DC Property & Casualty flashcards

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

Insurable Interest in Property

The insured must have a financial stake in the property that would be harmed by its loss, and that stake must exist at the time of the loss for recovery.

Principle of Indemnity

The insured is restored to approximately the same financial position held before the loss, no better and no worse, which is why coverage is limited to the value of the loss.

Actual Cash Value

A valuation method equal to the replacement cost of damaged property minus depreciation for age and condition, commonly used for personal property and older dwellings.

Apparent Authority

Authority an agent appears to have because the insurer's words or conduct led a reasonable third party to believe the agent possessed that authority.

Aleatory Contract

A contract in which the amounts exchanged are unequal and depend on an uncertain event, such as a large claim payment after a small premium.

HO-3 Special Form

A homeowners form insuring the dwelling and other structures on an open-peril basis while personal property is covered for named perils only, making it the most widely used homeowner form.

Coverage C Limit

On a standard HO-3 the personal property limit equals 50 percent of the Coverage A dwelling limit, applying worldwide to property usually at the residence.

Loss of Use Coverage

Coverage D pays additional living expenses and fair rental value when the residence is uninhabitable because of a covered loss, typically limited to 30 percent of Coverage A.

Coinsurance Formula

Payment equals the limit carried divided by the limit required, times the covered loss, where the required limit is the coinsurance percentage times the property's value at loss.

Replacement Cost Requirement

Under the homeowners form, dwelling losses are settled at full replacement cost only if insurance carried is at least 80 percent of the dwelling's full replacement cost.

Business Income Coverage

Pays the net income the business would have earned plus continuing normal operating expenses during the period of restoration following a covered property loss.

Period of Restoration

The time needed, with reasonable speed, to repair, rebuild, or replace damaged property so operations resume, beginning a set number of hours after the loss occurs.

Value Reporting Form

A commercial property rating method using a provisional deposit premium and periodic value reports, with premium adjusted at the end of the term based on reported values.

Bailee Coverage

Inland marine coverage protecting a business for loss of personal property belonging to customers while that property is in the business's care, custody, or control.

Comparative Negligence

A doctrine that reduces the injured party's recovery in proportion to that party's own share of fault rather than barring the claim entirely.

Claims-Made Policy

A liability policy covering claims first made and reported during the policy period for wrongful acts occurring on or after the stated retroactive date.

Split Limits

A liability limit structure stating separate maximum amounts for bodily injury per person, bodily injury per accident, and property damage per accident.

Proximate Cause

An unbroken sequence of events connecting the negligent act to the injury, without which the injury would not have occurred.

PAP Part D

The personal auto coverage for damage to the insured auto, divided into collision and other than collision, settled on an actual cash value basis.

Newly Acquired Auto

A vehicle acquired during the policy period that receives automatic coverage, commonly for 14 days, provided the insured reports it and pays any added premium.

No-Fault Insurance

A system in which each driver's own insurer pays medical expenses and wage loss through personal injury protection regardless of fault, with limits on lawsuits.

Financial Responsibility Law

A law requiring drivers to show proof of ability to pay for damages after an accident or serious violation, often through insurance or a deposit.

Business Auto Symbol 1

The covered auto designation meaning any auto, providing the broadest automatic coverage for owned, hired, and non-owned autos used in the business.

CGL Coverage A

The commercial general liability insuring agreement that pays sums the insured becomes legally obligated to pay as damages for bodily injury or property damage to others.

Umbrella Drop-Down

Umbrella coverage that responds to a loss not covered by the underlying policies, subject to a self-insured retention the insured must pay first.

Exclusive Remedy Doctrine

The rule that statutory workers compensation benefits are the employee's sole remedy against the employer for a work-related injury, barring a negligence suit.

Claims-Made E&O

Professional liability written on a claims-made basis, responding to claims reported during the policy period for acts after the retroactive date and within any extended reporting period.

DISB

The District of Columbia Department of Insurance, Securities and Banking, the agency that licenses producers and insurers and enforces DC insurance laws.

Twisting

An unfair trade practice in which a producer induces a policyholder to lapse or surrender a policy through misleading or incomplete comparisons of policies.

Rebating

Offering any part of a commission or anything of value not stated in the policy as an inducement to buy insurance, which is prohibited for DC producers.

DC Minimum Auto Limits

The compulsory liability minimums in the District of Columbia of $25,000 per person and $50,000 per accident bodily injury, plus $10,000 property damage.

DC Guaranty Association

The entity that pays covered claims of policyholders of insolvent DC-licensed insurers, subject to statutory limits and exclusions.