Insurance Terms
Insurance companies employ mathematical experts to predict how much premium they need to collect to pay for claims that are expected. The more cars, homes, and business they insure - the more accurate the predictions become. This is known as
The Law of Large Numbers
PG 4
This is the amount the insured must pay first before the policy will pay
A Deductible
PG 60
Prior to workers compensation laws, which common law defense argued that the employer should not be help responsible, since the workers injury was the fault of a co-worker?
Fellow Servant Rule
PG156
This type of insurance provides coverage for multiple buildings with just one limit of insurance
Blanket insurance
PG 57
In an occurrence form or claims made form policy, what is the event that must occur in order for a policy to pay a claim?
A coverage trigger
PG 140
What provides coverage for out of the ordinary, unusual, or high risk situations that a majority of insurance companies are unwilling to insure?
Surplus Lines Insurance
PG 21
These are the 2 main criteria to determine whether a specific business is eligible for a Businessowners Policy
Size- Generally only small to medium sized businesses qualify
Risk- generally, only low risk businesses qualify
PG 145
What are the two optional coverages one can purchase for an Aviation Insurance policy?
Hangarkeeper's Liability and Cargo Liability
PG 183
When two policies cover the same building concurrently, sometimes the _______ method is used instead of the pro rata method. This method provides that each policy pays for an equal amount until the loss is completely paid, or until each policy has reached its insurance limit, whichever is first.
The contribution by equal shares method
PG 62
This is a document added to the end of the policy that changes the entire policy and applies to all lines of insurance that are included in the policy:
Interline Endorsement
PG 115
These agencies are able to represent and sell for multiple insurance companies:
Independent Agency
PG 8
Which coverage can pay for temporary transportation expenses in the event of a loss to a covered auto?
Transportation Expenses
PG 102
This insurance can pay a claim if an insured director, officer, or manager is held personally responsible for a wrongful act, such as a making a bad decision that causes other people to lose money.
Directors and Officers Liability
PG 178
What are the four rating components that an insurer uses to determine premium cost?
Loss costs, Loss adjusting expenses, Operating expenses, and Profits
PG 45
These are 3 types of transportation carriers:
Common Carrier- Trucker who hauls goods for the general public
Contract Carrier- Trucker who hauls goods of others only on a contract basis
Private Carrier- Trucker who hauls only its own goods
PG 125
What is the risk selection process the insurers uses to select which risks to insure?
Underwriting
PG 43
What are the parts of the personal auto policy? (hint A-F)
Part A - Liability Coverage
Part B- Medical Payments and Coverage
Part C - Uninsured Motorists Coverage
Part D - Coverage for Damage to your Auto
Part E - Duties after an Accident or Loss
Part F- General Provisions
PG 97
This is payed by insureds under certain circumstances to utilize their umbrella insurance (similar to a deductible, paid when an umbrella policy can cover a loss that the underlying policies will not)
Self-insured retention (SIR)
PG 179
A typical _______ in a property policy states that any losses covered under the policy shall be paid, as insurable interest may appear, to the insured and the loss payee shown in the policy.
loss payable clause
PG 66
Which endorsement can be added to CAP to allow the employee to be insured while driving non-owned vehicles for personal use? This endorsement is purchased by the employer, but is for the benefit of the employee.
Drive Other Car Coverage
PG 113
Which type of insurer acts as the insurer of last resort?
Government Insurers
PG 10
What are two Utility service endorsements that the insured can purchase to provide coverage for losses caused by off premises failure of power or other utility services?
Utility Services- Direct Damage
Utility Services- Time Element
PG 161
What are the five types of Professional Liability policies?
DAILY DOUBLE
Medical Malpractice, Doctor's Professional, Legal Malpractice, Errors & Omissions (E&O), Architects and Engineers (A&E)?
PG 177
What are the 7 main components of Property and Casualty Insurance Policies?
DEEDISC
Declarations, Exclusions, Endorsements, Definitions, Insuring Agreement, Supplementary Coverage, Conditions
PG 59
These are all of the 7 states in AAA MWG footprint
DAILY DOUBLE
What is.....
Arizona
Utah
Nevada
Wyoming
Northern California
Alaska
Montana