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(2017) Test
- Executory Both sides perform certain acts to make contract enforceable.
- Endorsement Used to add, delete, or change any policy parts. May alter content of declarations and insurance agreement. May contain conditions exclu- sions, and definitions.
- Subrogation Used when insurer paid a covered claim on behalf of insured caused by another party. Entitled to insured's right of recovery from negligent party.
- Agreed value Agreed upon by insured and insurer.
- Insuring agreement Describes covered perils, risks assumed, nature of coverage, makes reference to contractual agreement between insurer and insured.
In package policy, each ditterent coverage form includes its own insur- ing agreement.
- Reservation of rights Insd fails to report claim in timely fashion.
Compromises insurance company's ability to investigate. Sends "" letter.
"" letter tells insd that the company will investigate but might deny due to late reporting.
- Exclusions Property, perils, hazards, or loss arise from specific causes not covered under policy.
- Non-waiver Retention of known right.
Insured/insurer must sign.
- Proof of loss
(2017) Test
Formal statement made by insured to insurance company regarding loss. Places suflcient information concerning loss before company to enable it to determine liability under policy.
- Hazard Increases seriousness of loss or likelihood loss will occur.
- Proximate cause Unbroken chain of events cause loss.
- Arbitration Appears in auto policies to resolve disputes for underinsured/unin- sured.
Settle dispute between insurance companies involving 3rd party liabil- ity claims.
- Risk Possibility (uncertainty) loss may occur and reason people buy insur- ance.
- Coinsurance Method of requiring insured to insure @ least 80% of value of property in exchange for premium discount.
If carries less than amount needed, penalty will occur in case of partial loss.
- Limitations May eliminate or reduce coverage, but under certain circumstances or when specified conditions apply.
- Market value Price market will support.
Ex: Antiques claims usually adjusted this way.
- Negligence Lack of reasonable care required to protect others and or their property from unreasonable chance of harm.
- Salvage Insurer pays loss on behalf of insd, insurer entitled to salvage to reduce claim
(2017) Test
- Indemnity Claimant should be restored to approximate financial condition that existed before loss, no better and no worse.
Applies to 1st and 3rd party claims.
- Abadonment clause Insured cannot abandon property to insurance company in exchange for full insured value
- Domestic insurer Insurer formed and domiciled under laws of particular state.
- Punitive damages Exemplary damages awarded by court and intend to punish.
- Binder Temporary evidence coverage is in ettect until policy issued. Written or oral.
- Tort Civil wrong, violates rights of others.
- Stated amount Agreed amount of insurance, stated on policy.
- Stated value Cannot pay more than policy limits
- Replacement cost Purchase new without depreciation
- Special damages Med expenses and loss of wages or costs of other known expenses
- Aleatory Insurance contract contingent of uncertain event (loss)
- Cause of loss forms States perils to be insured against
- Warranty Policy condition based on information given by insured in an applica- tion
- Breach of warranty Incorrect statement by insured which may void coverage
- Deductible Self insured party of an insured loss.
(2017) Test
1st party claims.
Insured must bear the loss.
- Estoppel Intentionally or unintentionally creates impression of a fact existing, innocent party relies on this impression and is damaged as a result, guilty party may be legally prohibited from asserting fact doesn't exist.
- Comparative negligence Allow injured party to collect from another party for a loss, even when injured party contributed to their loss.
Damages reduced by extent of injured parties negligence.
- Insurable interest Lawful, substantial, economic interest in preservation of property.
- 4 factors to establish negligence
- Legal duty owed
- Breach of legal duty owed
- Proximate cause
- Damages
- Modified comparative No recovery if person is either equally responsible or more responsible for resulting injury.
To recover, must be no more than 50% @ fault.
- Conditions Sets provisions, rules, duties, and obligations.
Commonly describe policy period, territory, right for each party to cancel policy.
- Named perils Specifically described perils to be insured against.
- Open perils Does not list perils but provides broader coverage.
All perils are covered except perils listed in exclusions
(2017) Test
Dispute in property claim, both parties select appraiser to determine value of loss. If appraisers do not agree an umpire is selected to make decision. Each pay for own appraiser and split umpire cost,
- Peril Potential cause of loss
- Pair or set clause Pair or set is lost, loss is valued as fair proportion of total value.
- Other insurance Other sources of recovery for covered claim. Some primary, some excess. Each will pay % of limit for claim
- Once repairs have been made
When can an insured collect full replacement cost on a structure?
- Pure comparative RI Negligence standard?
- Within 15 days RI: How often must contact claimant if more time is needed to investi- gate?
- 10 days RI: How long insurer have to reply to claimant?
- 15 days with written re- sponse
RI: How long to reply to inquiry from department of insurance regard- ing a claim?
- 30 days RI: How long does insurer have to report vehicle theft?
- 21 days RI: If operator of motor vehicle is involved in accident where person is injured/killed or PD is over $500.00, how long do they have to report to DMV?
- 25/50/25 RI: Minimum limits
- 3 years RI: If adjuster license where revoked, how long must you wait to reapply?
(2017) Test
- 4 years RI: How long is RI license good for?
- 21 days RI: How long do you have to respond to any inquiry from dept?
- 5 years RI: How long must retain records after termination of transaction?
- Licensee, 30 days. RI: Who reports legal name, address, or information submitted changes to department? How long do you have?
- 12 months without writ- ten exam
- 120 days unless extend- ed by director
RI: How long can you remain a RI adjuster if license expires?
RI: How long can emergency license be issued by director
- H0-1 Basic
Most states have dropped
- Fire
- Lightning
- Internal explosion
- H0-3 Open peril on structure
Broad peril on contents
80% coinsurance on structure to get full replace value ACV on contents unless endorsed
- H0-4 Renters coverage
Broad peril on contents
- H0-
LOU
30% Cov A on H0-2, -3, -
30% Cov C on H0-
50% Cov C on H0-
10 Cov A on H0-
- 30 months Use of non-OEM parts allowed under unfair claims when vehicles are older than?
- Commercial package policy
Covers 2 or more lines of business by combining commercial lines coverage parts.
*Worker's comp not included
- 30 days Replacement auto must be disclosed to insurer within X days?
- Yacht policy 65 foot sailboat
60 foot boat with an outward motor
- Visitors Med pay on H0 policy is for
- Personal article floater Inland marine policy
Can provide coverage for breakage
Ex: Furs, silver, cameras, postage stamps
- Policy number
- Effective dates
- Name of insured
Decs page contents
- Location/description on property
- Insuring agreement
- Conditions
- Exclusions
- Act of God, Contributo- ry
*Intentional acts are not a defense
Insurance policy contents
RI: Defense to negligence
- Promissory of warranty Made at time of application, insured refrains from doing certain activity
- Legal hazard Legal environment increases loss frequency
- Physical hazard Tangible characteristic of property, person, or operations that leads to loss
- Morale hazard Condition of carelessness increases loss
- Moral hazard Condition increases likelihood person will intentionally cause a loss
Ex: embezzlement
- Vicarious liability Secondary liab
Person liab for negligent act of other person
- Strict liab Liab due to special circumstances, do not need to prove negligence
- Split deductible One deduct for comp, one for collision
