Insurance Terms
This term is used to signify that no person or organization, other than the insured, having custody of Covered Property will benefit from the insurance policy.
No Benefit to Bailee
Page 110
What is the circumstance that increases the chance of a loss?
Hazard
Page 3
The ______ Limit is the most the policy will pay for the sum of all claims during the policy year for all coverages
The General Aggregate Limit
Page 138
What is is an addendum added to the policy that adds, removes, or changes coverage?
Endorsement
Page 87
This is someone who is trusted with someone else’s money:
A Fiduciary
Page 32
A Competent Party must be these 3 things:
At least 18 years old
Of sound mind
Sober at the time of entering the contract
Page 13
What are the two main types of reinsurance?
Facultative reinsurance and Treaty (also known as automatic)
Page 10
This form pays for loss the insured causes to property of others in the insured’s care, custody, or control
The legal liability coverage form
Page 119
This endorsement increases the Coverage A and Coverage B limits yearly to keep up with inflation. For example, the limits could be increased by 2% or 4% each year to keep up with rising construction costs.
Automatic Increase Insurance
Page 75
What type of bond guarantees that the money provided by a construction loan will actually be used by the contractor to complete the project?
Completion Bond
PG 171
An insurer would be this if they could no longer pay out on claims
Insolvent
Page 29
This is the authority given by the insurer to the producer; it is clearly stated in a written contract between the insurer and the producer
Express Authority
Page 11
A building or structure that is under construction is not eligible to be insured under the building and business personal property coverage form. Therefore, it needs to be insured by what form
The builders risk coverage form
Page 118
Under the Dwelling Policy this coverage pays for reasonable cleanup costs due to a covered Peril
Debris Removal
Page 73
John has lost both his hands AND his feet in a work place accident. He now suffers from permanent total disability and is now paid this % monthly for the remainder of his life
66 2/3 %
Page 168
What are the types of individual rating methods?
Judgement rating, Experience rating, Retrospective rating, Merit rating, Scheduled rating (JERMS)
Page 45
This is a Federal Law that regulates how information about consumers may be gathered and helps ensure the validity of reports
The Fair Credit Reporting Act
Page 38
These are the two main types of Commercial Crime coverage forms:
Commercial Entities — for private businesses (e.g. offices, restaurants, stores, etc.).
Government Entities — for public organizations (e.g. cities, counties, schools).
Under the Homeowners Policy, this is the limit an insurer will pay for defense cost
No limit
Page 85
What type of liability insurance covers businesses who serve alcohol?
Dram Shop Liability
Page 135
What are the 5 Methods of Handling Risk?
Sharing, Transfer, Avoidance, Reduction, Retention or STARR
PG 6
Because insurance policies operate with an assumption of change they are considered an ______ Contract
Aleatory
Page 15
The Building and Business Personal Property Coverage form does not cover:
HINT - There are 4 categories
-Money, currency, bills, notes, securities
-animals (they are covered if owned by others and boarded by the insured or if owned by the insured as stock inside a building)
-automobiles, aircraft, watercraft, and other vehicles
-land
Page 117
What coverage form is used for an old or unusual home?
HO-8
Page 81
What are the mandated coverage amounts for motor carriers?
-$750,000 for carriers of non-hazardous materials
-$1 million for carriers of oil and some other hazardous materials
-$5 million for carriers of extremely hazardous materials (such a gasoline, explosives, and radioactive material)
PG 42