MI Property & Casualty flashcards
MI 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.
- Certificate of Authority
- A license issued by a state insurance regulator, such as Michigan DIFS, allowing an insurer to transact insurance business in that state.
- Producer Fiduciary Duty
- Insurance producers must hold premiums and client funds in a fiduciary capacity, keep them separate, and may not commingle them with personal or business funds.
- Unfair Trade Practice
- An insurer or producer act such as misrepresentation, rebating, twisting, or unfair claim settlement that is prohibited by state insurance law.
- Law of Large Numbers
- The principle that as the number of similar exposure units increases, actual losses become more predictable and closer to expected losses, supporting ratemaking.
- Insurable Interest
- A financial stake in the person or property insured such that the insured benefits from its continued existence and suffers loss if it is damaged.
- Coinsurance Formula
- Loss payment equals the lesser of the policy limit or the insured loss multiplied by insurance carried divided by insurance required.
- Actual Cash Value
- A property valuation method equal to replacement cost minus depreciation; it reflects the damaged property's value at the time of loss.
- Named Peril Policy
- A property policy that covers only the perils specifically listed in the policy, with the burden on the insured to show the loss resulted from a listed peril.
- Mortgagee Clause
- A property policy provision giving the mortgagee rights to receive loss payments and notice, and allowing it to pay premium to keep coverage in force.
- Negligence Elements
- To establish negligence, a claimant must prove duty owed, breach of that duty, proximate cause, and actual damages resulting from the breach.
- Occurrence Policy
- A liability policy that covers injury or damage that occurs during the policy period, regardless of when the claim is reported.
- Supplementary Payments
- Liability coverage amounts paid in addition to the limit, such as defense costs, bail bonds, and interest on judgments, when the insurer defends a claim.
- Dwelling Policy DP-3
- A dwelling form that insures the dwelling building on an open-peril basis and personal property on a named-peril basis, for residential risks.
- Coverage D Fair Rental Value
- Dwelling coverage that reimburses lost fair rental income and necessary increased living expenses when a rented dwelling is made uninhabitable by a covered loss.
- Dwelling Policy Eligibility
- Dwelling policies are designed for owner-occupied or rented residential buildings with one to four families; they do not provide liability coverage.
- HO-3 Special Form
- A homeowners form covering the dwelling and other structures on an open-peril basis and personal property on a named-peril basis.
- Coverage C Special Limits
- Homeowners limits capping recovery for categories such as money, jewelry theft, firearms theft, and silverware theft, regardless of the overall personal property limit.
- HO-4 Renters Policy
- A homeowners form for tenants that insures personal property and liability but not the rented dwelling structure, which the landlord insures.
- Michigan No-Fault PIP
- Michigan requires personal injury protection in auto policies to pay medical, wage-loss, and replacement-service benefits for crash injuries, with selectable medical limits.
- Mini-Tort Coverage
- Michigan allows recovery of up to $3,000 for vehicle damage from an at-fault driver in certain crashes, waived under no-fault tort restrictions.
- PAP Part D Coverage
- Personal auto coverage for direct physical damage to the insured vehicle, including collision and other-than-collision perils, subject to deductibles.
- Commercial Package Policy
- A policy that combines two or more commercial coverage parts, such as property, general liability, auto, and crime, under common declarations and conditions.
- Business Income Coverage
- Commercial property coverage that replaces lost net income and continuing expenses during the period a business is shut down by a covered loss.
- CGL General Aggregate
- The maximum a commercial general liability policy pays for all covered claims other than products-completed operations during the policy period.
- Businessowners Policy Eligibility
- A BOP is designed for eligible small businesses such as offices, retail stores, and apartments; certain high-risk or large risks are excluded.
- BOP Combined Coverage
- A businessowners policy packages commercial property and general liability coverage, often including business income, for eligible small and medium businesses.
- BOP Optional Coverages
- Common BOP endorsements add crime, equipment breakdown, spoilage, outdoor signs, and employee dishonesty coverage beyond the standard package.
- Exclusive Remedy
- Workers compensation is generally the employee's sole legal remedy against the employer for work-related injury, replacing tort claims with statutory benefits.
- Workers Compensation Part Two
- Employers liability coverage in a workers compensation policy protects the employer against certain third-party and statutory claims not covered by Part One.
- Workers Compensation Premium
- Premium is calculated using employee payroll multiplied by classification rates, then adjusted by experience modification and other factors.
- NFIP Waiting Period
- National Flood Insurance Program policies generally impose a 30-day waiting period before flood coverage takes effect, with limited exceptions.
- Michigan Assigned Claims Plan
- A Michigan mechanism that provides no-fault benefits to persons injured in motor vehicle accidents who cannot obtain coverage from an insurer.