Questions and Answers
What is an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of an earthquake?
What is the exclusion that states that an insurer will not pay any claim due to lack of property maintenance?
Which Home Owner's form covers damage to a condo owner's property?
HO-6 Unit Owner's Form
Which Home Owner's form covers damage to a tenant's property?
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Which HO form covers damage to the dwelling?
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Which HO Form provides comprehensive coverage for dwelling and property?
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What is the term for conducting business according to laws and regulations?
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What term describes standards of conduct and moral judgment?
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What legal term describes the relationship between parties?
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What describes how an insurer appoints an individual to act on its behalf?
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What is an individual with a position of high trust and confidence called?
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What is the term for selling insurance policies that best fit prospects' needs?
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What is given when the applicant pays the initial premium at application signing?
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What does Full Disclosure mean in insurance?
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What is the name for a watchdog group that enforces ethical principles?
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Which Act addresses inappropriate advertising use?
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What does Misrepresentation mean in the context of policies?
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What term describes harmful communications that injure another's reputation?
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What is Rebating in insurance?
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What is Twisting in the insurance practice?
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A resident producer's license must meet what two requirements?
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In what two situations is it not required to be licensed as a manager or exclusive general agent?
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Which of the following cannot be issued a temporary license?
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Which is NOT a reason for a license to be suspended or revoked?
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Study Notes
Exclusions in Insurance
- Earth movement exclusion: Insurer does not pay for claims resulting from earthquakes, mudslides, landslides, or sinkholes.
- Neglect exclusion: Insurer excludes claims when property damage occurs due to the insured's failure to maintain the property.
Homeowner's Insurance Forms
- HO-6 Unit Owner's Form: Covers damage to a condo owner's property for events not specifically excluded.
- HO-4 Contents Broad Form: Covers tenant's property damage from incidents such as aircraft, civil commotion, fire, smoke, theft, vandalism, and wind.
- HO-3 Special Form: Covers dwelling damage from all events not excluded, and property inside from specific perils like fire, theft, and wind.
- HO-5 Comprehensive Form: Extends coverage to dwelling and property inside for any event not specifically excluded.
Key Terminology
- Compliance: Conducting business according to current governmental and judicial regulations.
- Ethics: Standards of conduct and moral judgment in business practices.
- Agency: Legal term defining the relationship between parties involved in insurance transactions.
- Agency Contract: Mechanism through which an insurer appoints individuals to act on its behalf.
- Fiduciary: An individual with high responsibilities involving trust and confidence, like a trustee or executor.
Insurance Practices
- Needs Selling: Obligation for producers to sell suitable policies that meet the prospects' needs and financial capability.
- Conditional Receipt: Issued when an applicant pays the initial premium at policy application signing.
- Full Disclosure: Requirement for informing clients of all necessary facts regarding policies to aid in informed decision-making.
Ethical Organizations and Regulations
- Insurance Standards Association (IMSA): A watchdog group ensuring member companies follow ethical standards.
- Unfair Trade Practices Act: Legislation addressing misuse of advertising in insurance.
Misrepresentation and Defamation
- Misrepresentation: Any statement that inaccurately describes an insurance policy’s features or coverage.
- Defamation: Communication that harms another’s reputation or character with false statements.
Unethical Practices
- Rebating: Occurs when an insurance buyer receives part of the producer's commission or any valuable inducement for purchasing a policy.
- Twisting: Persuading a policy owner to drop a policy only to sell another, ignoring potential disadvantages.
Licensing Requirements
- Resident producer's license: Must either reside in Pennsylvania or have a principal place of business in PA.
- Exemptions from licensing: Not required for limited authority managers or those who started before December 22, 1965.
Licensing Issues
- Temporary licenses cannot be issued for individuals selling insurance for a deceased producer's estate.
- Grounds for license suspension: Includes intentional violations, making false statements, and violating regulations. Making subjective policy comparisons is not a valid reason.
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Description
This practice exam features flashcards focusing on key exclusions in property and casualty insurance. Perfect for those studying for the Pennsylvania Property and Casualty License, this quiz will help reinforce your understanding of various insurance terms and concepts related to exclusions.
