Podcast
Questions and Answers
When do binders expire?
When do binders expire?
As soon as the policy is issued.
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy?
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy?
Limits of liability.
An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?
An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?
$10,000.
Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?
Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?
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What amount, if any, was not covered by the insurance in the case of an insured judged at fault in an automobile accident involving three other individuals awarded damages of $150,000, $75,000, and $75,000?
What amount, if any, was not covered by the insurance in the case of an insured judged at fault in an automobile accident involving three other individuals awarded damages of $150,000, $75,000, and $75,000?
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An applicant for a disability insurance policy has a heart condition of which they are unaware. How is the information they provide classified?
An applicant for a disability insurance policy has a heart condition of which they are unaware. How is the information they provide classified?
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An applicant for property insurance owns a building in which combustive materials are stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a?
An applicant for property insurance owns a building in which combustive materials are stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a?
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An insured has a maximum limit of coverage available under her liability during a policy year, regardless of the number of claims made or the number of accidents. What type of limit does this insured have?
An insured has a maximum limit of coverage available under her liability during a policy year, regardless of the number of claims made or the number of accidents. What type of limit does this insured have?
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Which of the following is covered by auto other-than-collision (Comprehensive coverage)?
Which of the following is covered by auto other-than-collision (Comprehensive coverage)?
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Which of the following exclusions would specifically fall under Coverage E?
Which of the following exclusions would specifically fall under Coverage E?
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How does insurance distribute the financial consequences of individual losses?
How does insurance distribute the financial consequences of individual losses?
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What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident?
What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident?
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An insured was having a new home built. Who pays for the damage caused when the contractor blasted a solid rock formation?
An insured was having a new home built. Who pays for the damage caused when the contractor blasted a solid rock formation?
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An insured is injured while driving his own car. Which coverage will pay for the loss?
An insured is injured while driving his own car. Which coverage will pay for the loss?
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The declarations section in a homeowners policy provides all of the following information except policy exclusions.
The declarations section in a homeowners policy provides all of the following information except policy exclusions.
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An insured has an automobile policy with the limits of 100/300/50 and a deductible of $1,000. What is the total payment made under the insured's policy after a claim?
An insured has an automobile policy with the limits of 100/300/50 and a deductible of $1,000. What is the total payment made under the insured's policy after a claim?
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An insurer must be fair in underwriting and pay all covered losses. For the faithful execution of these duties, what right does the insurer have?
An insurer must be fair in underwriting and pay all covered losses. For the faithful execution of these duties, what right does the insurer have?
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Which type of property would be covered under Coverage C - Personal property in a dwelling policy?
Which type of property would be covered under Coverage C - Personal property in a dwelling policy?
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Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Any loss paid under Coverage B reduces the Coverage A limit of liability.
Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Any loss paid under Coverage B reduces the Coverage A limit of liability.
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Which of the following elements best describes insurance written in support of public policy?
Which of the following elements best describes insurance written in support of public policy?
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If an insurance policy has the addition coverage provision, how does it affect the policy premium?
If an insurance policy has the addition coverage provision, how does it affect the policy premium?
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Which type of authority is found in the agent's contract?
Which type of authority is found in the agent's contract?
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Which provision defines how the policy will respond if there is other valid insurance written on the same risk?
Which provision defines how the policy will respond if there is other valid insurance written on the same risk?
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A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. Who pays for this damage?
A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. Who pays for this damage?
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An insured believes that his insurer is not properly fulfilling its obligations regarding his policy. What section of the policy will give the insured more information about specific duties of the insurer?
An insured believes that his insurer is not properly fulfilling its obligations regarding his policy. What section of the policy will give the insured more information about specific duties of the insurer?
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In contrasting stock insurers with mutual insurers, stock insurers are owned by the shareholders and issue nonparticipating policies.
In contrasting stock insurers with mutual insurers, stock insurers are owned by the shareholders and issue nonparticipating policies.
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Which would NOT be covered by an insured's uninsured motorist coverage: The insured causes a head-on collision with the car of an uninsured motorist.
Which would NOT be covered by an insured's uninsured motorist coverage: The insured causes a head-on collision with the car of an uninsured motorist.
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Which statement best describes agreement as it relates to insurance contracts?
Which statement best describes agreement as it relates to insurance contracts?
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When Jane and her insurer could not agree on the amount of liability loss after her accident, what condition did Jane use to settle the dispute?
When Jane and her insurer could not agree on the amount of liability loss after her accident, what condition did Jane use to settle the dispute?
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Policy limits are the maximum amount an insured may collect or for which an insured is protected under the terms of the?
Policy limits are the maximum amount an insured may collect or for which an insured is protected under the terms of the?
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For an additional premium, the extended coverages written on the basic form dwelling policy would cover what?
For an additional premium, the extended coverages written on the basic form dwelling policy would cover what?
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When does the federal emergency flood insurance program go into effect?
When does the federal emergency flood insurance program go into effect?
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Which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?
Which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?
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An insured was traveling down an icy road and hit a sign causing $1,350 in damage to his own car. If the insured has a $250 deductible and already collected $1,500 from a claim, how much will he collect on this claim?
An insured was traveling down an icy road and hit a sign causing $1,350 in damage to his own car. If the insured has a $250 deductible and already collected $1,500 from a claim, how much will he collect on this claim?
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You are at fault in an auto wreck out of state. How does your company adjust?
You are at fault in an auto wreck out of state. How does your company adjust?
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The amount of loss the insured is willing to absorb without insurance protection is known as?
The amount of loss the insured is willing to absorb without insurance protection is known as?
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An insured purchased an auto policy for his new car. Which section of his policy should the insured check to understand what perils are not insured against?
An insured purchased an auto policy for his new car. Which section of his policy should the insured check to understand what perils are not insured against?
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The transfer of legal right or interest in an insurance policy is called?
The transfer of legal right or interest in an insurance policy is called?
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Which of the following would be eligible for homeowners coverage F - medical payments in the event of injury at the insured's premises?
Which of the following would be eligible for homeowners coverage F - medical payments in the event of injury at the insured's premises?
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Which type of damages is intended as a form of punishment for negligent, willful, or outrageous intent?
Which type of damages is intended as a form of punishment for negligent, willful, or outrageous intent?
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For there to be negligent liability, all of the following must exist EXCEPT a reasonable expectation that the act may cause injury or damage.
For there to be negligent liability, all of the following must exist EXCEPT a reasonable expectation that the act may cause injury or damage.
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John and Carol purchased a property and have a homeowners policy with a mortgage clause naming Homeland as a loss payee. If they suffer a fire to their home, what will happen?
John and Carol purchased a property and have a homeowners policy with a mortgage clause naming Homeland as a loss payee. If they suffer a fire to their home, what will happen?
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Study Notes
Insurance Policies and Coverage
- Binders expire immediately upon policy issuance.
- Insurers' responsibility for payment is defined by limits of liability in common policies.
- Personal umbrella policies include self-insured retention; after a $12,000 claim, coverage pays $10,000 if the SIR is $2,000.
- Nonrenewal denotes termination of an insurance policy at expiration without offering continuation or replacement.
Claims and Liability
- In an auto accident with 100/300 coverage, damages of $150,000, $75,000, and $75,000 leave $50,000 uncovered.
- An applicant's unknown heart condition treated as representation on the disability insurance application.
- Storing combustive materials increases risk, classifying it as a morale hazard in underwriting.
Coverage Limits
- Aggregate limits restore coverage amounts annually, regardless of claims or accidents.
- Auto comprehensive coverage includes electric equipment necessary for car operation.
- Coverage E exclusions feature contract liability specifically.
Risk Distribution and Legal Aspects
- Insurance distributes financial loss by transferring risk to all insured individuals.
- Per occurrence limits in liability policies set the maximum payment for claims from a single accident.
- Construction damage caused by contractor actions is the contractor's responsibility.
Payment Coverage and Exclusions
- Part B of auto insurance covers medical payments for the insured's own injuries.
- Homeowners policies do not detail exclusions in the declarations section.
- Total payment under auto policy after a $125,000 injury and $1,200 car damage amounts to $125,200.
Rights and Responsibilities
- Insurers must adhere to fair practices and execute duties, allowing them to accept premiums for active policies.
- Coverage C in dwelling policies extends to personal property like rowboats.
- Coverage B does not reduce Coverage A limits for claims.
Insurance Fundamentals
- Insurance must serve a legal purpose, supporting public policy.
- Additional coverage provisions typically do not increase policy premiums.
- Agents possess express authority outlined in their contracts.
Claims Resolution and Policy Agreements
- Provisions detail responses to valid insurance on the same risk through "Other Insurance".
- Homeowners liability covers damages caused by actions, such as through a golfer's misdirected shot.
- Policy conditions offer specifics regarding insurer obligations to the insured.
Types of Insurers and Contract Details
- Stock insurers are shareholder-owned entities issuing nonparticipating policies.
- Uninsured motorist coverage excludes incidents where the insured is at fault.
- Agreement in insurance contracts requires acceptance of terms by one party.
Claims Disputes and Policy Limits
- Arbitration resolves disputes when parties disagree on liability loss amounts.
- Policy limits specify the maximum amount payable under the insurance terms.
Additional Coverage and Program Activation
- Extended coverages in dwelling policies for an additional premium include riot protection.
- Federal emergency flood insurance begins when a community applies for it.
- The DP-2 and DP-3 forms provide coverage for additional living expenses, not available under DP-1.
Claims Process and Self-Insured Retention
- Insured collects $1,100 from a $1,350 car damage claim with a $250 deductible.
- Auto policy companies adjust claims according to the minimum state requirements in fault cases.
- Self-insured retention reflects the loss amount the insured chooses to cover without insurance.
Policy Understanding and Transfer of Interest
- The exclusions section specifies uninsurable perils for an auto policy.
- Assignment refers to transferring legal rights or interests in an insurance policy.
Coverage Eligibility and Damages
- Full-time maids are eligible for homeowner medical payment coverage for injuries on premises.
- Punitive damages penalize negligent or intentional harm.
- Negligent liability requires factors that exclude reasonable injury expectation.
Co-Claimants in Insurance
- Co-claimants in loss reimbursement for property damage include both homeowners and the mortgage holder, receiving shared reimbursement from the insurer.
Studying That Suits You
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Description
Test your knowledge on various aspects of insurance policies, claims, and liability. This quiz covers essential topics like coverage limits, termination of policies, and the impact of hazards on underwriting. Perfect for anyone looking to deepen their understanding of insurance fundamentals.
