Free OR P&C Exam Flashcards

The Division of Financial Regulation (DFR) is Oregon's primary insurance regulator, operating within the Department of Consumer and Business Services (DCBS). It licenses producers, enforces the ORS insurance code, and investigates market conduct and unfair trade practices.

A nonresident license, issued through reciprocity with the producer's home state. Oregon honors the home-state license and education rather than requiring duplicate Oregon-specific pre-license hours.

24 hours every 2 years (biennially), including 3 hours of ethics content, approved through DFR-recognized CE providers.

Rebating. It is illegal because it distorts pricing, creates unfair competition among producers, and can pressure clients into coverage that doesn't fit their needs just to capture the rebate.

Misrepresentation: a false statement about a specific policy's terms made to an individual client. False advertising is broader deceptive marketing communicated to the public, not tied to one transaction.

Fiduciary duty. Premiums collected in a producer capacity are trust funds and must be held in a separate trust/premium account, not commingled with the producer's personal or operating funds.

Completion of a 3-hour NFIP flood insurance training course, a federal requirement layered on top of state P&C licensing before a producer may sell NFIP-backed flood coverage.

Pure risk offers only loss or no-loss (fire, theft, injury) and is insurable. Speculative risk offers a chance of gain or loss (gambling, investing) and is never insurable.

The deliberate act is a moral hazard (dishonesty that increases the chance or size of a loss). The careless indifference is a morale hazard (no bad intent, just carelessness that increases loss potential).

Offer (the applicant applies for coverage), acceptance (the insurer approves the risk, often via issuing the policy), and consideration (the premium paid plus the statements in the application).

Express authority: powers specifically written into the agency agreement, as opposed to implied authority (reasonably necessary to carry out express duties) or apparent authority (what a reasonable third party would believe the producer has).

The failure to exercise the degree of care a reasonably prudent person would use in similar circumstances, resulting in a breach of duty that causes harm to another party.

No. Storing explosives is an inherently dangerous activity subject to strict liability, meaning liability attaches regardless of fault or negligence just because the activity itself carries extreme risk.

Vicarious liability: an employer (or other principal) can be held liable for the acts of an employee or agent performed within the scope of their duties, even though the employer didn't personally act negligently.

A named peril (listed peril) structure - only the perils specifically named are covered, and the insured must prove the loss was caused by one of those listed perils.

ACV pays replacement cost minus depreciation for age/wear, resulting in a lower payout. Replacement cost pays to replace the roof new, with no deduction for depreciation, resulting in a higher payout (new for old).

Agreed value: the insurer and insured set a fixed dollar amount ahead of time, and that amount is paid in a total loss without a separate appraisal or depreciation debate at claim time.

Declarations identify who/what/limits; the insuring agreement is the core coverage promise; conditions spell out the insured's and insurer's duties; exclusions state what is not covered. (Remember: policy 'DICE'.)

Because the insured didn't carry insurance equal to at least 80% of value ($400,000), a coinsurance penalty applies: the claim payout is reduced proportionally to the underinsurance, even on a partial loss.

HO-5: it provides open (special) perils coverage for both the dwelling and personal property, broader than HO-3, which is open perils on the dwelling but named perils on contents.

HO-4 (tenants/renters broad form) covers a renter's personal property and liability. HO-6 (condominium unit owners form) covers the interior 'walls-in' finishes and personal property of a condo owner, since the master policy covers the building structure.

DP Basic covers only a short list of named perils. DP Special (DP-3) provides open-perils coverage for the dwelling, the broadest DP option, similar in structure to HO-3's dwelling coverage.

Coverage D (Loss of Use / Fair Rental Value). It reimburses lost rental income (or additional living expenses for an owner-occupant) while the property is being repaired after a covered loss.

The insurer must offer earthquake coverage as an endorsement and disclose that it is excluded from the base policy - the insured can decline it, but Oregon requires the offer given the state's Cascadia Subduction Zone risk.

The business pursuits endorsement extends personal liability coverage to specified work-related activities that would otherwise be excluded under a standard homeowners policy.

The home day care endorsement, an Oregon-specific liability endorsement that extends coverage for bodily injury claims arising from a licensed or exempt in-home day care operation.

Ordinance or law coverage. It pays the added cost of complying with current building codes during repair or rebuilding, which a standard policy would otherwise leave uncovered.

$25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, and $20,000 property damage liability - the statutory floor for auto liability coverage sold in Oregon.

PIP pays medical expenses (minimum $15,000) on a no-fault basis regardless of who caused the accident, plus wage-loss benefits equal to 70% of lost income starting after a 14-day waiting period.

UM (uninsured motorist) responds when the at-fault driver has no coverage, and Oregon makes it mandatory. UIM (underinsured motorist) responds when the at-fault driver's limits are insufficient; insurers must offer it, but the insured may reject it in writing.

Collision covers impact/upset damage (hitting the guardrail); comprehensive covers other-than-collision perils like theft and vandalism. Oregon also requires disclosure when non-OEM aftermarket crash parts are used in a repair.

Hired autos cover vehicles the business rents or leases for its operations. Non-owned autos cover vehicles the business doesn't own or lease but that are used on its behalf, such as an employee's personal car used for work.

The lessor endorsement (additional insured - lessor), which adds the leasing company as an insured on the commercial auto policy for its interest in the leased vehicles.

The 'employees as insureds' provision, which extends the commercial auto policy's coverage to employees operating a covered auto in the course of employment.

Both fall under CGL Coverage A (Bodily Injury and Property Damage Liability), which covers third-party bodily injury and property damage arising from the insured's operations.

CGL Coverage B (Personal and Advertising Injury), which covers offenses like copyright/slogan infringement in advertising, libel, slander, and false arrest - distinct from bodily injury or property damage.

CGL Coverage C (Medical Payments), a no-fault, limited coverage that pays medical expenses for injured third parties regardless of the insured's legal liability, helping avoid litigation over small claims.

This is an occurrence trigger. The alternative, claims-made, triggers coverage based on when the claim is reported to the insurer, not when the injury happened - and requires tracking a retroactive date.

The retroactive date is the earliest date an incident can have occurred and still be covered under a claims-made policy; injuries that occurred before that date are not covered even if the claim is reported during the policy period.

The per-occurrence limit caps payout for any one event; the aggregate limit caps the total the insurer will pay for all covered events combined during the policy period.

A Commercial Package Policy (CPP): a modular policy that combines multiple coverage parts (property, general liability, crime, etc.) chosen to fit a specific business's risk profile.

BPP covers the insured's building structure (if owned) and the business personal property inside it, such as furniture, fixtures, stock, and equipment used in the business.

Business income coverage replaces lost earnings and continuing expenses during the shutdown period; extra expense coverage pays additional costs incurred to keep operating or reopen sooner and minimize the business income loss.

The Basic Cause of Loss form: a named-perils form listing a limited set of covered causes of loss, narrower than the Broad or Special cause-of-loss forms.

A Businessowners Policy (BOP): a pre-packaged bundle of property and liability coverage designed for small, lower-risk businesses. It's simpler and often cheaper than assembling a full CPP, which suits larger or more complex commercial risks.

The exclusive remedy doctrine: employees give up the right to sue their employer for workplace injuries in exchange for guaranteed, no-fault workers comp benefits under ORS 656.

SAIF Corporation is Oregon's state-chartered but competitive workers comp insurer. Oregon's three-way system lets employers choose SAIF, a private insurer, or self-insurance to meet their workers comp obligation.

The FAIR Plan is the residual market of last resort for property coverage. The JUA (Joint Underwriting Association) is the residual market mechanism for hard-to-place commercial liability risks.

The Oregon Insurance Guaranty Association (OIGA) pays covered claims up to statutory limits when an admitted insurer becomes insolvent. Policyholders of surplus lines or other non-admitted insurers are not protected by OIGA.

A binder: a temporary written or oral contract providing immediate coverage evidence while the formal policy is being processed. In Oregon, a binder is valid for up to 90 days.