TX Property & Casualty flashcards

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

TDI Commissioner

The chief regulator of the Texas Department of Insurance, appointed by the governor with senate confirmation, who adopts rules and enforces the provisions of the Texas Insurance Code.

Prompt payment deadlines

Texas law requires a carrier to acknowledge a claim within 15 days, begin investigation within 30 days, and pay or deny within 60 days after receiving all items it requested.

Continuing education requirement

Licensed Texas agents must complete 24 credit hours of continuing education every two years, including at least 2 hours of ethics, before renewing the license.

Guaranty association cap

The Texas Property and Casualty Insurance Guaranty Association pays covered claims of insolvent member insurers up to $300,000 per claimant, funded by assessments on member insurers.

TWIA

The Texas Windstorm Insurance Association is a residual market pool providing windstorm and hail coverage to coastal properties in designated catastrophe areas that cannot obtain voluntary coverage.

Rebating

Giving or offering any part of a commission, a premium refund, or other valuable consideration not stated in the policy as an inducement to buy insurance; prohibited in Texas.

Temporary agent license

A license issued to a qualified applicant to continue the business of a licensed agent who has died or become disabled, valid for no more than 90 days.

Controlled business

Insurance written on the licensee's own property or life, or on risks of relatives and employers where the license is not the principal source of income; limited by statute.

Peril

The actual cause of a loss, such as fire, windstorm, theft, or collision; policies insure against listed perils or, in open-peril forms, against all risks except exclusions.

Hazard

A condition that increases the chance or severity of a loss, classified as physical, moral, or morale; a hazard is not itself the cause of loss.

Actual cash value

A loss settlement method equal to replacement cost minus depreciation, reflecting the depreciated value of the damaged property at the time of the loss.

Coinsurance formula

On a property policy with a coinsurance clause, payment equals the insurance carried divided by the insurance required, multiplied by the loss, never exceeding the policy limit.

Subrogation

The insurer's right, after paying a claim, to pursue the negligent third party who caused the loss and recover from that party the amount the insurer paid.

Aleatory contract

An insurance contract in which the values exchanged by the parties are unequal and depend on chance, so a small premium may fund a very large claim payment.

Insurable interest

A financial stake in the subject matter such that the insured suffers monetary loss from its damage; it must exist at inception for life insurance and at the time of loss for property.

Law of large numbers

A statistical principle holding that as the number of similar independent exposure units grows, actual losses approach expected losses, allowing insurers to set accurate rates.

HO-3 special form

A homeowners form that insures the dwelling and other structures on an open-peril basis while personal property is covered for broad named perils; it is the most common homeowners policy.

Coverage D loss of use

Pays additional living expenses, such as temporary housing and meals above normal costs, when a covered loss makes the residence uninhabitable, and may pay fair rental value.

HO-4 tenants form

A homeowners policy for renters that covers personal property against named perils and provides personal liability and medical payments, but does not insure the building itself.

HO-6 condominium form

A policy for condominium unit owners covering personal property, personal liability, and limited building items such as fixtures, improvements, and betterments within the unit.

Texas HO-B policy

A Texas promulgated homeowners form that covers the dwelling and personal property against named perils and settles dwelling losses on a replacement cost basis.

NFIP waiting period

Flood insurance from the National Flood Insurance Program generally takes effect 30 days after purchase, except coverage tied to a lender-required closing, which may start immediately.

Mortgagee clause

A policy provision giving the lender the right to receive loss payments to the extent of its interest, notice of cancellation, and the ability to pay premium and file proof of loss.

Vacancy exclusion

When a building has been vacant beyond 60 consecutive days, standard property forms exclude losses from vandalism, sprinkler leakage, glass breakage, and water damage.

Texas minimum liability limits

The financial responsibility requirement for private passenger autos is $30,000 per person and $60,000 per accident for bodily injury, plus $25,000 for property damage.

Personal injury protection

Texas auto coverage of at least $2,500 per person for medical expenses, lost wages, and funeral costs regardless of fault; insurers must offer it and keep any written rejection.

Uninsured motorist coverage

Coverage for damages caused by a driver with no insurance or by a hit-and-run driver; Texas requires insurers to offer UM and underinsured motorist coverage and obtain a written rejection.

PAP Part D

The personal auto policy part that pays for physical damage to the insured vehicle under collision and other-than-collision (comprehensive) coverage, subject to the stated deductible.

CGL each-occurrence limit

The maximum a commercial general liability policy pays for all damages arising out of a single occurrence, applying to bodily injury and property damage combined.

Products-completed operations

Commercial general liability coverage for bodily injury or property damage occurring away from the premises and arising from the insured's product or completed work, with its own aggregate limit.

Workers compensation Part Two

Employers liability coverage within a workers compensation policy that pays damages for work-related injury or disease claims falling outside statutory benefits, up to stated limits.

Personal and advertising injury

Commercial general liability Coverage B offenses such as libel, slander, false arrest, wrongful eviction, and invasion of privacy; it does not include bodily injury or property damage.