SC 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 the subject matter such that its loss causes a measurable economic loss; required at policy inception for life insurance and at the time of loss for property.

Principle of Indemnity

Restoring the insured to approximately the same financial position held before the loss, no better and no worse; it prevents profit from insurance and underlies ACV settlements.

Aleatory Contract

A contract in which the dollar amounts exchanged by the parties are unequal and depend on an uncertain future event, such as whether a covered loss occurs.

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 many property policies.

Coinsurance Clause

Requires insurance equal to a stated percentage of property value; if underinsured, payment equals the limit carried divided by the limit required, multiplied by the loss.

Named Peril Coverage

A policy form that covers only the perils specifically listed; the insured bears the burden of proving the loss resulted from one of those listed perils.

HO-3 Special Form

Homeowners form insuring the dwelling and other structures on an open-peril basis while personal property is covered for named perils; the most widely used homeowners policy.

Coverage D Loss of Use

Pays additional living expenses and fair rental value when a covered loss makes the residence unfit to live in, typically limited to 30 percent of the Coverage A limit.

HO-4 Renters Policy

Covers the tenant's personal property, loss of use, and personal liability; the building is the landlord's responsibility, so no Coverage A dwelling limit applies.

Dwelling Policy

A property-only form for rented or owner-occupied dwellings written as DP-1 basic, DP-2 broad, or DP-3 special; personal liability is not included unless endorsed.

Business Income Coverage

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

Agreed Value Option

A commercial property option that suspends the coinsurance requirement in exchange for a limit the insurer and insured agree represents the full value of the property.

Vacancy Condition

If a building is vacant beyond a stated number of days, commercial property coverage restricts certain perils and reduces loss payments because unoccupied buildings present higher risk.

Occurrence

An accident, including continuous or repeated exposure to substantially the same harmful conditions, that causes bodily injury or property damage during the policy period.

Claims-Made Policy

Covers claims first made against the insured during the policy period regardless of when injury occurred, and usually carries a retroactive date and extended reporting period option.

Duty to Defend

The insurer's obligation to provide and pay for legal defense of covered claims; under the CGL it applies even to groundless suits and costs are paid outside the limits.

PAP Part A Liability

Personal auto liability coverage paying damages for bodily injury and property damage the insured becomes legally liable for because of an auto accident.

Split Limits

Separate dollar limits stated per person and per accident for bodily injury, plus a single limit for property damage, for example 25/50/25.

Combined Single Limit

One total dollar amount available per accident for all bodily injury and property damage combined, rather than separate per-person and per-accident limits.

Other Than Collision

Personal auto physical damage coverage for losses such as fire, theft, vandalism, glass breakage, and weather, often called comprehensive; a separate deductible usually applies.

Covered Auto Symbol 1

On the business auto coverage form, symbol 1 means any auto, covering owned, hired, and nonowned autos used in the business, the broadest available scope.

MCS-90 Endorsement

Attached for for-hire interstate motor carriers, it guarantees the public is paid a negligence judgment up to the required minimum, even if the policy otherwise excludes the vehicle.

General Aggregate Limit

The maximum the CGL will pay for all covered losses other than products-completed operations during a policy period, reinstated only as endorsements provide.

Products-Completed Operations

CGL coverage, with its own separate aggregate, for bodily injury or property damage arising from the insured's products or completed work away from the insured's premises.

Your Work Exclusion

CGL exclusion barring coverage for property damage to the insured's own work performed by or for the insured, though damage caused by a subcontractor's work is typically restored.

Exclusive Remedy

The principle that statutory workers compensation benefits are the employee's only recovery from the employer for work-related injury, barring negligence suits except for intentional acts.

Employers Liability Coverage

Part Two of the workers compensation policy, responding to suits arising from work-related injury outside the compensation system; standard limits are $100,000 each accident and disease limits.

Experience Modification Factor

A multiplier applied to workers compensation manual premium that credits employers with better-than-average loss experience and debits employers whose losses are worse than average.

Umbrella Liability Policy

Provides excess limits over underlying auto, general liability, and employers liability policies and can drop down to cover gaps such as a self-insured retention.

Surety Bond Parties

Three parties: the obligee requiring performance, the principal who must perform, and the surety guaranteeing the obligation; the surety expects reimbursement from the principal for losses paid.

SC Auto Minimum Limits

South Carolina requires bodily injury liability of $25,000 per person and $50,000 per accident plus $25,000 property damage liability for private passenger autos.

SC Wind and Hail Association

A residual market insurer providing wind and hail coverage for eligible property in designated coastal areas of South Carolina where the voluntary market may not.