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Chapters 21-25 Terms
Terms in this set (52)
Automobile Insurance Plan (Assigned Risk Plan)
Method for providing auto insurance to persons considered to be high-risk drivers who cannot obtain protection in the voluntary markets. All auto insurers in the state are assigned their share of such drivers based on the volume of auto insurance business written in the state.
Compulsory Insurance Law
Law protecting accident victims against irresponsible motorists by requiring owners and operators of automobiles to carry certain amounts of liability insurance in order to license the vehicle and drive legally within the state.
Financial Responsibility Law
Law that requires persons involved in automobile accidents to furnish proof of financial responsibility up to a minimum dollar limit or face having driving privileges revoked or suspended.
Joint Underwriting Association (JUA)
Organization of auto insurers operating in a state that makes auto insurance available to high-risk drivers. All underwriting losses are proportionately shared by insurers on the basis of premiums written in the state.
No-Fault Auto Insurance
Auto insurance alternative in which the injured person collects benefits from his/her own insurer and does not have to sue a negligent third party who caused the accident and prove legal liability.
"No pay, No play" laws
Plan which restricts uninsured motorists from suing negligent drivers for noneconomic damages; for example pain and suffering compensation.
Reinsurance Facility (Pool)
Pool for placing high-risk automobile drivers that arranges for an insurer to accept all applicants for insurance. Underwriting losses are shared by all auto insurers in the state.
Shared Market (Residual Market)
Refers to plans in which auto insurers participate to make insurance available to drivers who are unable to obtain coverage in the standard markets.
Insurers that specialize/focus on insuring motorists with poor driving records. They typically insure drivers who have been canceled or refused insurance, teenage drivers, and drivers convicted of drunk driving.
Uninsured Motorists Coverage
That part of the personal auto policy (PAP) designed to insure against bodily injury caused by an uninsured motorist, hit-and-run driver, or a driver whose company is insolvent.
Additional Living Expenses
The increase in living expenses actually incurred by the insured to maintain the family's standard of living.
Extended Replacement Cost Endorsement
Pays 20 percent or more above the policy limit.
Homeowners 2 ("Broad" Form)
Covers the dwelling, other structures, and personal property on a named perils basis.
Homeowners 3 ("Special" Form)
Covers the dwelling and other structures on a risk-of-direct-physical loss basis.
Homeowners 4 ("Contents Broad" Form)
Covers a tenant's personal property on a named perils basis.
Homeowners 5 ("Comprehensive" Form)
Provides open perils coverage ("all-risks coverage") on the dwelling, other structures, and personal property.
Homeowners 6 ("Unit-Owners" Form)
Covers personal property on a named perils basis.
Homeowners 8 ("Modified" Coverage Form)
Designed for older homes.
Designed to protect the mortgagee's insurable interest.
The amount necessary to repair or replace the dwelling with material of like kind and quality at current prices.
Those costs paid as additional coverage, including but not limited to court costs, attorney's fees, and other legal expenses incurred in providing a legal defense.
Damage to Property of Others
Provision in Section II of a homeowners' policy that pays up to $1,000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability.
Identity Theft Endorsement
An "add-on" to a homeowners' policy that reimburses crime victims for the cost of restoring their identity and cleaning up their credit reports.
Inflation Guard Protections (Endorsement)
Items added at the insured's request to a homeowners' policy to increase periodically the face amount of insurance on the dwelling and other policy coverages by a specified percentage.
A credit-based score based on an individual's credit record and other factors that is highly predictive of future claim costs; insured with low insurance scores generally file more homeowners' and auto insurance claims than insureds with good credit and higher insurance scores. 5 Main Factors are: 1) On-time Payments/Payment History (35%), 2) Utilization of Credit (30%), 3) Length of Credit History (15%), 4) Credit Mix (10%), and 5) Recent Inquiries (10%).
Medical Payments to Others
Pays for medical expenses of others under a homeowners' policy in the event that a person (NOT an "insured") is accidentally injured on the premises, or by the activities of an insured, resident employee, or animal owned by or in the care of an insured.
An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, which results in bodily injury or property damage during the policy period.
Liability insurance that protects the insured for an amount up to policy limits against a claim or suit for damages because of bodily injury or property damage caused by the insured's negligence. This coverage is provided by Section II of the homeowners' policy.
Personal Property Replacement Cost Loss Settlement Endorsement
Under this added provision, claims are paid on the basis of replacement cost with no deduction for depreciation. Applies to items, such as: personal property, awnings, carpets, domestic appliances, and outdoor equipment.
Personal Umbrella Policy (PUP)
"Excess" coverage which provides an additional $1 million to $10 million of liability insurance, after the underlying coverage is exhausted. Designed to provide protection against a catastrophic lawsuit or judgement.
Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement)
Special coverage added at the insured's request to a homeowners' policy to insure items specifically listed. Used to insure valuable property, such as: jewelry, furs, and paintings.
Boat-Owners Package Policy
Special package policy for boat owners that combines physical damage insurance, medical expense insurance, liability insurance, and other coverages in one contract.
Dwelling Property I ("Basic" Form)
Property insurance that insurers the dwelling, other structures, personal property, fair rental value, and certain other coverages; covers a limited number of perils.
Dwelling Property II ("Broad" Form)
Property insurance that insures the dwelling and other structures at replacement cost. It "adds" additional coverages and has a greater number of covered perils than does the Dwelling Property 1 policy.
Dwelling Property III ("Special" Form)
Property insurance policy that covers the dwelling and other structures against "direct physical" loss from any peril, except those perils specifically excluded. However, personal property is covered on a "named-perils" basis.
Stands for "Fair Access to Insurance Requirements"; property insurance plan that provides basic property insurance to property owners in areas where they are unable to obtain insurance in the normal markets.
Mobile Home Insurance
A package policy that provides property insurance and personal liability insurance to owners of mobile homes.
National Flood Insurance Program (NFIP)
A federal program introduced in 1968 designed to reduce flood damage in communities by floodplain management ordinances and to provide flood insurance to property owners.
Personal Articles Floater (PAF)
Inland marine floater that provides "broad" protection on valuable personal property; coverage can be added as an endorsement to a homeowners' policy, or it can be written separately as a stand-alone contract.
Scheduled Personal Property Endorsement
A method used to add the "personal articles floater" to a homeowners' policy, while the endorsement provides essentially the same coverages provided by the freestanding personal articles floater.
Plan protecting the owner of property and/or the lender of money for the purchase of property against and unknown "defects" in the title to the property under consideration. The expense is normally included in the standard "Closing Costs" spelled out by the Lender.
Builders Risk Coverage Form
Developed because buildings under construction are exposed to numerous perils, especially weather-related perils and the peril of fire; Values are constantly changing as buildings are constructed to this policy protects these increases is value for building under construction in relation to the insurable interest of a general contractor, subcontractor, or building owner.
Building and Personal Property (BPP) Coverage Form
A commercial property coverage form that is widely used to cover a "direct physical" damage loss to commercial buildings and business personal property.
Business-Owners Policy (BOP)
Package policy specifically designed to meet the basic property and liability insurance needs of small- to medium-sized business firms, in one contract.
Cause-of-Loss Forms (Basic, Broad, and Special)
Form added to commercial property insurance policy that indicates the "Causes-of-Loss" that are covered. There are Three (3) Cause-of-Loss Forms: a.) Basic, b.) Broad, and c.) Special
Commercial Package Policy (CPP)
A commercial policy that can be designed to meet the specific insurance needs of business firms. Property and Liability (P & L) coverage forms are "Combined" to for a Single (1) policy.
Condominium Association Coverage Form
Provides coverage for both commercial and residential condominiums, and the form cover the following "types" of property: a.) Building(s), b.) Named insured's business personal property, and c.) Personal property of others.
Condominium Commercial Unit-Owners Coverage Form
Type of condo coverage which provides for: business personal property of the unit owner, and personal property of others while in the named insured's care, custody, or control.
Equipment Breakdown Protection Coverage Form
Insurance that covers losses due to an accidental breakdown of covered equipment; such as steam boiler explosions, electrical breakdown, and mechanical breakdown. Insurance can be written separately or as a mono-line (stand-alone) policy.
Extra Expense Coverage Form
A separate form that can be used to cover the extra expenses incurred by a firm to continue business operations during a period of restoration.
Inland Marine Insurance
Transportation insurance that provides protection for good shipped "On LAND", including: imports, exports, domestic shipments, instrumentalities of transportation, personal property, floater risks, and commercial property floater risks.
Ocean Marine Insurance
Type of insurance that provides protection for ALL "Types" of Oceangoing vessels and their Cargo, as well as 'Legal Liability' of Owners and Shippers.
This set is often in folders with...
personal lines insurance
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