Free CT P&C Exam Flashcards

Indemnity means restoring an insured to the same financial position they were in before a loss - no better, no worse. It's why insurers use ACV, replacement cost limits, and other-insurance clauses to prevent a profit from a claim.

Insurable interest means the policyholder would suffer a genuine financial loss if the insured property or person were damaged or lost. For property insurance it must exist at the time of loss; for life insurance it must exist at the policy's inception.

A peril is the actual cause of loss, such as fire, theft, or windstorm. A hazard is a condition that increases the chance or severity of a loss, such as frayed wiring or a swimming pool. Perils cause losses; hazards make them more likely.

Moral hazard is dishonesty or carelessness that increases loss potential, such as filing an inflated or fraudulent claim. Physical hazard is a tangible condition of the property itself that increases risk, such as a cracked foundation.

A warranty is a statement guaranteed to be true; breaching it can void coverage regardless of materiality. A representation is a statement believed true when made, material only if it affects underwriting. Concealment is intentionally hiding a material fact, which is also grounds to void the policy.

An endorsement (or rider) is a written amendment that adds, removes, or modifies coverage on an existing policy. Its terms override conflicting language in the base policy form.

HO-3 covers the dwelling on an open-perils basis (all risks except those excluded) but covers contents only on a named-perils basis. It's the most commonly written homeowners form.

HO-5 covers both the dwelling and contents on an open-perils basis, while HO-3 covers contents only on named perils. HO-5 is the broadest personal homeowners form available.

HO-4 is the renters/tenants form. It covers the tenant's personal property and liability but not the building structure, which the landlord insures separately.

HO-6 is the condominium unit-owners form. It covers the interior of the unit, personal property, and liability, while the condo association's master policy covers the building's common structure.

HO-8 is designed for older homes where replacement cost would far exceed market value. It settles losses on a functional replacement cost basis (like-kind, less-costly materials) instead of full replacement cost.

DP-1 is the basic form, covering only a short list of named perils with actual cash value settlement. DP-3 is the special form, covering open perils on the dwelling with replacement cost settlement available - commonly used for rental or investment properties.

Coverage A insures the dwelling structure itself. Coverage C insures personal property/contents, typically written as a percentage of Coverage A (commonly 50-70%).

A BOP bundles commercial property and general liability coverage into one package policy for small-to-midsize businesses like retailers, offices, or small contractors, avoiding the need to buy each coverage separately.

Builders risk covers a structure while it's under construction - materials, fixtures, and the building itself - against loss from fire, wind, vandalism, and similar perils until construction is complete and the owner takes occupancy.

A vacancy clause restricts or suspends certain coverages, often vandalism, glass breakage, and water damage, once a building has been vacant beyond a specified period (commonly 60 days), because vacant buildings carry higher risk.

Inland marine covers movable property and property in transit that doesn't fit standard property forms - contractors' equipment, fine art, cargo, and 'floater' policies that follow property wherever it goes.

ACV equals replacement cost minus depreciation. It's the default property valuation method unless the policyholder buys a replacement cost endorsement, and it always produces a lower claim payout than replacement cost.

Coinsurance payout equals (Amount Carried divided by Amount Required) multiplied by the Loss. It penalizes underinsuring a property below the policy's required coinsurance percentage (often 80%) by reducing the claim payment proportionally.

An agreed value endorsement waives the coinsurance penalty entirely - the insurer and insured agree in advance on the property's value, so no coinsurance calculation applies at claim time.

Part A is liability coverage: it pays for bodily injury and property damage the insured causes to others, plus the insurer's duty to defend the insured in a covered lawsuit.

Part B is medical payments coverage. It pays reasonable medical expenses for the insured and passengers injured in an auto accident, regardless of who was at fault.

Part C is uninsured/underinsured motorist coverage. It pays the insured's bodily injury (and in some states property damage) when the at-fault driver has no insurance or insufficient limits to cover the loss.

Part D is physical damage coverage for the insured's own vehicle: collision (impact with another object or vehicle) and other-than-collision/comprehensive (theft, fire, glass, animal strikes, and similar losses).

Yes - non-owned auto coverage extends the insured's own liability, medical payments, and UM/UIM coverage to a borrowed vehicle used with permission. It does not extend Part D physical damage coverage to the borrowed vehicle.

CGL Coverage A insures bodily injury and property damage liability the business causes to third parties arising from its operations, products, or premises.

CGL Coverage B insures personal and advertising injury liability - claims like libel, slander, false arrest, or copyright infringement in advertising, rather than physical bodily injury or property damage.

CGL Coverage C is medical payments coverage, paying small medical bills for a third party injured on the business's premises or operations, regardless of the business's fault.

An occurrence form triggers coverage based on when the loss happened, even if reported years later, with no tail coverage needed. A claims-made form triggers coverage based on when the claim is reported, requiring a retroactive date and often needing tail coverage if the policy is cancelled.

The retroactive date is the earliest date a covered incident can have occurred for a claim to be covered. It's set at the policy's original inception and should stay the same at each renewal - moving it forward creates a coverage gap.

Part One provides the statutory benefits required by state workers' compensation law: medical care and wage-replacement/indemnity benefits for employees injured on the job, paid regardless of fault.

Part Two is employers liability coverage. It responds to lawsuits that fall outside the statutory workers' comp system, such as third-party-over suits or claims by an employee's family for loss of consortium.

Exclusive remedy means workers' compensation benefits are, with narrow exceptions like an employer's intentional act, the only remedy an injured employee has against their employer - they generally cannot also sue the employer in civil court.

A surety bond is a three-party guarantee (surety, principal, obligee) that the principal will perform an obligation; if the surety pays a claim, it can seek reimbursement from the principal. A fidelity bond protects an employer against losses from its own employees' dishonesty or theft, functioning like insurance with no reimbursement expected.

A second injury fund is a state mechanism that shares the cost of a workers' comp claim when a new work injury combines with a worker's pre-existing disability to produce a greater overall disability than the new injury alone would cause.

An umbrella policy sits above underlying liability policies (auto, CGL, employers liability), providing additional limits once the underlying policy's limit is exhausted, and can also broaden coverage for some claims the underlying policies exclude.

A per-occurrence limit caps what the policy pays for any single covered event. An aggregate limit caps the total the policy will pay for all covered events during the policy period, regardless of how many separate occurrences happen.

Supplementary payments cover costs related to defending a claim - legal defense costs, court costs, premiums on required bonds, and certain other expenses - typically paid in addition to the liability limit, not subtracted from it.

Medical payments (med pay) is no-fault coverage that pays small medical bills regardless of who caused the accident. Bodily injury liability is fault-based coverage that pays when the insured is legally liable for injuring someone else, and typically involves larger claims.

The Connecticut Insurance Department (CID) is the state agency that regulates insurers and producers under Title 38a of the Connecticut General Statutes - licensing producers, approving policy forms, and enforcing unfair-practice laws.

Connecticut producers must complete 24 continuing education hours every 2 years, including at least 3 hours in law/ethics. License renewal is tied to the producer's birth month on a biennial cycle.

40 hours of pre-licensing education (20 hours property + 20 hours casualty), followed by a pre-license certification exam requiring a score of 70% or higher. The certificate is valid for 1 year and must be presented at the state exam.

Just 24 hours - Connecticut doesn't use an escalating wait schedule after repeated failures. There's no cap on total attempts, but the exam fee applies again each time and the pre-license certificate must still be valid.

CUIPA (Connecticut Unfair Insurance Practices Act, CGS §38a-815 et seq.) prohibits practices like misrepresentation, twisting, rebating, and unfair claims settlement. The Insurance Commissioner can fine, suspend, or revoke a producer's license for violations.

Twisting is misrepresenting an existing policy's terms to induce the owner to replace or lapse it for a new one. Rebating is offering something of value not stated in the policy, like sharing commission, as an inducement to buy. Twisting misleads; rebating bribes.

CIGA pays valid property & casualty claims - auto, homeowners, workers' comp, general liability, and more - up to $500,000 per claim when a member insurer is declared insolvent. It's funded by assessments on member insurers and is separate from the Connecticut Life & Health Insurance Guaranty Association.

Yes - Connecticut's Workers' Compensation Act (CGS Chapter 568, Title 31) requires nearly all employers to provide coverage for job-related injuries and illnesses. It's administered by the Connecticut Workers' Compensation Commission, a separate agency from the CID.

No - Connecticut's Second Injury Fund closed to new claims as of July 1, 1995 (CGS §31-349). Injuries occurring on or after that date remain the full responsibility of the employer or its insurer and cannot be transferred to the Fund.

Connecticut requires minimum auto liability limits of 25/50/25 (CGS §38a-335, §14-112) and mandatory uninsured/underinsured motorist coverage at matching 25/50 limits (CGS §38a-336).

Under Title 38a, the Commissioner can fine, suspend, or revoke a producer's license for violations such as CUIPA breaches, misrepresentation, unfair claims handling, or failure to meet CE and renewal requirements.