TN Property & Casualty flashcards

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

Tennessee Department of Commerce and Insurance

State agency led by an appointed commissioner that licenses insurance producers, reviews insurer solvency and market conduct, and enforces Tennessee insurance statutes.

Producer continuing education

Tennessee producers must complete 24 credit hours of approved continuing education every two years, including at least three hours of ethics, before their license can renew.

Sharing commissions

A licensed producer may not split or share a commission with an unlicensed person, because compensating unlicensed parties for soliciting insurance is prohibited.

Twisting

Inducing a policyholder to lapse, surrender, or replace an existing policy through misleading or incomplete comparisons of the two policies, an unfair trade practice.

Rebating

Offering a buyer any inducement not specified in the policy, such as part of the agent's commission, to encourage the purchase of insurance; prohibited in Tennessee.

Surplus lines diligent search

Documented effort by a licensed surplus lines broker to obtain coverage from authorized insurers before placing a risk with a nonadmitted insurer.

Insurable interest

A financial stake in the insured person or property such that a loss would cause monetary harm; for property it must exist at the time of loss.

Aleatory contract

An insurance contract in which the amounts exchanged by the parties are unequal and contingent on an uncertain event; the insured may pay premiums and never collect.

Contract of adhesion

An agreement drafted by the insurer and offered to the insured on a take-it-or-leave-it basis; ambiguous language is interpreted against the insurer that wrote it.

Subrogation

The insurer's right, after paying a covered loss, to stand in the insured's place and recover the amount paid from the party legally responsible for the loss.

Property coinsurance clause

A provision requiring the insured to carry a stated percentage of property value; if underinsured, payment is reduced by the ratio of carried limit to required limit.

Replacement cost

A settlement basis paying the cost to repair or replace damaged property with new property of like kind and quality, with no deduction for depreciation.

Actual cash value

A settlement basis equal to replacement cost minus depreciation, measuring the value of the property immediately before the loss occurred.

Pair and set clause

A policy provision stating that when part of a pair or set is lost, the insurer pays the difference between the value before and after the loss.

Vacancy

A condition in which a structure is empty of occupants and contents; property policies often suspend or restrict coverage once vacancy exceeds a stated period.

Ordinance or law exclusion

Excludes the extra cost of repairing or rebuilding to comply with current building codes; limited coverage can be added back by endorsement, often a percentage of the dwelling limit.

HO-3 special form

A homeowners form covering the dwelling and other structures on an open perils basis while personal property is insured for broad named perils.

Coverage D loss of use

Homeowners coverage paying additional living expenses, or the fair rental value lost, when a covered loss makes the residence premises uninhabitable.

Homeowners special limits

Caps on personal property such as $200 for money and $1,500 for theft of jewelry, watches, and furs, regardless of the stated Coverage C limit.

Dwelling policy

A property form covering a house and its contents, common for rental or non-owner-occupied dwellings; it contains no liability coverage unless added by endorsement.

Business income coverage

Commercial property coverage replacing net income and continuing normal expenses lost while the business is shut down by a covered loss during the period of restoration.

Blanket insurance

A single property limit that applies to two or more locations or classes of property, allowing values to be shared among them under one amount.

Negligence elements

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

Modified comparative fault

Tennessee rule under which a claimant whose own negligence is 50 percent or more of the total fault recovers nothing; below 50 percent damages are reduced proportionally.

Occurrence policy

A liability policy that responds to bodily injury or property damage that happens during the policy period, no matter when the claim is first reported.

Claims-made policy

A liability policy that responds to claims first made against the insured and reported during the policy period or an extended reporting period, regardless of when the injury occurred.

Supplementary payments

Amounts the liability insurer pays in addition to the limits of liability, including defense costs, premiums on appeal bonds, and interest on judgments.

Part C uninsured motorist

Personal auto coverage paying the insured for bodily injury caused by a driver who has no liability insurance or whose limits are less than the insured's damages.

Part D damage to your auto

Personal auto coverage for physical damage to a covered auto, written as collision, other than collision, or both, and subject to a deductible.

Symbol 1 any auto

A commercial auto designation giving liability coverage to every auto the business owns, hires, or borrows during the policy period.

Umbrella policy

Liability coverage that sits above underlying auto, general liability, and employers liability policies and may drop down to cover some losses not covered below.

Products-completed operations

General liability coverage for bodily injury or property damage occurring away from the premises and arising from the insured's products or completed work.