Property and Casualty Insurance Flashcards

Which of the following is an example of an 'inland marine' policy?

Answer: Cargo coverage for goods shipped by truck

Inland marine policies cover property in transit over land and certain types of movable property.

A 'named-perils' property policy differs from an 'open-perils' policy in that it:

Answer: Only covers perils specifically listed in the policy

Named-perils policies only pay for losses caused by perils explicitly listed, placing the burden of proof on the insured.

Under personal auto policy (PAP) liability coverage, the insurer's duty to defend the insured ends when:

Answer: The policy limits have been exhausted

Once the insurer pays its policy limit, its duty to defend the insured in that claim is extinguished.

Which homeowners form provides the BROADEST coverage for both the dwelling and personal property?

Answer: HO-3 (Special Form)

The HO-3 covers the dwelling on an open-perils basis and personal property on a named-perils basis, making it the most widely used and broadest standard form.

A 'split limit' auto liability policy expressed as 25/50/25 means:

Answer: $25,000 per person BI, $50,000 per accident BI, $25,000 property damage

Split limits are expressed as bodily injury per person / bodily injury per accident / property damage per accident.

What is the primary purpose of a 'proof of loss' requirement in a property insurance claim?

Answer: To provide the insurer with a formal statement of the amount claimed and circumstances of the loss

A proof of loss is a sworn statement by the insured detailing the loss, amount claimed, and relevant facts required by the policy.

Under workers compensation insurance, the 'exclusive remedy' doctrine means:

Answer: The employee's only remedy against the employer is through workers compensation benefits

Exclusive remedy bars injured employees from suing their employer in tort; workers comp is the sole remedy against the employer.