Mixed Deck — All Property And Casualty Insurance License Topics Flashcards
100 cards from real Property And Casualty Insurance License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 20 Mixed Deck — All Property And Casualty Insurance License Topics flashcards as text
Under the 'concurrent causation' doctrine, when two perils combine to cause a loss where one is covered and one is excluded, how is the loss typically treated?
Answer: The entire loss is covered because a covered peril was involved
Under the concurrent causation doctrine, if a covered peril and an excluded peril combine to cause a loss, the entire loss may be covered because a covered cause was a contributing factor.
What does 'uninsured motorist' (UM) coverage protect against?
Answer: Injuries to the insured caused by a driver who has no liability insurance
UM coverage compensates the insured for bodily injuries caused by a driver who carries no liability insurance or by a hit-and-run driver.
What is the role of a 'public adjuster'?
Answer: A licensed professional hired by the insured to negotiate the claim settlement on their behalf
A public adjuster represents the policyholder — not the insurer — in preparing, filing, and negotiating property insurance claims, typically charging a percentage of the settlement.
What does the 'insuring agreement' of a policy define?
Answer: The insurer's basic promise to pay and the scope of coverage provided
The insuring agreement is the core of the policy where the insurer promises to pay for covered losses in exchange for the premium.
What is the purpose of an 'umbrella' liability policy?
Answer: To provide excess limits above underlying primary policies and drop-down coverage for some uncovered claims
An umbrella policy sits above primary liability policies, paying claims that exceed underlying limits and sometimes covering gaps left by underlying policies.
What does it mean for an insurance policy to be a 'contract of adhesion'?
Answer: The policy is drafted by the insurer and the insured must accept it as-is with no ability to negotiate terms
Insurance policies are contracts of adhesion because the insurer prepares standardized terms that the insured must accept or reject without negotiation.
What is the 'other insurance' clause designed to do?
Answer: Prevent the insured from collecting more than the actual loss when multiple policies cover the same risk
The other insurance clause coordinates benefits when more than one policy covers a loss, ensuring the insured is indemnified but does not profit from duplicate coverage.
What is a 'mortgagee clause' (also called a mortgage clause) in a property policy?
Answer: A provision protecting the lender's interest in insured property even if the borrower violates policy conditions
The mortgagee clause gives the lender an independent right to receive claim proceeds and protects the lender if the borrower's coverage is voided by a policy violation.
What is 'structured settlement' in liability claims?
Answer: A settlement paid out in periodic installments over time rather than as a lump sum
A structured settlement pays the claimant in periodic payments, often funded by an annuity, providing long-term income instead of a single lump-sum payment.
Which of the following best describes 'professional liability' (E&O) insurance?
Answer: Coverage for claims arising from errors, omissions, or negligent acts in rendering professional services
Professional liability (Errors & Omissions) insurance protects professionals against claims alleging financial harm caused by their mistakes or failure to perform services properly.
What is the purpose of the 'NAIC Insurance Fraud Prevention Model Act'?
Answer: To set standards for insurer anti-fraud programs, reporting requirements, and penalties for insurance fraud
The model act requires insurers to establish anti-fraud plans, train employees, and report fraud to state regulators, creating a framework for detecting and preventing insurance fraud.
What does 'occurrence' mean in a liability policy?
Answer: An accident or continuous exposure to conditions that result in bodily injury or property damage
An occurrence is an accident, including repeated exposure to substantially the same general harmful conditions, that results in bodily injury or property damage.
What is 'misrepresentation' in insurance applications?
Answer: Making a false statement of a material fact on an insurance application
Misrepresentation is the act of providing false information on an insurance application; if material, it can allow the insurer to void the policy.
What is an 'independent adjuster' (IA)?
Answer: A freelance claims professional hired by insurers on a per-claim basis
Independent adjusters are self-employed or work for IA firms and are contracted by insurers to handle claims, particularly during catastrophes when staff adjusters are overwhelmed.
What is an 'inland marine' policy primarily designed to cover?
Answer: Goods in transit and movable property
Inland marine insurance covers goods being transported overland or by air, as well as certain types of movable property like cameras, jewelry, and contractor's equipment.
Which of the following is covered by comprehensive auto coverage?
Answer: Collision with a deer
Comprehensive coverage pays for vehicle damage from causes other than collision, including hitting an animal, theft, vandalism, fire, and weather events.
What is a 'surplus contribution' requirement in an insurance guaranty fund assessment?
Answer: A mandatory assessment charged to solvent admitted insurers to fund claim payments of insolvent insurers
When an admitted insurer becomes insolvent, the state guaranty fund assesses solvent admitted insurers proportional to their premium volume to cover the insolvent insurer's outstanding claims.
Replacement cost coverage for personal property pays:
Answer: The cost to replace the item with a new item of like kind and quality
Replacement cost coverage pays the amount needed to replace the damaged or destroyed item with a new one of similar kind and quality, without deducting for depreciation.
What is a 'named peril' policy?
Answer: A policy that covers only the perils specifically listed
A named peril policy only covers losses caused by perils explicitly listed in the policy document.
What is 'diminution in value' as a measure of damages?
Answer: The reduction in market value of a vehicle or property after it has been repaired following a loss
Diminution in value is the difference between the market value of a vehicle before a loss and its value after repair, even when properly repaired.