FL Property & Casualty flashcards

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

Insurable Interest

A financial stake in the person or property insured such that the insured benefits from its continued existence and suffers loss from its destruction; required at the time of loss for property insurance.

Principle of Indemnity

The insured is restored to approximately the same financial position held before the loss, no better and no worse; this explains why property policies pay actual cash value rather than a profit.

Utmost Good Faith

A mutual duty requiring both the applicant and the insurer to disclose all material facts; concealment, misrepresentation, or breach of warranty can allow the insurer to rescind or deny coverage.

Subrogation

The insurer's right, after paying a covered loss, to pursue the responsible third party in the insured's place and recover those payments, preventing the insured from collecting twice.

Moral Hazard

A condition of increased loss probability arising from dishonesty or intent to defraud, such as arson for insurance proceeds or faked disability claims, which insurers underwrite against.

Aleatory Contract

An insurance contract in which the money exchanged is unequal and performance depends on an uncertain future event, so the insured may pay premiums and receive nothing in return.

Actual Cash Value

The valuation method that pays replacement cost minus depreciation, reflecting the used value of damaged property at the time of loss; commonly used in property and auto physical damage claims.

Replacement Cost

A valuation basis that pays the cost to repair or replace damaged property with new property of like kind and quality without deducting depreciation; often requires insurance to at least eighty percent of value.

Coinsurance Clause

A property provision requiring the insured to carry a stated percentage of the property's value; if underinsured, the loss payment is reduced by the ratio of the carried limit to the required limit.

Mortgagee Clause

A policy provision giving the lender the right to receive loss payments, notice of cancellation, and the ability to submit a proof of loss, protecting its interest in the mortgaged property.

Loss of Use Coverage

Pays additional living expenses, such as temporary housing and meals above normal costs, when a covered peril makes the residence uninhabitable; typically a percentage of Coverage A.

Appraisal Provision

A dispute-resolution method in property policies in which each side selects a competent appraiser and the two choose an umpire when the appraisers cannot agree on the amount of loss.

Occurrence

An accident, including continuous or repeated exposure to substantially the same general harmful conditions, that causes bodily injury or property damage during the policy period.

Claims-Made Policy

Liability coverage that responds to claims first made or reported during the policy period, subject to a retroactive date, rather than to when the injury actually happened.

Extended Reporting Period

A tail endorsement that allows the insured to report claims made after a claims-made policy expires, for wrongful acts that occurred during the expired policy period.

Duty to Defend

The insurer's obligation to provide legal counsel and pay defense costs for covered claims; it is broader than the duty to indemnify and defense costs are usually paid outside the limit.

General Aggregate Limit

The most the commercial general liability insurer will pay for all covered losses under Coverages A, B, and C during a policy period, excluding products-completed operations losses.

Business Income Coverage

Pays the net income the business would have earned plus continuing normal operating expenses during the period of restoration after a covered loss at scheduled premises.

Ordinance or Law Coverage

Covers the extra cost of rebuilding to current building codes, demolition of undamaged portions, and the value of the undamaged portion that must be torn down.

Blanket Insurance

A single limit of insurance that applies to two or more covered items, locations, or coverages, rather than a separate specific limit for each one.

Builders Risk Coverage

Property coverage on a structure under construction, including materials, supplies, and equipment intended to become part of the building, ending when the project is complete.

Surety Bond

A three-party agreement in which the surety guarantees the principal's performance or payment to the obligee, with the principal ultimately liable for losses the surety pays.

Personal Injury Protection

Florida no-fault coverage paying 80 percent of reasonable medical expenses and 60 percent of lost wages up to $10,000, plus a $5,000 death benefit; care must begin within 14 days.

Property Damage Liability

Florida requires every driver to carry at least $10,000 of this coverage to pay for damage the insured causes to another person's vehicle or other property.

Uninsured Motorist Coverage

Florida requires insurers to offer this coverage at limits equal to bodily injury limits; the insured may reject it only in writing, and stacking must be purchased.

HO-3 Special Form

Homeowners form providing open-peril coverage on the dwelling and broad named-peril coverage on personal property, plus liability, medical payments, and loss of use.

HO-4 Tenant Form

Homeowners form for renters covering personal property on a named-peril basis plus liability and loss of use; it provides no coverage for the rented building itself.

Florida Insurance Guaranty Association

A state entity that pays covered claims of insolvent property and casualty insurers, up to $300,000 per claim, with a $100 deductible paid by the claimant.

Florida Hurricane Catastrophe Fund

A state-run reinsurance program that reimburses participating insurers for a portion of hurricane losses above their retention, funded by insurer premiums and used to stabilize the market.

Citizens Property Insurance

Florida's residual market insurer, providing property coverage to applicants who cannot obtain coverage from admitted carriers, and subject to surcharges when it operates at a deficit.

Florida Valued Policy Law

Florida statute requiring payment of the full policy limit for a total loss of a building caused by a covered peril, regardless of the property's actual cash value.

Continuing Education Requirement

Florida general lines agents must complete 24 hours of approved continuing education every two years, including 3 hours of ethics, in order to renew an active license.