VA Property & Casualty flashcards

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

Certificate of authority

An insurer's license issued by a state insurance department authorizing the insurer to transact insurance business in that state.

Fiduciary premium duty

Producers hold premium funds in a fiduciary capacity and must account for and remit them to the insurer; commingling premiums with personal funds is prohibited.

Virginia continuing education requirement

Resident Virginia property and casualty producers must complete 24 credit hours every two years, including at least 3 hours of ethics instruction.

Law of large numbers

As the number of similar exposure units increases, actual loss experience becomes more predictable and closer to the expected loss.

Moral hazard

A condition of dishonesty or character in an insured that increases the chance of intentional loss, such as arson or a faked theft claim.

Principle of indemnity

Insurance restores the insured to the same financial position held before a loss, no better and no worse, preventing profit from loss.

Coinsurance claim formula

The claim equals the lesser of the policy limit or the loss multiplied by insurance carried divided by insurance required, minus the deductible.

Actual cash value

Loss valuation equal to replacement cost minus depreciation, reflecting the used or depreciated value of the damaged property at the time of loss.

Mortgagee clause

A provision giving the lender rights to loss payment, advance notice of cancellation, and the ability to pay premium to keep coverage in force.

HO-3 special form

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

Coverage D loss of use

Pays additional living expense or fair rental value when a covered loss makes the residence uninhabitable, usually capped as a percentage of Coverage A.

HO-4 tenants form

A homeowners policy for renters covering personal property, loss of use, and personal liability, but not the building structure itself.

Business income coverage

Pays net income lost plus continuing normal operating expenses during the period of restoration following a covered direct property loss at insured premises.

Extra expense coverage

Reimburses expenses incurred to continue operations or avoid a shutdown after a covered loss, often written without a coinsurance requirement.

Inland marine insurance

Covers property in transit, property of others in the insured's care, and mobile property not kept at a fixed location.

Elements of negligence

The claimant must prove duty owed, breach of that duty, proximate cause, and actual damages in order to recover.

Virginia contributory negligence rule

Virginia follows pure contributory negligence; if the injured party is even slightly at fault, recovery is completely barred.

Vicarious liability

Legal responsibility imposed on one party for the negligent acts of another, such as an employer for an employee acting within scope of employment.

Virginia minimum auto liability

Virginia requires liability limits of at least $25,000 per person, $50,000 per accident for bodily injury, and $20,000 for property damage.

PAP Part D coverage

Physical damage coverage for the insured auto, divided into collision and other-than-collision coverage, each carrying its own deductible.

Uninsured motorist coverage

Virginia requires UM/UIM coverage at limits equal to the liability limits unless the insured rejects or reduces it in writing to the statutory minimum.

Garagekeepers coverage

Covers damage to customers' autos left in the insured's care for service, storage, or repair, written as legal liability or direct coverage.

Business auto symbol 8

A covered-auto designation meaning hired autos: vehicles the insured leases, hires, rents, or borrows for use in its business.

Nonowned auto liability

Liability coverage for a business when employees or others use autos the business does not own, hire, or borrow, while conducting its business.

CGL general aggregate

The maximum total the insurer will pay for all covered claims under the policy during the policy period, excluding products-completed operations.

Claims-made liability policy

Responds to claims first made during the policy period, with coverage limited to wrongful acts occurring on or after a stated retroactive date.

Umbrella liability policy

Provides excess limits above underlying policies and may drop down to cover losses excluded by or exceeding the underlying coverage.

Virginia workers compensation threshold

Virginia employers with three or more regular employees, including part-time and seasonal workers, must carry workers compensation insurance or self-insure.

Exclusive remedy doctrine

Workers compensation benefits are the employee's sole remedy against the employer for a work-related injury, barring most negligence lawsuits.

Workers comp waiting period

Virginia pays no compensation for the first seven days of disability unless the disability lasts beyond 21 days, when benefits become retroactive.

Virginia Bureau of Insurance

The state agency within the State Corporation Commission that licenses insurers and producers and enforces insurance laws under the Commissioner.

Virginia valued policy law

Requires an insurer to pay the full amount of insurance on a building totally destroyed by fire, absent fraud in obtaining the coverage.