Insurance Basics
15%of exam
Property
25%of exam
Casualty + Liability
35%of exam
Ohio Law + Regulation
25%of exam
ODI25/50/25BWCFAIR PlanOPLIGALicensing + CE
Quick Facts
- Exam
- OH P&C
- Questions
- 150 MC
- Pass
- 70%
- Time
- 2.5 hours
- Pre-license
- 40 hrs (20/line)
- Fee
- ~$42-49
- Vendor
- PSI Services
- Regulator
- ODI
Policy Parts: DICE
D-I-C-E builds every policy
D: DeclarationsI: Insuring agreementC: ConditionsE: Exclusions
ACV vs Replacement Cost
ACV
- Minus depreciation
- Insured bears wear
- Lower payout
RCV
- No depreciation
- Like kind/quality
- Repair often required
Depreciated vs full
Key Terms
- Peril
- Cause of loss
- Hazard
- Increases chance of loss
- Indemnity
- Restore, no profit
- Insurable interest
- Financial stake in loss
- Subrogation
- Insurer recovers from third party
- Salvage
- Insurer sells damaged property
- Law large numbers
- Bigger pool predicts losses
- Aleatory
- Unequal exchange, uncertain event
Peril vs Hazard
Peril
- Cause of loss
- Fire, theft, wind
- The event
Hazard
- Increases chance
- Physical/moral/morale
- The condition
Cause vs condition
Policy Parts (DICE)
- Declarations
- Who/what/limits/premium
- Insuring agreement
- Promise to pay
- Definitions
- Defined terms
- Conditions
- Duties of parties
- Exclusions
- Not covered
- Endorsements
- Modifications/riders
- Adhesion
- Take-it-or-leave-it
- Reasonable expectations
- Ambiguity favors insured
Subrogation vs Salvage
Subrogation
- Recover from third party
- After paying insured
- Money back
Salvage
- Take damaged property
- Sell it
- Total loss paid
Recover cash vs property
Settlement Terms
- ACV
- Replacement minus depreciation
- RCV
- No depreciation deducted
- Coinsurance
- Carry % or penalty
- Deductible
- Insured retention
- Pro rata
- Share by limits
- Equal shares
- Each pays equally
- Representation
- Believed-true statement
- Warranty
- Guaranteed-true, part of contract
Representation vs Warranty
Representation
- Believed true
- Material lie voids
- Outside contract
Warranty
- Guaranteed true
- Part of contract
- Strict
Belief vs guarantee
HO Forms
4 rent, 6 condo, 8 old
HO-4: renterHO-6: condoHO-3: open dwellingHO-5: open bothHO-8: older home
Named vs Open Peril
Named-peril
- Listed perils only
- Insured proves cause
- Narrower
Open-peril
- All but excluded
- Insurer proves exclusion
- Broader
Burden of proof shifts
Which HO/DP Form?
- Renter, no building→HO-4(Tenant)
- Condo unit owner→HO-6(Interior + improvements)
- Owner, broadest cover→HO-5(Open both)
- Owner, common choice→HO-3(Open dwelling)
- Older home, market low→HO-8(Repair cost)
- Rental dwelling, open→DP-3(Landlord)
- Dwelling, lowest cost→DP-1(Basic ACV)
- High-value jewelry→Floater(Schedule item)
Homeowners Forms
- HO-2
- Broad named-peril both
- HO-3
- Open dwelling, named contentsCommon
- HO-4
- Renters (tenant) contents
- HO-5
- Open-peril both
- HO-6
- Condo unit-owner
- HO-8
- Older home, repair cost
- Section I
- Property A-D
- Section II
- Liability E + F
HO/DP Coverages
- Coverage A
- Dwelling
- Coverage B
- Other structures
- Coverage C
- Personal property
- Coverage D
- Loss of use / rent
- Coverage E
- Personal liability
- Coverage F
- Medical payments to others
- Special limits
- Cash, jewelry, furs caps
- Floater
- Schedule high-value items
Dwelling + Commercial Property
- DP-1
- Basic named-peril, ACV
- DP-2
- Broad named-peril, RCV
- DP-3
- Open-peril dwelling
- DP no liability
- Add by endorsement
- Basic form
- Named-peril commercial
- Broad form
- Adds water, snow weight
- Special form
- Open-peril commercial
- Business income
- Lost profit, continuing expense
PAP Coverages
A liability, B med, C UM, D damage
A: liabilityB: medicalC: UM/UIMD: your auto
Occurrence vs Claims-made
Occurrence
- Injury in period
- Any filing date
- No tail needed
Claims-made
- Claim in period
- Retroactive date
- Tail/ERP extends
When it happened vs filed
Which Coverage Applies?
- You hurt a guest→Coverage E(Liability)
- Guest minor injury→Coverage F(MedPay, no fault)
- Auto hits third party→PAP Part A(Liability)
- Your car stolen→PAP Part D(OTC)
- Other driver uninsured→PAP Part C(UM)
- Business BI/PD claim→CGL Cov A(Occurrence)
- Libel by business→CGL Cov B(Personal injury)
- Worker injured on job→Ohio BWC(Statutory)
Personal Auto (PAP)
- Part A
- Liability BI/PD
- Part B
- Medical payments
- Part C
- UM/UIM
- Part D
- Damage to your auto
- Collision
- Impact or overturn
- OTC
- Comprehensive: fire, theft, glass
- UM
- At-fault driver uninsured
- UIM
- At-fault limits too low
Negligence: 4 Ds
Duty, breach, cause, damages
Duty owedBreachProximate causeActual damages
Commercial Lines
- CGL Cov A
- BI/PD liability
- CGL Cov B
- Personal/advertising injury
- CGL Cov C
- Medical payments
- Aggregate
- Total cap, policy period
- BAP symbol 1
- Any auto, broadest
- BOP
- Property + liability package
- Surety bond
- Guarantees principal performs
- Fidelity bond
- Employee dishonesty loss
Liability + Workers Comp
- Negligence
- Duty, breach, cause, damages
- Bodily injury
- Physical harm to person
- Property damage
- Damage/loss of use
- Vicarious liability
- Liable for another's acts
- Absolute liability
- No-fault, dangerous activity
- WC benefits
- Medical, disability, death, rehab
- WC no-fault
- Give up right to sue
- Compensatory
- Special + general damages
Ohio Law + Regulation
- ODI
- Ohio Department of Insurance
- Superintendent
- Heads ODI, enforces code
- Title 39 / 3905
- Insurance + producer law
- 25/50/25
- Auto minimum limits
- At-fault (tort)
- Negligent driver pays
- BWC
- Monopolistic state workers comp
- Stop-gap
- Employers liability endorsement
- Self-insured
- Approved BWC alternative
Ohio Consumer + Producer
- FAIR Plan
- Property insurer of last resort
- OPLIGA
- Pays claims if insolvent
- Guaranty caps
- Per-claim statutory limits
- UM/UIM rejection
- In writing, ORC 3937
- Pre-license
- 40 hrs, 20 per line
- CE
- 24 hrs/2 yrs, 3 ethics
- Cert validity
- 180-day completion certificate
- Appointment
- Carrier authorizes producer
Common Traps
Cause vs condition
Peril = cause of loss ≠ Hazard = increases chance
Recover vs property
Subrogation recovers cash ≠ Salvage takes property
ACV vs replacement
ACV minus depreciation ≠ RCV full like-kind
Renter vs condo
HO-4 is renters ≠ HO-6 is condo
Ohio workers comp
BWC is monopolistic ≠ Buy from state, not private
MedPay vs liability
Coverage F no-fault ≠ Coverage E needs liability
Last Minute
- 1.DICE = Declarations, Insuring, Conditions, Exclusions
- 2.Peril = cause; hazard = condition
- 3.ACV = depreciated; RCV = full
- 4.HO-4 renter; HO-6 condo
- 5.PAP: A liability, C UM
- 6.Negligence = duty, breach, cause, damages
- 7.Ohio auto = 25/50/25, at-fault
- 8.Ohio WC = monopolistic BWC
- 9.FAIR Plan = last resort; OPLIGA = insolvency
- 10.Ohio: 40 hr pre-license; 24 CE
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