AK Property & Casualty flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Pure Risk

A risk with only the chance of loss or no loss and never gain; the type of risk insurance is designed to transfer through pooling.

Hazard

A condition that increases the chance or severity of a loss, such as oily rags or icy steps; perils are the actual causes of loss.

Law of Large Numbers

Statistical principle that as the number of similar independent exposure units grows, actual loss results converge on expected results, making future losses more predictable.

Adverse Selection

The tendency of people with higher-than-average risk to buy or retain insurance; controlled through underwriting, exclusions, and rating classes so premiums match expected losses.

Insurable Interest

A financial stake in the subject of insurance such that a loss causes monetary harm; in property insurance it must exist at the time of loss.

Utmost Good Faith

The heightened duty of honesty in insurance contracts requiring both parties to disclose material facts; concealment, misrepresentation, or fraud can void the policy.

Subrogation

After paying a loss, the insurer's right to recover those amounts from the negligent third party responsible, preventing the insured from collecting twice.

Apparent Authority

Authority an agent appears to have because of the insurer's words or conduct, even if never actually granted; the insurer is bound by it.

Coverage A Dwelling

Homeowners coverage for the dwelling structure itself; limits for other structures, personal property, and loss of use are set as percentages of this amount.

HO-3 Special Form

Homeowners form covering the dwelling and other structures on an open-peril basis and personal property on a named-peril basis; the most widely used homeowners form.

HO-5 Comprehensive Form

Homeowners form covering both the dwelling and personal property on an open-peril basis, broader than HO-3 with fewer named-peril gaps.

Loss of Use Coverage

Pays additional living expenses and fair rental value when a covered loss makes the residence unfit to live in, keeping the household at its normal standard.

Replacement Cost

Settlement paying the cost to repair or replace with new property of like kind and quality without depreciation, usually conditioned on insuring to at least 80% of replacement cost.

Coinsurance Clause

Property clause requiring insurance to at least a stated percentage of value; if the insured carries less, the insurer pays only a proportional share of the loss.

Business Income Coverage

Commercial coverage paying lost net income plus continuing normal operating expenses during the period of restoration following a covered property loss.

Flood Exclusion

Standard property exclusion removing loss from surface water, waves, tidal water, and overflow of a body of water; coverage requires a separate flood policy.

Negligence

Failure to use the degree of care a reasonable person would use; the four elements are duty, breach, proximate cause, and damages.

Occurrence Liability Form

Liability form covering injury or damage that happens during the policy period, whenever the claim is later reported; the occurrence triggers coverage.

Claims-Made Form

Liability form covering claims first made during the policy period, with a retroactive date limiting how far back the covered act may have occurred.

Workers Compensation Part Two

Employer's liability coverage paying damages from employee injury lawsuits that fall outside the statutory workers compensation benefit system.

Uninsured Motorists Coverage

Personal auto coverage paying the insured's bodily injury damages caused by a driver with no liability insurance or by a hit-and-run driver.

Umbrella Policy

Excess liability insurance paying above the limits of underlying auto, general liability, and employers liability policies, and dropping down for some uncovered exposures.

Products-Completed Operations

CGL exposure for bodily injury or property damage arising from the insured's product or completed work away from the premises, with its own aggregate limit.

Alaska Auto Minimum Limits

Alaska requires liability coverage of at least $50,000 per person and $100,000 per accident for bodily injury and $25,000 for property damage.

Alaska Title 21

The Alaska Statutes title governing insurance in the state, covering producer licensing, insurer solvency, rates, trade practices, and guaranty funds.

Alaska Division of Insurance

State agency within the Department of Commerce, Community, and Economic Development that licenses producers and insurers and enforces Alaska insurance law under the director of insurance.

Alaska CE Requirement

Resident producers must complete 24 hours of approved continuing education every two years, including at least 3 hours of ethics, to renew a license.

Alaska Premium Tax

Alaska taxes authorized insurers at 2.7% of gross premiums written, with retaliatory provisions if the insurer's home state taxes Alaska insurers more heavily.

Rebating

Offering an inducement not stated in the policy, such as cash or gifts, to persuade a buyer to purchase insurance; prohibited as an unfair trade practice.

Twisting

Inducing a policyholder to lapse or surrender an existing policy through misrepresentation in order to sell a replacement policy; an unfair trade practice.

Surplus Lines Placement

Placing coverage with a nonadmitted insurer through a licensed surplus lines broker after the risk has been declined by authorized insurers through a diligent search.

Alaska Insurance Guaranty Association

Statutory entity that pays covered claims of policyholders of insolvent authorized property and casualty insurers, up to limits set by Alaska statute.