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Terms in this set (102)
The uncertainty of a loss occurring.
Common Policy Componets will have
policy cover, Declaration page, nterline Endorsement (a list of all endorsements on one page), Conditions
What kind of limit does Commercial General Liability have?
Under Commercial General Liability Coverage A is?
bodily injury & property of Others; does not apply to who is insured, only to customers and consumers (same in all policies)
Under Commercial General Liability Coverage B is?
Personal Injury & Advertising (just like bop) lawsuits ,slander. Defamation of chapter. Copyright of fringement.
Under Commercial General Liability Coverage C is?
Medical Payments;$1000 limit (works same as everywhere; can't delete med pay with homeowners , this is standard )
Commercial General Liability claims are payed by?
Contract of adhesion and comes standard
Commercial General Liability Coverage Territory are?
US, territories, Puerto Rico, Canada, International Airspace & Waterway, Anywhere in the work as long as the goods where made in territory.
Pays for claims that happen/occur during the policy period regardless of when it was reported (like auto or homeowners, when it happens ).
Only pays for claims reported during policy period of when loss happen.
Place an effective date
Before new policy was renewed. (Theses are aggregate limits)
Cover claims reported within 60 days of the new policy.
Cover claims up to 5 years
Supplemental Extended Reporting Period
Must be purchased before policy ends, premium 200% higher, coverage for life
clam related expenses, up to $250 bail bonds, reasonable expense includes by insured, Prejudgement interest, Post Judgement
Only a chance of loss no chance of gain
Non insurable risk with chance of win,lose, or draw
The unit of measurement to determine a rate
Condition or situation that increases the probability of a loss occurring. There are 3 types of Hazard.
Materials and Tangible hazard.
To submit fraudulent claims or lie on an application.
Indifference to an increase in a hazard.
The cause of a the loss of the insured. This is always what happens first. (Storm condition or icy roads)
Disappearance, destruction, or reduction of a thing of value.
The loss must be predictable, the loss must be definite, the loss must be measurable, the loss cannot be catastrophic, the loss does not have to be due to change.
The insuring of risks that are of poorer class (more prone to losses) than the average risk.
Law of Large Numbers
Principle stating that the LARGER the number of similar exposure units considered, the more closely the losses reported will equal the probability of loss.
Stock Company Insurer
Insurance Company owned by the people who provided the capital necessary to establish the company. The stock holders are Board of Directors who pay taxable dividends.
Risk Retention Group
A form of insurance whereby one insurance company indemnify another insurance company for part or all of it's liabilities from insurance policies it has issued.
Provides support facilities for underwriters that accept insurance risk. Each individual underwriter assumes apart of risk. In the event that the peril insured against occurs, each individual promises to pay a specified amount.
Independent Rating Services
AM Best, Fitch, Standard and Poors, Weiss, Moody
Independent Agency System/ American System
An agent who earns commissions on personal sales, overrides of other agents, and owns the expiration a of their policies which allows them to place the renewal business with any company they represent.
How many elements are to a contract.
There are 4. Legal Purpose. Competent Parties. Offer & Acceptance -offer made by a policyholder, acceptance made by insure. Consideration- payment of premium on part of the policyholder, promise to pay claim on part of the insurer.
Contract of Adhesion
A contract that is prepared by one of the parties and accepted or rejected by the other party. (Take it or leave it)Ambiguity always goes to the policyholder.
Between the insurer and and the insured.
Unequalatory, for small amount of premium money the insured could receive a lark return in event of a loss. (Unequal exchange)
Only one party of the contract is legally bound.
Both insured and insurer have conditions that must be met. (Liberalization, subrogation, salvage)
A provision in a insurance polity, in the event of a loss, an insured is permitted to collect only to the extent of their financial loss and not allowed to gain.
Statements that are believe to be true to the best of one's knowledge, but are not guaranteed to be true.
Utmost Good Faith
An absolutely true statement upon which the validity of the insurance policy
Sharing risk for a group of individual person or businesses with the same exposure. (Reciprocal)
Lowering the possibility or severity off loss.
Most effective way to handle risk. Pay an insurer to take on risk. The basic principle of insurance.
Fraternal Benefit Society
Only insure members, not for profit, charitable organization.
Insurers who have received a Certificate of Authority from the state Insurance Department. Authorized and licensed to transact business.
Non- Admitted Insurer
Insurance company not authorized to license and transact business. Usually an Excess or Surplus line.
Board of trustees are elected by policy holders, company started with policy holders premium dollars.
General Agency System
Independent agent, hire, fire, train agents. Receives commission and overrides.
Can only represent one insure or a group of insures with main insurance company. Receives commission and overrides but do not own expiration dates.
Represents multiple insures, receives commission on what they personally produce as well as overrides on there teams members production.
Acts like a GA but is a salary employee who does that receive commission.
Rules Of Agency
Insurer is principal-agent/producer represents the insurance company- broker represents the policyholder.
Vague/unclear in policy language. Often these uncertainties will go in favor of the insured in the court of law.
(Say nothing-no nothing) if the policy holder can reasonable expect coverage
Insurance company takes policy back.
Prevents someone from asserting right.
Process of reviewing applications for insurance.
Loss + Loss adjusting expenses
Change of Occupation
(premium may be based on occupation ..insured must notify carrier
Misstatement of age
not considered a misrepresentation; will not cancel coverage, will
Not void policy.
(If a claim is pending and the services on claim are age dependent) >benefits are adjusted >premium will be adjusted to reflect age
Other insurance with this insurer
2 policies with one carrier covering benefit (over insured)
Pro rata benefit reduction: split payment; and premium return on one
insurance with other carries
expense incurred;pro rata benefit reduction.
R-ship of earning to insurance
disability insurance privately purchase; a % of income will be paid based on income. (Prevents Over insurance and malingering )
will reduce the benifit if there is a claim pending
policy can be cancel by carrier any time for any reason in the first 90 days with a 30 day noticed....if a claim pending must be paid
right to examine
fee look ;health insurance = minimum 10-20 days; insured can return policy any time between 10-20 days and receive all premium back..
must state carrier , name of insured what's are covered
Private Purchase Policy) ; pays a cash benefit when insured becomes disabled...unable to perform job duties. Doctor must declare ind unable to work
own occupation policy
more expensive pays a cash benefit for 24 months, if insd is unable to pet from "own occupation", even of they can work doing something else.
pays a cash benifit to the insure if they are unable to perform any occupation for which they have education ,training, and experience
Basic Total Disability plan
protects family from economic loss should the main wage earner becomes disabled
Premium Elimination period
waiting period, had choice expressed in days 39,60,90...no benifit collected.
Longer the elimination period the lower the premium
benefit period begins after elimination ends-expressed in years. 2,5,10, up to 65....longer benifit -more expensive the premium
Waiver of Premium
(feature) waives future premiums, after the elimination had passed for length of disability. Does not have be paid back
fee for service
pays the physician for everything services rendered.
PPO- preferred provider org , insured can choose provider.
physician is paid a flat fee for every memeber of the group
Heath Maintenance Organization (HMO)
network of providers , primary care of physican is caled hate keeper
plan only covers one service
A)vision b)dental c) dead disease. D) RX
each procedure has a code and each code had a description and charge do see give
reasonable and customery
average charge for the service in a partcifina geographic field
individual responsible for premium payment
Basic hospital expense
preform:daily rate for for room and board.; misc hospital expense
Basic Physian /medical expenses
limited number of doctor number during year
Basic surgical expense
free code , benifit schedule, surgeans , anesteiilogist
usually sponsored by employer , credit union, fraternal benefit society , alumni assoc
1) sponsored of group holds master contract
2) members has a certificate of insurance
group of 100 members or more must be expirence rated- similar to WC how many claims were field
Dependent child age limit
any unmarried depends living at home with no access to health care , could be covered under parents group health up to age 29
Medicare healthcare for the elderly
apply 3 months before or 3 months after a 65
mandatory must enroll regardless of employment status.
has to include core Benifitst found in Plan A
Medical Supement Plans
fill in gaps left by medicine (medigap, Medicare carve outs)
Standards on Marketing
Standards 1)rules for agents to follow when compare king med Supp plans
2)standards to limit excessive sales of med supps
3)formula for replacement of med sups
4) First page must say "notice buyer, this plan may not cover all medical needs "
Long term Care
privacy purchased policy to meet needs of elderly -not health care
round the clock nursing... Rehab.always in institution. Doctored orders/order, always formed by license professional
occasionally rehab , at home institution , assisted living family, doctored ordered
dollar for dollar assets
every dollar spent on you LTC needs an equal $ is protected from Medicaid.
Partnership for Long Term Care
carries apply to state to become partner
Sets with similar terms
Disability Insurance Definitions
Life/Health - A.D. Banker - Chapter 11
General Insurance: Chapter 15
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