NH Property & Casualty flashcards

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

NH Insurance Department

State agency headed by a Commissioner appointed by the Governor with Executive Council approval; it licenses producers, reviews rates and forms, and enforces the insurance statutes.

NH producer license term

New Hampshire producer licenses run for two years and expire at the end of the term shown on the license; renewal fees and continuing education must be completed to keep authority active.

NH continuing education requirement

Producers must complete 24 credit hours every two-year license term, including at least 3 hours of ethics instruction, before the license can be renewed.

Fiduciary duty of producers

Premiums and returned premiums a producer collects belong to the insurer or the insured, must be held in trust, and cannot be commingled with the producer's own funds.

NH Guaranty Association limit

The New Hampshire Insurance Guaranty Association pays covered claims of insolvent property and casualty insurers up to $300,000 per claim and does not cover life or health claims.

Rebating

Giving, or offering to give, anything of value not stated in the policy as an inducement to buy insurance; an unfair trade practice prohibited in New Hampshire.

Insurable interest

A financial stake in the person or property insured such that a loss causes genuine economic harm; in property insurance it must exist at the time of loss.

Principle of indemnity

The insured is restored to approximately the same financial position held before the loss, no better and no worse; it limits payment to the actual amount of loss.

Four insurable risk elements

Requirements include many similar exposure units, losses that are accidental, definite and measurable, calculable probability, and no catastrophic concentration of risk in one location.

Moral hazard

A condition of dishonesty or intent to gain from an insurance loss, such as arson or a staged accident, which increases the chance and severity of loss.

Morale hazard

Carelessness or indifference toward loss because insurance exists, such as leaving keys in an unlocked car, which increases the frequency of losses.

Law of large numbers

As the number of similar independent exposure units grows, actual loss experience converges on expected loss, allowing insurers to predict losses and set accurate rates.

Coinsurance clause

A property clause requiring the insured to carry at least a stated percentage of the property's value; partial losses are reduced when the carried limit is inadequate.

Actual cash value

Replacement cost of damaged property minus depreciation, reflecting the property's value at the time of loss; the default valuation method in most property forms.

Replacement cost valuation

Pays the cost to repair or replace with new property of like kind and quality with no depreciation deduction, usually limited to the Coverage A amount.

Pair and set clause

When one item of a pair or set is damaged, the insurer pays the difference between the value of the complete set and its value after the loss.

Vacancy exclusion period

If a building has been vacant more than 60 consecutive days, standard property forms exclude vandalism, sprinkler leakage, building glass breakage, and water damage.

Negligence elements

The claimant must prove a legal duty owed, a breach of that duty, proximate cause linking the breach to the injury, and actual damages.

Comparative negligence

A rule that reduces an injured party's recovery by their percentage of fault; modified versions bar recovery when the claimant's fault exceeds a stated threshold.

Claims-made coverage trigger

Coverage applies to claims first made or reported during the policy period, not to when the injury occurred, subject to the policy's retroactive date.

Retroactive date

The date on a claims-made policy before which occurrences are not covered; it fixes how far back the policy will respond to injury or damage.

Supplementary payments

Amounts the liability insurer pays in addition to the limit of liability, such as defense costs, bail bond premiums, and the insured's lost earnings at trial.

Coverage C special limits

Standard homeowners forms cap theft of jewelry and furs at $1,500, silverware at $2,500, firearms at $2,500, money at $200, and securities at $1,500.

Loss of use coverage

Coverage D pays additional living expenses and fair rental value when a covered peril makes the residence premises uninhabitable, usually limited to a percentage of Coverage A.

HO-4 tenants form

Covers a renter's personal property, personal liability, and loss of use, but not the building itself, which the landlord is responsible for insuring.

Commercial causes of loss forms

Basic, broad, and special forms define which perils a commercial property policy covers; the special form insures risks of direct physical loss unless excluded.

Business income coverage

Pays the net income the business would have earned plus continuing normal operating expenses during the period of restoration following a covered property loss.

PAP Part C UM/UIM

Uninsured motorist coverage pays for injury caused by a driver with no insurance or a hit-and-run; underinsured motorist coverage responds when the at-fault driver's limits are too low.

CGL Coverage A

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

CGL Coverage B

Covers personal and advertising injury offenses such as libel, slander, wrongful eviction, and infringement of copyright in an advertisement.

Extended reporting period

A claims-made feature that extends the time after policy expiration to report claims arising from occurrences that took place before the policy expired.

Workers compensation Part Two

Employers liability coverage that responds to tort suits by employees for work-related injuries that fall outside the statutory benefits provided under Part One.