Free Property & Casualty Insurance Exam Flashcards

Insurance that provides financial protection against damage to or loss of physical property from covered perils such as fire, theft, windstorm, or vandalism.

Property insurance that covers only the specific perils listed in the policy. If a peril isn't named, damage from it is not covered.

Property insurance that covers all causes of loss except those specifically excluded. Provides broader coverage than named perils policies.

Settlement method that pays the replacement cost minus depreciation. Represents what the property was worth at the time of loss.

Settlement method that pays the cost to replace damaged property with new property of like kind and quality, without deduction for depreciation.

Insurance that covers legal liability for injuries or damage to others, including bodily injury and property damage liability.

Coverage that protects the insured against claims arising from injuries or damage to other people or their property caused by the insured's negligence.

Failure to exercise the degree of care that a reasonable person would exercise under similar circumstances, resulting in harm to another.

A civil wrong (other than breach of contract) for which the law provides a remedy, typically money damages. Includes negligence and intentional acts.

Legal responsibility imposed on one person for the acts of another, such as an employer being liable for an employee's actions within the scope of employment.

Auto coverage that pays for injuries the insured causes to others in an at-fault accident. Expressed as split limits (e.g., 100/300 means $100K per person, $300K per accident).

Auto coverage that pays for damage the insured causes to another person's property, such as their vehicle, fence, or building.

Auto coverage that pays for damage to the insured's vehicle from collision with another vehicle or object, regardless of fault.

Auto coverage that pays for damage to the insured's vehicle from non-collision events such as theft, vandalism, fire, flood, or hitting an animal.

Coverage that protects the insured when injured by a driver who has no insurance or insufficient insurance to cover the damages.

The most common homeowners policy. Covers the dwelling on an open perils basis and personal property on a named perils basis.

Homeowners coverage for the structure of the home itself, including attached structures like a garage.

Homeowners coverage for detached structures on the property such as a shed, detached garage, or fence. Typically 10% of dwelling coverage.

Homeowners coverage for the insured's belongings such as furniture, clothing, and electronics. Typically 50-70% of dwelling coverage.

Homeowners coverage that pays for additional living expenses if the home becomes uninhabitable due to a covered loss.

Coverage protecting businesses against loss or damage to buildings, equipment, inventory, and other business property.

Coverage that replaces lost income and pays continuing expenses when a business must close temporarily due to a covered property loss.

Coverage protecting businesses against claims of bodily injury, property damage, and personal/advertising injury arising from business operations.

A package policy combining commercial property and general liability coverage for small to medium-sized businesses at a reduced premium.

Coverage protecting professionals against claims of negligence, errors, or omissions in providing professional services. Also called Errors and Omissions.

Homeowners coverage protecting against lawsuits for bodily injury or property damage the insured causes to others, anywhere in the world.

Homeowners coverage that pays medical expenses for guests injured on the insured's property, regardless of fault. Good-faith coverage.

Excess liability coverage that provides additional limits above underlying auto and homeowners policies. Also covers some claims excluded by underlying policies.

Legal responsibility of manufacturers, distributors, and sellers for injuries caused by defective products.

Legal responsibility of property owners for injuries that occur on their property due to unsafe conditions.

Coverage providing benefits to employees injured on the job, including medical expenses, disability income, and death benefits. No-fault system.

Coverage protecting employers against lawsuits by employees who are injured on the job but not covered by workers compensation (e.g., third-party-over suits).

A method of adjusting workers compensation premiums based on the employer's actual loss experience compared to expected losses for similar businesses.

The principle that workers compensation is the only remedy for workplace injuries, preventing employees from suing their employer for negligence.

An illness or condition caused by exposure to hazards in the workplace over time, such as repetitive stress injuries or lung disease from chemical exposure.

The process of identifying, analyzing, and responding to risk factors to minimize potential losses and protect assets.

Eliminating the risk entirely by not engaging in the activity that creates the risk. Most effective but not always practical.

Taking steps to reduce the frequency or severity of potential losses through loss prevention and loss control measures.

Shifting the financial consequences of risk to another party, typically through insurance contracts or hold-harmless agreements.

Accepting responsibility for a risk, either deliberately (self-insurance) or through deductibles and policy limits.

Property insurance provision requiring the insured to maintain coverage equal to a specified percentage of the property's value (typically 80%) to receive full payment on claims.

The insurer's right to pursue a third party who caused the loss to recover the amount paid on a claim. The insured cannot interfere with this right.

When multiple policies cover the same loss, each insurer pays a proportion of the loss based on their policy limit relative to total limits.

Policy provision protecting the mortgagee's (lender's) interest in the property. The mortgagee receives loss payments even if the insured's claim is denied.

Policy provision that limits or excludes coverage when property is vacant for more than a specified period (typically 60 days).

The insured's obligation to promptly notify the insurer of a loss, typically required as soon as practicable after the loss occurs.

A formal, sworn statement documenting the details and value of a loss, required by the insurer before paying a claim.

A person who investigates insurance claims, determines coverage, and negotiates settlement amounts. May work for the insurer, insured, or independently.

Policy provision allowing either party to demand an appraisal when they disagree on the value of a loss. Each party selects an appraiser; an umpire breaks ties.

Damaged property that retains some value after a loss. The insurer may take possession of salvage after paying a total loss claim.