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Property and Casualty Exam

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Terms in this set (113)
Bailee
An individual or organization who has taken into its care, custody, and/or control the property of another for servicing, repair, or storage
Hazard
Something that increases the chance or likelihood of a loss occuring.

(physical or moral or morale)
Market Value
A property policy provision that changes the valuation method otherwise applicable (ACV or RV) to a valuation method that allows reimbursement to the insured, according to the price a willing buyer would pay for the property purches from a willing seller
Insurable Interest
(limit of liability)
Specifies that the insurer will not be responsible for an amount which is greater than the financial interest of an insured person or more that the limit of liability stated on the Declarations Page
Actual Cash Value
(ACV)
The policy pays for the cost to repair or replace the damaged property at the time of loss, less depreciation
Deductible
The amount of money which the insured party must pay before the insurance company's own coverage plan begins.
Vacancy
A property that has neither occupants nor personal property is described as vacant.
Right of Salvage
The right of the insurer to take possession of damaged property after the loss to the property has been paid. The salvage belongs to the insurer.
Inherent Vice
A condition or defect that exists within property itself that causes the property to spoil, break, become defective, or destroy itself. Insurance policies typically exclude inherent vice. Example: The quality of materials used in a painting allows the painting to fade or lose luster with time.
Aircraft Hull Insurance
Provides coverage on an open peril basis for physical loss or damage to the insured aircraft, on ground, or in flight.

In flight is from the moment it moves forward for takeoff until it completes its landing run.
Motor Carrier Act of 1980
Department of Transportaion (DOT) requires:

-Motor carrier must carry an insurance policy of certain minimum limits, or
-Post a surety bond representing certain financial stability criteria when transporting passengers or cargo.
Contribution by Equal Shares
Under this concept, when 2 or more insurers' policies cover at the same level (Primary or Excess), each insurer contributes an equal amount to the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first.

Example: If there are 3 insurers participating, each would pay 33 1/3 percent of the loss; if 4 insurers participating, each would pay 25 percent of the loss; or if 5 insurers participating, each would pay 20 percent of the loss.
Certified Act of Terrorism
Any act, certified jointly as terrorism by the Secretary of Treasury, State and Attorney General which is at least one of the following:
-Violent/dangerous to human life/property/infrastructure.
-Damaging within the U.S. or on U.S. air carrier/vessel/mission.
-Committed by persons on behalf of any foreign person/interest to coerce/influence the U.S. civilian/government policy.
Nationwide Marine Definition
Wet insurance and Dry insurance are terms that the Nationwide Marine Definition uses in specifying risks that may be written under marine insurance. The National Association of Insurance Commissioners adopted the Nationwide Marine Definition that defines 6 broad classes of property that may be insured under marine contract

The classes are:

1. Imports

2. Exports

3. Domestic Shipments

4. Instrumentalities of Transportation or Communication (i.e. bridges, tunnels, antenna towers)

5. Personal Property Floater Risks (as discussed in Chapters 3 and 9)

6. Commercial Property Floater Risks
Homeowners (liability) Endorsements (for additional premium)
-Business Pursuits - Extends liability coverage for involvement in business not owned or controlled.
-Home Day Care- Extends Section II coverage.
-Limited Fungi, Wet or Dry Rot, or Bacteria Coverage- covers insured's liability exposure from claims of others.
-Permitted Incidental Occupancies - Necessary and incidental use of premises.
-Personal Injury- Defines and adds personal injury to the policy.
-Watercraft Liability
-Home Business
-Worker's Compensation Residence Employee