril is specifically excluded in the homeowners policy, do property owners in these areas have to purchase a separate endorsement or policy to cover against the peril of windstorm? |
|
Definition
|
|
Term
| What is a method used in society for individuals and business to transfer risk of financial loss to an insurance company in exchange for paying a premium? |
|
Definition
|
|
Term
| What is the principle of actuarial science that states that the greater the number of risks insured in the same risk pool, the more predictable losses become so that premium charges can be very accurate and insurers can be more financially stable when accepting insurable risks? |
|
Definition
|
|
Term
| Insurable interest means what 4 things must be present? |
|
Definition
1) If the subject property is lost, damaged, destroyed or stolen the insured would suffer financial loss (must have a financial loss potential) AND
2) There is only a chance to for loss (pure risk); and
3) There is no chance to gain (Speculative risk) AND
4) The insured must prove to the company that they have insurable interest both at the time they buy the insurance and when the loss actually happen |
|
|
Term
| What is defined as an insured having to prove to an insurance company that they have a legitimate interest in preserving the property they seek to insure? |
|
Definition
|
|
Term
| What is defined as an uncertainty regarding financial loss? |
|
Definition
|
|
Term
| What are the 2 basic types of risk? Which one is insurable and which one is not insurable? |
|
Definition
1) Pure risk - insurable
2) Speculative risk |
|
|
Term
| What are 3 ways to handle risk? |
|
Definition
1) Ignore it
2) Manage/transfer risk
3) Avoid it |
|
|
Term
| What type of risk is solely the chance of loss without a possibility to gain a profit from that loss? |
|
Definition
|
|
Term
| What type of loss involves the possibility or chance of loss or gain (you could win or lose - example is gambling)? |
|
Definition
|
|
Term
| What creates an increased possibility that a peril (a cause of a loss) will actually occur? |
|
Definition
|
|
Term
| What are the only risks that are insurable? |
|
Definition
|
|
Term
| What are the 3 types of hazards? |
|
Definition
1) Morale hazard
2) Moral hazards
3) Physical hazards |
|
|
Term
| What type of hazard depends upon the personal or subjective makeup of the insured and can arise from a state of mind related to indifference of the insured to the loss that may occur? |
|
Definition
|
|
Term
| What type of hazard make loss more likely to occur due to the character of the insured because they have bad habits or perhaps are dishonest people, even disposed to criminal activity? |
|
Definition
|
|
Term
| What type of hazard is a physical condition that is left in a manner making a loss more likely to occur? |
|
Definition
|
|
Term
| What is an immediate specific event which causes a loss? |
|
Definition
|
|
Term
| What is an unintended, unforeseen reduction or destruction of financial or economic value? |
|
Definition
|
|
Term
| What are the 2 types of losses? |
|
Definition
|
|
Term
| What type of loss results in property which is damaged or destroyed by a peril which is insured against, without any intervening cause? |
|
Definition
|
|
Term
| What type of loss is damage which results from a covered peril, but the loss itself was not directly caused by that peril? |
|
Definition
|
|
Term
| What type of loss is covered by insurance? What type is not? |
|
Definition
Direct loss is covered by insurance
Indirect loss is not covered by insurance |
|
|
Term
| What are the 5 methods that can be used to determine the value of a loss? |
|
Definition
1) Actual cash value
2) Replacement cost
3) Market value
4) Stated value
5) Salvage value |
|
|
Term
| What type of cost means what the insured property will cost today (new) at the time of the loss to replace? |
|
Definition
|
|
Term
| What means the use or wear and tear property experiences over time that reduces the value of the property because it is used? |
|
Definition
|
|
Term
| What is the formula to calculate actual cash value? |
|
Definition
| Current replacement cost - depreciation |
|
|
Term
| What is the exact amount of money needed to replace damaged or destroyed property at the time the loss occurred (without regard for any depreciation)? |
|
Definition
|
|
Term
| What is the price at which property will sell in the regular marketplace when neither the seller nor the buyer is forced to terms? |
|
Definition
|
|
Term
| What is the value of a property in which the owner indicates to a company and they accept it at the time the policy is issued but does not issue any formal agreement with that value in the event of a claim? |
|
Definition
|
|
Term
| What is the value of insured property after its useful life has ended? |
|
Definition
|
|
Term
| What refers to the concept that an action that begins in motion an "unbroken series of events" which leads to cause a loss can be used to establish liability? |
|
Definition
|
|
Term
| What provision requires the insured to pay the first dollars, as specified in the contract, toward the settlement of the claim before the insurer will pay any loss amount? |
|
Definition
|
|
Term
| All property insurance contracts are contracts of what, which means their purpose is to make the insured "whole" again to reimburse the loss and not to make the insured better off than they were? |
|
Definition
|
|
Term
| What are the stated maximum amounts of coverage as expressed in the declarations of the policy? |
|
Definition
|
|
Term
| What is the limit the policy will pay for all covered loss in a policy period regardless of the total number of claims brought? |
|
Definition
|
|
Term
| What is the most the policy will pay for any single claim brought under the policy and is normally found in a policy with an Aggregate Limit? |
|
Definition
|
|
Term
| What is the most a policy will pay to one person for bodily injury or death, up to the state policy limit? |
|
Definition
|
|
Term
| What are the category limits that express separate limits for specified category losses? |
|
Definition
|
|
Term
| What limit expresses a single dollar amount that will be paid for both bodily injury (including death) and property damage? |
|
Definition
|
|
Term
| Does the co insurance requirement apply to total or partial losses? |
|
Definition
|
|
Term
| Does the co insurance requirement apply to total or partial losses? |
|
Definition
|
|
Term
| In a replacement cost policy, what provision requires the insured to have in force a minimum specified amount of the replacement cost value (expressed as a percentage) of the full value of the insured property in order for partial loss claims to be paid in full? |
|
Definition
| Coinsurance/Insurance to Value |
|
|
Term
| What is the math formula to calculate coinsurance? |
|
Definition
| (Amount of Actual Insurance/Required Amount of Insurance) x Loss = The Settlement Amount |
|
|
Term
| The simple idea behind what is that if the insured does not insure the property at the required minimum for total loss (at least 80% of the full replacement cost of a dwelling or building) then the company will not pay fully when partial loss happens? |
|
Definition
|
|
Term
| What is a broad concept that includes both (1) an accident and (2) continuous or repeated exposure to conditions over time that results in injury or loss? |
|
Definition
|
|
Term
| What is an unexpected, unintended and sudden event which causes property damage or bodily injury? |
|
Definition
|
|
Term
| Can an occurrence happen over a lengthy period of time to eventually cause a loss? |
|
Definition
|
|
Term
| Can both the insured and insurance company cancel insurance coverage? |
|
Definition
|
|
Term
| What type of refund is issued if the insurance company cancels a policy? What if the insured cancels? |
|
Definition
Insurance company = pro-rata (includes all money not applied to premium)
Insured = Short rate (unused premiums and processing costs) |
|
|
Term
| What is the difference between cancellation and non-renewal? |
|
Definition
| Cancellation is before the policy terminates and nonrenewal is the policy ends when it is terminated |
|
|
Term
| What means a dwelling or a structure has no people and no contents inside? |
|
Definition
|
|
Term
| What means a dwelling or structures has no people inside but it does still contain contents? |
|
Definition
|
|
Term
| What are the 3 types of liability? |
|
Definition
1) Absolute
2) Strict
3) Vicarious |
|
|
Term
| What type of liability applies when one person is legally responsible for the actions of another (Employer/employee or parent/child)? |
|
Definition
|
|
Term
| What is the Latin phrase that refers to vicarious liability? |
|
Definition
|
|
Term
| What type of liability applies to a manufacturer of products in which a victim only has to prove that the product was defective and not that the maker was negligent in its manufacture? |
|
Definition
|
|
Term
| What type of liability exists when a person subjects another to a dangerous or hazardous condition present, including the idea of harboring a wild animal on their premises? |
|
Definition
|
|
Term
| Liability insurance provides coverage only for what types of acts? |
|
Definition
|
|
Term
| A person has what when their action results in the bodily injury or property damage of another person? |
|
Definition
|
|
Term
| Courts use what standard when determining whether or not an insured used reasonable care under the circumstances in deciding whether or not the insured is liable and negligent? |
|
Definition
|
|
Term
| What are the 4 elements that an injured party must prove to show someone was negligent and therefore legally liable? |
|
Definition
1) Duty
2) Breach of duty
3) Actual injury
4) The first 3 elements were the proximate cause of the loss suffered by the injured party |
|
|
Term
| Are simple negligence and willful and wanton negligence considered types of negligence? |
|
Definition
|
|
Term
| What type of negligence is the failing to act in a reasonable or prudent manner? |
|
Definition
|
|
Term
| What type of negligence is considered much more serious than simple negligence and borders almost on being an intentional act? |
|
Definition
| Willful and wanton negligence |
|
|
Term
| What is temporary coverage and can be given by agents who have binding authority from the insurance company for insuring against risk? |
|
Definition
|
|
Term
| What are 2 ways to terminate a binder? |
|
Definition
1) The application is rejected
2) The policy is given to the insured |
|
|
Term
| Can binders be oral or written? |
|
Definition
|
|
Term
| What are written additions that are added to a contract of insurance while the policy is in force? |
|
Definition
|
|
Term
| What type of coverage is referred to as a "no-fault" or "goodwill" benefit because negligence need not be established to trigger a benefit payment? |
|
Definition
|
|
Term
| What are clauses found in some insurance contracts that pay medical benefits and even funeral costs in situations where an insured is not legally liable to pay for loss but may feel a sense of moral obligation? |
|
Definition
|
|
Term
| What is the difference between blanket or specific coverage in insurance policies? |
|
Definition
1) Specific - covers one single property at one location
2) Blanket - covers perhaps more than one property at one or more locations under a single policy |
|
|
Term
| What are the 4 parts of an insurance policy/contract? |
|
Definition
DICE
1) Declarations
2) Insuring Clause
3) Conditions
4) Exclusions |
|
|
Term
| The Declarations section of an insurance policy is the face/first page of the policy and includes what 7 things? |
|
Definition
1) Name and address of the insured
2) Name of the insurance company
3) States the loss the policy is insuring against
4) Length of time for the coverage
5) Premium amount
6) Fact amount
7) Applicable deductibles |
|
|
Term
| Which section of an insurance policy specifies the promises between the 2 parties? |
|
Definition
|
|
Term
| What section of an insurance contract states the specific obligation which is being assumed/promised by the insurance company in relation to the insured party? |
|
Definition
|
|
Term
| What section of an insurance contract set froth and describes the rights and duties of both the insurance company and the insured in creating coverage? |
|
Definition
|
|
Term
| What limit the scope of insurance coverage in a contract by specifically listing any causes of loss for which coverage will not exist? |
|
Definition
|
|
Term
| Does a party that is not specifically named as an insured have legal rights to recover directly under a policy? |
|
Definition
|
|
Term
| Can any party with a right to collect under a policy do so even if they are not listed in the declarations? |
|
Definition
|
|
Term
| What is a third party who is usually added to the policy because they also have loss potential? |
|
Definition
|
|
Term
| Who is the only party in a commercial policy that the insurance company will recognize or deal with under the contract even if there is more than one named showing as the insured in the declarations? |
|
Definition
|
|
Term
| What are the 7 duties of an insured? |
|
Definition
1) Immediate Notice
2) Prevent Further Loss
3) Damaged and Undamaged Property must be separated
4) Inventory the loss
5) Claim verification
6) Police Reports
7) Proof of Loss |
|
|
Term
| What are the 4 separate rights belonging to a mortgagee? |
|
Definition
1) Loss to mortgaged property is payable to the mortgagee
2) There is advance written notice to the mortgagee of policy cancellation
3) There is nothing the insured can do that would take insurance rights away from the mortgagee
4) Mortgagee has the right to sue via the policy under its own name |
|
|
Term
| A mortgagee in connection to an insurance policy is expected to do what 3 things? |
|
Definition
1) Notify the insurer any changes in ownership, occupancy or exposure
2) Pay any due premium
3) Submit a signed, sworn statement of loss within the appropriate time frame |
|
|
Term
| What is the condition in the property policy that addresses a situation in which the insured and the insurer cannot agree on the value of the loss? |
|
Definition
|
|
Term
| Each party in an insurance contract selects a disinterested third party to be the appraiser of a loss's value - if they disagree, what happens? |
|
Definition
| They select an umpire/referee who makes the final decision |
|
|
Term
| What type of liability is a formula for indemnification when coverage by more than one company is in effect on the same property at the time of a loss? |
|
Definition
|
|
Term
| What is the formula to calculate pro rata liability? |
|
Definition
| (Company coverage amount/total amount of insurance) x Loss amount |
|
|
Term
| If 2 companies are covering an insurance loss, and one of them becomes insolvent, what happens? |
|
Definition
| The pro rata liability still applies and the insured suffers the loss which would have been covered by the insolvent company |
|
|
Term
| What is the transferring of some or all rights held under an insurance contract from on party to another? |
|
Definition
|
|
Term
| Is written permission from an insurance company required for an assignment to be valid? |
|
Definition
|
|
Term
| What are the 4 basic elements to any valid contract? |
|
Definition
1) Offer and Acceptance
2) Consideration (exchange of value between the parties)
3) Contract must be for a legal object
4) Competent parties to the contract must exist |
|
|
Term
| What concept refers to the insurance company's right to recover from third parties, who caused the covered loss to the insured? |
|
Definition
|
|
Term
|
Definition
| An agreement which has no legal effect whatsoever |
|
|
Term
| What is a voidable contract? |
|
Definition
| An agreement that does exist but whose legal effect can be put aside by a court of law |
|
|
Term
| What is a fact which is sworn to by a party as the absolute truth? |
|
Definition
|
|
Term
| What are considered to be statements of fact, in the opinion of the person making those statements? |
|
Definition
|
|
Term
| Are insurance applicants expected to make warranty statements or representations? |
|
Definition
|
|
Term
| What is a statement that would have changed the underwriting basis of a policy? |
|
Definition
|
|
Term
| What is the failure to disclose a known fact of material importance? |
|
Definition
|
|
Term
| If an applicant intentionally lies about a material fact, it is considered to be what? |
|
Definition
| a fraud and it is always sufficient grounds to enable a company to void a policy |
|
|
Term
| What federal law helps insure that applicants for insurance are treated in a fair, accurate, and confidential manner and says that reports can only be furnished for certain purposes, like underwriting insurance? |
|
Definition
| Fair Credit Reporting Act |
|
|
Term
| What must be granted before an insurance company can obtain a report from a credit reporting agency? |
|
Definition
|
|
Term
| Under the Fair Credit Reporting Act, can consumers find out information that an investigative agency used about them and to whom such reports have been made? |
|
Definition
|
|
Term
| In the event information contained in a credit report results in a lesser offer from an insurance company to the insured, the insured has a right to what? |
|
Definition
| To a free copy of the credit report and a description of their rights afforded under the act - this report must be provided from the original credit reporting agency and not the insurance company |
|
|
Term
| What Act protects the privacy of consumer information held by "financial institutions? |
|
Definition
| The Gramm-Leach-Bliley Financial Modernization Act of 1999 (GLB) |
|
|
Term
| What is an individual who obtains or has obtained a financial product or service from a financial institution for personal, family or household reasons? |
|
Definition
|
|
Term
| What is a consumer with a continuing relationship with a financial institution? |
|
Definition
|
|
Term
| Are customers or consumers entitled to receive a financial institution's privacy notice automatically? |
|
Definition
|
|
Term
| Can consumers and customers opt out of having their information shared with certain third parties? |
|
Definition
|
|
Term
| What are the 2 situations in which an individual cannot opt out of receiving information from a financial institution? |
|
Definition
1) A financial institution shares information with outside companies that provide essential services like data processing or servicing accounts
2) The disclosure is legally required |
|
|
Term
| What is a printed form upon which all applicant answers and information is recorded and signed by the applicant which will be forwarded to the underwriter of a company for evaluation? |
|
Definition
|
|
Term
| Who are the only insurers that are covered under the Terrorism Risk Insurance Act? |
|
Definition
| Only commercial insurers and causes of losses |
|
|
Term
| What Act provides a temporary program that, in the event of major terrorist attack, allows the insurance industry and federal government to share losses according to a specific formula? |
|
Definition
| Terrorism Risk Insurance Act |
|
|
Term
| The Terrorism Risk Insurance Act requires the Secretary of the Treasury to notify Congress no later than how many days after the date of an act of terrorism as to whether aggregate insured losses are estimated to exceed the cap? |
|
Definition
|
|
Term
| The Terrorism Risk Insurance Act has been renewed through waht year? |
|
Definition
|
|
Term
| There must be nonrenewal and cancellation provisions which outlines the manner in which policies can be cancelled or nonrenewed in all policies offered for sale in Illinois except what 5 policies? |
|
Definition
1) Life policies
2) Accident and health contracts
3) Fidelity insurance
4) Ocean marine
5) Contracts of reinsurance or surplus lines insurance |
|
|
Term
| Can an insurance company cancel a policy solely based on the fact that the insurance agent who wrote the policy has left the company? |
|
Definition
|
|
Term
| Except for Workers' Compensation, all companies issuing policies shall provide what 3 pieces of information for the 3 previous policy years to the first named insured within 30 days of the insured's request? |
|
Definition
1) On closed claims
2) On open claims
3) All other |
|
|
Term
| How long can written binders be issued for? |
|
Definition
|
|
Term
| Can companies refuse to issue or renew a homeowners policy solely because a spacer heater is used in a single family or 2-4 unit dwelling? |
|
Definition
|
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Term
| A company cannot terminate a line of business without notifying the Director, with reasons, at least how many days prior to such termination? |
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Definition
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Term
| No agent or company can advise an insured to cancel a policy without information the insured in writing about what? |
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Definition
| The additional cost that might be charged for doing so |
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Term
| For what type of insurance is a pro rata refund required in the event of a cancellation, even if the insured requests the refund? When must the refund be made? |
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Definition
Auto insurance exception
Must be made within 30 days of either the cancellation by the company or from the date notice was received by the company |
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Term
| All notices of nonrenewal for a personal lines insurance must be provided by a company at least how many days prior to the renewal date? |
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Definition
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Term
| If casualty policies (not auto or fire & EC) have been in force for at least 60 days, they cannot be cancelled except for one of what 6 reasons? |
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Definition
1) Nonpayment of premium
2) Policy was obtained by the insured through misrepresentation or fraud
3) Any action which will increase the risk originally accepted, in a measurable fashion
4) Violation of policy terms or conditions on the part of the insured
5) The Director determines that continuation of the policy would violate the insurance code
6) If the risk was reinsured and the Director certifies the loss of the reinsurance of the company |
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Term
| No notice of cancellation of an insurance policy is valid unless what 3 things are present? |
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Definition
1) Mailed to the insured and mortgagee to last known mailing address on company record AND
2) A copy of cancellation must be sent to the insured's producer (last address) AND
3) The company must maintain proof of mailing on an acceptable and recognized US postal form |
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Term
| A notice of cancellation for both personal and commercial lines must be mailed at least how many days in advance if the policy has only been in effect for 60 days or less? What if it has been in effect for more than 60 days? What if the reason for cancellation is for nonpayment of premium? |
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Definition
30 days if policy has been in effect less than 60 days
60 days if policy has been in effect for more than 60 days
10 days if cancellation is for nonpayment of premium |
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Term
| Notice of intention not to renew in the case of commercial insurance must be mailed at least how many days in advance? |
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Definition
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Term
| Can a company refuse to insure or impose a surcharge for auto insurance solely on the basis the person is a volunteer driver? |
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Definition
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Term
| A company may cancel a Commercial Fire and Marine Policy with 10 days notice after the insured property is found to consist of one or more of what 4 items? |
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Definition
1) Insured fails to commence repairs within 60 days of being paid on a loss claim
2) Buildings unoccupied 60 consecutive days
3) Ordinance of law has declared the building is unsafe and must be vacated or demolished
4) Buildings not connected for 40 days or more to heat, water, electricity or sewer service |
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Term
| When a personal auto policy has been in effect for 60 days or subject to renewal, the company shall not cancel except for 1 or more of what 7 reasons? |
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Definition
1) Nonpayment of premium
2) Policy was obtained by the insured through misrepresentation or fraud
3) Violation of policy terms or conditions on the part of the insured
4) Named insured fails to fully disclose accident and moving violation fro past 36 months
5) Insured makes false/fraudulent claim or assists such activity
6) Insured or vehicle operator had license revoked or suspended within last 12 months, has history of heart attacks or epilepsy, has record of accidents, has been addicted to use of narcotics within last 36 months, convicted or jumped bail in a criminal manner within the last 36 months involving auto use
7) Car is mechanically defective |
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Term
| If a personal auto policy has been in effect for 5 years or more, can a company exercise their right for nonrenewal on the basis of nonpayment of premium? |
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Definition
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Term
| Illinois law prohibits nonrenewal for any of what 3 reasons? |
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Definition
1) The age of a property
2) The location of the property
3) Due to owner sex, age, color, martial status or ancestry |
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Term
| Any insured that wishes to appeal an Auto or Fire and EC policy cancellation or nonrenewal by an insurance company shall give how many days notice to the Director requesting a hearing and offering clearly the basis for the appeal? |
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Definition
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Term
| Can an auto insurer fail or refuse to accept an application from a physically handicapped person or refuse to issue a policy solely because of the physical handicap? |
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Definition
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Term
| How much of a fine per violation does one receive if they were not properly premium finance licensed when they were supposed to be? |
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Definition
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Term
| Can an insurer providing fire and EC insurance coverage nonrenew or cancel an insurance policy on a day care home or group day care home, solely on the basis that the insured operates a duly licensed day care home or group day care home on the insured premises? |
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Definition
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Term
| Is the Director authorized to make reasonable rules requiring insurers doing business in the State of Illinois to report factual information in their possession that is pertinent to suspected fraudulent insurance claims, fraudulent insurance applications or premium fraud after he has made a determination that the Information is necessary to detect fraud or arson? |
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Definition
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Term
| An insurer authorized to do business in Illinois that uses credit information to underwrite or rate risks shall not do what 7 things? |
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Definition
1) Use an insurance score that is calculated using income, gender, address, ethnic group, religion, marital status or nationality of the consumer as a factor
2) Deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information
3) Base an insured's renewal rates for personal insurance solely upon credit information
4) Take an adverse action against a consumer solely because he or she does not have a credit card account
5) Consider an absence or credit information or an inability to calculate an insurance score in underwriting or rating personal insurance unless the insurer treats the consumer as if the applicant or insured had neutral credit information
6) Take an adverse action against a consumer based on credit information, unless an insurer obtains and uses a credit report issued or an insurance score calculated within 90 days from the date the policy is first written or renewal is issued
7) Use credit information unless not later than every 36 months following the last time that the insurer obtained current credit information for the insured |
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Term
| What means a number or rating that is derived from an algorithm, computer application, model or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured? |
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Definition
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Term
| An insurer issuing policies may not cancel, refuse to issue, or refuse to renew the policy solely on the basis that one or more claims have been made against any policy during the preceding WHAT TIME PERIOD for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report? |
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Definition
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Term
| What is defined as an act that is by force or threat of force, willfully injuring, intimidating, interfering with oppressing, or threatening any other person in the free exercise or enjoyment of any right or privilege secured to him or her by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person's race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics? |
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Definition
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Term
| Can a homeowner's policy be refused based solely on the geographic location of the real property? |
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Definition
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Term
| What is the practice of refusing a policy based on a property's geographic location? |
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Definition
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Term
| The purpose of what is to make basic property insurance increasingly available to the citizens of this States and creates an opportunity for individuals who are unable to otherwise purchase coverage through regular channels, to obtain fire and extended coverage insurance? |
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Definition
| The Illinois FAIR (Fair Access to Insurance Requirements) Plan |
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Term
| Who does the FAIR plan apply to? |
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Definition
| Owner-residents of a 1 to 4 family dwelling unit |
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Term
| Who administers the FAIR plan? |
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Definition
| The Industry Placement Facility |
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Term
| What is defined as the personal multi-peril property coverages? |
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Definition
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Term
| What is the coverage against direct loss to real or tangible personal property at a fixed location provided in the Standard Fire Policy and Extended Coverage Endorsement and such vandalism and malicious mischief or such other classes of insurance as may be added with respect to the property by the Industry Placement Facility with the approval of the Director? |
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Definition
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Term
| A person that is entitled to make application to the Facility for an inspection and evaluation of the property by the Inspection Bureau must have an insurable interest in real or tangible personal property and what 6 other requirements must apply? |
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Definition
Personal property is at a:
1) Fixed location
2) In an urban area
who after
3) Diligent effort has been
4) Unable to obtain basic property insurance as evidence by
5) 3 attempts to procure such insurance or who
6) had a policy nonrenewed |
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Term
| Is it possible for property to be uninsurable even by the FAIR plan? |
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Definition
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Term
| When can a reinspection of property take plan under the FAIR plan in an attempt to meets its standards after an initial rejection? |
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Definition
| It may be requested at any time beginning at least 60 days after an initial FAIR plan inspection if the applicant makes improvements to the property which he or she believes are sufficient to meet the criteria standards for acceptance into the FAIR plan |
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Term
| What means the gross direct premiums charged with respect to property in this State? |
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Definition
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Term
| What means any community having a blighted, deteriorated or deteriorating area which the Facility has been designated? |
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Definition
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Term
| What means the organization formed by insurers licensed to write and engaged in writing basic property insurance within the State of Illinois to assist applicants in urban areas in securing basic property insurance and to formulate and administer a program for the equitable apportionment among such insurers of such basic property insurance? |
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Definition
| Industry Placement Facility |
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Term
| What means organization(s) designated by the Industry Placement Facility, with Director approval, to make inspections to determine the condition of the properties for which basic property insurance is sought and other duties assigned by the IPF? |
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Definition
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Term
| Once a person qualifies for making an application to the FAIR Plan, the property owner can submit a binding application to the Facility of coverage until the property has been duly inspected, whereupon, 1 of what 3 things will take place? |
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Definition
1) Approve the application and provide the coverage, OR
2) Decline the applicant until certain specified hazards are corrected, OR
3) Reject the application because the property is uninsurable |
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Term
| Do all insurers who write property insurance on a direct basis in Illinois have to participate in the Facility (and part of the FAIR plan) as a condition of their authority to transact business in Illinois? |
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Definition
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Term
| All policies under the FAIR plan are issued in the name of what? |
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Definition
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Term
| Under the FAIR plan, who sets all underwriting criteria, deductibles, coverage limits and commission to producers? |
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Definition
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Term
| What means lateral or vertical ground movement caused by a failure initiated at the mine level, of man-made underground mines, including, but not limited to coal mines, clay mines, limestone mines, and fluorspar mines that directly damages residences or commercial buildings? |
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Definition
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Term
| What are the only things covered under mine subsidence insurance? |
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Definition
| Structures - includes dwellings, buildings, and fixtures that are permanently attached to the real estate |
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Term
| What are the 8 exclusions under Mine Subsidence insurance? |
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Definition
1) Landslide
2) Volcanic eruption
3) Earthquake
4) Collapse of storm and sewer drains and rapid transit tunnels
5) Land
6) Plants
7) Trees
8) Crops |
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Term
| A mine subsidence does not include vertical ground movement caused by what 10 things? |
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Definition
1) Earthquake
2) Landslide
3) Volcanic eruption
4) Soil conditions
5) Soil erosion
6) Soil freezing and thawing
7) Improperly compacted soil
8) Construction defects
9) Roots of trees and shrubs
10) Collapse of storm and sewer drains and rapid transit tunnels |
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Term
| Do all insurance companies issuing P&C contracts have to have a customer affairs information department to deal with policyholder questions and complaints? |
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Definition
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Term
| Insurance companies must provide written responses to written inquiries within how many days of receipt of such inquiries? |
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Definition
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Term
| Is there an Illinois Mine Subsidence Insurance Fund that was established to ensure that insurance coverage is available for residences, living units and commercial buildings? |
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Definition
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Term
| Do policies renewed or issued in a county that has 1 million or more population in any county which has an immediate border to such a populous county have to offer Mine Subsidence Insurance? |
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Definition
| No they are exempt from that law |
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Term
| The total insured value, which is reinsured by the Illinois Mine Subsidence Fund, cannot be more than what amount per structure? What about per living unit? |
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Definition
No more than $200,000 per structure
No more than $15,000 per living unit |
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Term
Does a company that issues P&C contracts have to maintain a toll free number?
Does it have to have a location in either the home, regional or branch office of the company? |
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Definition
Yes - or accept the charges for any phone calls placed to the department
Yes |
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