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Property and Casualty insurance exam
questions and answers already passed
Insurance ✔✔The transfer of risk through a legal contract
Property ✔✔Covers real property and personal property against damage or loss resulting from covered causes of loss called perils
casualty ✔✔covers non-property losses (3rd Party)
Personal lines ✔✔Insurance for families and individuals
Commercial Lines ✔✔Insurance for Business
Risk ✔✔Uncertainty of financial loss
Pure Risk ✔✔Chance of loss only (insurance only covers)
Speculative Risk ✔✔Chance of loss or gain
law of large numbers ✔✔as the number of homogenous loss exposures increases, the more accurate claims can be predicted from the group
Perils ✔✔causes a loss
Named Peril ✔✔lists the perils that are covered
open peril ✔✔cover all perils except those specifically excluded by the policy
hazard ✔✔Are not causes of loss but are things that increase the chance of a peril happening.
Physical Hazard ✔✔something you can physically look at
Moral Hazard ✔✔dishonest tendencies
morale hazard ✔✔attitude of carelessness
Direct Loss ✔✔immediate physical damage to property
indirect loss ✔✔loss that happens after the direct loss but due to the loss of use of the property. Also called consequential
proximate cause ✔✔the first cause in an unbroken chain of events
Absolute Liability ✔✔liability w/o fault
strict liability ✔✔product defect claims
Legal Duty Negligence ✔✔owe an obligation to act or not act
breach of duty negligence ✔✔failure to comply with the duty
actual loss negligence ✔✔another suffers a loss
proximate cause negligence ✔✔the breach of duty is the direct causer of the loss
accident ✔✔event that is sudden and unexpected
occurence ✔✔an event that happens over time
Admitted Carrier ✔✔authorized insurer, issued a certificate of authority to transact business in the state.
nonadmitted carrier ✔✔unauthorized insurer, not regulated to get certificate of authority, can only transact surplus lines insurance
Domestic ✔✔same state
foreign ✔✔another state
alien ✔✔another country
State regulation ✔✔State legislature passes the laws
Commissioner ✔✔Runs Tx Dept of Ins. Appointed by Governor, does not write laws
Texas Property and Casualty Insurance Guaranty Association ✔✔Protects claimants and policy holders in the event of insurer insolvency
Board of Directors ✔✔5 members from insurers, 4 from the public
Assessment ✔✔authorized insurers in the state are required to pay into the fund. The amount they pay is based upon their share of the market in texas
2 common methods of rate regulation ✔✔prior approval & file and use
DP-1 ✔✔basic policy, covers fire, lightning, explosion
Coverage D ✔✔Loss of use; Fair Rental Value, Additional living expenses
Coverage E ✔✔Personal Liability; covers claims for bodily injury to others
Coverage F ✔✔Covers Med Pay to others up to 3 years
Flood Limits ✔✔250,000 structure, 100,000 contents
Fair Access to Insurance Requirements ✔✔Insureds meeting underwriting criteria and declined twice by authorized insurers cannot be declined by the plan.
