CT Property & Casualty flashcards

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

McCarran-Ferguson Act

The 1945 federal law that leaves regulation of insurance primarily to the states and grants insurers a limited antitrust exemption for activities regulated by state law.

Certificate of authority

A license issued by a state insurance department that allows an insurer to transact insurance business as an admitted insurer in that state.

Surplus lines insurer

A non-admitted insurer eligible to write risks that admitted insurers decline; its policies are not covered by the state guaranty association.

Principle of indemnity

The concept that insurance restores the insured to the same financial position as before a loss without profit, limiting property recovery to the actual loss sustained.

Coinsurance formula

Payment equals insurance carried divided by insurance required, multiplied by the loss, then capped at the policy limit and reduced by the deductible.

Utmost good faith

An insurance principle requiring both parties to act honestly and disclose material facts, so concealment or material misrepresentation can void coverage.

Named peril

A cause of loss specifically listed in the policy as covered; losses from unlisted causes are excluded unless an endorsement adds them.

Replacement cost

A valuation method that pays the cost to repair or replace damaged property with new property of like kind and quality without deducting depreciation.

Mortgagee clause

A policy provision giving a lender rights to loss proceeds and to notice of cancellation or nonrenewal, independent of any acts by the insured.

Negligence elements

Duty owed to another, breach of that duty, proximate cause, and actual damages; all four elements must be proven for liability to attach.

Claims-made policy

A liability policy covering claims first made or reported during the policy period, subject to a retroactive date that limits coverage for prior acts.

Supplementary payments

Amounts such as defense costs and bail bonds that a liability insurer pays in addition to, rather than within, the policy limit.

Dwelling policy

A property form for residential risks not eligible for homeowners coverage, such as rental dwellings up to four units; it includes no liability coverage.

Coverage D fair rental value

Dwelling coverage paying the rental value of the dwelling while it is uninhabitable because of a covered loss, typically 20 percent of Coverage A.

DP-3 special form

A dwelling form covering the dwelling and other structures on an open-peril basis while personal property remains insured for named perils only.

HO-3 special form

A homeowners form insuring the dwelling on open perils and personal property on named perils; it is the most common form for owner-occupied homes.

Coverage F medical payments

Homeowners liability coverage paying reasonable medical expenses to others injured on the premises regardless of fault, subject to a per-person limit.

HO-4 renters policy

A homeowners form for tenants covering personal property, loss of use, and liability, but not the building structure owned by the landlord.

Part D collision coverage

Personal auto coverage paying for damage to the covered auto from collision or upset regardless of fault, subject to the deductible.

Newly acquired auto

A newly purchased or leased vehicle automatically covered under a personal auto policy for a limited period, typically 14 days for an additional auto.

Uninsured motorist coverage

Personal auto coverage paying for bodily injury caused by a driver who has no liability insurance or by a hit-and-run driver.

Commercial general liability

Coverage for bodily injury, property damage, personal and advertising injury, and medical payments arising out of the insured's business operations.

Products-completed operations

CGL coverage for injury or damage occurring away from the premises and arising from the insured's products or completed work.

Causes of loss special form

A commercial property form providing open-peril coverage for direct physical loss, subject to exclusions such as flood, earth movement, and wear and tear.

Businessowners policy

A package policy for small eligible businesses that combines property, business income, and general liability coverage at standard limits.

BOP business income

Coverage replacing lost net income and continuing expenses when operations are suspended by direct physical loss at the described premises.

BOP eligibility

Small apartments, offices, retail, and service risks qualify; auto dealers, bars, and large manufacturers must use a commercial package policy.

Exclusive remedy

The workers compensation principle that benefits are the employee's sole recovery against the employer for work-related injury, barring tort lawsuits.

Employer's liability coverage

Part Two of a workers compensation policy covering tort liability for work-related injury not covered by statutory benefits, with per-accident limits.

Experience modification

A factor applied to workers compensation premium that credits employers with better-than-average loss experience and debits those with worse experience.

Umbrella policy

Excess liability coverage above underlying auto, general liability, and employers liability limits, with a self-insured retention for gaps in coverage.

Surety bond parties

A three-party agreement among the obligee who benefits, the principal who must perform, and the surety that guarantees performance or payment.