NJ P&C flashcards
NJ P&C · 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.
- Insurable interest
- A legal right to suffer financial loss from damage to person or property; must exist at policy inception for life insurance and at time of loss for property.
- Indemnity principle
- Restores insured to approximate pre-loss financial condition with no profit; property claims often paid actual cash value unless replacement cost is endorsed.
- Utmost good faith
- Both parties must disclose material facts; concealment or material misrepresentation can allow the insurer to rescind or deny coverage.
- Subrogation
- Insurer's right after paying a loss to pursue responsible third parties and recover payments, preventing the insured from collecting twice.
- Named peril policy
- Covers only causes of loss specifically listed; the burden is on the insured to show the loss resulted from a listed peril.
- Coinsurance clause
- Requires insurance to a stated percentage of property value; underinsurance reduces claim payment by carried limit divided by required limit.
- Actual cash value
- Valuation method equal to replacement cost minus depreciation; used when the policy does not specify replacement cost valuation.
- Mortgagee clause
- Protects the lender's interest in insured property; the lender receives loss payments and notices even if the insured's acts impair coverage.
- Negligence elements
- Duty owed, breach of that duty, proximate cause, and actual damages; all four are generally required for a liability claim.
- Occurrence policy
- Responds to bodily injury or property damage that occurs during the policy period, regardless of when the claim is reported.
- Claims-made policy
- Responds to claims first made during the policy period; the retroactive date and extended reporting period affect coverage.
- Aggregate limit
- Maximum amount the insurer will pay for all covered claims during a policy period, in addition to per-occurrence limits.
- HO-3 policy
- 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
- Sub-limits cap payment for categories such as cash, jewelry theft, silverware, and firearms; endorsements can increase them.
- Loss of use coverage
- Pays additional living expenses if the home is uninhabitable or fair rental value if rented, usually for a reasonable time.
- HO-6 condo policy
- Covers the unit owner's personal property, improvements and betterments, loss of use, and liability; the association covers common elements.
- NJ minimum auto liability
- New Jersey requires at least $15,000 per person and $30,000 per accident bodily injury liability and $5,000 property damage liability.
- Personal injury protection
- No-fault medical, lost wage, and essential services coverage required in New Jersey auto policies; applies regardless of fault.
- Uninsured motorist coverage
- Pays the insured's damages when the at-fault driver has no insurance or is a hit-and-run driver; underinsured motorist covers insufficient limits.
- Collision coverage
- Covers damage to the insured auto from impact with another vehicle or object, subject to a deductible, regardless of fault.
- Business income coverage
- Pays lost net income and continuing normal expenses during the period of restoration after covered property damage.
- CGL occurrence form
- Commercial general liability form covering bodily injury and property damage that occurs during the policy period, regardless of claim timing.
- Additional insured endorsement
- Extends liability coverage to another person or organization for claims arising from the insured's operations or premises.
- Products-completed operations
- CGL coverage for bodily injury or property damage caused by the insured's product or completed work away from the premises.
- Umbrella liability policy
- Provides excess limits over underlying auto, general liability, and homeowners policies; may fill gaps subject to a self-insured retention.
- NFIP flood insurance
- Federal program providing building and contents coverage for flood; typically has a 30-day waiting period before coverage begins.
- Workers compensation
- Statutory coverage for employee work-related injury or illness, paying medical benefits and lost wages; exclusive remedy limits employee lawsuits.
- Surety bond
- Three-party agreement among obligee, principal, and surety guaranteeing performance or payment; not a two-party insurance contract.
- NJ producer license
- Insurance producers must be licensed by the New Jersey Department of Banking and Insurance and complete required continuing education for renewal.
- Unfair trade practice
- Includes misrepresentation, false advertising, rebating, twisting, and unfair claim settlement; prohibited under New Jersey insurance law.
- NJ FAIR Plan
- New Jersey Property Insurance Underwriting Association provides basic property insurance to owners unable to obtain coverage in the voluntary market.
- Guaranty association
- New Jersey Property-Liability Insurance Guaranty Association pays covered claims of insolvent insurers, subject to statutory limits and exclusions.