KS Property & Casualty flashcards

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

Kansas Commissioner of Insurance

Statewide elected official who heads the Kansas Insurance Department, serves a four-year term, and administers and enforces the Kansas Insurance Code.

Kansas producer continuing education

Kansas requires licensed producers to complete 24 hours of continuing education every two years, including at least 3 hours of ethics, before renewing a license.

Kansas P&C Guaranty Association

Statutory entity funded by assessments on member insurers that pays covered claims, generally up to $300,000, of policyholders of insolvent Kansas property and casualty insurers.

Kansas minimum auto liability limits

Kansas requires private passenger autos to carry at least $25,000 per person and $50,000 per accident bodily injury liability and $25,000 property damage liability.

Kansas no-fault PIP benefits

Kansas personal injury protection must provide at least $4,500 medical, $4,500 work loss, $4,500 rehabilitation, $25 per day in-home services, and $2,000 survivor loss.

Insurable interest

A financial stake in the insured person or property such that the insured gains from its continued existence and loses from its destruction; required at inception for life and at loss for property.

Principle of indemnity

The insured is restored to approximately the same financial position as before the loss, no better and no worse, which limits recovery to the actual amount of loss.

Aleatory contract

An insurance contract in which the amounts exchanged by the parties are unequal and depend on the occurrence of an uncertain event such as a loss.

Combined ratio

The sum of the loss ratio (incurred losses divided by earned premium) and the expense ratio; a result above 100% indicates an underwriting loss.

Apparent authority

Authority a producer appears to hold because of the insurer's representations or conduct, binding the insurer even though no express or implied authority was granted.

Coinsurance clause

A commercial property requirement that the insured carry a stated percentage of property value; recovery equals limit carried divided by limit required, times the loss, capped at the limit.

Actual cash value

Replacement cost of damaged property minus depreciation, reflecting its value at the time of loss; the default valuation for most personal property in property policies.

Mortgage clause

A property policy provision giving the mortgagee rights to receive loss payments and usually to advance notice of cancellation, to submit proof of loss, and to pay premium to protect its interest.

Business income coverage

Pays the insured's lost net income and continuing normal operating expenses during the period of restoration after a covered cause of loss at the described premises.

Flood exclusion

Property policies exclude flood, surface water, and water that backs up through sewers or drains; separate flood insurance is available through NFIP or private insurers.

Replacement cost coverage

Pays to repair or replace damaged property with new property of similar kind and quality without deducting depreciation, subject to the policy limit and any coinsurance requirement.

CGL Coverage A

Commercial general liability coverage that pays sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

Claims-made trigger

Coverage applies only if the claim is first made during the policy period or extended reporting period, and only for occurrences that happened after the retroactive date.

Extended reporting period

A period after a claims-made policy expires during which claims for occurrences reported to the insurer during the policy period may still be submitted; the basic period is automatic and free.

Employers liability coverage

Workers compensation Part Two coverage for the employer's legal liability from employee injury lawsuits not covered by statutory benefits, usually written with per-accident, per-employee, and aggregate limits.

Products-completed operations

CGL coverage for bodily injury or property damage occurring away from the insured's premises and caused by the insured's product or completed work.

Newly acquired auto

Under the personal auto policy, an additional auto gets 14 days of automatic coverage for coverages already carried, but only 4 days for collision if no listed auto has it.

HO-3 special form

Homeowners form that covers the dwelling and other structures on an open-perils basis and personal property for named perils; the most widely used homeowners form.

Scheduled personal property endorsement

An endorsement that insures itemized high-value articles such as jewelry or furs for broader perils and higher limits, usually with no deductible applied.

NFIP waiting period

Flood insurance purchased through the National Flood Insurance Program generally takes effect 30 days after application, with exceptions for new mortgage loans and closings.

Personal umbrella policy

Excess liability coverage over homeowners and auto policies that requires specified underlying limits, with a self-insured retention for losses not covered by underlying insurance.

Loss of use coverage

Homeowners coverage that pays additional living expenses and fair rental value when a covered loss makes the residence uninhabitable, for the time reasonably needed to repair.

Businessowners policy

A package policy for eligible small businesses such as offices, retail stores, and apartments that combines property, general liability, and business income coverage.

Additional insured endorsement

An endorsement extending liability coverage to another party, such as a landlord or general contractor, usually limited to liability arising out of the named insured's operations.

Premium audit

After a commercial policy expires, the insurer reviews payroll, sales, or other exposure measures to determine the final earned premium and adjusts the policy accordingly.

Experience modification factor

A workers compensation pricing factor comparing the insured's loss experience with others in the same class; values below 1.00 are credits and above 1.00 are debits.

Agreed value option

A commercial property option in which the insured and insurer agree on a property value; coinsurance is suspended and a higher rate applies.