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Property & Casualty
| Term | Definition |
|---|---|
| What is a Property Insurance policy? | A policy that protects the insured from a loss caused by damage from a covered peril to insured property |
| What is a Casualty Insurance policy? | A policy that protects an individual or business when it is found liable for negligent acts that cause injury to others or their property |
| Who does Property Insurance pay? | I, me, my |
| Who does a Casualty Insurance pay? | The Third Party, the other guy |
| DICEE Acronym | Declarations Insuring Agreements Conditions Endorsements & Additional Coverage Exclusions |
| Additional Supplementary Coverage is what? | Is a payment for additional expenses that are normally not covered - they may also have a separate limit of insurance |
| When a client (insured) cancels a policy, do they have to give notice? | No |
| When an insurance company (insurer) cancels a policy, do they have to give notice? | Yes |
| What does Primary Insurance do? | Attaches immediately upon the occurance or loss |
| What does Excess Insurance do? | Pays whatever is not paid by the primary policy (up to the coverage limit or amount of the loss - whatever is cheaper) |
| What is the Pro Rata Formula? | (Policy limit of ONE company) / (Policy limit of ALL companies) * by (loss) Ex. Company X insured $10k, Company Y insured $10k, Loss is $15,000 Since company X is the primary insurance, he will pay the max limit ($10k) & Company Y will pay remainder $5k |
| Pro Rata Example You have 2 homeowners policies totally $400,000 A is $100,000 and B is $300,000 A policy will cover 25% (100k/400k) and B policy will cover 75% (300k/400k) If you have a loss of $50k, How much will A & B each cover? | Policy A; 100k/400k = 25% (25%) * 50,000 (loss) = $12,5000 Policy B; 300/400 = 75% (75%) * 50,000 (loss) = $37,500 |
| Contribution to Equal Shares Example; There is a $24k liability covered by 2 companies X has a $5k policy Y has a $25k policy What would each company pay? | X is the smallest company so he would max out the limit X would pay $5,000 Y would pay the remainer of the $24k liabilty $24k-$5k (from X) = $19k |
| Contribution to Equal Shares Example; There is a $4k liability covered by 2 companies X has a $5k policy Y has a $25k policy What would each company pay? | Since the loss is not more than the smallest companies limits, they would split the cost X would pay $2,000 Y would pay $2,000 |
| Named Insured Duties After Loss (PPC-MSC) Acronym | Prompt notice to insurer Protect Property from more damage Complete inventory Make property available for inspection Submit to examination Cooperate w insurer |
| What are the (3) basic ways underwriters assign rates? | (1) Judgement rating (2) Manual (or Class) rating (3) Experiene rating |
| ISO Acronym | Insurance Security Officer A company that provides loss costs informatino |
| FCRA Acronym | Fair Credit Reporting Act |
Created by:
marerickson
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