Insurance Terminology and Concepts, Exams of Advanced Education

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$1,000 - ANSWER-Deductible that applies separately to building and contents under a flood policy $1,500 - ANSWER-Peril of theft limit for jewelry, watches, and furs $2,500 - ANSWER-All peril limitation for business property on premises $2,500 - ANSWER-Peril of theft limitation for fierarms and related equipment 10 - ANSWER-How many days of notice must an insurer give an insured in the event of cancellation? 10 - ANSWER-Number of days notice for a hearing given by the commissioner when an adjuster is accused of wrongdoing 15 - ANSWER-Number of BUSINESS days a claimant must be notified in writing of acceptance or rejection of a claim after all requested information has been received 15 - ANSWER-Number of days an agent has to: acknowledge receipt of a claim, commence investigation, forward necessary paperwork requesting information from a claimant 18 - ANSWER-Minimum age requirement for an adjuster to be licensed 2 - ANSWER-An insurance adjusters license must be renewed every ___ years 250 - ANSWER-Standard deductible for coverages A, B, and C under a homeowners policy 30 - ANSWER-Amount of notice required for nonrenewal of an insurance policy 30 - ANSWER-For how long is liability for newly acquired livestock covered? 30 - ANSWER-Number of days after which vandalism coverage is suspended due to vacancy on a standard fire policy. Term for other policies is 60 days 30 - ANSWER-Number of days an agent has to resolve a claim that is the result of a major natural disaster 30 - ANSWER-Number of days an agent has to resolve claims where arson is suspected 30 - ANSWER-Number of days in the waiting period for flood insurance

30 - ANSWER-Number of hours of continuing education needed during a license cycle 30 days - ANSWER-Amount of time one has to notify the commissioner of an address change 4 - ANSWER-Number of years one is required to keep a record of continuing education 5 - ANSWER-Number of business days an adjuster has to send a check to the claimant once a settlement has been reached 5 days - ANSWER-Notice period required for a commissioner to issue a temporary or emergency license 6 - ANSWER-Number of construction classifications 60 - ANSWER-Number of days an agent has to investigate fraud 90 - ANSWER-Number of days an adjuster has to renew a license after expiration. Payment must include a 50% penalty A violent act dangerous to life, property, or infrastructure as certified by the US secretary of treasury; results in damage within the US or an air carrier, vessel, or premises of a US mission - ANSWER-Criteria of an act of terrorism Absolute liability - ANSWER-The law imposes liability without regard to fault or negligence Accident limit - ANSWER-Used to include an incident that is sudden and unforeseen. Accounts receivable floater - ANSWER-Floater that covers loss resulting from the damage or destruction of accounts receivable records by paying the reasonable expenses incurred to reestablish accounts receivable records. Does not pay for accounting or billing errors Actual cash value - ANSWER-Replacement cost minus depreciation Advanced payment - ANSWER-A partial payment of a claim that is issued withour obtaining a signed release. Agent - ANSWER-One who sells insurance policies Aggregate limit - ANSWER-Maximum amount of coverage available during the policy period

Agreed value - ANSWER-Payment of the policy limit for the property scheduled. Typically applies to one of a kind, classic cars, and antiques. Items are insured for their appraised value Aid - ANSWER-First aid supplementary payments that are paid with no limit Aleatory contract - ANSWER-A contract in which the values exchanged are not equal. Ex: Someone insures a $300,000 house, but only pays $200 in premiums Alien insurer - ANSWER-An insurer who is organized and domiciled outside the United States An earthquake endorsement, a schedule personal property endorsement, home daycare endorsement, and personal injury indorsement - ANSWER-Common endorsements to a homeowners policy Analyze reports, gather evidence, verify evidence, observe the site, take photos, gather medical reports, consult experts, identify conflicting information - ANSWER-Steps to take when determining liability Annual transit policy - ANSWER-Covers all incoming and outgoing shipments for a year. Assignment clause - ANSWER-A clause that explains the policy may only be assigned to another with the insurers written consent Bad faith - ANSWER-Occurs when the insurer does not abide by the terms and spirit of the policy. The insured must prove that the insurance company had no reasonable basis for denying a claim or payment. Bail bond - ANSWER-A bond that guarantees appearance in court Basic causes of loss form - ANSWER-A named perils form that includes all of ther perils learned in personal insurance, also includes sinkhold collapse and sprinkler leakage Bid Bond - ANSWER-A bond used when writing a contract where the bidding company makes a promise to complete the work as outlined in the bid Binder - ANSWER-A temporary insurance contract Blanket insurance form - ANSWER-Uses a single limit of insurance to cover multiple buildings or their contents at multiple locations Blanket schedule - ANSWER-Covers theft by any employee Boat owners policy - ANSWER-A policy that covers boats under 26'

Bond - ANSWER-A guarantee that a specific duty will be performed Bonds - ANSWER-supplementary payments with no limit Bonds, aid, interest, loss of earnings, expenses, defense and investigation - ANSWER- Supplementary payments found on all liability policies and paid in addition to the limits Broad causes of loss form - ANSWER-A named perils form that includes all of the basic perils plus weight of ice, snow, falling objects Broad coverage - ANSWER-Coverage that adds theft coverage for any insured Builders risk coverage form - ANSWER-A property policy that covers buildings or dwellings that are under construction Burglary - ANSWER-Requires physical signs of forced entry or exit Business auto coverage, garage coverage, truckers coverage, motor carrier coverage - ANSWER-Four types of commercial auto coverage Business Coverage A - ANSWER-Coverage for building including permanently installed fixtures, machinery, and equipment Business Coverage B - ANSWER-coverage for business personal property including property within 100 feet of the business premises Business Coverage C - ANSWER-Coverage for personal property of others that is borrowed; does not cover bailee customer's property Business day - ANSWER-A day other than Saturday, Sunday, or holiday. Business income coverage - ANSWER-Purchased by a business that remains closed during a period of restoration due to a covered direct loss Business owners policy - ANSWER-A policy that is reserved for small and medium businesses and allows for hazards. The plans come prepackaged. Due to this factor, these plans are not very flexible Carriers - ANSWER-Who is responsible for establishing why a claim is denied? Cease and desist orders, $25,000 fines, revocation, suspension, refusal to renew license - ANSWER-Potential disciplinary actions an adjuster can face if found guilty of wrongdoing

Claim - ANSWER-A request for indemnification under an insurance contract due to a financial loss. Paid by an insurer to indemnify losses to the insured or to others who have experienced losses for which the insured is liable Claimant - ANSWER-One who makes a claim Claims investigation - ANSWER-A meticulous, unbiased inquiry and the basis of good faith claims handling. Claims-made form - ANSWER-Form for reporting incidents typically used for professional and pollution liability insurance. Insurer will set a retroactive date to the policy. Basic tail is automatic and requires that occurences be reported to the insurer within 60 days of expiration Coinsurance clause - ANSWER-A clause that encourages the insureds to carry as close to the full replacement value of the property as possible Coinsurance penalty formula - ANSWER-Insurance carried divided by insurance required multiplied by the loss is the amount paid. Commercial articles floater - ANSWER-Used by photographers and musicians to cover equipment related to their profession Commercial general liability - ANSWER-A policy that is typically written on an occurrence form and covers the insured's obligations for: legal liability for bodily injury and property damage, legal liability for personal injury and advertising injury, medical payments (goodwill payment) Commercial package policy - ANSWER-A policy open to any commercial insured. An agent will assemble a policy based on mandatory components and the needs of the insured. This is a very flexible policy. Compensatory damages - ANSWER-Damages paid to make an injured person whole again Competent parties, Agreement, Lawful objective, Considration - ANSWER-Essential elements for a valid contract Computer fraud coverage - ANSWER-Coverage for theft of money, securities, and other property when any computer is used to transfer the property outside the premises. Concealment - ANSWER-Deliberately withholding material information from an insurer. Will void coverage Conditional contract - ANSWER-A contract that may be voided if all policy conditions are not met

Conditions - ANSWER-A document that contains territorial restrictions, procedures, duties, and rights of the insured/insurer Condominium association master policy - ANSWER-Covers buildings and personal propertyowned by the association itself or that the unit owners have an indivisible ownership interest in as defined by the bylaws Condominium commercial unit owners form - ANSWER-Covers business and personal property of a unit owner that operates a business out of the condominium unit Consequential loss - ANSWER-Loss resulting from spoilage or temperature change Contract of adhesion - ANSWER-A contract where all parties agree to adhere to the contract as a whole; when ambiguities arise, the court will rule in the favor of the insured Contractor's equipment floater - ANSWER-Covers tools and equipment for business. Loss of items due to dishonest acts, loss of use, mysterious disappearance, mechanical breakdown, or wear and tear are not included. Contractual liability - ANSWER-One party assumes the liability of another party under written agreement Cost, Freight (CF) - ANSWER-Buyer responsible for insurance on freight Cost, Insurance, Freight (CIF) - ANSWER-Seller is responsible for insurance on freight Cost, Insurance, Freight (CIF); Cost, Freight (CF); Free on board (FOB) - ANSWER- Three ways to write transportation coverage Court bond - ANSWER-A bond that permits one to seek remedy in a court of equity Coverage C - ANSWER-Personal property includes property of family members living on the premises and student's property at a dormitory, but it does not cover animals, vehicles, and property of boarders Coverage L - ANSWER-Personal liability to cover the legal obligations on the insured for bodily injury/property damage to a third party Coverage M - ANSWER-Medical payments to cover medical and funeral expenses for others including a residence employee regardless of fault. Supplementary payments (BAILED) Coverage provided by TAIPA - ANSWER-Minimum split limits of liability (30/60/25), minimum personal injury protection of $2500 per person, minimum underisured/uninsured motorist coverage

Coverage trigger - ANSWER-"When did the bodily injury or property damage get reported?" Coverages granted when coinsurance is met - ANSWER-30 days for newly acquired buildings (up to 25%), $10,000 for personal property temporarily off premises, $1, for signs permanently attached to the business, trees, new personal property, 30 days for preservation of property, 25% of actual loss for debris removal (additional $10,000 if needed), $2500 per year for restoration of electronic data Covers losses as they might relate to construction and any temporary structures within 100 feet of the construction site. Coverage can be written two ways: completed value, and as a value reporting form. 100% coinsurance requirement - ANSWER-What is a builders risk form? Crime insurance - ANSWER-Insurance that can be purchased to cover the property of a custodian (inside the premises) or a messenger (outside the premises). Damage to personal property - ANSWER-Exposure of CGL that is covered under a bailee policy Day - ANSWER-Any calendar day including weekends and holidays Debris removal to cover the cost of cleanup after a loss, up to $500 per tree shrub or plant, up to $500 for fire department service charges - ANSWER-Additional coverages automatically built into most policies Debris removal, property removal for 30 days, up to $500 for theft or unauthorized use of debit cards/forgery/counterfeit money, trees/plants/shrubs if the loss is caused by the covered peril - ANSWER-Additional coverages built in to most homeowners policies Declarations page - ANSWER-The receipt for a policy that includes information like property description, parties to contract, policy period, policy limits/deductibles, and premium Declarations page - ANSWER-This page of a policy identifies specific information about the named insured that will tailor this policy to this individual and his family who live in the same household. It identifies specific coverages requested with deductibles and amounts of insurance that are available in the event of a loss. Also includes the name of the indurer, address of insured, vehicles to be included, and dates of coverage. Declarations page, insuring agreement, conditions, exclusions - ANSWER-Four parts to an insurance contract Defend the insured even from frivolous lawsuits - ANSWER-Promise of liability insurance.

Defense and investigation cost - ANSWER-Supplementary payments for defense and investigation that are paid with no limit. Denial of coverage - ANSWER-Results when an investigation reveals that either the wrong policy is involved or coverage does not apply to the actual claim. Denial of liability - ANSWER-Occurs when the claims investigation of all of the facts and circumstances reveals that the insured is not the liable party Depreciation - ANSWER-A decrease in the value of a property as a result of age, use, obsolescence, wear and tear, or deterioration Difference in conditions policy - ANSWER-A policy written on large property accounts with high deductibles that covers losses normally excluded by other policies Direct liability - ANSWER-One party is a tortfeasor that committed a wrongful act that injured another party Direct loss - ANSWER-Immediate and actual physical damage to tangible property Domestic insurer - ANSWER-An insurer organized, admitted, and writing insurance in texas Dp-1 - ANSWER-A basic dwelling where property is covered for baisc named perils. Basic causes of loss include fire, lightning, and extended coverage. DP-1. DP-2, DP-3 - ANSWER-Types of dwelling policies DP-2 - ANSWER-A broad dwelling policy that states tat all property is covered for the same broad named perils. Broad causes of loss in addition to basic perils include burglary damage, falling objects, freezing, and collapse due to weight of ice/snow DP-3 - ANSWER-A special type of dwelling policy. Coverages A, B, D, and E are covered for open perils that exclude coverage for flood, earthquake, and other common perils that are uninsurable or better covered in other ways. Coverage C is subject to the broad perils. Draft authority - ANSWER-The size of a claim check that an adjuster is allowed to wirte without prior approval. Drop draft settlement - ANSWER-A draft an release sent to a claimant for an amount believed to be sufficient to settle a claim.

Duties of the insured when a loss occurs - ANSWER-Provide notice to insurer, minimize loss, completing and returining proof of loss or other documents, cooperating with the company Duty owed, duty breached, actual loss, proximate cause - ANSWER-Must be proven in order to charge negligence Dwelling Coverage A - ANSWER-Dwelling policy intended for structures containing one to four family units and includes anything attached to the main structure Dwelling Coverage B - ANSWER-Other structures policy that covers any structure on the property not attached to the dwelling. 10% of coverage A built in. Dwelling Coverage C - ANSWER-Personal property (Contents) coverage to include any household goods that belong to the insured or their family members. Does not extend to the belongings of the renter. 50% of coverage A built in Dwelling Coverage D - ANSWER-Coverage for fair rental value. This coverage is only available if the dwelling is tenant occupied. 10% of A built in Dwelling Coverage E - ANSWER-Coverage for Expenses in a dwelling that is owner occupied only. 20% of A built in Dwelling under construction - ANSWER-Insures homes being constructed for insureds who are the intended occupants upon completion Dwelling, other structures, personal property, loss of use - ANSWER-Coverage under section 1 (property) of a homeowners insurance policy Earth movement - ANSWER-The peril of collapse is excluded if caused by this Earthquake endrosement - ANSWER-Endorsement that applies a standard deductible of 5% of coverage A. Second occurences within 72 hours are considered a single loss Electrocution of covered livestock, attacks on covered livestock by dogs or wild animals, drowning of livestock, and accidents involving the unloading or loading of livestock but not the transport - ANSWER-Broad form peril inclusions in a farmer policy Emergency program - ANSWER-The initial phase of community participation in NFIP where rates are the same for all insureds regardless of hazards in the community and only limited amounts of coverage are available. Employee theft coverage - ANSWER-Coverage for the theft of money, securities, and other property by employees. Endorsements - ANSWER-Changes that add, delete, or modify a policy

Equipment breakdown coverage - ANSWER-Coverage that covers losses to objects from the peril of breakdown. Includes explosion and mechanical breakdown Equipment dealers floater - ANSWER-Used by companies that sell agriculture related equipment and covers Bailee property. Losses are settled on an ACV basis Estoppel - ANSWER-The involuntary relinquishment of a known right Excess policy - ANSWER-The policy that will pay after the primary policy is exhausted Excess policy and umbrella policy both may be written over underlying policies, but an excess policy does not provide broader coverage - ANSWER-Difference between umbrella and excess policies Exclusions - ANSWER-A document that lists the property and perils that are not covered Expenses - ANSWER-Supplementary payments incurred at the request of the insurer Exports, imports, domestic shipments, instrumentalities of transportation, instrumentalities of communication, commercial property floaters, personal property floaters - ANSWER-Six categories of inland marine risks Exposures for which a business may become legally liable - ANSWER-Premises, operations, products, completed operations, fire legal liability, host liquor liability Extended nonowned coverage - ANSWER-Coverage that broadens to include nonowned autos that are available for regular use by the insured (company car). Extended reporting period - ANSWER-Extends the policy reporting period once a policy expires. Extra expense coverage - ANSWER-Coverage purchased by businesses that cannot close and must remain open during periods of restoration or they suffer a permanent loss of customers Farmer Coverage E - ANSWER-Scheduled farm property Farmer Coverage F - ANSWER-Unscheduled farm personal property Farmer Coverage G - ANSWER-Barns, buildings, other farm structures Fiduciary - ANSWER-Type of responsibility held by agents where they handle financial resources

Fiduciary bond - ANSWER-A bond that guarantees that the fiduciary will execute their duties honestly and faithfully fire, lightning, removal - ANSWER-Three perils initially covered by the standard fire policy First-party claim - ANSWER-When the insured submits a claim for indemnification Five coverages of an auto liability policy - ANSWER-Liability, medical payment, personal injury, uninsured/underinsured, physical damage Flood - ANSWER-Temporary inundation of two or more acres of normally dry land area or of two or more properties from any natural source of water. flood, earthquake, power failures occuring off premises, insects, vermin, and domestic animals - ANSWER-Standard exclusions under section 1 Foreign insurer - ANSWER-An insurer domesticated outside the state where it writes insurance Forgery and alteration coverage - ANSWER-Coverage against forgery that does not cover employee acts Fraud, nonpayment, license revocation or suspension, orders from TDI - ANSWER- Beyond 60 days of underwriting, what reasons must you have for the cancellation of a policy Free on board (FOB) - ANSWER-Seller is responsible for insurance on freight to a certain point, then buyer assumes responsibility Full formal report - ANSWER-A detailed narrative report generally completed when the loss exceeds authority, claim is denied, or fraud is suspected Garage coverage form - ANSWER-Commercial auto coverage typically used by vehicle dealers that may also have garage operations or may be in possesion of customer autos. Garage liability, garagekeepers, physical damage - ANSWER-The garage coverage form incorporates these General aggregate - ANSWER-Pays for all other claims on CGL during a specific policy period until the limit is exhausted General damages - ANSWER-A category of compensatory damages that include the noneconomic losses and are difficult to assign a monetary value to

General definitions - ANSWER-Definitons are provided for key terms which are noted in quotation marks throughout the policy Hazards - ANSWER-conditions that increase the chance of loss HO-2 - ANSWER-form that provides for broad perils on all property HO-2, HO-3, HO-5, HO-8 - ANSWER-Policy form choices for insureds who own the home and live on the premises HO-3 - ANSWER-Form that provides open perils on structures and broad perils on contents HO-4 - ANSWER-Policy form for insureds who rent and do not own the structure. Provides broad perils on contents and tenant improvements/benefits, but no structure coverage HO-5 - ANSWER-Form that provides for open perils on property HO-6 - ANSWER-Policy form for insureds who own a condominium and live on the premises. Form provides for broad perils on contents and limited structure coverage because it will primarily be covered by the association's policy. HO-8 - ANSWER-Form that provides for older homes and provides basic perils on all perperty and claims are settled on a n actual cash value basis Home daycare endorsement - ANSWER-Covers property and liability exposures of a daycare operation including injuries to children enrolled, but does not include employee injuries Homeowners policies cover the peril of theft - ANSWER-A homeowners policy covers the same perils as a dwelling policy except that How much can be recovered, expense involved, whether the other party has insurance under which to make a claim, financial position of the at fault party - ANSWER-Factors to use when determining whether or not to pursue subrogation Hull insurance, cargo insurance, freight insurance, protection and indemnity - ANSWER-Coverages of ocean marine insurance Hull insurance, third party liability for injuries or damage, hangar keepers liability - ANSWER-Coverages of aviation insurance If there is a partial loss and coinsurance is met, the partial loss is paid up to the limit of insurance. If coinsurance was not met, a penalty will apply. In total loss situations, there

is no penalty. The limit is paid whether the property is over or under insured. - ANSWER-How are losses settled when there is a coinsurance requirement in place? Implied warranties in a boat owners policy - ANSWER-Vessel is seaworthy, competent crew, not overloaded, no deviation in voyage Independent adjuster - ANSWER-An adjuster who handles claims for more than one company and receives a fee based on time and expense Indirect loss - ANSWER-Inability to use property as a result of direct loss Inflation guard - ANSWER-designed to offset the increased costs of replacing a building during periods of inflation Inflation guard - ANSWER-Protects insured for increased building costs due to inflation Initial or first field report - ANSWER-A report that is initially done to document an event. Done within 24 hours- 7 days Injuries to employees - ANSWER-Exposure of CGL that is covered by worker's compensation Injury to an employee, operation of mobile equipment unless the equipment is in transit on a trailer, and organized racing/stunt activities - ANSWER-Business auto exclusions under liability Inland marine insurance - ANSWER-Insurance designed primarily for property subject to movement. Installation floater - ANSWER-Covers property while in transit until the property is permanently installed and teste at the premises of the customer who then assumes responsibility. Insurance - ANSWER-A contract based on the principle of indemnity that transfers risk from one person or organization to an insurance company. Insured must always live on the premesis - ANSWER-The key difference between a homeowners and a dwelling policy is that Insured's duties after a loss - ANSWER-Provide immediate written notice, protect damaged property from further damage, providing proof of loss to the insurance company, providing an inventory of the damaged property to the company, cooperating with the company during a claim investigation Insurer may immediately suspend coverage if equipment is found to be in, or exposed to, a dangerous condition - ANSWER-A unique condition of breakdown coverage

Insuring agreement - ANSWER-Document that contains the insurers promise including the covered perils Interest - ANSWER-Supplementary payment on judgements that are paid with no limit Interim or status report - ANSWER-A report that is issued periodically to document the progress of a claim. Done every 15 to 30 days Jettison of cargo - ANSWER-A captain of a boat orders cargo to be thrown overboard to save the vessel and crew. Covered on a general average basis where all parties share responsibility for loss Jewelers block floater - ANSWER-Covers property held for sale and similar property in the insured's care, custody and control. The policy excludes jewelry worn by a custodian. Does not cover mysterious disappearance, dishonesty, inventory discrepancy, or storage. Land, foundations, underground pipes, drains; accounts, bills, money, securities; detached outdoor signs; bailee customer property - ANSWER-Exclusions under business and personal property coverage Law of large numbers - ANSWER-A mathematical concept used by insurance companies to predict future losses in order to charge an appropriate premium leakage at any valve, seal, joint, connection, or fitting; damage to any structure or foundation supporting the covered equipment, functioning of any safety or protective device; losses to any object while being tested - ANSWER-Exclusions of breakdown Lease of premises, easement or license agreement, agreements with municipalities as required by an ordinance, sidetrack agreements, elevator maintenance agreements - ANSWER-Types of contracts that are not excluded under a CGL policy Legal liability insurance - ANSWER-Covers specific risks the insured tenant becomes legally obligated to pay because of direct physical loss or damage, including loss of use, to the landlord's building caused by accident arising out of any covered cause of loss Liability - ANSWER-Legal obligation to pay for damages caused to another. There are four types: property, personal injury, bodily injury, advertising injury. Liability and physical damage - ANSWER-Business auto policies typically have these two types of coverage Liability coverage - ANSWER-Covers the insured's legal obligations for bodily injury to others or damage to the insured's property

Liability loss - ANSWER-A damage or injury claim that arises out of actions that cause loss to a third party Liability sipplements, broad theft coverage, inflation guard, dwelling under construction, mobile home - ANSWER-Common endorsements to a dwelling policy Liquor liability - ANSWER-Exposure of CGL that is covered by dram shop liability Loss of earnings - ANSWER-Supplementary payment of up to $250 per day to assist in defending or investigating a claim Loss sustained form - ANSWER-Most crime policies are required to be written on this type of form and reported during the policy period or a year after expiration. Similar to an occurrence form Material misrepresentation - ANSWER-Incorrect information given by the prospect/insured that void the insurance contract because the insurer would have made a different decision had they known the truth. MCS-90 endorsement - ANSWER-Endorsement that is required on policies for truckers and motor carriers to establish proof of financial responsibility for bodily injury, property damage, and pollution Medical payment coverage - ANSWER-Covers medical and funeral expenses for the insured and the insured's guest passengers for a period of 3 years. Miscellaneous vehicles coverage - ANSWER-Allows liability and physical damage coverage to be added for a motor home, motorcycle, dune buggy, golf cart, or similar type of vehicles. No snowmobiles. Misrepresentation - ANSWER-Incorrect information given by the prospect/insured that does not affect coverage; the insurer would have made the same coverage decisions had the truth been known Mobile home endorsement - ANSWER-Allows mobile homes to be added to a policy if they meet specific criteria (wheels removed and home is placed on a foundation Monoline policy - ANSWER-A policy that provides only one line of insurance Moral hazard - ANSWER-Hazards arising due to the dishonesty of the insured Morale hazard - ANSWER-Hazards arising from an attitude or indifference to loss Motor carrie act of 1980 - ANSWER-Act that imposes additional financial responsibility requirements for the pollution of exposure based upon what the truckers are hauling.

Motor carrier coverage form - ANSWER-Used by businesses that may use other vehicles in addition to tractor trailers Name schedule - ANSWER-Covers theft only by employees named on the policy. Named insured and resident spouse, resident family members, persons under the age of 21 who are under the care of the insured, and full time students under the age of 24 that were residents before leaving for school - ANSWER-Insured as defined by a homeowners policy Named insured, insured spouse acting for business, insured's employees for business acts - ANSWER-Named insured under a business liabiltiy policy Named perils policy - ANSWER-A policy that covers only the causes of loss specfically listed. No - ANSWER-Can an adjuster accept gratuities or gifts? No - ANSWER-Can an adjuster give legal advice? No - ANSWER-Can an adjuster make a legal determination of liability? No - ANSWER-Can an adjuster make legal determinations? No - ANSWER-Does the insurance company or adjuster have a contractual duty to a third party claimant? Obligee - ANSWER-The party of a bond to whom the promise is being made Occurrence form - ANSWER-Form for reporting incidents typically used for business liability. Incidents are reported to an insurer based on the occurrence date. Occurrence limit - ANSWER-Limit that includes loss caused by continued and repeated exposure to the same peril or conditions over time Offices, Apartments (60 unit, 6 floors), Retail (25,000 sq. ft., 3 mil), Service or processing (25,000 sq. ft., 3 mil) - ANSWER-Businesses eligible for a business owners policy Open perils policy - ANSWER-A policy that covers any causes of loss not specifically excluded. Open perils, boat, motors, trailer, and equipment necessary for boat operation - ANSWER-Physical damage coverage on a boat owners policy

Ordinance or law enforcement endorsement - ANSWER-Coverage to pay for losses resulting from the enforcement of a building code or ordinance Out of state clause - ANSWER-If the insured is involved in an accident in a state that requires higher liability limits than the insured purchased, Texas policy will be interpreted at the higher limit. Example: If in Maine the minimum is 50/100/50 and in Texas the limit is 30/60/25, if an accident occurs in Maine at the fault of the Texas insured, coverage defaults to 50/100/ Outdoor signs floater - ANSWER-Insures outdoor signs not adequately covered by commercial property policies. Does not include damage related to wear and tear, short circuit, or defective wiring Outside the premises coverage - ANSWER-Covers property while outside the premises and in the care and custody of a messenger or in possession of an armored car company Package policy - ANSWER-A policy that combines property and liability into a single policy Payment bond - ANSWER-A bond that guaranteed payment from the principal to the obligee Peak season endorsement - ANSWER-Used for business that have an identifiable time during the year when inventory levels increase. Provides coverage for this increase for the specified period by the insured People who are insured under an auto policy - ANSWER-Named insured, resident spouse, resident relatives, any person driving the vehicle with permission Performance bond - ANSWER-A bond that guarantees work will be performed to specifications Peril - ANSWER-cause of loss Personal contract - ANSWER-A contract that states that the insured may not transfer rights and duties under the contract without the insurer's written permission Personal injury endorsement - ANSWER-adds liability coverage for libel, slander, wrongful eviction, and other types of claim involving the injury of a third party's character or reputation Personal injury protection coverage - ANSWER-Similar to medical payment coverages, but extends to cover up to 80% of lost wages or essential services

personal injury, injury to insured, business liability, automobile liability, watercraft liability

• ANSWER-Standard exclusions under section 2 Personal liability and medical payments - ANSWER-Coverage under section 2 (liability) of a homeowners insurance policy Personal property - ANSWER-contents of a structure that are insured Personal property outside, property below ground, indirect loss, water damage from water sources under your control - ANSWER-Exclusions from flood coverage Physical damage coverage - ANSWER-Covers collision or other than collision (comprehensive) claims to an insured's auto or nonowned auto in the insured's care Physical hazard - ANSWER-visible hazard Policy territory - ANSWER-Area where coverage applies Pollutants injury to compensated farm employees aircraft spraying/crop dusting, the insured's performance or failure to perform custom farming operations for others f receipts exceed $2,000 per year - ANSWER-Exclusions of farmer coverage Pollution - ANSWER-Exposure of CGL that is covered under pollution liability Position schedule - ANSWER-Covers theft by employees with listed job titles Posting bond payable in the amount of $85,000, Depositing money or securities with the Texas Secretary of State in the amount of $85,000, Self-insuring (primarily for a business), Carrying auto liability insurance in split limits or a CSL - ANSWER-Ways to meet the financial responsibility requirements for Texas Primary policy - ANSWER-The policy that will pay first Principal - ANSWER-The party of a bond that is making a promise Pro rata liability - ANSWER-The bigger policy pays proportionally more than the smaller policy Product claims have worldwide protection, but the lawsuit must be filed in the US - ANSWER-The coverage territory for CGL is typically the US, territories, and Canada. The exception is for Products and completed operations aggregate - ANSWER-Pays for all products and completed operations claims during a specific policy period until the limit is exhausted

Products and completed operations, general - ANSWER-Two aggregates under a commercial general liability policy Professional Liability - ANSWER-Exposure of CGL that is covered under medical malpractice or errors and omissions Public adjuster - ANSWER-An adjuster who works on behalf of the insured in negotiating a claim settlement Punitive damages - ANSWER-Damages awarded that are intended to punish the wrongdoer because of gross negligence. These penalties are intended to act as a deterrent and are awarded in civil court Real property - ANSWER-Structures that are insured Regular program - ANSWER-Provides actuarial based rates and larger amounts of flood insurance for those who are in an area where flood maps have been prepared and the community has implemented flood control measures Release - ANSWER-A contractual agreement stating that after the claimant has been paid for a loss, he cannot collect additional damages resulting from the loss Replacement cost - ANSWER-Todays cost for an item without depreciation replacement cost of structures inf insured meets coinsurance requirement, actual cash value on personal property unless a replacement clause has been added, actual cash value on a property claim that is $2,500 or more until the property is repaired or replaced. - ANSWER-Loss settlement provisions in a homeowners policy provide the following Representations - ANSWER-Statements made by the prospective insured on an application that are believed to be entirely true Reservation of rights letter, nonwaiver agreement, declaratory judgement - ANSWER-If an adjuster is unsure of whether or not a claim is covered, they can use these methods to check Residence premises described on the declarations, vacant land on which a residence is being built, and cemetary plots or burial vaults - ANSWER-Insured location as defined by a homeowners policy Retroactive date - ANSWER-The first date the insurer becomes responsible for injuries and damages

Right of salvage - ANSWER-States that the insurer may take possession of the totaled property after a financial agreement is settled upon between the parties involved; selling of the salvage is a way for the insurer to recoup some of the loss that was paid. Rights of mortgagee (lender) - ANSWER-May act as the insured for submitting claims and paying premiums, has full right to recovery for claims up to the amount under mortgage, has a right to receive advance written notice of cancellation, nothing the insured does can prevent the mortgagee from collecting under the policy Risk - ANSWER-A chance of loss or uncertainty; insurance companies do not insure items where this is speculative due to a simultaneous chance of loss or gain. Robbery - ANSWER-Requires violence, threat, or fear Salvage - ANSWER-Occurs when the insurer takes title to the propertyof the insured under a covered loss and becomes the new owner of the property. Scheduled personal property endorsement - ANSWER-a;;pws the insured to scheduleitems to obtain open perils including mysterious disappearance and brakage with no deductible. Items may also be covered under a separate inland marine policy. Self insured retention - ANSWER-A deductible that applies when the umbrella liability policy acts as primary insurance because the underlying policies do not cover the loss Sinkhole collapse, collision to farm machinery and livestock, and earthquake and flood loss to livestock - ANSWER-Basic farm perils include all of those found in other polices as well as: Special causes of loss form - ANSWER-An open perils form that covers all risks of direct loss unless specifically excluded Special damages - ANSWER-A category of compensatory damages that are the actual economic damages to a party Spoilage endorsement - ANSWER-Covers perishable stock for the perils of breakdown of refrigeration equipment, contamination by refrigerants, and power interruption. Max $50,000 per occurrence SR-22 - ANSWER-A form that shows proof of financial responsibility for a driver that did not have insurance and was involved in an accident that resulted in injuries to a third party, or after being convicted of a major traffic offense Staff adjuster - ANSWER-An adjuster who is on the payroll of one insurance company and is paid a salary or by the hour

State legislature - ANSWER-Government entity that passes statutes that form the Texas insurance code Strict liability - ANSWER-Liability claims involving the defect of a product Subrogation rights - ANSWER-The rights of the insurer, who has settled at the insured's loss, to recover from an at-fault third party Surety - ANSWER-The party of a bond that agrees to be responsible for loss if the principal does not keep his promise Symbol 1 - ANSWER-Any auto symbol Symbol 19 - ANSWER-Mobile equipment symbol Symbol 2 - ANSWER-Company owned auto symbol Symbol 3 - ANSWER-Company owned private passenger vehicle symbol Symbol 4 - ANSWER-Company owned vehicles other than private passenger symbol Symbol 5 - ANSWER-Company owned autos subject to no fauly symbol Symbol 6 - ANSWER-Company owned vehicles subject to compulsory under/uninsured motorist coverage symbol Symbol 7 - ANSWER-Specifically described autos symbol Symbol 8 - ANSWER-Hired autos symbol Symbol 9 - ANSWER-Non owned autos symbol Territory for a boat owners policy - ANSWER-Inland waters with limited coastal use Texas department of insurance - ANSWER-A state agency that oversees the business of insurance The purpose of Texas Automobile Insurance Plan Association (TAIPA) - ANSWER- Allows persons who cannot get coverage in the open market to obtain coverage, and allows for the equitable distribution of insureds to insurance companies for this type of business. The umbrella policy will pay as if the underlying policy were still in place - ANSWER- What happens if one lets an underlying policy lapse? Theft - ANSWER-Unlawful taking of property from another

Third-party claim - ANSWER-When one who is not a party to the insurance contract submits a claim for indemnity due to the insureds legal liability Time and materials method - ANSWER-A method of valuation where the cost of laor and materials together determine the estimate To amend the valuation clause so that obsolete and useless equipment is not repaired or replaced - ANSWER-Why do we have the actual cash value endorsement for equipment breakdown coverage? Total loss - ANSWER-When the cost to repair or replace is greater than the value of the insured property Towing and labor coverage - ANSWER-Coverage that pays up to $120 per disablement for towing costs amd labor performed at the place of disablement Trailer interchange coverage - ANSWER-Coverage for the bailee exposure for nonowned trailers Transaction must have occurred in the US - ANSWER-One stipulation of money order and counterfeit currency coverage Trip transit policy - ANSWER-Covers a single shipment of goods one time one way. Truckers coverage form - ANSWER-Used by truckers who are hired to haul the goods of others using tractor trailers Type 1 trucker - ANSWER-Trucker who is for hire for the transport of non hazardous materials and must carry a minimum of 750,000 Type 2 trucker - ANSWER-Trucker for hire or private transport of hazardous materials and must carry a minimum of 500,000 Type 3 trucker - ANSWER-Trucker for hire or private transport of hazardous materials that does not qualify as a type 2 trucker and must have a minimum of 1 million Typical coverage territory for policies - ANSWER-United States, its territories and possesions including Puerto Rico and Canada. Losses in Mexico are not covered Unfair claims settlement practices - ANSWER-Actions such as: misrepresenting facts regarding coverage; failing to promptly acknowledge communication; failing to adopt reasonable standards when handling claims; not attempting in good faith to have prompt, fair, and equitable settlement to a claim in which liability is reasonably clear; compelling policyholders to sue because they cannot recover amounts due by offering substantially less than amounts actually covered

Unilateral contract - ANSWER-A contract where only one party makes a legally enforceable promise Uninsured/underinsured motorist coverage - ANSWER-Covers bodily injury or property damage to the insured or the insured's guest passengers if they are hit by an uninsured or underinsured motorist Unit cost method - ANSWER-A method of valuation where the unit cost is the estimate. Typically used in the valuation of buildings where a price would be given as a per square foot price Unoccupied - ANSWER-No occupant is present, but intends to return Vacant - ANSWER-Premises are empty Valuable papers and records floater - ANSWER-Describes a receptacle on the declarations page and warranties instructs the insured to keep all papers and records in fireproof containers when not being used otherwise losses by fire will not be covered. Does not cover money or securities and is settled on a value policy basis Value reporting endorsement - ANSWER-Used for businesses that experiencee frequent fluctuations in the value of their inventory and requires the insured to regularly report the value of their inventory Vehicle registration - ANSWER-The most important document in determing whether to write a personal or commercial auto policy Vehicles insured under a personal auto policy - ANSWER-Owned autos, additional and replacement vehicles (14 days coverage, 4 days physical), A temporary substitute vehicle, rented vehicles, trailers attached to covered vehicles Verify coverage, obtain additional information, verify and compare information - ANSWER-What are the three steps in a claim investigation Vicarious liability - ANSWER-One party is responsible for the wrongdoers actions (i.e. a parent of a child) Waiver - ANSWER-The voluntary relinquishment of a known right Warranty - ANSWER-A written promise in the policy that the insured will do (or not do) something; if breached, coverage is suspended and the claim will be denied What are the types of insurable interest? - ANSWER-Ownership of property, mortgagee, tenant interest when improvements are made, ownership or rental of

vehicles, ownership of personal or business property, a consignee or bailee's interest in property Wind, civil commotion, smoke, hail, aircraft, vehicles, volcanic eruption, explosion, riot - ANSWER-Perils that can be named in a DP-1 or DP-2 ppolicy (WCSHAVVER) Workers' compensation, ocean marine, and aviation - ANSWER-Commercial policies that must always be written separately from a commercial package policy Write your own program - ANSWER-A program that enlists insurers to write flood insurance in partnership with the federal government who retains responsibility for underwriting losses Yacht policy - ANSWER-A policy that covers larger vessels Yes - ANSWER-Are aggregate limits restricted by other limits on the commercial general liability policy? Yes - ANSWER-Can prompt contact with the insured and claimant help to resolve issues and avoid a lawsuit? Yes - ANSWER-Is good faith and fair dealing implied in a contract? Yes - ANSWER-When liability is reasonably clear, can an adjuster render a decision?