MA Property & Casualty flashcards
MA Property & Casualty · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Pure risk
- A situation offering only the chance of loss or no loss, with no possibility of gain; only pure risk is generally insurable.
- Insurable interest
- A financial stake in the subject matter such that a loss would cause monetary harm; in property insurance it must exist at the time of loss.
- Indemnity principle
- The insurer restores the insured to approximately the same financial position held before the loss, no better and no worse, preventing profit from insurance.
- Aleatory contract
- An agreement in which the amounts exchanged by the parties are unequal and depend on the occurrence of an uncertain event such as a loss.
- Subrogation
- After paying a claim, the insurer acquires the insured's legal right to recover the loss amount from the negligent third party who caused it.
- Law of large numbers
- The principle that as the number of similar exposure units increases, actual loss experience more closely matches expected losses, making rates more predictable.
- Coinsurance clause
- A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value; a lower limit reduces the claim payment proportionally.
- Actual cash value
- Replacement cost of the damaged property minus physical depreciation, reflecting the property's value in its pre-loss condition.
- Replacement cost
- The amount needed to repair or replace damaged property with new property of similar kind and quality, without deduction for depreciation.
- Standard mortgage clause
- A policy provision giving the mortgagee separate rights to receive loss payment up to its interest, notice of cancellation, and the option to pay premium.
- Appraisal provision
- A dispute-resolution method for the amount of loss in which each party chooses a competent appraiser, who may select an umpire to decide differences.
- Negligence
- Failure to use the care a reasonable person would use under similar circumstances, resulting in unintended injury or damage to another.
- Compensatory damages
- Money awarded to make an injured party whole; special damages cover economic losses such as medical bills, while general damages cover pain and suffering.
- Comparative negligence
- A doctrine reducing a claimant's recovery by their percentage of fault; in Massachusetts a claimant 51 percent or more at fault recovers nothing.
- Claims-made policy
- Liability coverage that responds to claims first made during the policy period, subject to a retroactive date and usually a reporting extension.
- Supplementary payments
- Amounts the liability insurer pays in addition to the limits, such as defense costs, bail bonds, and lost earnings up to a stated daily maximum.
- Personal Injury Protection (PIP)
- Massachusetts coverage paying up to $8,000 for medical expenses, 75 percent of lost wages, and replacement services for the insured and passengers, regardless of fault.
- Massachusetts tort threshold
- In Massachusetts, a lawsuit for pain and suffering is allowed only if medical expenses exceed $2,000 or the injury is a fracture, disfigurement, permanent loss of function, or death.
- Safe Driver Insurance Plan
- Massachusetts merit rating plan that adds surcharge points for at-fault accidents and traffic violations and grants credits for consecutive clean driving years.
- Massachusetts compulsory auto limits
- Massachusetts requires bodily injury limits of at least $20,000 per person and $40,000 per accident, plus $5,000 property damage, on every private passenger auto policy.
- Massachusetts FAIR Plan
- The Massachusetts Property Insurance Underwriting Association, which offers basic property insurance to owners unable to obtain coverage in the voluntary market.
- Producer continuing education
- Massachusetts licensed producers must complete 45 hours of continuing education every three years, including at least three hours of ethics instruction.
- HO-3 special form
- Homeowners form insuring the dwelling and other structures on an open-peril basis and personal property for named perils, with liability coverage included.
- Coverage B other structures
- Homeowners coverage for detached structures on the residence premises, insured for 10 percent of Coverage A unless another limit is shown.
- Loss of use coverage
- Homeowners Coverage D pays additional living expenses and fair rental value when the residence is uninhabitable because of a covered loss; the standard limit is 30 percent of Coverage A.
- HO-4 renters policy
- A homeowners form for tenants covering personal property on a named-peril basis plus liability and loss of use, but not the building.
- Personal auto Part D
- Coverage for direct and accidental damage to the insured auto, split into collision and other-than-collision coverage, each with its own deductible.
- Newly acquired auto
- Under the personal auto policy, a newly acquired auto of the same type as an insured auto has coverage for 14 days; a newly acquired trailer is also covered for 14 days.
- 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 covered by the policy.
- Products-completed operations
- CGL coverage for bodily injury or property damage occurring away from the insured's premises and arising from the insured's product or completed work.
- Businessowners policy (BOP)
- A package policy for eligible small businesses combining commercial property, general liability, and business income coverage at a lower cost than separate policies.
- Business auto symbols
- Numbers entered on the commercial auto declarations that designate which autos, such as owned, hired, or non-owned, are covered autos.