Free MS P&C Exam Flashcards

HO-2 covers the dwelling and personal property against a named list of broader perils (fire, windstorm, theft, and more) than the basic form, but it is still named-perils — anything not listed is excluded.

HO-3 (Special Form) covers the dwelling on an open-perils (all-risk) basis — everything is covered unless specifically excluded — while personal property stays on a named-perils basis, giving broad protection at a moderate premium.

HO-4 (renters/tenant form) covers the policyholder's personal property and liability but never the building structure, which the landlord insures separately.

HO-5 (Comprehensive/Premier Form) extends open-perils coverage to BOTH the dwelling and personal property, whereas HO-3 keeps personal property on named perils — HO-5 is the broadest standard homeowners form.

HO-6 (condo/unit-owners form) covers only the interior unit, betterments and improvements, and personal property; the condo association's master policy covers the building structure and common areas.

HO-8 is written for older homes where replacement cost would greatly exceed market value; it settles losses on an actual cash value/functional replacement cost basis instead of full replacement cost.

HO-3 insures a policyholder-owned, freestanding dwelling and its structure; HO-6 insures only a condo unit's interior because the association's own policy already covers the building shell.

DP-1 covers only a short list of named perils — fire, lightning, and internal explosion, with optional extended coverage endorsements — making it the least expensive but most restrictive dwelling form.

DP-2 (Broad Form) adds named perils like windstorm, hail, vandalism, and falling objects on top of DP-1's basic fire/lightning coverage, while still using a named-perils structure.

DP-3 (Special Form) covers the dwelling on an open-perils basis — the broadest dwelling fire policy available, and the DP counterpart to HO-3 for non-owner-occupied or seasonal dwellings.

Under DP-1 the insured must prove the loss was caused by a listed peril; under DP-3 the insurer must prove an exclusion applies — open-perils forms shift the burden of proof to the insurer.

A peril is the actual cause of a loss (fire, windstorm, theft); a hazard is a condition that increases the chance or severity of a loss (frayed wiring, a broken step) without itself causing the loss.

A moral hazard is dishonesty or poor character that increases the likelihood of a loss — for example, an insured who exaggerates or fabricates a claim to collect insurance proceeds.

Proximate cause is the dominant, unbroken cause that set the loss in motion; coverage turns on whether that triggering cause is an insured peril, even if later events in the chain would otherwise be excluded.

Indemnity means insurance restores the insured to the same financial position held before the loss — no better, no worse — which is why insurers use valuation methods like ACV and coinsurance to prevent profiting from a claim.

For property insurance, insurable interest must exist at the time of loss (unlike life insurance, where it need only exist at policy inception) — a financial-stake requirement that prevents wagering on property you don't own.

It lets insurers predict aggregate losses accurately across a large pool of similar exposures, even though they can't predict which individual policyholder will suffer a loss — the statistical foundation of ratemaking.

ACV pays replacement cost minus depreciation (a lower, aged-value payout); replacement cost coverage pays to rebuild or replace with new materials at current prices, with no deduction for depreciation.

Recovery = (Amount of Insurance Carried ÷ Amount Required by the Coinsurance Clause) × Loss. Carrying less than the required percentage of value means the insured absorbs a proportional share of every loss, even a partial one.

Blanket coverage applies one limit across multiple locations or items, giving flexibility when values shift between them; specific coverage assigns a separate limit to each item, which is simpler but less forgiving if one item is underinsured.

Coverage A (Bodily Injury and Property Damage Liability) pays sums the insured is legally obligated to pay because of bodily injury or property damage to third parties caused by an occurrence.

Coverage B (Personal and Advertising Injury Liability) covers offenses like libel, slander, false arrest, and advertising copyright infringement — reputational and dignitary harms, not physical injury.

Coverage C (Medical Payments) pays medical expenses for a third party's bodily injury regardless of the insured's fault, as a goodwill payment intended to head off a liability lawsuit.

An occurrence form responds based on when the injury or damage happened, even if the claim is reported years later; a claims-made form responds only if the claim is reported while the policy is in force, on or after its retroactive date.

The aggregate limit is the maximum the insurer will pay for all covered claims combined during the policy period, as opposed to the per-occurrence limit, which caps payment for any single claim.

Split limits set separate maximums for bodily injury per person, bodily injury per accident, and property damage (e.g., 25/50/25); a combined single limit sets one maximum that applies to all bodily injury and property damage from an accident combined.

Collision covers damage from impact with another vehicle or object, including rollovers; comprehensive covers non-collision perils like theft, fire, vandalism, flooding, and glass breakage.

Uninsured Motorist (UM) coverage pays when the at-fault driver carries no liability insurance; Underinsured Motorist (UIM) coverage pays the gap when the at-fault driver's limits are too low to cover the full loss.

It pays for bodily injury and property damage the insured driver causes to OTHERS; it never pays for the policyholder's own vehicle damage or injuries, which require separate physical damage and medical/PIP coverages.

Workers comp benefits are the employee's sole remedy against the employer for a covered workplace injury — in exchange for guaranteed no-fault benefits, the employee generally gives up the right to sue the employer in tort.

It covers employer liability claims that fall outside the workers comp statute's exclusive remedy — such as third-party-over actions, loss-of-consortium suits, or dual-capacity claims — that comp benefits alone don't resolve.

Premium is based primarily on payroll for each job classification code, multiplied by a class-specific rate reflecting that occupation's injury risk, then adjusted by the employer's experience modification factor.

A fidelity bond reimburses an employer for losses caused by an employee's dishonesty, such as theft or embezzlement; a surety bond guarantees a third party (the obligee) that a principal will perform a contractual or legal obligation.

E&O covers claims that a professional's negligent act, error, or omission in rendering services caused a client financial harm — the professional-liability counterpart to a CGL policy's bodily-injury/property-damage focus.

D&O (Directors & Officers) liability covers claims against leadership for wrongful management decisions, such as breach of fiduciary duty; EPLI (Employment Practices Liability) covers claims like wrongful termination, discrimination, and harassment brought by employees.

Duty of care, breach of that duty, causation linking the breach to the injury, and actual damages — missing any one element defeats a negligence claim.

Vicarious liability holds one party responsible for another's negligent acts (e.g., an employer for an employee acting within job duties) without the first party being at fault itself; strict liability imposes liability for certain activities or products regardless of fault or care taken.

Subrogation lets an insurer that pays a claim step into the insured's shoes to recover its payment from the at-fault third party — it prevents the insured from double-recovering and helps control premiums system-wide.

Exclusions carve out exposures the insurer never intended to price into the policy, such as intentional acts, pollution, or professional services, narrowing the broad insuring agreement so premium matches the risk actually assumed.

The Mississippi Insurance Commissioner is elected statewide to a four-year term and administers the Mississippi Insurance Code (Title 83) and all producer licensing rules and exams.

Mississippi requires 40 hours total — 20 hours of property topics and 20 hours of casualty topics through an MID-approved provider — plus passing the course's final exam before sitting the state exam.

Pearson VUE administers the exam: 90 scored multiple-choice questions plus 10 unscored pretest questions, a 150-minute time limit, and a 70% passing score.

24 hours of CE per biennial renewal period, including at least 3 hours of ethics training, to keep the producer license active.

Twisting is misrepresenting or omitting facts to induce a policyholder to lapse, surrender, or replace an existing policy to their detriment — it's an unfair trade practice under the Mississippi Insurance Code even if the producer believes the new policy is better.

Rebating is offering a client any inducement not stated in the policy — cash, gifts, or discounts — as enticement to purchase; it's illegal in Mississippi regardless of the rebate's size or intent.

Producers must report known or suspected fraud to the MID; for unfair trade practices generally, the Commissioner can issue a cease-and-desist order, plus fines or license revocation, to stop the prohibited conduct.

MIGA pays covered claims against Mississippi P&C insurers that become insolvent, capped at $300,000 per claimant — except workers compensation claims, which MIGA pays in full without that cap.

MWUA is the residual-market wind/hail pool for Mississippi's coastal counties (Hancock, Harrison, Jackson, Pearl River, Stone, and George); a producer typically must show a declination from an admitted insurer before placing coverage through MWUA.

MWUA covers only wind and hail for coastal-county properties; the Mississippi FAIR Plan provides basic fire and extended coverage statewide as a last resort — they solve different availability gaps and are not substitutes for each other.

Mississippi requires 25/50/25 minimum liability limits ($25,000 per person / $50,000 per accident bodily injury / $25,000 property damage) and is a pure comparative negligence tort state — insurers must OFFER UM/UIM coverage, but the law doesn't mandate the insured carry it.