AL Property & Casualty flashcards

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

Alabama Commissioner of Insurance

The official appointed by the Governor to head the Alabama Department of Insurance, which licenses insurers and producers, reviews rates and forms, and enforces the state insurance laws.

Alabama producer continuing education

Alabama-licensed producers must complete 24 credit hours of approved continuing education every two years, at least 3 of which must be ethics, in order to renew the license.

Alabama Insurance Underwriting Association

Also called the beach pool, it is a residual-market association that writes wind and hail coverage on eligible coastal Alabama property when admitted insurers decline to provide it.

Principle of indemnity

The concept that an insured should be restored to approximately the same financial position held before a loss, no better and no worse, so recovery cannot exceed the actual loss.

Insurable interest

A financial relationship in which the insured would suffer a genuine economic loss from destruction of the property; for property insurance it must exist at the time of loss.

Coinsurance formula

Payment equals insurance carried divided by insurance required, multiplied by the amount of loss, and the result never exceeds the policy limit; underinsurance reduces recovery proportionally.

Actual cash value

A property valuation method equal to replacement cost minus depreciation, reflecting the value of the damaged item immediately before the loss rather than the cost of a new one.

Named peril coverage

A policy form that covers only the specific perils listed in the policy, placing the burden on the insured to show the loss resulted from one of those listed perils.

Open peril coverage

A policy form that covers all risks of direct physical loss except those specifically excluded, placing the burden on the insurer to prove that an exclusion applies.

Mortgagee clause

A provision giving a lender rights in the policy, including notice of cancellation, payment of loss up to the outstanding debt, and the ability to submit proof of loss.

HO-3 Coverage C

Personal property coverage under the special form homeowners policy, written on a named-peril basis and set at 50 percent of the Coverage A limit unless another amount is shown.

Homeowners special limits

Caps on certain theft or loss categories, commonly 200 dollars for money, 1,500 dollars for securities, and 1,500 dollars for jewelry theft, which can be increased by endorsement.

HO-4 tenants policy

A homeowners form for renters that covers personal property on a named-peril basis plus liability, and limited building additions and alterations, but not the rented structure itself.

Loss of use coverage

Homeowners Coverage D pays additional living expense and fair rental value when the residence is uninhabitable because of a covered loss, for the time reasonably needed to repair.

Business income coverage

Commercial property coverage that replaces net income plus continuing normal operating expenses during the period of restoration following a covered loss at an insured location.

Agreed value option

A commercial property endorsement that suspends the coinsurance condition when the insured submits a statement of values and the policy limit equals the agreed value.

Commercial package policy

A single policy combining two or more commercial coverage parts, such as property, general liability, auto, and crime, under a common declarations page and shared conditions.

Negligence elements

To recover for negligence, a claimant must prove the defendant owed a legal duty, breached that duty, and the breach was the proximate cause of actual damages.

Comparative negligence

A defense doctrine that reduces an injured party's recovery in proportion to that party's own share of fault, rather than barring the claim entirely as contributory negligence does.

Claims-made policy

A liability policy responding to claims first made during the policy period, usually subject to a retroactive date and offering an extended reporting period for claims made later.

CGL Coverage A

The commercial general liability insuring agreement that pays sums the insured is legally obligated to pay as damages because of bodily injury or property damage covered by the policy.

Products-completed operations

CGL coverage for bodily injury or property damage occurring away from the insured's premises and arising out of the insured's product or completed work, subject to its own aggregate.

Fire legal liability

A CGL sublimit that pays for fire damage to premises rented to or temporarily occupied by the insured, which the damage-to-property exclusion would otherwise bar from coverage.

Split liability limits

Automobile liability limits stated as three numbers, such as 25/50/25, meaning per-person bodily injury, per-accident bodily injury, and per-accident property damage maximums.

Business auto symbol 1

The covered-auto designation for any auto, providing the broadest liability coverage for owned, hired, borrowed, and nonowned autos used in the insured's business.

Uninsured motorist coverage

Coverage that pays the insured for damages caused by a negligent driver who carries no liability insurance, or by an unidentified hit-and-run driver, up to the listed limits.

Exclusive remedy doctrine

The principle that workers compensation benefits are the employee's sole recovery against the employer for work-related injury, barring most tort suits in exchange for no-fault benefits.

Workers compensation experience modification

A factor comparing the insured's past losses with expected losses for its classification, applied to manual premium so that values below 1.00 produce a credit.

Workers compensation Part Two

The employers liability section of a workers compensation policy, covering work-related injury lawsuits that fall outside the statutory benefit system, with its own per-occurrence limits.

Umbrella liability policy

A policy providing limits above scheduled underlying policies and, over a self-insured retention, covering some exposures the underlying policies exclude entirely.

Employee theft coverage

Crime coverage indemnifying the insured for money, securities, or other property stolen by employees, often written on a discovery basis with a stated per-loss limit.

Equipment breakdown coverage

Coverage for loss caused by accidental breakdown of covered mechanical, electrical, or pressure equipment, including damage to the equipment and resulting business income loss.