LA 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 property or a person such that loss or damage causes monetary harm; required for property at loss and for life at inception.

Indemnity principle

The principle that insurance restores the insured to the pre-loss financial position, no better and no worse, subject to policy limits and valuation.

Apparent authority

Authority a third party reasonably believes an agent has because of the principal's conduct or representations, even without actual express authority.

Subrogation

After paying a loss, the insurer acquires the insured's legal right to recover from the responsible third party to prevent double recovery.

LIGA

Louisiana Insurance Guaranty Association pays covered claims of insolvent member property and casualty insurers, subject to statutory caps, and excludes life, health, and certain other lines.

Louisiana CE requirement

Resident Louisiana producers must complete 24 continuing education hours every two years, including at least 3 hours of ethics instruction.

Rebating

Offering inducements not stated in the policy, such as cash or gifts, to buy insurance is illegal rebating under Louisiana unfair trade practice law.

Producer appointment

An insurer must appoint a licensed Louisiana producer before the producer may solicit or sell insurance on that insurer's behalf.

Coinsurance formula

Insurance carried divided by insurance required, multiplied by the loss, subject to the policy limit; insurance required equals coinsurance percentage times value at risk.

Actual cash value

Replacement cost minus depreciation. Actual cash value reflects the pre-loss value of property and is the default valuation in many property policies.

Percentage deductible

A deductible stated as a percentage of the dwelling or building limit, common for hurricane or wind coverage; it is not a percentage of the loss.

Mortgagee clause

Policy provision protecting a lender's interest by allowing the mortgagee to receive loss payments and notice of cancellation or nonrenewal.

HO-3 special form

A homeowners form covering the dwelling on an open-perils basis and personal property on a broad named-perils basis; liability and medical payments are included.

HO-4 renters policy

A renters policy covering the tenant's personal property, loss of use, liability, and medical payments; it does not insure the building.

HO-6 condominium form

A condominium unit-owners form covering personal property, unit interior improvements, loss of use, liability, and limited loss assessments.

Flood waiting period

National Flood Insurance Program policies generally take effect 30 days after purchase, with limited exceptions such as lender-required flood coverage at closing.

Business income coverage

Covers net income plus continuing normal operating expenses during the period of restoration after a covered property loss, plus extra expense.

Employee dishonesty

Crime coverage indemnifying the insured for theft of money, securities, or other property by employees, often on a discovery basis.

Equipment breakdown

Formerly boiler and machinery, it covers loss from accidental breakdown of covered equipment, including electrical or mechanical failure and related business income loss.

Negligence elements

Duty owed, breach of that duty, proximate cause, and resulting damages; all four must be shown for a negligence claim.

Comparative fault

A rule reducing a plaintiff's recovery by the plaintiff's own percentage of fault; Louisiana uses comparative fault rather than contributory negligence.

Claims-made policy

A liability policy covering claims first made during the policy period, often subject to a retroactive date and extended reporting period.

PAP liability limits

Personal auto liability limits are shown as split limits, such as 15/30/25, meaning per-person bodily injury, per-accident bodily injury, and property damage.

UM rejection

Louisiana requires uninsured motorist coverage to be offered; the insured may reject it only by a signed written rejection.

No Pay No Play

Louisiana law limits recovery of noneconomic damages by drivers who operate without required liability insurance at the time of an accident.

MCS-90 endorsement

An endorsement filed for certain commercial motor carriers certifying minimum financial responsibility; it can create liability despite policy exclusions.

CGL Coverage A

Covers sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

Products-completed operations

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

EPLI

Employment practices liability insurance covers claims such as wrongful termination, discrimination, and harassment, typically on a claims-made basis.

Exclusive remedy

Workers compensation benefits are the employee's exclusive remedy against the employer for work-related injury, barring most tort suits absent intentional conduct.

Temporary total disability

Temporary total disability benefits replace a portion of lost wages while an injured worker is unable to work and has not reached maximum medical improvement.

Experience modification

A factor applied to workers compensation premium that compares an employer's loss experience with the expected experience for its classification.